HC Deb 09 March 1971 vol 813 cc369-84

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Humphrey Atkins.]

9.39 p.m.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

The Minister will agree wholeheartedly with at least my first proposal, which is that anyone who is initiating a discussion on the subject of the Grangemouth-Falkirk development area should first pay tribute to the work done by the late Professor Donald J. Robertson of the University of Glasgow in drawing up the economic section of the Survey and Plan and also to the work undertaken by Professor Percy Johnson-Marshall. If I stress the work done by Professor Robertson I mean no disrespect to Professor Johnson-Marshall. Professor Robertson's demise is a great loss to Scottish economics and, indeed, to United Kingdom economics, and his advice to Governments of all political colours will be sadly missed.

I shall divide my case into three unequal sections: first, to look at the economic propositions involved; second, to look at the issues of land area and population dispersal; third, to look briefly at the sociological considerations.

The area embraced by Grangemouth-Falkirk has considerable natural advantages of geographical location for the attraction of industry. One could argue, from the standpoint of economic history, that it cradled Scotland's first Industrial Revolution. Thanks to certain developments in the past ten years or so, it is beginning—or was beginning, certainly, and, I think, is beginning—to look to the future and take part progressively in the second industrial revolution. But, as Professor Robertson pointed out in his Survey and Plan, these advantages are not of themselves sufficient to ensure economic growth.

Two propositions of economic importance are paramount in relation to the development of Central Scotland: first, that a major aspect of Government thinking must be directed to restricting growth in the South-East of England. Here, I quote from Professor Robertson's section of the report: Immigration into that area"— that is, the South-East— is becoming an increasing problem, and for this reason, if no other, it is reasonable to assume that the present policy of favouring the development of Central Scotland will continue". He was writing prior to 1966, when his plan was promoted. In view of the present Government's intentions, one may question whether adherence to the restriction of growth in the South-East of England is being maintained with the same vigour. One must look at the implications of the changes in the Government's investment incentive policy and in the emphasis on industrial development certificates for the development of Central Scotland as a whole.

The second proposition of economic importance is, in Professor Robertson's words: We may assume as a fact that Central Scotland is part of an economy which is likely to run at full employment and be short of labour. There are, therefore, two pillars, as it were, upon which this plan for the Grangemouth-Falkirk area is erected. One is that there would be restriction of development in the South-East of England; the other is that the general atmosphere in the United Kingdom economy would be one of full employment and that there would accordingly be some shortage of labour.

In tackling these two aspects of the matter in the period 1966–70, the Labour Government ensured in this area the growth of manufacturing employment. Their plan put forward a level of 800 additional manufacturing jobs per annum, and as early as 1969, in answer to a Question put by my predecessor, the indication was that the target for job increases for 1975 had been reached.

Right hon. and hon. Members opposite have raised the question of job gains and losses in Scotland, but, no matter what the argument may be for other development areas, it is clear that the emphasis on regional incentives and I.D.C. policy created for this area a growth of job potential well in excess of the targets envisaged in the Report. My hon. Friend the Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) represents that part of the area which has been most instrumental in producing a build-up of job growth, namely, the port of Grangemouth. In this build-up, the Burgh has been amply assisted by a system of investment incentives based on cash grants. Hon. Members have been critical of the growth of capital-intensive industry in Scotland as a whole, but it is true that in this area there has been such a growth. It ill behoves hon. Members opposite to criticise this when the Secretary of State recently, clutching one of the few straws available to him on projected or real industrial expansion in Scotland, welcomed the announcement of further capital-intensive expansion by the British Petroleum Company at Grangemouth. We also welcome that expansion. We only hope that it will reach fruition, because I understand that this is a projection for expansion. Perhaps the Minister will give us further details. I have no doubt that the company will be looking long, and doing its discounted cash flow sums, in considering the effect on this type of expansion of the new form of tax-based incentives. I should welcome information, if the Minister has it, that this is a much more firmly based piece of expansion than appears at first sight in the Press.

Second, we have had indications that, although Imperial Chemical Industries is experiencing difficulty elsewhere, at least in this area there is an indication of job stability, if not expansion. All the investment projections of that firm are under consideration, but I do not wholly lay the blame for this at the Government's door. I.C.I. has important developments in the Grangemouth area. Its whole investment projections are in doubt post at least 1975. That is in the relatively distant future. But, if one thinks of expanding in chemicals in 1975, one's cost exercises and some indication of one's cash flow position must be considered in the very early 1970s.

However, as the survey and plan point out, despite the growth of the Grangemouth complex the area does not have a buoyant employment structure. That contention, made in 1966 and published in 1968, is valid today. I do not want to appear in any way jealous of what is happening in other parts of Scotland or the United Kingdom. I am not in the least jealous of the momentous problems that the West of Scotland area has, but we must have from the Minister, who had meetings with the Advisory Council the other day, an idea of what he thinks of the employment structure now.

A serious feature in the lack of buoyancy is the decline in the numbers employed in the casting industry. Although both political parties have managed to bring to Scotland industries which should have used castings, there has been little sign that the casting industry in the area has been flexible enough to adapt itself to the potentialities of new manufacturing industries moving in. The casting industry in the area exemplifies a characteristic of Scottish decline. I am making a generalisation; I know that there are one or two exceptions.

When a market disappears or alters, the Scottish entrepreneur seems incapable of changing or adapting existing skills and capital equipment to new uses. We seem incapable of anticipating changes. I remember visiting one casting firm a long time ago. It had been very famous for lion-head fountains. But those fountains went out of use 50 or 70 years ago. It had made its name with that product and when the market for it disappeared it found little desire in terms of entrepreneurial skills to adapt.

The second characteristic of the problem in relation to Grangemouth and the Falkirk-Grangemouth area in general, and in relation to the capital intensive nature of the industry there in particular, is the almost total failure to obtain what we loosely call "spin-off" from the capital development. This point may relate to issues which are extraneous to the industry itself, but I shall refer to it later.

I turn now to the second main point on land use and population dispersal. A considerable area to the north-east of Grangemouth was suggested in the plan for industrial development by large land-users. To my knowledge, little has been done to exploit that site. However, for the future, consideration ought to be given to a feasibility study of reclaiming the mud flats on the Forth at Skinflats by using surplus ash from the Longannet power station. The Minister might care to look into this with the Scottish Development Department. It may be possible to pump this surplus ash—which will be a problem to the power station in years to come—across the Forth and use it together with the unsightly remnants of a coal bing in the area to reclaim the mud flats. This could be a valuable industrial site. I would not like to put a figure on the cost of reclamation, but it should be considered if the Scottish Development Department has not already undertaken some surveys.

A further possibility of land use as it affects my constituency—and others are involved as well—is the infilling of the Union Canal. I know that this is the subject of an inquiry and I do not expect the hon. Gentleman to tell me tonight exactly what is going to happen, but I hope that once the reporter has made his submission to the Secretary of State the Scottish Office, in view of the cost involved, will expedite the transmission of the Secretary of State's views to the responsible bodies as soon as it can.

Attendant on these problems of economic and physical planning are the issues of administrative control. I want the hon. Gentleman to pay particular attention to these issues in view of the way in which the Government have used this area, in terms of its total integrity, as a district. Virtually the whole area covered by the plan is, as far as I can see, a district in the central region of Scotland. I appreciate that there may be difficulties because of the negotiations which the Department wants to embark upon in relation to boundaries but, having made allowances for that, I cannot just dismiss in the present context considerations of administrative control.

I say this advisedly without casting aspersions upon the valuable work done by people in local authorities, but it might be said that this growth area has attracted new industry despite the presence of local friction. I note from today's White Paper that the Minister seems assured on the basis of the proposals contained in the White Paper for the reform of local government that a new spirit will emerge. I would like him to be a little more forthcoming as to the basis for that.

I hope he will assure us that he has managed to convey to the local authorities, among whom there is a friendly rivalry, the need to come together to create a single administrative unit in the not too distant future. Even if we get this in 1975, in the short run these difficulties will remain unless a clear lead is given by the Scottish Office. It is not sufficient for the Minister to meet the Advisory Committee from time to time and to advise on the appointment of an industrial development officer. What Professor Robertson called for was a major administrative reorganisation and I submit that this means that industrial development cannot be treated as an appendage. It is not something to be added, as an afterthought, to the other functions of local government.

When I look at the proposals for the reform of local government I see that there is little said about management. Management is the key. What we have to concentrate our attention on is how to manage to attract industry to the area. It is not sufficient to think that we can do this by employing one industrial development officer, giving him some secretarial assistance and sticking him in some poky litle office under the thumb of existing bureaucracy. Present local conditions are not oriented towards the attraction of industry—they are very good for empire builders. What we need is an empire built round the "attraction of industry" policy. Industrial development must be at the heart of any new thinking for the district and the region. If we are asking for the appointment of one development officer he will have to call on other resources and might be frustrated by existing bureaucracy.

Yet there are five Scottish universities within easy access. What continuing influence and interest, if any, has Glasgow University in the working out of this plan? There is an excellent Department of Economics and Social Research there and many of the people who compiled the plan are still there, such people as Kevin Allen and others. We can call on five Scottish universities, particularly Glasgow and link this with the new Scottish business school. How can we solve the problem of attracting industry by appointing one man at a cost of £12,000 to £15,000 a year? This strikes me as a failure in thinking. I urge the Minister to give consideration—

It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Monro.]

Mr. Douglas

The new University of Stirling has an industrial projects section whose services should be used in carrying out feasibility studies of existing industries and the possibilities of new industries.

What must be considered in any area—I am not arguing particularly for the Falkirk-Grangemouth area—is the element of potential growth in the new industries, which we loosely call spin-off, and the possibility of finding and utilising new markets for existing skills. This involves market appraisal, and no one industrial development officer will do that job. Local authorities are being encouraged in kidding themselves into thinking that if such an officer is appointed all the problems will be solved.

As Professor Robertson argued, what is required is some form of industrial development board for the growth areas which would have access to the technological, economic and scientific know-how of all these institutions and the new Scottish Business School, plus—and this is the weakness in the Scottish set-up—access to financial expertise. What I am arguing for this area I would argue writ large for the whole of Scotland. We need a business school type of organisation linked with financial expertise to public and/or private capital. A weakness in the Scottish set-up is the inability to obtain quickly risk capital for ventures touching on advanced technology. This is why it is pitiful that today we gave a Third Reading to a Bill abolishing the Industrial Reorganisation Corporation. In this context an organisation of that type, linking possibly public and private capital, is absolutely indispensable.

Lastly, but not least, I turn to the sociological considerations. There has been a considerable scaling down of the estimates in the population projections. I know that these were projections and not firm estimates, but the survey plan envisaged a possible population for the area of 250,000 by the mid-1980s. The projected increase in the area covered by my constituency was 41,000. I understand from discussions with the local authorities that the reassessment is that the population increase should be scaled down to about 35,000 in the mid-1980s.

Can the Minister give some reason for that regressive scaling down? After a considerable examination taking two or three years, these eminent individuals believed that, based on its job attraction possibilities, this area should be capable of being a metropolitan complex and have a hinterland to hold a population of 250,000. Have the local authorities fallen down in the number of houses they have built? Has the attraction of industry policy failed? Have there been administrative difficulties? Has the Scottish Office, under Government of both parties, failed to provide the assistance necessary to build up the population?

If this population growth is to take place, then we must remember that, even at the lower end of the scale, great stress is placed on the locality. Apart from the local authorities, bodies like the churches must be assisted to help to give the area a coherent and distinct identity.

As I explained, this area was the cradle of the first Industrial Revolution. Some of the ravages of it have yet to be cleared up. If new population is to come in and if we are to have a broadly based area—if, in other words, Falkirk is to be the metropolis, as the plan envisaged—some assistance must be given to bodies like the churches so that they can persuade the new population to come together in a community. In this connection, I pay tribute to Rev. Norman Swann and I commend his organisation to the Minister's attention.

I have raised many points and while I do not expect the Minister to answer them all tonight, he must be aware that the people of Falkirk and Grangemouth expect them to be answered in the near future. The Government cannot deny answers to these questions for too long. They cannot withdraw from this type of economic planning in Scotland. Nor can they withdraw from the considerations on which the then Conservative Government embarked in their plan of 1963.

If I may be permitted to say so, "This is your baby, Mr. Minister. Do not leave it out in the cold. If you do, at least a few of my hon. Friends will not be squealing but will be pestering the living daylights out of you".

10.7 p.m.

Mr. Malcolm MacPherson (Stirling and Falkirk Burghs)

My hon. Friend the Member for East Stirlingshire (Mr. Douglas) has not only raised a number of important points but has performed a valuable service tonight. He has used the opportunity of this longer than usual Adjournment debate to give a comprehensive survey of the Grangemouth-Falkirk development area. The people of not only this part of the country but of Scotland generally will be grateful to him for having laid some vital questions right at the Minister's feet.

My hon. Friend and I have adjoining constituencies, and both Grangemouth and Falkirk are in my constituency. Indeed, they are the nucleus of the area. If this part develops in growth, that growth will take place for the most part in my hon. Friend's constituency, though, as I say, Falkirk and Grangemouth are at the centre of it. Our two constituency interests are, therefore, closely linked.

This area has for a long time been, and remains, capable of great growth. The range of industry in the two towns which form the centre of the area is potentially growth-worthy, and I say that in the fullest sense of the term. For example, in Grangemouth we have the docks and chemical industry, while in Falkirk we have the casting industry, with British Aluminium. In both towns there is a considerable accretion of smaller, newer industries, most of them having developed in the last ten years. This growth has been going on for a considerable time and is likely to continue. If this area cannot be developed into a growth area proper, what sort of area can?

I differ in emphasis from my hon. Friend in one respect. To some extent local authorities and their officials have done well in attracting new industry to this area. Indeed, Grangemouth has for a considerable time been an example to Scotland in the attraction of new industry. I am not simply referring to appendages to big industries, such as chemicals and oil, but to additional industries. They have built their own advance factories. I do not know what more a small burgh could have done.

Falkirk has attracted a considerable amount of industry. There has not been a complete reliance on the old industry of casting and the British aluminium industry. There has been a considerable growth of a number of other types of industry. Therefore, the area has managed to develop a good deal under its own steam.

There is one point on which I differ from my hon. Friend. Although I agree with him almost entirely, there is some difference of emphasis. He talked of the casting industry as not being very ready to adjust itself to modern times. In the 1950s, when the foundries were in difficulties it took a long time, but in due course the foundries adjusted themselves. They went into plastics and other matters—so much so that if one went into a foundry in Falkirk one got the impression that it was not a foundry but a factory because it had changed so much. Although this process took some time, it did at last get round to change, with the typical Scottish calmness, and perhaps slowness in regard to change.

My hon. Friend was right to say that in present circumstances there had not been the same kind of buoyancy. For example, when the steel industry opened an establishment in Scotland, I feel that the Falkirk iron industry did not take as much advantage as it might have done of that situation; various ancillary activities might have been pursued. However, we must remember that the Falkirk iron industry when under pressure did not prove itself to be unbuoyant. At the moment this area still has growth potential, even without much additional help. One feels that whatever local government or central government does it will continue to expand.

There has been a feeling of delay over growth projects. This is the case that I put to the Government, though I must point out that the delay has not occurred entirely in the last nine months. The idea of a growth area did not start in the locality. It is not a matter which the local people thought they could develop and handle. It is a matter which, from the beginning, was always conceived as a development strategy stretching beyond the area itself and requiring central intervention. This is why it appears to many people that at present the whole project is becoming bogged down. It is left in the hands of local authorities which, although composed of a great many competent and forward-looking people who possess the best will in the world, still have not managed to move on as one would expect. It is now surely time for Government intervention to get the whole project going.

I do not wish to take up any more time since I know that the Minister will want time to reply. I had intended to speak for only two minutes, but I have been a little longer since we have had the good fortune to have a longer Adjournment debate than is usual. I hope that the Minister in his reply will be able to give us some hope.

10.15 p.m.

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

I thank the hon. Member for Clackmannan and East Stirlingshire (Mr. Douglas) both for taking the trouble to initiate this debate and for the most impressive way in which he put across his survey of the industrial and economic difficulties of his constituency and those neighbouring his constituency. I also congratulate the hon. Member for Stirling and Falkirk Burghs (Mr. Malcolm MacPherson) for his intervention which, as always, showed his deep and long knowledge of the area. I would like, too, to be able to mention the hon. Member for West Stirlingshire (Mr. W. Baxter) who, I know, would have liked to be here. We all hope that he will soon recover and be back with us.

This is a timely occasion for the debate. It so happens that it was only yesterday that I had a meeting with the Joint Planning Advisory Committee for the Falkirk-Grangemouth growth area. It was the first occasion that I have had a chance to meet the Committee, and it was a most useful and helpful meeting. I was grateful to have that meeting, and I am grateful now to report to the House some of the matters discussed at the meeting, because they were all very relevant to what has been said tonight.

Let me first make it clear that the original designation of the Falkirk-Grangemouth area as an important growth point in Central Scotland made originally in the 1963 White Paper still very much stands. I told the J.P.A.C. that the Government hopes, as did their predecessors, that it will do all that it can to move ahead and get the plan under way.

It is fair to say that there was general agreement among those present yesterday. Everyone felt that matters had not gone as fast or as far as any of us would have liked to see in the past few years in getting the plan off the ground. I am certain that the hon. Member for Greenock (Dr. Dickson Mabon), who had a great deal to do with helping the project along in many ways when he was in office, will agree that it has not got as far as he and all the rest of us hoped. What we discussed yesterday was what immediate steps can be taken to get the project off the ground again as soon as we can.

The first problem before us was the long-standing one that the Committee has had to decide, whether to appoint an industrial development officer and, if so, how and to what extent. I emphasised yesterday that this is not a decision that I can make for the Committee. It is not one for a Government Minister to make. It must be taken by the local planning authorities together, not because of some rusty old convention that that is the only way in which it can be done but because the local planning authorities are the only people with planning powers under the present system. They must remain so until we have the reform of local government in effect. Therefore, we must work through the local planning authorities and take them with us, and all our efforts must be geared to persuading and helping them to get together sufficiently to put the necessary steam behind the preparation of these plans.

I told the Committee about one other matter which may prove helpful. I believe that the publication of the Government's White Paper indicating the main lines of the reform of local government provides a new situation in which these authorities can see more clearly in what direction they should be going in the years ahead. There is all the difference in the world between discussing whether to appoint an industrial development officer in the abstract and discussing it against the background of knowing broadly what the new local government boundaries will be.

I suggested to the Committee, therefore, knowing their difficulties, that they should consider one of two alternatives: either to agree to appoint an industrial development officer for an area roughly covering what will be the eventual Central Region under the new local government White Paper reforms; or, if that proves too difficult or impracticable, to appoint one for the new district area covering the present area of Falkirk and Grangemouth, and then, if wished by the authorities, the other districts in the region can do the same. It is not for me to press them to do one or the other, but I did, and I do again, press them to get on with the job of deciding what they want to do in this sphere and of getting someone on the ground to speak up for the Falkirk-Grangemouth area, or perhaps the Central Region, in the industrial promotion which is going to be very much needed throughout Scotland.

The hon. Member for East Stirlingshire touched on this point with a most interesting series of suggestions, particularly suggesting the need to bring universities into the studies necessary in this matter. I believe that there are two separate functions. One is the function, which certainly may and should be needed, of calling in universities, with all their expertise, to carry out studies on particular problems and points which may need to be studied from time to time. There are five universities within easy reach which can and should be called on by the local planning authorities or, better still, by the J.P.A.C. as and when needed.

In addition, there is and must be a need for a specifically charged officer to deal with industrial development. This needs to be organised in Scotland on a more professional basis than ever before if for no other reason than that our competitors are already in this sphere in a bigger way than we are. This is why I hope that Falkirk and Grangemouth will have an organisation of its own to contribute to what I hope will be an all-Scotland effort, under the auspices of the Scottish Council, to see that Scotland's voice is clearly heard outwith Scotland on the need to attract new industry.

The members at the meeting also felt that they would like to get on with the planning and implementation of the study which was published in 1968 and which has lain under consideration, but little more, since.

We had a long discussion about population targets. I should make it clear that the fact that we are now talking about a population target of 35,000 by 1991, whereas five years ago we were talking about a population target of 50,000 within a slightly different period, in no way reflects any change or lack of drive in this area. It is merely a reflection of the change in the forecasts for the United Kingdom population increase generally. Five years ago the experts were telling us that the population in Britain would or ought to expand by approximately 20 million in the next 25 years. They have now revised these figures to more like 12 million in the same period. It therefore follows, if we are to heed the advice given by the population projectors and experts, that we must scale down our projections for each of the other areas. The same thing has happened in other areas. We had very much the same kind of discussion in Tayside when I was there not long ago.

I welcome what the hon. Member for East Stirlingshire mentioned about the expansion announced about a week ago by B.P. for an oil refinery at Grangemouth. I cannot give further details now. However, the announcement by B.P. makes clear the way in which its mind is working. It has promised to make a further announcement as soon as it is able to do so. It is most encouraging to think that B.P. is thinking in these terms. It would be most encouraging both to the area represented by the hon. Gentleman and to Scotland as a whole to have at Grangemouth what would amount to the largest oil refinery of its kind in Europe.

The hon. Gentleman made one or two interesting suggestions. The first was the feasibility of reclaiming considerable quantities of land at Skinflats. I will look at this most interesting suggestion with great interest and care. As he knows, a considerable amount of land has already been reclaimed on the other side of the Forth, with considerable success. There is also land at Skinflats extending to 1,800 acres which is suitable for the development, 500 acres of which is already owned by Stirling County Council, so there is a nucleus of land available for industrial development.

The hon. Gentleman also mentioned the in-filling of the Union Canal. As he said, there is an inquiry in progress, and it would not be proper for me to comment either way on that, as the Secretary of State may or may not become involved in it. As soon as the results of the inquiry are available, I assure the hon. Gentleman that there will be no unavoidable delay by the Secretary of State in helping to make the decision and getting the work under way.

The hon. Gentleman also mentioned the administrative organisation of the area. I agree with him that dealing with many different local authorities covering the same area is not the most ideal method of organisation in the working out and following up of a large and important development plan such as this. We have, however, no alternative but to work through the local authorities in the area. Two suggestions were made at the meeting I had with the J.P.A.C. yesterday. One was that I should impose New Town powers over the area, and the other was that I should in some way invest the J.P.A.C. with powers that it could exercise over the other authorities in the area. I firmly reject that as a possible method of working.

However much one might like to give a body such as the J.P.A.C. powers to act under its own hand in the processing of these plans, one simply cannot divorce the executive action from the democratically elected representatives of the local authorities who have the power to raise the money to do the work, who have the responsibility for fulfilling the planning Acts and the responsibility for producing the necessary infrastructure, and so on. It would not be "on" to give to another amorphous body, without direct responsibility to the electors or for raising its own finance, the powers to do, over the heads of the local authorities, what it or we may wish to be done.

I took it from the meeting yesterday that the local authorities' representatives clearly understood, that they are the people with the power until local govern-men is reformed. There was a general spirit at the meeting of wanting to get on with putting forward this plan which, in the opinion of us all, had not gone as fast as we had hoped. I am, therefore, hopeful that we shall now get the local authorities working together through the J.A.P.C. and doing one or two things as quickly as they can. The first is deciding to appoint an industrial development officer to fly the flag for the area. The second is to work out in concert with each other the first steps in implementing the necessary infrastructure for the plan.

I hope that no one will think that the area around Falkirk and Grangemouth is in any way an unsuccessful one, even though the development has not gone as fast as we hoped. In the last five years this area has been one of the most successful parts of Scotland. It alone has registered an increase in population as against many other parts of Scotland which have registered a decrease. It has the best communications anywhere in Scotland. It has two motorways constructed through it. From next month it will have the fastest train service in Scotland, between Glasgow and Edinburgh, running right through it. There are the docks at Grangemouth where large sums are being spent on putting in new lock gates. There are two airports within reasonable proximity to it.

If I were to be fortunate enough to be appointed the new industrial development officer—which I shall not be—I should know that I had marvellous pieces of ammunition to put into brochures in favour of the area. Falkirk/Grangemouth is a growth area. In the Government's view it will remain a growth area and will receive every possible help from the Government to get going as fast as possible towards the growth targets which we all hope it will achieve.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.