§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Weatherill.]
§ 10.12 p.m.
§ Mr. John P. Mackintosh (Berwick and East Lothian)Despite the suggestion of the right hon. Gentleman the Leader of the Liberal Party, the subject of this debate is unemployment in Scotland and many hon. Members wish that we could have had more time than is available in which to discuss this matter. Many hon. Members wish that we could have had a full day in which to discuss this issue. So far as we are concerned, the announcement today that the jobless total in Britain had reached 929,000.—[Interruption.]
§ Mr. SpeakerOrder. Will hon. Members withdraw quietly please? Mr. Mackintosh.
§ Mr. MackintoshI am grateful to you, Mr. Speaker.
331 I was pointing out that the high unemployment figures announced today had a particularly ominous message in Scotland because every hon. Member, particularly those of us on this side of the House, with an industrial constituency, has been struggling throughout the summer to try to save something from the difficulties of redundancy and closure with which we are faced. I look round these benches and I see Members on our side of the House who have faced these recent devastating closures and redundancies in Dundee. I see men trying to keep the Plessey factory open in Dunbartonshire. Therefore, I think it is right that when the House is recalled we should spend at least half an hour considering this very important question.
I wish to begin by analysing the situation in Scotland because only when we do this do we get the full picture of the seriousness of the situation. In this we are aided by the new publication which the Government have produced, the Scottish Economic Bulletin, a new venture in this field but one which is extremely welcome. As the Bulletin points out, the difficult problem for Scotland in the 1960s was the rundown in the traditional industries of mining, shipbuilding, railways, agriculture and metal manufacture. These industries ran down, and to counterbalance this there was a massive programme of local authority building and public investment, and at the same time a great effort in regional development to bring in new industries in vehicle building, the electrical industry, engineering, professional and scientific services.
§ Mr. John Brewis (Galloway)rose—
§ Mr. MackintoshI shall not give way at this stage. I am at the beginning of my analysis.
As a result of the Labour Government's efforts in regional policies, in the period 1966–70, difficult years for the national economy, the position in Scotland was noteworthy, and it is well described in this Government Report:
The latter years of the 1960s are rather unusual in that they are the only period since the war when Scottish employment has moved in line with or slightly more favourably than employment in Great Britain.That is to say, the years 1966–69 were the only period when the gap was being closed.
§ Mr. MackintoshI am quoting from a Government publication which I have here, and I shall now give the figures to support what I say.
§ Mr. Brewisrose—
§ Mr. MackintoshThe supporting figures show that wages in Scotland in 1960 stood at 91.6 per cent. of the United Kingdom average and went up by 1969 to 97.2 per cent. Unemployment, which had been running at twice the United Kingdom average, fell to 1½ times. Thus, during this period, the latter part of the 1960s, the key point is that Scotland did better than the other development areas.
§ Mr. MacArthurWhen citing these figures, the hon. Gentleman should recognise that the improvement to which he refers related to the year 1963–64 and sprang directly from the budgetary measures of 1963, as had been widely recognised and as was set out in the White Paper of 1964. That was under a Conservative Government, a fact which he might bear in mind in his speech.
§ Mr. MackintoshI shall not give way again if hon. Members opposite make these tedious partisan points. I was quoting directly from a Government publication. The years are 1966ߝ69. Clearly, the hon. Gentleman has not bothered to read this document. Those are the facts of the situation.
I come now to the present position. This Government have been in office for 15 months. So far, when we have pressed the Secretary of State for Scotland about Scottish unemployment, he has said that the Scottish economy is part of the British economy, the whole British economy is admittedly deflated because the primary task is to beat inflation, and, once inflation and excessive wage demands are defeated, we can inflate the British economy and Scotland will benefit like the rest of the country.
I shall not take up that argument now, although it has been taken up on our side many times in other debates. What I say in the present context is that, even accepting the deflated state of the British economy, the Scottish development area 333 has suffered relatively worse than the other development areas, and the present situation is in sharp contrast to the immediately preceding period when, as I have shown from this Government publication, Scotland was doing better than the other development areas.
§ Mr. MacArthurBunkum.
§ Mr. MackintoshIf the hon. Gentleman goes on shouting, I shall have to quote again from the Scottish Economic Bulletin, edited by Dr. Gavin McCrone, a distinguished member of the Scottish Office:
… unemployment … in Scotland has risen more sharply in 1970 than in other Development Areas or than in the United Kingdom as a whole.I refer again to the statistics I have mentioned. From being 1½ times the United Kingdom average, it is now 1.75 times. Relative wages, which had climbed to 97½ per cent., have slipped back to 96 per cent. of the United Kingdom average. Next, looking at Scotland's share of employment through industrial development certificates issued, we see that it was 20 per cent. of the United Kingdom total in the mid-1960s whereas last year it was 8½ per cent.That is the situation to which I am drawing attention tonight, a devastating and dangerous situation from the Scottish point of view.
Why has the Scottish region fallen behind in this way? Three tentative answers are produced in this document which I do not find entirely satisfactory. One refers to the greater number of American firms in Scotland, it being said that the recession came earlier in America and, therefore, it was bound to affect Scotland more seriously. Second, a rather odd reason, because there was more unemployment elsewhere there was not the normal emigration from Scotland and people stayed at home to inflate our unemployment figures. Third, reference is made to the serious falling off in house-building and employment in the construction industry as a major factor in Scotland.
I am not happy about the first two answers, particularly emigration, because even if there is less emigration because of restricted opportunities elsewhere that would only have inflated our unemployment figures. It would not explain the 334 closures, the low investment, the low demand, the low inflow of industry. So we must ask the Government whether they have made a study of the reasons why the Scottish development area, having done relatively better than other development areas up to 1970, has been doing relatively worse in the past year.
This is an extremely serious matter. The hon. Gentleman makes his partisan points, but it is accepted to be serious in all the places where economics is studied seriously. That is the real problem. Have the Government examined it seriously?
Is it true to say, as the Secretary of State for Scotland keeps saying, that if the whole of Britain expands that will be the answer to Scotland's problems as we go along with that expansion? That would be true if the Scottish situation were simply part of the total British situation, but there are special factors which make the Scottish picture particularly worrying.
First, I believe that the real reason for Scotland's lagging behind is a low rate of investment in our newer industries in which we have put so much hope in the past decade. I find that very worrying.
The second point that I find alarming is that in the past year or two the traditional industries which were running down so rapidly in the 1960s have held up remarkably well. Mining employment has not declined, and there have not yet been reflected in the figures the redundancies in the shipping industry. In the past year and a half the traditional industries have held up extremely well. But we must ask the Government to look ahead into the 1970s, into the period when they hope that reflation will be bringing the Scottish economy out of its depression, and ask what is the picture for the traditional industries in the years 1973, 1974 and 1975.
The possible situation then worries me greatly. For example, let us take coal. The electricity boards are consuming 60 per cent. of the total output of the Scottish pits, 6 million tons. They estimate that with the increasing demand for electricity this will rise by 1973 to 8 million tons, by when the boards will be consuming 70 per cent. of all the coal dug in Scotland. Employment will therefore he secure in the mining industry until 1973. At that point Hunterston B nuclear 335 power station, which must be run round the clock, comes in. Inverkip becomes oil-fired in 1975, and if oil is cheaper than coal it will be run round the clock. Surplus capacity that will be damped down will be the coal-fired, as the most expensive. Forecasts differ, but according to information extracted from the boards' report it could be that by 1975 only about 4 million tons of Scottish coal will be used in the power stations. If so, employment in the Scottish coalfield could be seriously hit. Are the Government making an energy policy for the early 1970s to forecast the demand?
Let us consider shipbuilding. We have seen only the beginning of the redundancies, a few hundred so far, but many people reckon that by Christmas there will be 2,500 on the Clyde. Whatever happens, however the situation settles down, there will be a serious loss of manpower in that industry.
Steel now employs 28,000 people. It is clear from the British Steel Corporation's reports that it regards the future of open-hearth processes as virtually nonexistent. It seems that by the mid-1970s the open-hearth furnaces at Motherwell, Glengarnock and Cambuslang will be closed. If so, employment depends on how much finishing is retained. There could be redundancies of between 5,000 and 10,000 men. Admittedly, we may get the Hunterston mill. We hope that we do. I am glad that the Secretary of State has chosen one mast to which to nail his colours on that issue. But there will be no employment from that until 1976 at the earliest, so we again face a period when the steel industry may have serious redundancies in the next few years.
I turn to British Rail. It is the Government's policy to stop giving money to some uneconomic lines. British Rail employs 22,000 people. What will be the redundancies there if that Government policy is pursued? Finally, another traditional industry, agriculture, will continue to lose at the present rate of about 1,000 a year.
If we put these figures together in relation to the traditional industries—not looking at the modern, new industries, which are lagging behind at the moment and are causing our basic difficulty—the prognosis is a decline in the traditional industries over the next five 336 years of 35,000 jobs, and that is a modest estimate. In these circumstances, we could well get a situation in which the British economy pulls out of its recession in 1972–73, as the Government hope and plan, while the Scottish economy remains sluggish, continuing the present forecasts, and with the present gap widening further. I hope that that does not happen. If it is not to happen, the Government must think and act more rapidly and with more determination.
First, let me say what I think that the Government should not do. It would not be suitable for the Under-Secretary of State to tell us yet again about special development areas. A great deal of money is being given out to incoming industries in those areas, but almost no industry is coming into them, and the provision applies only to incoming industries. Clearly the trouble is with present industry which is already on the ground and is paying people off right and left. If the Government are really so interested in incoming industry, it is a pity that they slackened I.D.C. control and raised the level from 5,000 to 10,000 sq. ft. before permission is needed. However, little industry is on the move at the moment.
Another thing which the Government should not do is to try to plug holes in one part of Scotland by snatching industry from other areas of Scotland. The Highland Development Board is now running at a modest level due to the Government's toning down of its activities and due to the appointment of inactive men where active men used to be happy in the North when I heard the Board being attacked and criticised, because it was then active. Now it is not even active enough to be worth criticising. That is serious, because this is an important board with important functions. The Government should not force industry out of the Highlands, for example, into the West of Scotland. This is a problem for the whole of Scotland. Unemployment, for example, is 10 per cent. in Dundee and 10 per cent. in the Cromarty Forth. It is high all over Scotland. I hope also that the hon. Gentleman will not rely on little things like roadworks and extra money for this school and that, because such works take a long time in the pipeline. What we want is productive industry with a future and with jobs.
337 Now I turn to what I hope the Government will do. They should first realise their great mistake in changing from grants to investment allowances. At first, this was thought to be a partisan point by the Labour Party but it is now being said by the whole of Scottish industry. It applies to existing industry in Scotland now which we need to get along. By the admission of the Under-Secretary of State for Trade and Industry, the margin in favour of investment allowances has dropped from 55 per cent. to 37 per cent. even if the existing industries are making full profits. When profits are low, the margin comes down even further in favour of allowances.
Secondly, the Government should withdraw their decision to phase out the regional employment premium. I do not want to hear again about its not having been promised beyond 1974. The Government must face these policies ahead and it may well be sensible to say that the premium will continue beyond then.
We have said these things as loudly as we can. But Lord Clydesmuir, Chairman of the Scottish Council for Development and Industry, said on 17th September:
We must now ask the Government to take a more radical approach to regional policy in present Scottish conditions.Mr. Campbell Adamson, Director-General of the C.B.I.—the Government are presumably ready to listen to him—said in Dundee:The Government must show their determination by a number of measures to give efficient, productive employment to those out of work … The Government must reformulate their regional policies.If the Government will not listen to the voices of the 140,000 in Scotland who are out of work, perhaps they will listen to the Director-General of the C.B.I. and perhaps they will listen to the Chairman of the Scottish Council for Development and Industry. If they do not quickly announce something drastic and effective, the view in Scotland will be that we have been written off politically and economically.
§ 10.31 p.m.
§ The Under-Secretary of State for Development, Scottish Office (Mr. George Younger)I congratulate the hon. Member for Berwick and East Lothian (Mr. Mackintosh) on his good fortune and his 338 perspicacity in getting this Adjournment debate at such short notice. It should probably have been answered by one of my colleagues in the Department of Trade and Industry, but I am glad to be able to be here to answer some of the comments which the hon. Gentleman made in his usual interesting and effective manner. I hope that he will forgive me if in the short time available to me I am not able to cover everything, but I will carefully study all that he said.
He began by saying that in the time of the Labour Government the differential of Scottish unemployment against that of the rest of the United Kingdom was marginally better. That is true, but there are two sides to the equation and the main reason for that was not so much that the Scottish position was getting better, but that the English position was substantially worse. That greatly changed the relative positions. Between 1966 and 1970 numbers unemployed in Scotland went up by no less than 70 per cent. That was the situation which the hon. Member used as an argument in his favour.
He made some interesting comments about the long-term trends of the Scottish economy. I assure him that in the Scottish Office, with the help of Dr. McCrone and his unit in the Regional Development Division, which is the division of the Scottish Office which mostly deals with these things, we are carefully studying the trends of the Scottish economy, and all the things which the hon. Member mentioned, so fas as I could pick them out, are under careful study. The individual industries which he mentioned are partly Scottish Office responsibilities and partly the responsibilities of other Ministries. We are in constant touch with them to make forecasts of likely trends, and this is the most important task on which we are engaged.
The hon. Gentleman mentioned I.D.C.s. He was not quite correct—it may have been a slip of the tongue—to say that we had followed what the Hunt Commission recommended. The limits have been raised in the South East and the Midlands not to 10,000 square feet, but from 3,000 to 5,000 square feet. We refused to implement the Hunt Report because we thought that in that respect that would be unwise. It is worth pointing out that raising the figure from 3,000 339 to 5,000 recognises what was the practice of the Labour Government, which was that very little between those small figures was refused. In any case, I wonder whether anyone has settled down to think how tiny an area 5,000 square feet is. It may not be known that it is just about the size of this Chamber. That, therefore, is not a major factor.
I should like to answer two charges which were implicit if not explicit in what the hon. Gentleman said. They are charges which have been made up and down the country in recent months and they require an answer. The first, on which I do not propose to spend more than a minute, is that the present situation, which we very much deplore and about which we are very concerned and worried, is all due to the policies of the present Government. The charge is that the Labour Party has no responsibility for the present situation.
It is not necessary for me to labour this point because no serious person, outside the realms of politics in some places, believes that for a moment. No decision, whatever it might have been, taken since June, 1970, could have produced this situation. I shall not spend any more time trying to analyse that situation because we all know in our hearts that what I have said is right. It is impossible to say that the present situation is entirely due to the present Government.
§ Dr. J. Dickson Mahon (Greenock)To some extent.
§ Mr. YoungerI shall be glad to answer that, too, but I wish to concentrate on the second charge.
The second charge is that the Government have done nothing. The hon. Gentleman had better look at what the newspapers say. Whatever else one says about the Government, one cannot say that they have done nothing. I should be boring the House if I were to list everything, but I refer to the measures taken to reflate the national economy—the reductions in corporation tax and income tax, the halving of selective employment tax and the reduction in Bank Rate to the lowest rate for seven years. It would be tedious for me to mention other measures, but all those measures eased the squeeze put on by the Labour Party 340 when it was in government for five years, squeezing the pips out of British industry.
There are two other points which should be made to put the unemployment position in perspective. One of them was referred to by the hon. Gentleman and the other he brushed aside. The first concerns the short-term measures to try to reduce unemployment by every way possible. I do not think that anyone could say that the amount of public expenditure and the measures produced by the Government were anything other than massive. There is the question of the special development areas which was talked down by the hon. Gentleman. There is the amount of money announced two months ago—£33 million. The hon. Gentleman is not on a good wicket this evening because this is the second time that he has put his foot in it. He says that the money has not been spent. It is supposed to be spent over the next two winters to reduce unemployment. [Interruption.]
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)Order. I must ask the hon. Member for Greenock (Dr. Dickson Mabon) not to make sedentary interventions.
§ Mr. YoungerIt is clear that with the local authority contribution the £33 million will amount to about twice that sum. The hon. Gentleman is quite wrong in saying that it has not been spent. It is being more than spent and it will be very valuable in the short term in trying to reduce unemployment. There is also the special extra help for Glasgow, now extended to the areas around Glasgow where the construction industry will get £1 million a year for five years to help to reduce unemployment.
All these measures probably amount to well over £50 million. This is the amount of money which the Government have made available in order to reduce the short-term problem.
I wish to say a few words about the longer-term problem because the hon. Gentleman made some interesting comments about the long-term trends in the Scottish economy as opposed to the British economy. To counterbalance any continuing drop in jobs we may have in future, such as that which the hon. Gentleman outlined, we must attract new 341 industries and new jobs. That is why the Government have once more done something quite new in producing, not £20,000 or £30,000, but £100,000 for the setting up of a special operation under the aegis of the Scottish Council to attract new industries and jobs to Scotland to replace the jobs which we may lose.
§ Mr. YoungerI am sorry; there is not much time left. I wish that we could have more time for these debates.
It is no use imagining that we can possibly replace those jobs without attracting new industries. We need a genuine all-Scotland effort to attract new industries. That is what we have set up this organisation to do.
The hon. Gentleman mentioned existing industries. He is right in saying that if we take a particuluar firm which is concerned only with investment in plant and machinery the differential is not so great. That completely ignores the other side of the picture, and that is the service industry firms which receive help under the new system but which received nothing before. The hon. Gentleman's constituency is very much affected by this matter. The extra made available under the Local Employment Acts probably amounts to £25 million a year. Nobody mentions that. The S.D.A. arrangements will involve a great deal of extra Government expenditure.
So all this has to be seen as a whole and taken as a whole. The amount of money being spent by this Government on regional development is certainly as great as and probably very much greater than that spent by the previous Government, and it is covering a wider field more attractive to industrialists coming in, and the vast expenditure on infrastructure which has been put in is, of course, an extra attraction to industry.
As for I.D.C.s, I would just point out that they, during the last Government's time in office, did not always show a good picture. This last year we have margin- 342 ally improved I.D.C.s over what the situation was in the previous year, half of which was during the previous Government's time. I do not want to make too much of the point because the period is short, but the signs are encouraging.
I emphasise that the Government are very concerned about the level of unemployment, and that we entirely share with hon. Members opposite and everyone else the worry about this. We are tackling it and have produced massive aid to help put it right. It is no use anybody pretending we have not, because we have, and we are determined to get a successful conclusion and to get the trend of unemployment right. We have already put into effect measures to that end, let alone anything else which may come. They are measures greater than anyone has asked us to produce, and they are bound, in themselves, to produce an improvement in the situation. It does not help anyone merely to concentrate on complaining of the problem.
There are hopeful signs for the future of the Scottish economy. One is the finding of North Sea oil. I see the hon. Member for Aberdeen, North (Mr. Robert Hughes) here. It concerns his constituency. It is a most encouraging development, one to which, I hope, many Scottish firms are alive and on their toes to meet, so as to make the best of it. There are great opportunities for them. I was told, when I visited the area last week, that there is great difficulty in getting Scottish firms to quote for some of the service activities associated with it. I am glad to see that the North-East Scotland Development Association has just today made a Press release—
§ The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order, till Monday, 18th October.
§ Adjourned at eighteen minutes to Eleven o'clock.