UNEMPLOYMENT

HC Deb 31 January 1972 vol 830 cc58-176

Mr. Speaker

Before I call the right hon. Member for Bristol, South-East (Mr. Benn) to move the Opposition Motion, I should tell the House that I have selected the Amendment in the name of the Prime Minister and other right hon. Members.

4.40 p.m.

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

I beg to move, That this House deplores the grave damage inflicted on the engineering and shipbuilding industries throughout the United Kingdom by the policies of Her Majesty's Government which have increased unemployment, created uncertainties and held down essential investment. This debate is one of a series of debates that the House will be having this winter on the subject of unemployment. It began last Monday with the general debate on unemployment following the publication of the figures indicating that 1 million people were out of work. We shall be coming back to further debates on the crisis in Scotland, Wales and development areas generally and the English regions which have also been very badly hit, especially so since the figures released by the Department of Trade and Industry on Thursday last show that there was a big drop in the number of new jobs which have become available in development areas in every part of the United Kingdom.

Today we are concentrating on the engineering, metal and shipbuilding industries which are the key sectors of our economy and which are now the most depressed. Without intending any personal discourtesy to the Secretary of State for Scotland, I hope he will understand when I say that neither he nor his hon. Friend the Minister for Industry are really able to answer the charges that we shall make over the whole range of the Motion covering the aircraft industry as well as machine tools, shipbuilding and other industries. I believe that the Secretary of State for Trade and Industry ought to have been here today to answer what is in effect a censure Motion on the policies for which he is the responsible Minister in the Cabinet.

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

We understood until this morning that the right hon. Member for Kilmarnock (Mr. Ross) was to open the debate and that it was to be a specifically Scottish debate as well as dealing with these three industries.

Mr. Benn

I do not know how the usual channels work in notification of speakers. I mean no discourtesy to the right hon. Gentleman but the Motion covers the whole of the engineering, shipbuilding and metal industries, and, candidly, neither of the Ministers put up today has responsibilities within Government covering the whole of this area. We shall have a Scottish speaker winding up the debate who has special responsibilities for aerospace, but there is no such Government speaker.

The unemployment figures were debated last week, but if we break them down to the industries to which they most apply it will be seen that the biggest proportional rises in unemployment in the past year have been in iron and steel, mechanical engineering—particularly metal working and machine tools —and aerospace equipment, manufacturing and repair. The figures show that from the first quarter of 1970 to the third quarter of 1971 there has been a 6 per cent. drop in engineering employment. It is this that in part explains the extension of unemployment to the West Midlands which was previously thought of as a prosperous area but where male unemployment at 6.7 per cent. is now only marginally below that of the North-West at 6.9 per cent. and nearly twice the South-East figure at 3.4 per cent.

In my own City of Bristol the area manager in publishing the unemployment figures recently had this to say in the accompanying statement: In engineering, one of the worst sectors, unemployment has more than doubled during the year; what is disturbing in this sector is that the high unemployment level has very little seasonal element in it and cannot be expected to respond to the seasonal factors which in the spring normally cut down the numbers unemployed in construction, catering and some of the holiday trades. There is no clear sign of improvement in engineering in the sense that any employers are saying, 'We'll soon be wanting more labour from you'.… What the area manager said in Bristol is of general application throughout the country.

The Sunday Times survey based on a study of forward intentions of a number of major firms came out with the same conclusion about eight days ago when it pointed out that its survey had revealed: The position in commercial vehicles, agricultural machinery and the capital goods sector, with no sign of an improvement in final deliveries of goods, is even worse, and is resulting in a further steady trickle of redundancies. We have not had an up-to-the-minute survey of the forecast of future investment during 1972. The last one actually forecast some fall. The only people in this situation still radiating optimism are on the Government Front Bench. The Chancellor in his statement in Leeds last Friday said: We have the springboard for sustained expansion, and that is the only sure way to reduce unemployment. Even The Times, not a notorious Labour paper, in its leading article on Saturday queried that statement by the Chancellor when it said: …'business confidence in the sense of new investment and willingness to create new jobs is unusually low at the moment…. The grounds for pessimism which we are reflecting in our comments and the reason for this debate are very well rooted in facts. In the machine tool industry, very much the core of the engineering industry and a good indicator of the health of the economy, 1971 was the worst year in living memory. Orders fell 43 per cent. in that industry in 1971 and 6,600 skilled men were sacked during the last year. There are a number of plants, such as the Churchill plant, which are subject to threats of closure. There is trouble at Alfred Herbert's, and Asquiths, and these are the problems of the numerically controlled machine tool industry, which, although it is growing, is now affected by the growth of imports of cheap micro-circuits. There is, too, the closure of Witham which was to have been one of the largest micro-circuit factories in the west of Europe, Glenrothes, and the progressive withdrawal of Plesseys and Mullards from micro-circuits which are needed in that particular side of the numerically controlled machine tool industry.

When along with others I raised this with the Secretary of State, I received from him a reply which is far from reassuring. In his letter to me of 31st December, after I had written to him about my concern for the machine tool industry, he said that he "shares my concern". Then he comes back to the standard Front Bench answer that: There are signs that the economy is already responding to these reflationary measures. He adds: I prefer to leave provision of capital to normal finance sources and I am confident the broad measures introduced by the Chancellor will be instrumental in resolving the problems highlighted by Sir Richard Way's report. The position is not improving.

I want now to deal specifically with the figures of unemployment and vacancies in engineering and allied trades—notably with draughtsmen and skilled designers—to underline the gravity of the position. If we take the figures in June, 1970, when the Government came into office, there were 31,500 unemployed with 26,000 vacancies, and, therefore, just over one man was looking for every vacancy. In the period from June, 1970, to September, 1971, the number of unemployed had risen from 31,000 to 58,000—it has risen higher since—while the number of vacancies shrank more than 26,000 to 11,000 and it has fallen since. The number of skilled engineering workers for every vacancy, was just under one for one but now more than five skilled people are in search of every vacancy.

If we look at the figures for draughtsmen who are the people who actually design advanced equipment in British industry, in June, 1970, there was more than one vacancy for every unemployed draughtsman. Today there are 11.5 skilled unemployed draughtsmen for every vacancy. There could not be a clearer indication of the weaknesses of the engineering industry than those figures.

Eight weeks ago the "Little Neddy" for the mechanical engineering industry published its report showing no growth in 1971, and forecasting that output in 1972 would go up by less than 1 per cent., that investment was stagnant and would remain stagnant until the summer of 1972 and that deliveries in 1972 would be noticeably below those of 1971. The comment of the Sunday Times was that it was A strong warning of continued stagnation in the engineering industry right through to late 1972—in sharp contrast to the optimistic line taken by the Chancellor. Wherever we look we find this contrast between the facts and expert non-political comment and the continual optimism, if that is the right word for it, of the Government.

If one turns to some of the industries concerned, the position can be seen in clearer focus. There are still serious difficulties about the shipbuilding industry. Despite that, at the end of last year the Government decided to persist with their decision to wind up the Shipbuilding Industry Board. It is true that when the board was set up the idea was that it should do a short, sharp job to promote industrial reorganisation and then come to an end.

Mr. Simon Wingfield Digby (Dorset, West)

The right hon. Gentleman has just taken the Government to task for winding up the board. Does he remember that in Committee he resisted an Amendment not to bring it to an end compulsorily?

Mr. Benn

I was reminding the House that the original idea was that the board should be in existence only for a time.

An Hon. Member

What about the Geddes Committee?

Mr. Benn

I am prepared to give the hon. Gentleman full credit, but the Geddes Committee recommended that it would be better if the Shipbuilding Industry Board was created for a period and then terminated in order to try to bring forward investment in the shipbuilding industry. Given the problems which remain in the shipbuilding industry, and given the advice of Sir William Swallow, the very distinguished industrialist who was chairman of the board and who regarded it as highly desirable to provide that the work of the board should be carried forward, it is very unfortunate that the board should have been brought to an end in December, 1971.

Let us consider the Government's handling of particular industries and firms. We have had many opportunities in the last year to debate their handling of Upper Clyde Shipbuilders. I do not wish to go over the same ground today, although we shall no doubt have the opportunity to debate it when the Government produce their proposals. It is, however, perfectly clear—and I referred to this last week—that promoting Govan Shipbuilders and the way in which the matter has been handled by the Government will cost far more money than would have been the case if U.C.S. had been allowed to complete its reorganisation under Mr. Ken Douglas.

I was taken to task by the Secretary of State for Trade and Industry for saying that in the debate last week, but I come today with my evidence. Mr. Douglas, in giving evidence to the S.T.U.C. inquiry, put the cost of starting Govan Shipbuilders at no less than £30 million. Despite the period which has elapsed, the Government have not received the feasibility study giving a clear indication of the future of Scotstoun. I have been in touch with the Minister's office quite regularly on this matter and I have been told that no feasibility study is available.

The Government know very well that in order to preserve employment on the Clyde, and even to get Govan Shipbuilders set up, Clydebank is the key, and it is absolutely essential that the Government should play a more active part in trying to promote a scheme which will bring about the successful take-up of Clydebank. At a meeting this morning, the U.C.S. workers voted to release a ship for launching tomorrow so as to give the Government more time to find a satisfactory solution. But it is no good the Government expecting us to take seriously their protestations about unemployment while they continue to act with such insensitivity.

I turn now to the rôle of workers in the engineering industry who have been confronted with a major crisis affecting their firms and many of whom have been declared redundant with very little notice and thrown on the street. Since last summer we have had the case not only of the U.C.S. shop stewards and the workers who have undoubtedly succeeded in per- suading the Government to consider the possibility of making Govan Shipbuilders more wide-ranging, but of the workers at Plessey, at Alexandria, who, if Press reports are right, appear to have succeeded in part as a result of their work-in. There are the Fisher-Bendix case in which my right hon. Friend the Leader of the Opposition has played a notable part as the local Member in b ringing the matter to a successful conclusion, the Allis-Chalmers case at Mold, in North Wales, and the pending case of the workers at the Churchill machine tool plant,

Looking back over the evidence of this new industrial phenomenon, there is no doubt that the men involved have behaved in a highly responsible manner in defending their jobs against Government policy as it has affected them. All the emphasis has perhaps been on those aspects which have been called the "occupation", "the work-in" or "the sit-in". Much too little attention has been given to a parallel phenomenon which has emerged and which can be symbolised by the flight of Mr. McGarvey and Mr. Jack Service to Texas to try to get the Clydebank yard taken over, with a "no strike" pledge in their pockets given to them by the workers involved; the workers at Hawker Siddeley who have been to the House regularly recently to safeguard employment in their company; and the very constructive work done by the workers in B.A.C. and other companies who are making concrete proposals to safeguard their position and, moreover, to promote the interests of their industries.

My experience of dealing with many of these groups is that increasingly there is to be found a little man at the back with gold-rimmed spectacles who comes from the management and who supports the shop stewards. One of the most important changes which has occurred in recent years is that workers are crossing the old demarcation lines—even the lines between white collar worker and blue collar worker—and are coming together, not only in a necessary defensive action but to consider the future of their industry, bearing in mind the need for them to be successful in the national interest. When we come to consider an alternative to the odious Industrial Relations Bill we shall have learned a great deal from the responsibility exercised by the workers.

I turn from that general consideration of what has happened in industry to the question of the aircraft industry, where the situation is similar. The Government have made no statement of policy on the aircraft industry since they took office. It is true that, partly no doubt because of the pressure of the Hawker Siddeley workers, the Nimrod order has been announced, but on going into the matter a little more deeply we find that it is an undated contract. There is no provision for the Nimrods to be produced at once. Not only will new employment not be created but not all the Hawker Siddeley jobs involved will be saved.

The Government have the report of the Society of British Aerospace Constructors which calls for a decision on vertical and short take-off aircraft. My hon. Friend the Member for Newark (Mr. Bishop) has referred to this matter in the House. As with the shipbuilding industry, we are waiting for a clear statement from the Government on this question.

The answer which the Government always give when they are pressed on these matters is that our entry to the Common Market will provide us with a market which will justify the increased investment. But, without wishing to be negative, I must warn the Government against the creation of a new mythology —that entry into Europe will solve all our industrial and investment problems. It is simply not true to say that British industry, which makes its decisions on the basis of its feel for the situation, does not recognise that the drop in tariffs which divide us from the Six will work the other way and will greatly increase foreign competition. The common agricultural policy will increase living costs and hence prices, and hence may lead to a further round of wage demands, and industry will be operating not under the department which it knows, the Department of Trade and Industry, but under regulations made under a totally different system and tradition of law in the Common Market. It really makes industry anxious rather than immediately automatically self-confident as we approach the European decision. Indeed, in the one industry which has really, in a sense, been Europeanised for some years, the motor industry, where, for example, there have been federal companies—Ford of Europe set up in the summer of 1966, General Motors and Chrysler already operating on a European basis—these developments have not necessarily led to increased investment in this country. All the evidence and statistics that we have suggest to us that General Motors has been building more and more on its Opel operations on the Continent. Similarly, Chrysler has been building up in Spain, and Ford has put far more new investment into Cologne than into this country.

I will go further and say that as we approach Europe we should not adopt an ideology about the relations between Government and industry which is not shared by European Governments already within the Common Market. The German Government have enormously subsidised their own advanced industries. As the House must know, they made their decision about the European airbus without standing on strict criteria—anyway, at the time of the last conference which we attended with them. The French have behaved similarly, and the Italians use public enterprise on a much bigger scale, certainly in development areas, than we have done. For us to approach Europe on the basis that market forces will solve all our problems or create a healthy engineering industry is a very big mistake.

I turn now to some points which, I believe, the Government must take immediately into consideration.

Mr. Dan Jones (Burnley)

Before my right hon. Friend leaves the aircraft industry, may I impress on him in turn to impress upon the Government the hope that there will be possibilities of the Government's proceeding with the mark II of the RB211?

Mr. Benn

Well, my hon. Friend may be fortunate and catch the eye of the Chair. The argument about a further mark of RB211 has to be seen in the context of the market available for it. When we do have that debate, as surely we must, on Rolls-Royce, we shall have opportunity to pursue this, but I hope that my hon. Friend may wish to raise it in the context of this debate, too.

What I am arguing today is that the Government should look again at the need for direct intervention to promote employment, and there are five areas I have identified which require serious consideration. The first is the area which one can perhaps properly call that of the advanced industries. We want decisions on aircraft; we want decisions on further expansion of the machine tool industry, given the Government claim that within a year there will be a demand for more machine tools; and on electronics, where there is a serious danger that with the importation of cheap micro-circuits from abroad this country will be left in effect without a micro-circuits industry at all.

The second area is in those industries which have special difficulties, and there is no doubt at all that shipbuilding is still an example of such. It would be very wrong at this moment for the Government to leave the work of dealing with the shipbuilding industry solely to a small group of civil servants within the Department of Trade and Industry. Thirdly, there is regional development. I cited at the beginning the figures published by the Government last week, and they appeared in the newspapers on 29th January, and they make it clear that in 1971, following the change in the Government's regional policy, the number of new jobs being created in the regions is everywhere diminishing except for, I think, 40 more in East Anglia, against a drop of 43,000 or more nation-wide. Here is an area where it is immensely difficult to get industry to go simply on the basis of trying to build confidence indirectly. I have no doubt at all that the rôle of public enterprise in regional development will have to be looked at more seriously, as it has been in other countries.

Next is the area of advancing industrial investment where there is an obvious time lag. I am really astonished that the Government on one hand should be urging the nationalised industries to advance their own investment—here is an area where the Government have rather more scope because they are nationalised industries—and, should be prepared on the other hand, to sit back and accept that the engineering industry should mark time for a year, when they tell us that within that year the engineering industry will be so heavily stretched that even Ministers are anxious that this may lead to the sucking in of imports, with adverse effects on the balance of payments.

Fifth, there is the area of the broad range of what one may call environmental expenditure. I hope I shall not be out of order if I cite as one example of this the case which has received wide publicity this weekend in respect of the R.T.Z. smelter at Bristol where lead poisoning has occurred at levels that can affect not only the employees of the firm concerned but the community, and, if the test results made available are correct in the Severn Estuary itself. Here is an area where there is a divergence between profit and loss as it appears in a company's balance sheet and the social benefits or disadvantages as they affect the community as a whole. The environment represents an absolutely correct and legitimate and, indeed, urgent area where the Government should be spending money now to create employment as well as to meet the main objectives which I have mentioned.

Dame Irene Ward (Tynemouth)

I am listening to the right hon. Gentleman's interesting speech. I want to ask him whethter he would not just pay credit to the Secretary of State for the Environment and the other Ministers for all the work they have ever done. I can do all the criticising, but it becomes awfully boring to hear from the right hon. Gentleman nothing but criticism, without his saying anything about the achievements which there have been. I would like to hear what he has to say about what has been done in a very big way indeed.

Mr. Benn

The hon. Lady is always a colourful contributor to our debates, and everybody likes to be loved, and we all love her for her contributions, but I think she will recognise that I am at present identifying areas where Government intervention is desirable. Of course, it is true that in all these areas there is some Government intervention, but what I am arguing is that in this area of the environment there is scope for even further intervention. We all recognise that the Secretary of State for the Environment is extremely keen to promote the environment; but in that, he is building on the work done by the previous Government, which, in their turn, built on work done by Governments even before that.

In looking at the five areas which I have identified it is obvious that the case

for Government intervention and public enterprise in all of them is growing daily stronger. The Government themselves recognised this by nationalising Rolls-Royce, though their handling of the operation left much to be desired and some people were badly hurt. In the case of shipbuilding, Govan Shipbuilders will be private enterprise only in name, because of the public assets going into it, and probably £10 million to £20 million of public money on top of that. It is the experience now of other countries, notably Italy, that public enterprise plays a large part in causing employment to develop. Even the French regard their side of Concorde at Toulouse, itself a nationalised industrial enterprise as part of their regional development programme. For the reasons I have given, the nationalised industries have very great advantages over private industry in their capacity to advance investment to meet this problem.

Even if these major changes cannot be announced at once, there is no doubt that there must be more orders advanced from the public sector for machine tools, particularly pre-production orders, and an advancement of orders for re-equipment from the nationalised industries. As has been urged by my right hon. Friend and I, and others, in recent weeks and months, cash grants should be re-introduced to stimulate investment, certainly during the next 12 months, the regional employment premium should be maintained and some means of channelling investment into industry through national sources should be found.

Whether right hon. Gentlemen opposite are still as resolutely opposed to the Industrial Reorganisation Corporation, I do not know, but I do know that in present circumstances a growing body of opinion in industry and the City is convinced that there must be some agency which will allow the Government to stimulate investment through a public body. We require also the clear decisions on aircraft and shipbuilding to which I have referred.

The Government have been in power for more than 18 months. During that period unemployment has risen to the highest level since the war. Scotland, Wales, the North and the North-West have sunk to the lowest levels they have experienced in many years, and the blight has spread to the prosperous regions. Engineering has slumped, investment is stagnant, confidence has hit bottom, if The Times is to be believed, and industrial relations, measured by days lost, have been a great deal worse than they were during the period of Labour Government.

The Chancellor of the Exchequer in Leeds on Friday, in a curious moment of frankness, is reported in The Times in these words: Mr. Barber admitted that unemployment had risen by more than he had expected. That is the first breakthrough of candour that we have had from the Government Front Bench.

The Amendment which is before us must be the most complacent of any that could have been visualised, given the gravity of the circumstances that face engineering and the people of this country generally. Because the Amendment is as inadequate as the Ministers who have promoted it, I urge the House to vote for the Motion.

5.12 p.m.

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

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'recognising the problems of heavy industry following five years of almost total economic stagnation, welcomes the steps Her Majesty's Government have taken and are taking to restore confidence in the economy, with the object of providing increased employment, greater price stability and a sound basis for future expansion'. This is a timely opportunity to consider the problems which have been besetting certain groups of industries. It is important that these problems should be faced and tackled, and this is what the Government have been doing in consultation with the bodies representing the industries.

Unfortunately, the previous Government were disposed to pretend that some of these problems did not exist instead of facing up to them. Indeed, the Opposition are clearly misguided in the Motion which they have tabled. It is misconceived in its terms, and the Amendment which I have moved will assist the Opposition towards reality.

The right hon. Member for Bristol, South-East (Mr. Benn) commented on the Ministers who are to take part in the debate, but my hon. Friend the Minister for Industry and I together cover a wide range of the industries referred to in the Motion. The right hon. Member for Bristol, South-East raised, for example, the important question of the environment and measures against pollution. I am the Minister who is entirely responsible for these matters in Scotland as the counterpart of the Secretary of State for the Environment who has responsibility for environmental matters in England. I do not think that hon. Members representing Scottish constituencies will complain about that. I am very much aware of the importance, in planning for new industries and the installations which they bring, of the points which the right hon. Gentleman raised about the environment and pollution.

The most difficult problems for the three groups of industries mentioned in the Motion have undoubtedly arisen from the severe inflation which was raging in 1970. Because these industries plan and work over longer periods than most other industries, they were hard hit by sharply rising costs. Moreover, it became difficult to look ahead, and this inhibited new investment.

When we took office we found the economy in a deep-freeze, following a low rate of growth and monetary squeezes. But we were also faced with a wild wave of inflation caused by the sudden burst of wage demands after the abortive statutory incomes policy of the previous Government. One of our priority tasks has been to curb that dangerous inflation; and we can now see that the country has succeeded in reducing the average rate of wage settlements.

Mr. F. A. Burden (Gillingham)

In this context, does my right hon. Friend remember that in July. 1967, the Deputy Leader of the Opposition said—and this is an accurate quotation—[Laughter.] If hon. Members check the words, they will find they are absolutely right. He said that if there is devaluation, any attempt by organised labour to obtain wage increases must be ruthlessly resisted.

Mr. Campbell

My hon. Friend is correct in his recollection. It rings a chord with me as having been said at that time.

We can also see that, as a result, price increases in recent months have also presented a much better picture.

Perhaps no industry has suffered more from this bout of severe inflation than the shipbuilding industry, owing to the long-term nature of its work and contracts. With the success of our efforts in the battle against inflation, and the reduction of the general trend of wage settlements, we are probably doing more to help the shipbuilding industry than we could in any other single way.

One of the effects of the rapid increase in wage rates over the past two years has been the large-scale shedding of labour by industry. My right hon. Friend the Prime Minister described this in his speech in the House a week ago. While there has been a massive shake-out of employment during the past year or so, productivity in the past year rose by as much as 5½ per cent. This is the new phenomenon which has contributed to the distressingly high unemployment figures. We are now having to deal with an entirely new element in unemployment, especially in the manufacturing industries.

I must point out, however, that one of the groups of industries being discussed today, the shipbuilding and ship repairing industry, has not, in the last two years, in Great Britain as a whole, reduced the number of its employees. Indeed, since 1969 the numbers of employed have increased by about 3,000 That is the difference between the numbers employed in September, 1969, and last November.

While the shipbuilding industry has great problems before it, largely arising from very steep inflation, it has not fewer people in total employment now than it had in 1969. It is in fact employing more. On this point, therefore, the Motion tabled by the Opposition is both defective and misleading.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

Will the right hon. Gentleman give a breakdown of the figures?

Mr. Campbell

I shall be dealing with particular problems and the future in a moment. In manufacturing industry as a whole employment has fallen by as much as 4½ per cent. in the last year.

Mr. Douglas

Before the right hon. Gentleman proceeds with his argument, will he give the House a breakdown of the figures between shipbuilding and ship repairing? Secondly, if we are moving on to a period in which inflationary wage demands, as he calls them, are having very little effect on the shipbuilding industry, will he guarantee that the shipbuilding industry will be able to quote fixed price contracts against the rest of the world?

Mr. Campbell

I can give the hon. Gentleman the figures: 153,000 in September, 1969, and 156,000 last November. The breakdown is in regard not only to shipbuilding repairs but boat building. I will arrange to let the hon. Gentleman have the whole breakdown. There are a number of figures and I cannot give them now. As regards fixed price contracts, this is for the industry itself to decide; but when it is up against inflation at the sort of rate which was reached in 1970, it is difficult for it to know what costs are going to be for a period of four years ahead and to make contracts of that kind.

In manufacturing industry as a whole there has been a reduction in employment by about 4½ per cent. This has led to the sort of unemployment figures which we have seen this winter and which we in the Government deplore. We are determined to get rid of this high unemployment, but it is clear that it cannot be cured only by the kind of measures which have been effective in the past. Many firms are evidently ready to increase production without necessarily adding to their labour forces. One of the main objectives is to increase the growth rate of the economy, and there are already signs that this is happening.

Mr. James Sillars (South Ayrshire)

In helping the House to understand the Government's difficulties, could the right hon. Gentleman say what growth rate would be required in the United Kingdom be fore we got full employment in Scotland?

Mr. Campbell

This is a calculation which economists would find it difficult to agree about, but I understand that economists are suggesting a growth rate this year of about 5 per cent., and every- body is agreed that this would be in the right direction. In this way the human resources and skills which have become redundant can again find employment.

We want to change as soon as possisble a situation in which many families are experiencing the misfortune of having one or more of their members on the dole. My right hon. Friends and I are acutely aware of the unhappiness and insecurity which unemployment brings. Our policies are designed to promote the new investment which provides lasting jobs, producing goods and services needed in the modern world. Indeed, we must aim for the goods and services which are positively in demand in the world today, and will be in the future.

No Government have ever pumped so much money into the economy in so short a period, or advanced so many projects particularly in the areas needing special assistance. Besides the figure of £1,400 million a year of tax cuts, the abolition of restrictions on hire purchase and reducing Bank Rate, the measures have included £160 million of advanced public works in the development areas—about £60 million is extra expenditure on roads—accelerated capital expenditure by the nationalised industries of £100 million, and, not least, £80 million of advanced naval and other Government shipbuilding.

Advancing this shipbuilding programme will help the shipbuilding industry in areas of high unemployment. In particular, a large proportion of it has been placed with firms in Scotland; namely, the Scott-Lithgow group, Yarrows and Robb Caledon. Only last Thursday my right hon. Friend the Minister for Transport Industries announced that certain transport orders worth several million pounds were being brought forward to the next two years, including ferries, which will provide more work for shipbuilders. There were also orders placed for 100 Bulldog aircraft, and this wil lhelp Scottish Aviation.

I turn to regional development. The Government have been tackling high unemployment in particular parts of the country. After reviewing the situation on taking office, we made a number of changes to increase the effectiveness of regional measures as a whole. High priority was given to the acute problems of the older industrial areas and assistance was extended considerably under the Local Employment Acts. More flexible use is now being made of the powers to make loans under those Acts and of the powers to give grants. The rates of building grants to new factories and extensions have been increased, and they can now be as high as 45 per cent. The 40 per cent. initial tax allowance for new industrial building is being continued indefinitely, instead of reverting to 15 per cent. as the previous Government had intended.

An important change has been the introduction of a new system of free depreciation in the development areas. This enables the whole expenditure on new plant and machinery to be written off in the year in which it is purchased. Moreover, it can be carried back against the trading profits of the three previous years, and, if necessary, it can be taken forward to later years. Free depreciation has also been extended to the service industries in the development areas.

The importance of this system of free depreciation has been emphasised by industry. Recently the Scottish Council drew attention to its value as an incentive for the re-equipment of industry with capital goods. Increased activity in the capital goods sector is likely to have more Effect in the development areas than elsewhere.

As my right hon. Friend the Prime Minister stated during the debate on the Address, the Government are studying alternative options in regional development, and this is a progressive and continuous process. But it must be borne in mind that the investment decisions of industry are made more difficult if too many changes in the system are being made too often.

I turn to the shipbuilding industry. The Government's aim is to promote the ability of the industry to compete in world markets. The assistance given generally to the industry is broadly comparable in amount to the average given by other shipbuilding countries to their industries, for example through the Home Shipbuilding Credit Scheme and the Shipbuilders' Relief Subsidy. In certain respects encouraging progress has been made. The merchant order book approaches 4.5 million gross tons, worth £680 million. The naval order book is worth £400 million, of which nearly half is represented by export orders. The major yards in the industry have work for at least two years and some substantial orders thereafter.

A wide variety of ships are being built. In particular, Harland and Wolff, Swan Hunters and Scott Lithgow are competing in the big ship league. Inflation has hit the industry hard, but it is now being brought under control.

In certain respects the United Kingdom industry still faces serious problems. Labour relations remain a vital area in which both sides of the industry must co-operate to achieve much higher levels of productivity in the yards. It is disturbing that the output of the industry over the last five years has remained very much the same, at a little over 1 million gross tons per annum.

Mr. Norman Buchan (Renfrew, West)

Is the right hon. Gentleman saying that he is satisfied with the existing order book of the British shipbuilding industry when compared with previous years?

Mr. Campbell

No, I am not satisfied, but I am stating what the situation is. It is more encouraging than some reports which have been circulating would suggest. I should like to inform the House about the latest situation on the Upper Clyde where there are special problems.

Captain Walter Elliot (Carshalton)

It has been said that we aim to help our industry by an equivalent amount to that which is being provided by foreign Governments to help their shipbuilding industries. Since there are many subtle ways of subsidising industry which are used all over the world, has my right hon. Friend an efficient method of finding out all about them and estimating what is required?

Mr. Campbell

My hon. Friend raises the question of subtle and perhaps not obvious ways of assisting industry. The information which I have is that on average in the assistance given to our ship builders we compare broadly with what is done in other countries. There are some countries which give more help and some which give less.

In regard to the situation on the Upper Clyde, since the sudden application for liquidation last June by the U.C.S. company, progress has been made with the proposals we outlined in the debate on 2nd August for a successor company based upon the Govan and Linthouse yards. A feasibility study was commissioned by the Government to include examination of the question whether the Scotstoun yard could be included. The result of that study is expected shortly.

A tragic and severe loss was sustained by the death of the chairman of the new company, Mr. Hugh Stenhouse, in a road accident. He had already become dedicated to making a success of the new project, and his energy and enthusiasm quickly spread to others. This was an untimely setback. But we have been extremely fortunate in the arrival of a new chairman, Lord Strathalmond, who is also imbued with the determination to make a success of Govan Shipbuilders and so to contribute to the economic and social wellbeing of Clydeside.

The Government have provided the liquidator with working capital and have given certain guarantees to shipowners to enable them to confirm orders. The liquidator has consequently been able to continue work in the yards of the former U.C.S., while plans for the future are under consideration.

The liquidator and the Government have also been in touch with several concerns which have been interested in the Clydebank yard. The most recent is the lively interest shown by an American company, Marathon Manufacturing. It is interested in acquiring the Clydebank yard for the construction of oil rigs, and representatives were in this country last week investigating practical aspects of this. My hon. Friend the Minister for Industry saw representatives of the company last Friday after their visit to Glasgow. The Government have taken great trouble with the liquidator to attract concerns and to interest them in the Clydebank yard, and I reject strongly a suggestion to the contrary which I thought that I detected in the right hon. Gentleman's remarks.

The new company, Govan Shipbuilders, is preparing proposals to be put to the Government. An important condition for the launching of the new company is that efficient working practices should be agreed between management and unions. Negotiations on this will need to be completed soon to avoid any hiatus between the finishing of former U.C.S. ships and the takeover by the new company of yards from the liquidator.

When a system of working practices has been determined, the rate of throughput of ships should be faster than the yards have experienced hitherto. This will mean continuing work for the suppliers. While the number of men working directly in the yards on the Upper Clyde seems likely to be reduced, we must remember the men working for the suppliers also. If, for some unfortunate reason, Govan Shipbuilders were unable to get started, many jobs outside the yards would also be affected.

Mr. Douglas

We keep telling the right hon. Gentleman that.

Mr. Campbell

I have said it before, but it needs saying again. I said it at the beginning of August in this House.

I need not emphasise how vital it is that the conditions should be met soon to enable Govan Shipbuilders to get going.

The redundancies at U.C.S. since June have been something over 1,000 so far. However, the evidence from the latest figures registered is that the unemployment from shipbuilding and ship repairing on Clydeside is now no higher than it was last March before the liquidation of U.C.S. Alternative jobs are available at Yarrows and Scott-Lithgow. The latter will be taking on several hundred more men, though the vacancies will not precisely match the trades becoming redundant on the Upper Clyde.

Mr. Buchan

Then, where is the right hon. Gentleman's 1,000?

Mr. Campbell

It was suggested by some last summer that U.C.S. could have continued in being with a further £6 million of Government assistance. It is now all too clear that this is a fallacy. It would have needed a great deal more than that. The liquidator found debts of about £32 million. Of course, about £20 million from the taxpayers had already gone to U.C.S.—far more than any special assistance to any other individual shipbuilding company. That £20 million has disappeared. It did not go into capital equipment but, apparently, went towards meeting losses.

When Govan shipbuilders gets going, as I hope it soon will, it is our intention that the money provided by the Government will be for constructive purposes.

Mr. Buchan

Earlier, the right hon. Gentleman referred to the Clydebank situation and the work that the Government had been doing behind the scenes. Clearly, one of the problems in establishing Govan-Linthouse—and, we would expect, Scotstoun—is the argument that the four yards must be dealt with before discussion takes place. The Government could assist now if they said openly and publicly that if a reasonable offer came from one of these American firms to which the right hon. Gentleman has referred Government support would be Forthcoming to support the Clydebank yard. It is vital that the right hon. Gentleman should say this openly and directly.

Mr. Campbell

The hon. Gentleman could not have been listening to me on 2nd August when I said that the Government were prepared to make assistance available which is available under the Local Employment Acts and in other ways for any such new venture. The interests which have come forward—there have been at least four in recent weeks, and there were others before that which ceased their interest—looked at Clydebank with a view to different purposes. The present one is oil rigs. Another one which has been interested for many weeks was concerned with a new form of tanker for liquid gas. Therefore it is not possible to give any definite terms until proposals come forward. All that one can say is that the normal assistance from the Government under the Acts is there and will be available, and that each concern can look at that, applying its own plan.

Mr. Benn

The right hon. Gentleman knows that the Clydebank yard is the key to the establishment of Govan Shipbuilders. I think that the anxiety felt in Clydeside is that if the Government take only the Local Employment Act money on a very strictly limited basis and leave out of account the enormous social costs involved in allowing Clydebank to slip out of the industry, they will not get a measure of the true economics of supporting Clydebank with some new owner. The House wants to know whether the Government are prepared to think flexibly about the amount of money necessary to re-launch Clydebank, for the reasons that I have given, and also to make possible the establishment of Govan Shipbuilders with Scotstoun included.

Mr. Campbell

The Government are always willing to think flexibly, and we have been doing a great deal to attract possible firms from different parts of the world, as well as this country, which might be able to use Clydebank in a number of different ways, and not simply for building ships. But we have also made it clear that Government assistance in the usual form as applied to a new project is available. However, it is difficult until one has a project put forward, whether it be for oil rigs or for liquid gas tankers, to say how flexibly the Government can approach the project. There are a wide variety of possibilities on Clydebank. The Marathon company has entered the scene only fairly recently, and the Government are doing their best to help it size up the problem. We very much hope that that company will find that this is a yard in which it can make the kind of oil rig that it intends.

That brings me to the new oil industry in the North Sea. It calls for skills associated with shipbuilding. Only one company, B.P., has so far announced its plans, but there is clearly a major oil field in the North Sea. Conditions are more difficult than in any other maritime oil operation. The depth of water requires the largest platforms in the world for drilling and extraction. Highly specialised knowledge and techniques are needed, from experts and companies who lead the world. But valuable work and services can be provided from Britain.

Already there have been rapid developments in Scotland. Following B.P.'s announcement, there is clearly work to be done on pipelines and expanding refinery capacity. Planning authorities have been able to grant permission quickly while watching amenity and other considerations. I have myself been able to give planning permission quickly to Messrs. Brown and Root/Wimpey at Nigg Bay, where that concern is to build these giant platforms, one of which has already been ordered from it by B.P.—

Mr. Douglas

Two.

Mr. Campbell

One from this company. No time has been lost in finding a site, applying for planning permission, and then getting the contracts.

Another international firm which is a leading specialist in this work has applied at another site in Scotland. Platforms are also to be built on Teesside. Each of these new installations will employ several hundred men, and some of the skills needed are those which we can readily supply. The important point is that this construction work will be taking place in Britain, much of it in the North and East of Scotland. Each of these platforms requires a huge quantity of steel—it has been said as much as for a large liner.

On the steel industry, the House is aware of the general position concerning the investment plans of the British Steel Corporation. My hon. Friend the Minister for Industry confirmed the situation on 16th December. The corporation is unlikely to reach a conclusion on the question of major new capacity until the summer. The review which it is near to completing will provide an assessment of the longer-term level of demand, but there is no question of the Government reaching a decision until we have received proposals from the B.S.C. In the meantime, the options for the whereabouts of any major new steelworks remain open.

I must make it clear that there was no foundation whatever for a report which appeared in the Press last Friday to the effect that the Government had abandoned the idea of a new integrated steelworks in Britain, irrespective of whether the site would be in England, Scotland or Wales. I do not know where that false rumour started, for there has in fact been a recent decision of quite another kind. I refer to the announcement made today by the British Steel Corporation that it has decided upon an ore terminal at Hunterston. I am sure that the House will welcome this news. It means that the B.S.C. will now start immediate talks with the Clyde Port Authority on this project.

I am especially pleased, as hon. Members representing Scottish constituencies will know, because after the protracted public inquiry I granted planning permission for an ore terminal and deep- water port and zoning for industrial development at Hunterston. In addition, last September the Government joined the newly formed Hunterston Development Company in financing a project study designed to establish the feasibility and costs of reclamation required to develop the full potential of Hunterston.

Dame Irene Ward

This is very good news. Our ore terminal on the Tyne has been moved to Teesside. Therefore, I should like to know what we are going to get regarding an ore terminal which is just as important to Tyneside. It is interesting to hear about Scotland, but I should like to hear more about Tyneside and Teesside.

Mr. Campbell

I will make sure that my hon. Friend's question is referred to the British Steel Corporation. I did just now mention that one of these very large new oil platforms was being built on Teesside.

Dame Irene Ward

I heard my right hon. Friend say that.

Mr. Campbell

But the news from the British Steel Corporation today happens to be news for Scotland. That is why I referred to it.

Mr. Buchan

We should have more debates like this.

Mr. Campbell

Because of the increasing use of mammoth ships, the deep-water asset at Hunterston has the capability of providing an ocean terminal for Britain and a trading gateway to Europe. Nowhere else round Britain's shores can sheltered deep-water berths be made available for what I would call leviathans up to half a million tons without need of dredging. The potential latent here in the Lower Clyde must now enter into the assessments of developers of industry of all kinds and of the Government.

Returning to the steel industry, the British Steel Corporation announced last year its short-term projects, including Llanwern and Ravenscraig. At the same time, it is confronted by the need for necessary modernisation. This entails the progressive closing down of obsolescent plant, with attendant problems arising in some of the areas concerned.

In July we announced the Government's intention to encourage mineral development in this country by contributing to costs incurred by mining companies engaged in proving our mineral resources. We have now introduced measures which are geared to meet the special needs of companies engaged in this activity, and the necesary legislation has been passed by the House. Under this legislation, we are offering financial incentives amounting to £25 million with provision for a further £25 million by order. This has been welcomed by the metal mining industry and by others engaged in mineral exploration. It is already having a stimulating effect on the level of activity. If my hon. Friend the Member for Tynemouth (Dame Irene Ward) will forgive me, I should point out that Scotland stands to gain especially, because of the considerable mineral wealth which is believed to be awaiting discovery there.

The Opposition's Motion simply does not stand up to examination. The shipbuilding industry, as I have pointed out, has not dropped in employment in the last two years. On the contrary, it has gained about 3,000 jobs. Furthermore, any damage to the industry has arisen directly from the calamitous rate of inflation caused by the last Government's policies.

Regarding the iron and steel industry, there has been very little investment in re-equipment over the past eight years. The Motion speaks of uncertainties; but the steel industry had the greatest uncertainty possible because of nationalisation hanging over it, and it was made a political football by right hon. and hon. Gentlemen opposite. Today the steel industry must catch up with modernisation if it is to compete in world markets. This means that for the same amount of production fewer men are needed. This modernisation of the steel industry is now happening at the same time as the general shake-out in the engineering industries which I have described.

Mr. Dan Jones

Why is it that, with the copious references to Scotland and the equally copious references to development areas, the right hon. Gentleman has made no reference at all to intermediate areas? May I remind him that I represent an intermediate area which depends upon the engineering industry for its industrial sustenance.

Mr. Campbell

The hon. Gentleman will find that I used the generic term "assisted areas" to cover all three types: special development, development, and intermediate areas. I should make it clear that, in a speech which I have tried to keep to the usual Front Bench length, I have not attempted to cover all the many aspects which could be covered in this wide subject.

Mr. Alex Eadie (Midlothian)

rose—

Mr. Campbell

Let there be no mistake—

Mr. Eadie

Since the right hon. Gentleman does not propose to give way to me, Mr. Deputy Speaker, may I seek your guidance?

Mr. Deputy Speaker (Miss Harvie Anderson)

Order. The hon. Gentleman knows that this is a matter which rests between the two hon. Members concerned, and the right hon. Gentleman has not given way.

Mr. Campbell

rose—

Mr. Eadie

Further to that point of order—[Interruption.] This is a genuine point of order.

Mr. Deputy Speaker

Order.

Mr. Eadie

May I suggest—

Hon. Members

Sit down

Mr. Deputy Speaker

Order. The hon. Gentleman said that his was a further point of order. There was no previous point of order.

Mr. Campbell

I had no intention of being discourteous. I have already given way to many hon. Members during the debate—[An HON. MEMBER: "Too many."] I hear someone say "Too many". I did not see the hon. Gentleman. If I had seen him rise, I would have given way. I give way now.

Mr. Eadie

I thank the right hon. Gentleman. Since he has given us very good news today, since he is talking about jobs and unemployment, and since his hon. Friend the Minister for Industry, who has some responsibility for the mining industry, will be winding up the debate, will he assure the people who will be subjected to power cuts that something will be done to bring the miners' strike to an end?

Mr. Campbell

The hon. Gentleman will have detected that I have touched on a large number of subjects. I was not going to touch on the coal industry, which lies within the responsibility of my hon. Friend.

Let there be no mistake where Scotland is concerned that Scottish industry and commerce have made it clear that they are in favour of Britain joining the European Economic Community. They intend to go for the opportunities which will be open to them with membership. Given encouragement, the leaders of Scottish industry with vision and enterprise will succeed in getting more orders and increasing business. I am not one of those—and here I agree with the right hon. Gentleman—who say that joining the Common Market will solve all our problems—not at all—but it gives us much wider scope to operate in this vast, rapidly expanding market. Those working in Scottish industry will respond with the skills and energy they possess in good measure. There is no place for gloom and defeatism in this.

There is no doubt that the three groups of industries have to face new demands and conditions in the world, but they can now do this with confidence. First, they can do so because inflation has been curbed, and that can now clearly be seen. Second, they can do so because new opportunities are open to them arising from membership of the European Economic Community and from new prospects such as the developing undersea oil industry. Third, they can be confident because there is a Government determined to promote growth in the economy and to encourage these industries to modernise and overcome their difficulties.

5.51 p.m

Mr. Stanley Orme (Salford, West)

I have not before had the opportunity of following the Secretary of State for Scotland in a debate, but doing so on this occasion leads me to have sympathy with some of my Scottish friends who have to deal with the right hon. Gentleman on Scottish affairs. The right hon. Gentleman concentrated a large proportion of his speech on Scotland but I think he will agree that the debate goes wider than Scotland and covers all regions and parts of the United Kingdom.

The right hon. Gentleman said that there was no need for any gloom, but he made that statement in what seemed to me to be a rather gloomy way. We are faced with the problem of 1 million unemployed. We are faced with a rundown in our major manufacturing industry of engineering on which we depend for our exports. My hon. Friends representing areas such as Scotland, Wales and the North-East have been plagued with unemployment problems for a long time, but we are now meeting the problem of unemployment in what used to be regarded as the more prosperous areas, such as the Midlands, the North-West and even the South-East. All those areas are being affected by what is happening in industry.

We are told that the problem stems from structural changes in industry, but structural changes are nothing new. Ever since the Industrial Revolution, which was only comparatively recently, industry has undergone structural changes, sometimes under boom conditions and sometimes under conditions of depression. Changes have taken place and, as my hon. Friends have said, those changes have been brought about by market forces over which the industries have had no control. With our inherent skills in technology and craftsmanship it is an absolute crime that we are not producing to the full in order to meet the demands of people all over the world and at the same time improve our standards of living.

A sane man is bound to ask how such a situation has arisen. I know that under the Labour Government we were faced with the problem of increasing unemployment and that there were many arguments about what might or might not be done to deal with it. I think some of my right hon. Friends would admit that some of the Labour Government's policies were wrong and that more imaginative policies should have been adopted. But surely everyone will accept that the Labour Government were not in the hopeless situation in which they the present Government find themselves, because the Conservative Government merely wring their hands and announce that, unfortunately, unemployment is increasing. The Government say that they have injected a certain amount of money into the economy, but it is not producing results.

Despite the industrial situation, we are still seeing booms in other sectors. There is still a property boom. There are all sorts of ways in which capital is being increased, and there is still financial speculation, but there is no investment in order to produce more employment. I think we must examine the problem in the labour-intensive industries. In the name of rationalisation attempts are being made to close down labour-intensive firms. In the present situation that is criminal.

I have spent the greater part of my life as an apprentice and craftsman in the engineering industry. The right hon. Gentleman referred to industrial relations and to wage inflation. What he did not tell the House was that bad industrial relations in the engineering industry are due to the engineering employers being too archaic and being unwilling to accept that we are now in 1972. He did not tell the House that the Engineering Employers Association is not prepared to sign a new agreement with the engineering trade unions which would give workers some dignity and rights within their own plants.

The engineering employers have withdrawn from the proposals to set up a new agreement in the engineering industry. Time and again during debates in the House hon. Members have said that the York Memorandum is unsatisfactory for modern industrial relations. That memorandum was imposed upon the trade unions at the time of the lockout in 1921 and 1922. There is now a chance for a fresh start in the engineering industry, and the trade unions have leaned over backwards to try to improve the situation. The Government for their part have brought in the Industrial Relations Act and an industrial relations code of conduct, but they have not dealt with the central issue, which is that of introducing the status quo for workers. The Government have dodged that issue because their friends in the industry are opposed to it.

The right hon. Gentleman spoke about high wages being at the bottom of our problems. I have always believed in a high wage economy. Recently an agreement was made in the tool-making industry in the Midlands whereby toolmakers are to receive £52 a week. They are possibly the highest paid craftsmen in the country. The firm is prepared to pay that money, not because of extortion or blackmail but because its unit costs are low. The trade unions which negotiated that settlement were right to do so.

I do not want to spend too much time on what I might call the general politics of the engineering industry but, as my right hon. Friend the Member for Bristol, South-East (Mr. Benn) said, there has been a 6 per cent. reduction in the labour force and 100,000 people leave manufacturing industry every year. The rundown is accelerating, and we must, therefore, take positive steps to overcome the problem.

I now propose to say something about redundancy. I associate myself with my right hon. Friend's comments on what the workers and the shipyards have done at U.C.S. Trade unions are often criticised, but the trade unionists at U.C.S. and elsewhere are fighting not for more money or the standards to which they are entitled but for the right to work. They say that when a community is built up on a particular industry, no one has the right to make it derelict by a stroke of a pen. This is not the north of Scotland in the seventeenth and eighteenth centuries but Clydebank in 1972. Workers there are exerting their right in a highly intelligent manner, with which I and many of my hon. Friends are pleased to be associated. They are not out of the wood yet, there are difficulties to come and perhaps some heartaches, but they have set a fresh pattern for British industry.

The Government will make announcements tomorrow or on Wednesday about retraining for the unemployed. I am in favour of retraining, but in the greater Manchester area craftsmen who have followed the same trade as their fathers and grandfathers are moving on to the highest technological tools and working to the highest precision limits. One such skilled craftsman I know is now pushing a brush in a foundry. This is wastage and very wrong socially. It is no good talking about retraining when those who are already trained, the lifeblood of our industry and our nation, are being thrown out.

The Hawker Siddeley aircraft firm, despite increased orders, made 350 people redundant last week. A total of 1,100 people—400 due to wastage—finished at the British Steel Corporation works at Irlam on 31st December, 1971. Churchill Machine Tools Limited, which is now a subsidiary of Alfred Herbert, has been in the Salford and Broadheath area for 50 years and its precision grinders are second to none in the world. It has an order book of £2¼ million, with enough full-time work to last it into 1973 and 1974. But, in the name of rationalisation, Alfred Herbert's want to close the firm and transfer some of the tools and highly skilled workers to Coventry.

In a B.B.C. North programme on televisison, the managing director said that his first duty was to his shareholders and that social consequences were the Government's responsibility. That is as irresponsible as anything that the iron-masters said in the nineteenth century. One cannot contract out like that. The shareholders will not suffer.

In a firm which has an exceptional industrial relations record, the Churchill workers decided to fight, like those at U.C.S., Fisher-Bendix and Plessey. They are not fighting selfishly. The shopkeepers, the local authority, and everyone in the area are supporting them. This is not just one firm of 1,100 men. Other firms with apprenticeship and training arrangements in the area could go, and this could take a lifetime of industry and development from the area.

About two years ago, those workers would probably have taken their redundancy pay and, after a week or two, found another job with G.E.C., English Electric and A.E.I. But there are no such jobs for them now. There are hundreds of skilled engineers signing the vacancies book in the greater Manchester area. It is particularly difficult to place fitters. They have nowhere to go. Skilled members of my union branch who were made redundant about eight months ago have not yet found alternative employment.

My right hon. Friend the Member for Bristol, South-East referred to the Churchill struggle and the intelligent way in which those men are fighting to maintain employment. At the Alfred Herbert plant in Coventry, where some workers are on a four-day week, they have refused to take the work from Broadheath and are standing by the lads who are fighting to keep their factory open. That is true trade union solidarity.

The Prime Minister recently visited the North-West and following his visit there was correspondence between him and the North-West Industrial Development Association. I have never read such a trite and complacent reply as that which the Prime Minister sent. His reply was unanimously rejected by that all-party body, which has Conservative and Labour members, trade unionists and industrialists. The situation is deteriorating rapidly and there is an urgent need for something to be done.

One cannot divorce many of these closures and the lack of investment from the question of the Common Market. I believe that many large firms are holding back investment so that they can have free movement of capital later on. Some of this rationalisation is only a drawing-in from the outer regions. The Secretary of State said that the Common Market would have a good effect on Scotland. I doubt this, but other areas will be affected because there will be a tug towards the centre of a new industrial oligarchy in South-East Europe.

The key to our problems was summed up by the managing director of Albert Herbert, who said that his responsibility was to the shareholders. Our responsibility is to the industry and its workers. A future Labour Government must be far more positive in this respect.

We must take a firm hold of the free enterprise society which has failed and which, without direction, continues to fail. When the Government want some form of reflation and when they want to inject money into the economy, it goes into the public sector. We need a much larger public sector so that the economy can be much better planned. There might be many arguments about the form this should take; we could argue about ownership, direction, and workers' participation. Many experiments could be tried Some of them would be successful.

Working people will not go back. They will reject this laissez faire society which is based on accident. The Government take some action; they put so much money out, so much of it into the private sector, but they have no real control over it; they do not know whether it will produce results; they merely hope that it will provide employment. We need a much more positive approach.

This debate is pertinent to the general argument. It is to the engineering industry—the manufacturing side—that we must pay attention. The workers in the industry, with their skill and organisations, have something to offer the country. We must get our priorities right so that those who produce the wealth in our society get their just rewards.

6.11 p.m

Mr. Kenneth Warren (Hastings)

I commend the hon. Member for Salford, West (Mr. Orme) on his fluency—a fluency which I cannot match because of a rather heavy cold. The only hon. Member who dare sit near me is my hon. Friend the Member for Bristol, North-East (Mr. Adley) to whom I gave the cold last week. I can only hope that through the air conditioning my germs will waft across to hon. Members opposite.

I was interested to hear my right hon. Friend the Secretary of State for Scotland refer to the new phenomenon of high productivity yet high unemployment. It is on this problem in the engineering industry that I shall concentrate.

I want first to make a critical comment on the relationship which is accepted as standard between the theory and the facts of unemployment in engineering today. Successive Governments have found no substitute for the standard Keynesian dogma about the way in which unemployment problems of the type we face today can be solved. What J. K. Galbraith called the conventional economic wisdom has stood through decades without challenge, whilst education, consumer expectation and technology have surged forward. Today's economists still greatly rely on the teaching they heard 20 or 30 years ago, which was itself based on the experience of the 1920s and the 1930s. Nobody then appeared to be able to cope competently with the empty shipbuilding yards in Jarrow any more than the last Government's rationalisation could cope with the problems of Upper Clyde Shipbuilders forty years later.

The strategic and tactical effects of this widening gap between an understanding of what is happening and the reality of events is, I am convinced, a major factor in causing the unemployment which exists today, particularly in engineering. Unemployment is more than just one man out of a job or 1 million men out of jobs. It is a scar which is carried forward throughout that man's life and usually, as happened in the 1930s, into the lives of his children. It reflects upon the whole enterprise of the man and his family and his willingness to take risks at a time when it might be to his benefit to do so.

The hon. Member for Salford, West asked what are the structural changes which are going on. Two new factors have emerged as realities in engineering over the last 10 years. Both of them should have been anticipated rather than just observed. The first of these has had a tactical effect and the second a strategic effect.

There is, first, the cumulative effect which arrived rather suddenly of two decades of active labour-saving investigations. They stemmed from the wartime experience of United States productivity and the encouragement which took place, particularly in the few years after the Second World War, when teams from the engineering industry in Britain went to the United States to study laboursaving processes.

There has, second, been the outflanking effect of advancing technical knowledge on traditional jobs and on traditional industries. The whole idea of time and motion study was to get more production from each person. There is nothing particularly wrong about that, because at the end of it employees generally get some form of bonus, whether it be of the "stop-watch, I'm all right Jack" type or, at the other end, management systems like the Pert management control system.

As the hon. Member for Salford, West said, there has been a decline in labour-intensive industry demands in Britain, not only because of the time and motion study experience but also because of the competition which those very industries have experienced from abroad. Lancashire has to compete with India, Clyde-side had to compete with Japan. Coventry and Oxford had to compete with Wolfsburg.

Acting against this problem throughout much of the 1960s was the propensity of management to hoard labour, both on the shop floor and in offices. The consequential effect on wages and the bargaining power of unions, particularly unions like D.A.T.A., had to be seen to be believed. The skilled employee rapidly discovered that he had only to threaten to go to work for a competitor and he was soon given a fairly sensible and handsome pay rise.

The trigger which broke that hoarding of labour can be traced to selective employment tax. It did not do what it was intended to do, which was to displace people from service industries and get them into production. It ate up companies' cash resources which they should have been using for new investment in plant and machinery and in the extension of factories.

I commend to the Government the Swedish Government's attitude towards encouraging investment and their capital equipment investment scheme—not so much as an investment incentive but as a proven means of minimising the bad effects of a business cycle.

In the 1960s it was the wage pressure and the tax pressure combined which forced managements to shed their hoarded labour. A very successful industrialist in the motor car industry said to me recently, "What we have done now is to shake a tree which we should have shaken long ago. We are not going to have those people again."

These shake-outs have swept the engineering industry and have brought unemployment to people who in the last decade were actively encouraged by managements and unions alike to believe that they were worth far more in the market place then they now find they are. This is the particular tragedy of the unemployed white collar worker who has been swept out of a job which he would have held on to in the 1930s, but in the 1970s he finds that he must go with the rest. In terms of Keynesian economics it has been a blow to the heart-land, at the general theory of consumer boom economics which relied particularly on tax reliefs being spent quickly. There may be a consumer boom in suburbia, but it does not give a job to the man across the street who is out of a job.

What is missing all the time in engineering is the growth of new enterprise, because only that will provide jobs for the white-collar workers as well as for the unemployed skilled tool room opera- tor. I believe that the opportunity for providing new enterprise lies in an examination of the new types of technology which have come forward and the growth in effective knowledge on jobs. A recent American study showed that between 1750 and 1900 the world's total store of technical knowledge doubled. It doubled again between 1900 and 1950, and again between 1950 and 1958; and it is now doubling every five years. Thus it has increased 10 times while economics has virtually stood still over the last 30 or 40 years.

The laws of supply and demand and of diminishing returns are all still there, even if they are not often recognised by either management or unions in this country. They are there, and it is unfortunate that neither the standards of understanding of the unions nor, frequently, those of management have advanced at the same rate as the technology surrounding them.

I believe that environmental pollution is a typical and visible by-product of this problem. I am sorry that the right hon. Member for Bristol, South-East (Mr. Benn) is not here at the moment, because I wanted to advise him not to bother to read the Sunday Times a week after Private Eye had published the story of what is going on at Avonmouth. Here was a typical example of unfortunate collusion between unions and management. Had it not been for a doctor appointed by one of the unions, who held out rigorously over a long time to make sure that the real threat was disclosed, it might have been swept aside completely. It is a tragic state of affairs and I hope that the Government will cause an investigation to be made into what has happened at Avonmouth in order to solve the problem quickly.

There is no doubt that the rapidly changing and growing body of technical knowledge has not been adequately applied in Britain. We have concentrated our attention on preserving old industries without a parallel application of attention to opportunities for using our new knowledge to progress those old industries or found new ones. This goes right back to education, which too often today, I believe, fails to equip pupils adequately with the basic knowledge for them to hold any job, let alone equip them for a life in which, because of the rate of change and the amount of change, they will have to cope with the need to change their jobs several times, let alone have the ability to field several skills. We need a revolution of understanding in education authorities of the real world in which their pupils have to seek, hold and change jobs.

Recently, I went through an experience which, no doubt, all hon. Members undergo. I met some sociologists. From two separate universities they told me that they were feeling thwarted at the mid-point of their training by a sudden realisation that nobody had jobs to offer them when they completed their courses of study. When I was an apprentice in engineering 25 years ago, I was told repeatedly that all that I learned would lead me to an ability to master one skill alone, when I knew, and all my friends knew then—as all those who are apprentices now know—that training over a four-year or five-year period would enable one, and does enable one, to take on several skills in different factories and in different types of business. Over 25 years attitudes in education have changed far too little, while the needs of employers have been, and are, changing fast.

We must in our education and training processes guarantee to people that they will be taught subjects relevant to what employers predict they want and what they will be able to find when they leave school or university. Above all, we must give them the educational flexibility to be able to cope with changes in employment. Nowhere is the need more apparent than in engineering today.

The Government's predicted retraining plans will be of great help to those now in need. I hope that the schemes will become a permanent part of our education process, as retraining will be a far more frequent need for people as part of the normal pattern of their working lives.

Heretofore, I believe, all the effort has been directed towards higher productivity from reduced labour forces. I hope that we can now move on rapidly to apply the same concentration to the production of new business enterprises in engineering, to utilise the great advances in world technical knowledge, advances which are there and waiting to be used. Environmental conservation, I believe, is one area of knowledge and enterprise which is crying out for attention.

In the encouragement of new engineering enterprises—although I am as delighted as anyone to hear of the new orders for shipbuilding, oil rigs, aeroplanes and roads—I feel that it is far too often assumed that it is the big industries which need help and stimulus because that is where the growth lies. This is not true in engineering today. What one does by giving new orders to them is to maintain their current employment, not increase it. From my own experience of trying to manage an advanced technological enterprise, I believe that one comes to realise that the optimum size of company is usually quite small, something like 200 or 250 persons, and that it is impossible to manage efficiently anything on a much larger scale.

One of the most valuable advantages of British entry into the Common Market will, I am sure, be the opportunity and ability of specialist engineers to find and found firms which will be able to supply the larger market of Europe, something which they certainly could not do if Britain remained at its current market size. But the intervention which I hope the Government will be able to provide should not be of the I.R.C. type such as hon. Members opposite have suggested. That, surely, after Rolls-Royce and Beagle, has been proved to have been a disaster in this country. [HON. MEMBERS: "Rubbish."] The Common Market is only a year away for Britain now. I hope that the investment incentives which are needed in engineering will be diverted to those ways by which we can help new firms to start up.

Investment incentives and tax reliefs do not help new companies, but cash in any form can. New engineering opportunities are needed and are possible now. I know of many unemployed skilled engineers who would sweat their guts out if given the opportunity to get going in a new company. It is far better for a Government to put their money into work rather than into unemployment pay.

In conclusion, I give one example to show where such enterprise could be fostered: that is, the monitoring and control of pollution. How many study contracts have been placed by the Government with private industry so far? Such contracts could found whole new businesses quickly, with markets across the world. Engineers do not get sympathy from the City if they go there to look for finance. Are the Government prepared to accept the challenge and act? They have shown that they will step forward in placing orders with shipbuilding and the larger heavy engineering companies. Small engineering companies could use the same chances now.

6.28 p.m.

Mr. Frederick Willey (Sunderland, North)

I hope that the hon. Member for Hastings (Mr. Warren) will forgive me if, save for my good wishes for his quick recovery from a bad cold, I do not follow his observations further. This is a composite debate and, representing the constituency which probably has a greater concentration of shipbuilding than any other in the United Kingdom, I wish to deal with the particular problems of the shipbuilding industry.

Last year, 1971, was a good year for the Wear yards, and we are completing the modernisation of the yards. But this does not help us in our serious unemployment problem. As a result of modernising the yards, we have year by year had a few hundred fewer men employed than the year before. Moreover, although we have orders up to the end of 1973, the industry, despite what the Secretary of State said, has lost its buoyancy. Indeed, the Minister for Industry himself warned the industry only the other day it is now going "through a difficult period".

The Government have not helped. We had all the uncertainty last year about credit guarantees. A glance at the order book for last year leaves one in no doubt about how much it was affected. Only a year ago the Minister was joyfully anticipating the demise of the Shipbuilding Industry Board and telling the industry that it could hope for no further help from the Government. That was unacceptable to the industry, not because it was a begging-bowl industry but because, among other things, it has no tariff protection, unlike manufacturing industry generally. I have a Rolls-Royce factory in my constituency, and I supported the action the Government took, but the shipbuilders have never had the aid and support that the aircraft industry has had.

The most important factor of all is that by and large the shipyards are in the development areas, and we cannot divorce policy about the shipbuilding industry from development area policy. I am happy to say that the Minister has now eaten his words. It is a practice I commend. A few days ago he told the industry—a blinding revelation—that "the Government, of course, must help". I am delighted to hear that, and I shall encourage him. The Government are indeed helping. The £75 million naval programme has been brought forward. Unfortunately, that does not help us in Sunderland, because we do not build on naval contracts and there would be no good reason for us to do so. There are also the £1,000 million credit guarantees with improved arrangements which do help and are very important.

But internationally the pressure is on, as the Minister has said. That is the fact of life that we must face. The Governments in the countries competing with us in shipbuilding will intervene where and to the extent they think it is necessary to protect their own shipbuilding industries. We need not expect any advantage from the revaluation of the yen, because the Japanese will make certain we do not receive it.

I join my right hon. Friend the Member for Bristol, South-East (Mr. Benn) in regretting the ending of the Shipbuilding Industry Board, and I call the Government's attention to the specific recommendation of the Geddes Report that: The Government should obtain advice from the Shipbuilding Industry Board on the impact on the British shipbuilding industry of the various measures of State assistance and protective devices used overseas. I invite the Government to do that. They have in Sir William Swallow someone with unparalleled experience. They should ask him to inquire into the matter and evaluate the prospects of State assistance in competing shipbuilding countries and recommend to the Government what countervailing measures they should take.

Mr. Douglas

I hope my right hon. Friend does not want in any way to diminish the importance of the work of the staff of the Shipbuilding Industry Board. I have great respect for Sir William Swallow, but would not my right hon. Friend suggest that what we really need is the continuation of the Board and the comprehensive expertise it has gained?

Mr. Willey

I have argued this in previous debates. Unfortunately the S.I.B. has been brought to an end. I make my suggestion as something that I hope will be acceptable to the Government. I accept my hon. Friend's point, and when I mention Sir William Swallow I also have in mind the staff who have worked with him.

In the shipbuilding industry we have a basic national industry competing in one of the greatest, if not the greatest, postwar international growth markets. In 1948 we were completing just over half the total tonnage completed in the world, yet today we are completing just about 5 per cent. Britain, which once dominated this great world industry, finds that not only is the total United Kingdom production one-ninth that of Japan but that we have fallen to fourth in the league table, and we are being hard pressed by France. What is particularly significant is that in world competition generally in industrial goods all our major competitors have gone out for shipbuilding. Who competes with us in world markets for industrial production? The answer is Japan, West Germany, Sweden and France, all countries that saw the possibilities of the world shipbuilding market and went for it.

Let us consider the position since the Geddes Report. We may say that the British industry has enjoyed a moderate success since then; we can claim that we have increased our output by about 200,000 tons. But in that period the Japanese have increased their enormous production by a further 5 million tons. In other words, since Geddes the Japanese yards alone have increased their output by four times the total British production. Sweden and Germany have each increased their output by about 1 million tons and France has more than doubled her output.

I regard all this as a measure of the failure of development area policy. We should not have apathetically accepted no better target than to prevent ourselves doing worse. We should have said. "Here is an opportunity for us to expand employment and help tackle development area problems." The position has been tragic over the past few years, because every one of our major competitors has had difficulties over skilled labour while we, in the development areas, in the shipbuilding districts, have had hundreds and thousands of men stood off and idle. A determination that this basic national industry should at least keep pace with our major competitors, to be no more ambitious, would have done far more for the development areas and would have cost no more than the building a few factories for foot-loose industries. It would have dealt with the basic problem of the development areas.

Fifteen or 16 years ago I published a plan for shipbuilding which later was largely endorsed by the Geddes Report. It was a pity that did not come earlier. But I did not regard the plan as a solution to the problem of shipbuilding; only as a beginning. I pleaded in addition for new forms of public aid and partnership, not to stifle enterprise but to get a deliberate, concerted effort so that we could create an expansionist industry which would take the opportunities in the world market. That would have afforded the basis for a far more effective, dynamic, development area policy than that which has been pursued by successive Governments since the war.

Let the Government prepare and announce a Geddes phase II programme. Let them do no more than accept the very modest target that Geddes set the industry, which should have been attained by now, of 12½ per cent. of the world production and with an output of 2¼ million tons. Let us at any rate make an effort, if it be no more, to make up the ground we have lost since the Geddes Report.

I am concerned because of my constituency, because of the development area in which it happens to be. I am sure that such action by the Government would do far more than anything else to bring back hope to the North-East Coast.

6.40 p.m.

Mr. Hugh Fraser (Stafford and Stone)

I shall not follow what was said by the right hon. Member for Sunderland, North (Mr. Willey), who speaks with great knowledge of the shipbuilding industry and who has, I know, contributed a great deal to the thinking about it in the past. I speak as a Member representing an area in the West Midlands, where there is suddenly a high rate of unemployment, and as a man who is involved in engineering in various areas in the country. Before I get into what I want to say, however, I commend to the Government the suggestion put forward by my hon. Friend the Member for Hastings (Mr. Warren). Undoubtedly one way in which Government money could be used now rather than in the lavish ways suggested by the right hon. Member for Bristol, South-East (Mr. Benn) is by getting study contracts going on new potential development industries. This is a very important idea.

Several years ago, when we were in opposition, I put forward a case for the need for us to get into the oceanographic business, to do research, development and application there. There was a great deal of talk about it but nothing happened. Today most of the machinery and application in the North Sea is American plant. I believe that this was an incredible dereliction of possibilities by the last Government.

I want to turn now to the real problem which faces us. I believe that the decline in our heavy engineering can be pinpointed from 1965 onwards. A mass of statistics has been produced about investment, the number of machine tools installed and the reduction of employment in our traditional labour intensive industries—mining, engineering, aircraft and heavy transport—but I want to produce a new thought which I do not think has been published before. It is perhaps the best way of measuring the situation which has developed is by the consumption of electrical power at work load average throughout the country. I agree that the peak load has risen enormously because of the huge number of cookers, television sets, heaters and so on which we now all possess in the affluent society. But one of the most notable figures that one can study is that of the standard loading since 1965, which has remained almost constant—that is to say, the amount of electrical power we are using has not increased very much since then.

I believe that the graphic picture is one of a constant flat trajectory. The growth, where growth has arisen, has been not in heavy industry but in light engineering and service industries. This is the main problem facing those of us taking part in the debate. It is very well borne out by the figures of what the Central Electricity Generating Board has been purchasing over this period. Let us look at its order rate for distribution switchgear.

In 1964 it was at a rate of £30 million per annum. Over the period from 1969 to 1971 it dropped to the annual average rate of £12 million for 1971—at 1964 prices, a rate of £8 million. For transformer switchgear, the figures are just as bad, and those for heavy transmission transformers are even more devastating. In 1965 the rate of ordering was £22 million per annum. In 1970 it was £5 million and in 1971 it was £2 million. No wonder there is unemployment in a town like Stafford, which produces the finest transformers and heavy and light switch-gear in the world. This is as good a measure as any of the problems facing us. The increase in the gross domestic product has been almost wholly in light and service industries, using less power and producing more units at a more profitable cost.

There are some, including the Economist, who suggest that all that is necessary is to achieve a general growth in the economy and all will be well. It is also suggested that all can be put right by the massive retraining programme which the Government will announce tomorrow. Both these proposals are very useful and excellent. The trouble is that they have only a marginal effect on the huge investment not simply in machines but in people and skills engaged in our heavy engineering, aircraft, heavy electric and other traditional, labour-intensive industries which have made this country famous throughout the world. I believe that this is the measure of the problem facing us.

At this point I want to say something which I believe to be important when I allude to what happened under the last Government. I believe that every Government must avoid any unnecessary acceleration of latent structural change, but this happened in a devastating way with the last Government's handling of the aircraft industry. It is possible for people to get together and say, "We see in the future that this country cannot afford a shipbuilding industry", or an aircraft industry or whatever it may be. But for the Government to take action which anticipates or hastens the death of those industries is almost the height of political folly.

I take as one example the supreme folly of destroying the labour-intensive aircraft industry. If the TSR2 had been kept in being until it was clear whether the American rival, the F111, would fly instead of the TSR2 being destroyed—jigs included—which was what the last Government did, and if the P1154 had been kept as a project, we would not only have made a heavy profit in our exports, running at between £750 million and £1,000 million, but we would have kept between 100,000 and 150,000 jobs. Too much foresight by intellectual planners can be as disastrous as too little. I hope, therefore, that the present Government will not become involved in bringing forward the demise, which need not be demise at all, of some of our traditional industries. What the right hon. Member for Sunderland, North said about the shipbuilding industry I take as true from him. Many of these things could be saved.

For this reason I congratulate the Government on their proposals for new shipbuilding and on placing orders for more Nimrod aircraft. But the question remains, is enough being done? Is it enough just to rely on a consumer-led boom? My fear is that in the next 18 months we are not likely to see the take-up in investment that many people imagine. In the engineering industry there is a great deal of talk about orders but it is fair to say that orders are at the moment simply not being placed.

My fear is that, if we do not act now, when we do act it will coincide, God willing, with a major pick-up in world trade and that, therefore, we could have a major overheating of the economy between 1973, 1974 and 1975. That may be politically advantageous but it would be a disaster to be forced back into a stop-go situation.

It is most important for something to be done now to increase investment and I suggest that there are two wide areas in which the Government can act. First, the Government must do much more to speed investment at home. Secondly, they must make the export of heavy industrial goods easier than it is. Our problem today in the export of heavy industrial goods is not in our skills or our management, or even in our prices. It is frequently in the financial arrangements, in which we simply do not compete with the Japanese, the American, the French or the Germans.

It is no good just hoping for the much-needed reversal in the trend of company profits. I agree with my right hon. Friend the Prime Minister that one of the reasons for the downturn in investment has been the downturn in company profits, which not merely languished but diminished between 1965 and 1971. I believe that there is not enough around to make a vast jump now into the machine-tool industry and the reinvestment which should be taking place.

More than has been suggested is necessary. On 13th December I made a rather long speech on this subject and my right hon. Friends on the Government Front Bench said that they would look into what I suggested. However, they have not written to me about it. If they would look at it again I should be grateful, because there were some good suggestions about ways in which to speed up investment.

In spite of free depreciation, which is an advantage, I believe that the time has come to return to investment grants in selected areas. We cannot be held up by some parliamentary or political shibboleth from doing something which is clearly the fastest way in which to get investment in machine tools going again. It should not be for ever. I agree with my right hon. Friends that investment grants are not as good in the long term as other forms of allowance, but there is a crisis and orders for machine tools are dead beat and the only way in which to get the orders moving again is by having investment grants. I do not think they should be for ever, but if they were only for two years investors would jump in to get them, and if they did not jump in within that time they ought not to be able to get them.

Secondly, I hope that my right hon. Friends will consider my suggestion that when a machine tool is finally written off—and this accounts for the tremendous switching-round of machine tools which occurs in Germany and Japan—when the item is balanced and the machine tool is sold, a large part of the proceeds of that sale ought to be regarded as not subject to taxation. That would mean a quicker turn-round and an increase in the machine-tool market.

In my speech of 13th December I agreed with many hon. Members who said that the regional employment premium must be kept for the regions and that it could not be allowed to wither away in 1974. This is especially true now that we are moving towards the Common Market. The Government ought to look much harder at relaxing the conditions for industrial development certificates. They talk about everything moving forward, about a general increase in the gross domestic product and about retraining, but the only way in which places such as Stafford and many others in the Midlands can be revived now, because of the changes in machinery techniques and in management techniques, is by arranging for the labour there to be employed, to he gainfully employed and well employed.

If I.D.C.s are refused to certain companies in the Midlands, I seriously believe that the development of those companies will occur not in the areas about which hon. Gentlemen are concerned, not in Northumberland or in Inverness, but in the Pas de Calais, where there is now high unemployment, or in the Ruhr coalfield, where 200,000 miners are threatened with the loss of their jobs. I hope that Ministers will consider that very carefully. If they do not allow I.D.C.s to go to the West Midlands, industry there will invest not northwards but in the South, in areas which are the distressed areas of Germany and the distressed areas of France and where it will get aid and help to do so. I hope that these matters will be carefully considered.

I want finally to deal with overseas trade in heavy equipment. Here we are being outgunned not industrially, price-wise or technically, but financially. As the right hon. Member for Sunderland, North suggested, Britain may no longer rule the waves, but the whole trouble is that Britain refuses to waive the rules. Everyone else does. Everyone else fills in the gaps and everyone else considers what action will be most baneficial to him. The one country which does not do that is this country. Let us show some proper national interest when considering the small print of international agreements in exactly the way that Hermes does in Germany or as the French export guarantee organisation does. I do not want this country to be destroyed by too much piety by moth-blown civil servants.

The E.C.G.D. has to take more risks. The time has come for a review of the whole structure of our export finance to bring it into line with political and economic purposes and with unemployment, as well as with benefiting aid overseas. The developing world still needs an enormous amount of installations and as things are it will get them from the Japanese on 30 years' credit. We have to make a move, not to lose money—the E.C.G.D. has not lost a penny piece yet—but to change the structure of the arrangement.

For instance, in future the E.C.G.D. should cover sub-contract work by British firms working with European consortia. After all, we are going into Europe—or we are supposed to be—and one would have thought that the one thing we could do would be to get the E.C.G.D. to cover British firms doing sub-contracting work for British consortia, but at the moment we cannot. I have written to the Minister about that.

Secondly, E.C.G.D. should be able to cover local work—that is to say, to finance a local contract. When a sugar plant is built in Venezuela, the machinery costs £1½million but the local construction work costs £2½ million. The German Hermes and the French organisations will guarantee that kind of local construction work but all the E.C.G.D. can do is to guarantee the British exports. We have to come into line with the Europeans in that respect.

Another area in which we have to come into line with the Europeans is to offer an insurance against cost escalation. Hermes and the French offer up to 15 per cent. but we offer nothing. Lastly, we have to do some better matching, in the time span and in interest rates offered, with foreign credit organisations.

Those are steps which I seriously recommend to the Government. It is no good waiting for things to happen. If we do, not only will unemployment and depression snowball until they are even worse but this under-utilised capacity and this under-used manpower, because of the effect of the Government's inducements to a boom, will result in an overheated economy by 1973, 1974 or 1975. There is not much time: the time for the Government to take appropriate action is now.

6.58 p.m.

Mr. Ray Carter (Birmingham, Northfield)

It is purely fortuitous that I follow the right hon. Member for Stafford and Stone (Mr. Hugh Fraser) in this debate. I was invited on Thursday last week to address a meeting this morning of English Electric workers who are threatened with redundancy in the right hon. Gentleman's constituency. He is probably as concerned about that redundancy as anyone, but it serves to highlight the situation in the West Midlands when a company like English Electric, after being merged with A.E.I. and G.E.C., is in a parlous condition and when its order book is such that it is laying people off, not only in Stafford but throughout the West Midlands.

When I first entered the House in June, 1970, Birmingham was extremely prosperous. Given certain weaknesses, that prosperity was fairly evenly spread across the city, as across the whole of the West Midlands. For the past 40 years the prosperity of the people of Birmingham and the rest of the West Midlands had been gradually rising, with minor fluctuations, to the point which it had reached in June, 1970. But since then the situation has dramatically changed, not only in Birmingham but in the whole of the West Midlands. In Birmingham the unemployment figure has doubled and now totals 37,000 which is equivalent to 5.6 per cent. of the employable population. The same percentage applies to the West Midlands.

When I became a Member of the House the West Midlands was the third best region for employment. Now it is the third worst, exceeded only by Scotland and the Northern Region. In the City of Birmingham 8 per cent. of the population is unemployed. While the position in the West Midlands is serious the situation in Birmingham is worse. We have 27 per cent. of the working population of the West Midlands in Birmingham but 34 per cent. of the unemployment—just over one-quarter of the working population but over one-third of the unemployed.

The situation is worse when we look at the level of vacancies in the city. There are 26 men on the unemployed register chasing each vacancy. That is unparalleled in Birmingham and has never been known in the West Midlands. An even sadder aspect is that 66 per cent. of all unemployed men have been unemployed for eight weeks or more. Unemployment is a tragedy for any region, community or individual, but it has come as a sad surprise to people in Birmingham who have enjoyed over 40 years of continuing prosperity.

The people in Birmingham—this is probably true of the West Midlands too —were entirely unprepared for this. The unions were not organised to assist; they did not know much about unemployment statistics or the placing of men or unemployment services within the unions. The same applies to the Department of Employment offices in the city and throughout the region. They had to learn an awful lot in a short time. If that city and region cannot prosper, what chances has the rest of the country?

Centred in the Midlands are some of our keenest export earners in almost every industry, principally in the industries we are discussing today. In representing Birmingham I do not represent simply any city; I represent probably the world's oldest industrial city. Birmingham, the Black Country, the Midlands, gave the world industrialism. It is now being hit by the second wave of a process of industrial change that has hit first our basic industries such as coal-mining, shipbuilding, textiles and is now going forward into the manufacturing industries which predominate in the West Midlands, more so than in any other part of the country. This is shown by the fact that 60 per cent. of all employment in the area is in the engineering, metal goods and vehicles sector whereas in the rest of the country it is less than 50 per cent. and in some cases considerably less than 40 per cent.

It follows that many of the problems we face are directly attributable to our historial past. People in the West Midlands are not as prepared for change, even if it is round the corner. People are brought up in a total engineering environment; children are almost born with a tool kit; women traditionally work alongside their men. It may be that this is partly the reason why the region has some in-built inability to change and attract new industries. It is finding it difficult to attract even modern forms of engineering. The Government must learn from the many mistakes that successive Governments have made when dealing with the rapid decline in Britain's traditional industries which have led to problems in the coal industry, shipbuilding and textiles. The lesson is that when these industries go into decline, Governments must act at every stage to protect the livelihood and well-being of communities that have lived for generations with these basic industries at the centre of employment opportunities in their area.

If the Government cannot help or are reluctant to do so, a community can do precious little to help itself. I hope that in the West Midlands, in dealing with what I am sure will be the continuing problem of the second wave of industrial change—which might accelerate when we enter the Common Market—we will look seriously at our way through what is sure to be a long, hard and bitter struggle to accommodate change.

It is not just that aspect of employment and industry in the West Midlands that has caused the present difficulties. Many others were put to me and other people at a conference which I organised in the City of Birmingham on 14th January. That conference was attended by every section of industry, the University of Birmingham, trade and commerce, trade unions—everyone with an interest in the welfare of the citizens of Birmingham. It was rather heartening, at a time when there is a great deal of cynicism about public life and in particular politics, that everyone who attended believed that unemployment was a pernicious evil that we in political life should do our best to get rid of at the earliest opportunity.

That did not prevent people from being critical of government at central and local level, trade unions and industry. As a result of the conference a working party was established when we got down to the job of putting forward solutions to local and central government. A number of reasons were given, quite apart from the historical ones, as to why we were finding difficulties in the West Midlands. It was unanimously agreed that the Government bear the prime responsibility for the level of demand within the economy.

We were addressed by my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) who has admitted that the last Government made a mistake when forecasting the projected levels of demand within the economy. The present Chancellor of the Exchequer has admitted that the Government were wrong. I believe, and the conference in Birmingham believed, that the Government have not accurately gauged the potential level of demand in the economy. I hope that before the Budget, or at the latest in the Budget, the Government will take measures actively to stimulate demand.

We in the West Midlands can point to continuing uncertainty about the likely effects of our entry to the European Economic Community. It was interesting that at a chamber of commerce luncheon in Birmingham which I attended with other Labour Members on Friday not one leader of commerce in Birmingham, including the president, could say categorically that Birmingham or the West Midlands generally would benefit from Britain's entry to the E.E.C. On the contrary, doubts were expressed about future employment in the city and in the region when we go in.

I hope that the Government will consider carefully the possible effects of our entry on regions like the West Midlands which will have to compete directly with the washing machine manufacturers of Italy, the motor car manufacturers of France and the chemical manufacturers of Germany. Perhaps in time, a decade or more, Britain will find her place in the Common Market. I hope that she does, even though I voted against entry. But we can by no means be certain that in the short term the benefits which have been held out by the Government and others will follow.

Inflation has hit industry in the West Midlands, particularly the labour-intensive industries. The cost of labour has increased. It was made clear at the conference and at the chamber of commerce meeting on Friday that industrialists are looking to labour as the quickest, surest and easiest method of containing rising costs. There is the question of over-manning, with labour being thrown on the market. There is a different balance of forces in the economy, and industrialists are more prepared to get rid of surplus labour.

There is the question of restructuring, of which we have had a great deal in the West Midlands. It has affected the constituency of the right hon. Member for Stafford and Stone. People in Birmingham and other parts of the West Midlands were affected by the A.E.I.G.E.C. merger. It will be a good thing in the long term, but I am sure that many people who were made redundant and were given "fat' cheques as a result thought that they would find employment immediately. Unfortunately, that has not happened.

A large metal manufacturing firm, Delta Metals, has been shutting down factories throughout the City of Birmingham and reorganising its manufacturing and distribution capacity. B.S.A. has closed major factories in Birmingham. British Leyland, after the merger in 1966, has gone through a long process of rationalisation in almost every sector—employment, manufacturing capacity, technique, and so on. All these things have hit an economy which was operating at a near zero growth rate. It was inevitable that labour would suffer.

Then there is the economic philosophy of the Government. They have either watered it down or departed from it. The Secretary of State for Trade and Industry went about his job in a violent way initially. We heard about "lame ducks", "subsidised incompetence", and so on. The philosophy got across to the board room, whether it was intended or not, and industrialists believed that they should tackle pressing problems in the spirit laid down by the Secretary of State—"When in doubt, fire." That might be disputed by the Government, but, unfortunately, Governments of both political parties have a habit of creating economic and social climates and before long people believe them and act in accordance with what they say or do.

The pattern of world trade is changing. It was a popular joke at one time that if we bought a candlestick in Cairo or a pair of brass snakes in Delhi we would, on turning them upside down, find the imprint "Manufactured in Birmingham." That is no longer true. At the lunch which I attended on Friday, having had a pleasant meal in the dining room I examined the cutlery which appeared to be made of Sheffield stainless steel. I turned it over and looked at the imprint, which read "Made in Hong Kong." I pointed this out and there was some laughter about it. Apparently, it was believed when the cutlery was bought that it had been manufactured in Sheffield, but no doubt the firm, Vintners, which had its mark stamped on it, finds it cheaper, more economic and more profitable to have it manufactured in Hong Kong and then sell it in this country.

The changing pattern of world trade hit the shipbuilding, textile and many other basic industries. It has now hit industry in the West Midlands, and, despite the protective wall which the E.E.C. will put round us, goods from under-developed countries will come through that wall and will affect areas like Birmingham and, no doubt, the South-East in a profound way.

Because of the low demand for labour, recruitment in the West Midlands has been affected. Many thousands of young people in the West Midlands are unemployed. Last year in one area in Birmingham about 40 school-leavers failed to find employment.

That is the picture in the West Midlands. There are many other reasons why we have high unemployment. Stripped of sloganising and examined in the cold light of day, it is a massive problem which can be tackled effectively only by the Government. But that presupposes that the Government are prepared to take on the task. When the Conservative Party took office, judged by its pronouncements the competitive forces of the market place alone would solve our economic problems. I hope that the Government have put that philosophy behind them.

I commend to the Government a series of short-term measures to deal with unemployment. The aim would be to mount a massive programme of public works: first to take up the enormous amount of unemployment in the construction industries, and secondly, to generate a higher level of wealth in the local economies. I should like to see a massive urban renewal programme. The cities of this country of ours are in many respects a disgrace. Anybody who has travelled on the continent and compared our cities with continental cities must, I feel, be ashamed at the squalor in our cities, many of which had to withstand the Second World War and should afterwards have been largely and immediately pulled down. Housing, therefore, is an area which could and should be tackled as a social need, and yet at the same time it would provide valuable employment opportunities. The roads in Birmingham are in a pretty parlous condition and could be greatly improved.

There is desperate need, too, for improvement in our schools. Announcements have been made about a renewal and rebuilding programme for primary schools, but much more could be done in knocking down and rebuilding secondary schools also. There are also the hospitals, many of them Edwardian or Victorian buildings, and certainly not the kind of buildings in which modem medical practice should be carried on.

Then there is the question of retraining. An announcement is, I believe, to be made tomorrow, but it will be a drop in the ocean compared with the size of the overall problem. What one must emphasise is that we do not retrain people to put them straight into the dole queue. We must see that there are jobs for them at the end of the day and I would, on that, emphasise that in a situation like this it would be far better if men were trained or retrained on the job rather than in special institutions which we might set up for this purpose.

Another problem which the Government could tackle and immediately find a solution to is that of ordering in the capital goods sector. We are desperately short of orders in the machine tool industry. The capital goods industries at present should have greater incentives for companies to order capital goods of this kind. This would be of great assistance to the West Midlands economy.

I would urge the Government to study carefully two recent reports on the West Midlands economy and its future, one published by the West Midlands Planning Council and the other by the West Midlands Planning Authorities Conference. Both of those documents charted a course for the West Midlands area in the coming quarter century or so. As those two documents adequately and most professionally demonstrated, we in the West Midlands need a far more diversified economy than we have. As I said earlier, 60 per cent. of the employment in the West Midlands is bound up with the motor industry, which will inevitably suffer in the coming years. The situation, to my mind, as those two reports show, calls for a more planned approach on the part of every authority concerned, but principally the Government, to ensure that in 15 or 20 years' time the West Midlands is not the industrial desert which so many of the areas of our formerly profitable and traditional industries are.

If nothing else comes out of this debate I sincerely hope that this cardinal factor does, that to deal with the rapidly changing economic and industrial structure we must have far greater planning than the Government so far have been prepared to introduce and support.

7.25 p.m.

Mr. Michael McNair-Wilson (Waltham-stow, East)

As a London Member I feel some trepidation in entering into a debate on unemployment since, fortunately, in Greater London the unemployment rate is about half that in the country overall. Yet there are some problems in London which deserve the attention of the House. We in the Walthamstow area—in Waltham Forest—have seen our unemployment pool double its usual figure, and perhaps it would be useful if I told the House something about our problems and put forward one or two thoughts that we have for putting the situation right.

At this moment there are 2,438 men and 215 women out of work. Normally our unemployment figure is about 1,000 persons. Since my constituency has within it a variety of works, mainly light engineering, but one factory, producing power transformers, some of the problems facing those companies are not dissimilar to the problems facing industry throughout the country.

What struck me most forcefully about the figure of our unemployed was that 38 per cent. of the men and 27 per cent. of the women were unskilled, and that one-quarter of those men and one-third of those women are within 10 years of retirement. In other words, the largest single proportion of unemployed in my constituency and within my borough are unskilled and within 10 years of retirement. I believe that the two categories probably overlap, and present one of the most difficult and intractable categories of unemployment in this country at this moment and probably for the foreseeable future. This is a point I want to come back to later in what I have to say.

Before doing that I should remind the House of some of the problems of unemployment and redundancies which have been caused by the takeovers which other hon. Members have mentioned, and because of falling home and overseas demand. In particular we have seen three major companies either close down or in course of closing down. One of them, B.X.L., has closed down. One, Micanite, was involved in the G.E.C.A.E.I. merger and is being phased out, as is Ever-Ready in the not far distant future. The closing down of B.X.L. meant the unemployment of 900 people, and the closing down of Every-Ready will mean another 600. There has been a cut back at London Electric, a company involved in making electric wires for industry. These are all considerable blows, as anyone will appreciate, within a single London borough.

So here I feel I should pay a particular tribute to the employment office in Walthamstow. It is a fact that most, if not all, of those people who have found themselves either declared redundant or unemployed within the area are being or have been absorbed into other industries in the area. The site offices which the employment office has set up at Micanite, B.X.L. and Ever-Ready have proved a particularly effective way of meeting unemployment before it has come about, because once a redundancy or unemployment notice has been given to an employee the site office has taken action and, using the London job bank, has been able to assist him before he actually found himself out of a job.

A man who has lost his job in his own locality will often be faced with having to take a job outside his locality which will involve him in travelling and the disruption of the life he has grown used to. This is a hardship and involves a change in family routine. It is therefore, better if we can maintain the number of jobs within the local industries. Therefore, rather on the lines of my right hon.

Friend the Member for Stafford and Stone (Mr. Hugh Fraser), I make a plea for Hawker Siddeley Power Transformers, which is far and away the largest company in my constituency, employing 1,000 people.

That company is one of the main suppliers of power transformers in the United Kingdom, and its order book depends to the extent of 65 per cent. on orders from the Central Electricity Generating Board. Recently the C.E.G.B. has allowed its 54,000 mW programme, which was due to be finished in 1970–71, to slip to 1976–77. As my right hon. Friend said, this has made a great difference to the number of orders being placed for power transformers. Indeed, it has meant a drastic cut-back which is having a worrying effect on Hawker Siddeley Power Transformers.

Whilst I appreciate that the C.E.G.B. will no doubt argue that it has adequate power for its foreseeable demands, certain of our older power stations are producing electricity at about four times the cost of the modern 550 mW power stations our older power stations produce electricity at about 2p per unit, against ½p per unit in the newer power stations.

Although electricity demand necessarily reflects the requirements of our production industry, so that the slowing down in industrial growth is no doubt reflected in the C.E.G.B.'s programme change, I cannot help feeling that at a time when the rate of electricial expansion in West Germany is running at 8.75 per cent. and ours at only 5.25 per cent. the anticipated demand to which all our forecasts point should persuade the C.E.G.B. to bring forward its load requirement ahead of that demand. Indeed, rather than let the programme slip to 1976–77, I suggest the C.E.G.B. might re-think it, bring forward the target date and start placing orders now to meet that target. If this thought commends itself to my hon. Friend the Minister for Industry, I hope he will exhort the C.E.G.B. to think about recasting its timetable within a period of months. I understand that there is a pressing need in the industry to know what the likely demand will be, and its future programme and the amount of labour it will require are tied up with those orders.

The company to which I have referred is also concerned about its competitive position after our accession to the European Economic Community. From that date onwards it believes it will be free to compete alongside European manufacturers for orders throughout the area of the 10 nations, but the company has a sinking feeling that it may not find itself in fair competition. Although this feeling may be no more than the natural doubt of any company that finds itself in a new competitive rôle, some reassurance is needed. It would be a tragedy if the firm found itself competing in this country against French and German manufacturers on a fair basis, while in Western Europe the dice were loaded against it.

I suppose all our debates on unemployment turn on whether the Government's forecast of a boom to come is accurate, or whether we are "Waiting for Godot" and remembering that Mr. Godot never comes. Generally speaking, no attempt to expand an economy shows much effect for 18 months and, therefore, if in a mood of optimism I say that our 18 months are up and the boom should start, it is because I genuinely believe it.

If I ask my industrialists when were the beginnings of the unemployment which is now so massive in our midst, they say that it started in 1967 with the realisation that, because of economic stringency, industry would have to tighten its belt, and one way of doing this was by looking at labour costs. If that is so, what we are seeing is not born of this Administration but the end of what started as long ago as 1967.

Employers all say now that the cost of labour is a consideration which weighs more heavily in their minds than ever before, and that what happened in 1967 was both a lesson and a shock, and that industry required that shock to produce the shake-out of the surplus labour that it was carrying. It was a shock which they now welcome because they realise that they were overstaffed, and it is a lesson which has made them determined not to re-accumulate the labour force that they have so painfully slimmed down. This means that the concept of labour-intensive industries is probably a thought of the past and not of the future, and that, in an economy which is controlled by fierce competition and narrow profit margins, we must get used to an industry that wishes to remain slim and efficient and sees surplus labour as something against which it should be continuously on its guard.

The aircraft industry has been mentioned several times in this debate. That industry is an exact example of a labour intensive industry which has slimmed down its labour force and has no intention of taking on additional labour unless it really requires it. We can talk about the projects that that industry should have and argue that the Govern-men have not yet stated a new policy for it, though, to be fair, we must remember that the Marshall Committee is looking into the industry. But anybody in that industry today is realistic enough to admit that the aerospace industry throughout the world has over-capacity, that we have no right to expect ours to be the exception, and that the industry may contract further. However, whatever else it will not be, it will be more efficient than it has ever been in the past.

It has been said in this debate that unemployment is looked upon as something of a social stigma by the person who suffers it. We must armit that it damages a man's personal dignity and also the man himself because he imagines that in the eyes of his family he no longer stands in their midst as the breadwinner. By the same token when a man is unemployed and is exhorted to be retrained, he may feel that the concept of retraining suggests that in some way he is not up to the job he has lost and therefore must be retrained for something else.

I believe we must get away from these outworn and outdated concepts and must seek to show our labour force that if there is to be a dynamic and changing economy, then a man may well have more than one job during his working life and that this will become the pattern rather than the exception. We must get across the idea that when unemployment or redundancy occurs, this may be a time for a man to acquire a new skill, and this is where retraining comes in.

I look forward with great enthusiasm to tomorrow's statement on the industrial training boards and on retraining in general. I believe those boards have begun to create something dynamic in our whole approach to our work force. We talk about a right to work. We should also talk about a right to be trained or retrained to work. If we just say that a man has one skill and if he cannot use it he must be doomed to unemployment, then we are not doing our job in the House of Commons. A man or woman should have the right to feel that the Government are seeking to develop their skills to the maximum and, if that is what is required, to place at their fingertips a new skill.

If retraining and more training is the right way to get the best out of our labour force, it is a different problem when one is dealing with a person who has only 10 years to serve before he retires. It could be said that retirement should be brought forward to help those people, but that may be easier said than done. We must ask ourselves whether retraining is worth while if somebody has such a short time to go before retirement, or whether we should seek some other way of finding a use for the person's skills. If it is a question of declaring an older or younger man redundant, it might be better to make the younger man redundant because he is worth retraining and will be able to hold on to a new skill for the rest of his working life. The older person may find that he cannot get another job.

However, I am convinced that the American idea of paying premiums to industry to take on a proportion of those who cannot get jobs is not satisfactory. The Americans have found that the net result of having this sort of premium is that people are taken on who are unemployable and industry holds on to them because it is not willing to go through litigation to get rid of them. The answer may well be to go in for something on the lines of State subsidies to industry to encourage it to take on people who otherwise would not find employment.

Mr. Deputy Speaker

Before I call the next speaker, I should like to draw attention to the fact that if hon. Members speak at great length it is impossible for the Chair to call all those who have waited throughout the debate.

7.45 p.m.

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

I am mindful of the remarks made by the hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson), and, although I am tempted to take up some of them, I will resist that temptation and get on with the job before me. [HON. MEMBERS: "Hear, hear."]

The first thing to do is to give the right hon. Gentleman the Secretary of State for Scotland some information about the employment of shipbuilding and shiprepairing workers in industry. I quote from paragraph 27 of the Shipbuilding and Shiprepairing Report of the Commission on Industrial Relations: In May, 1967 the numbers employed in shipbuilding on our definition were a little over 80,000 and the numbers in shiprepairing a little over 45,000 making a total of about 126,000. The fall in numbers over the three years 1967 to 1970 was therefore about 6½ per cent. in shipbuilding and 23 per cent. in ship-repairing. It goes on In shipbuilding the biggest part of the fall in numbers took place between 1959 and 1962, by which time it was probably about 80,000. It is all very well for the Secretary of State to give us some eclectically chosen figures and say that they include ship repairing, shipbuilding and boatbuilding and Uncle Tom Cobleigh and all. The facts are that shipbuilding, particularly in Scotland, has had a reduced labour force and this is what one would expect in terms of the increase in capital investment. If, as my right hon. Friend the Member for Sunderland, North (Mr. Willey) said, we accept the idea that this is not a declining but a growth industry, then we should be seeing some upturn in terms of investment activity in the United Kingdom and taking a larger share of the total world trade.

Let me give the Secretary of State a warning on the complacent and contemptuous Amendment that is before the House today. This contempt is seen not only among hon. Members on this side of the House but in every speech from the Government benches. We have seen no confidence on the part of hon. Members opposite that they believe that the Government's economic strategy will provide these industries with the kind of growth potential they deserve.

The difficulty in dealing with Scotland and the regions is that if we seek to highlight unemployment we shall perhaps erode confidence. Yet at the same time, in face of the harshness of the unemployment situation, we must ventilate our grievances through the democratic processes.

Let me deal with the question of Japan, which now has some 50 per cent. of world output and its slogan is to achieve 80 per cent. by 1980. The Japanese will not do that without Government intervention. To indicate the degree of that intervention, I should like to quote from the Shipbuilding and Shipping Record of 16th July, 1971 how the Japanese have structured their orders: During the last five years, a third of Japanese export orders was for E.F.T.A. and E.E.C. shipowners. But not a single ton has been built in Europe for the ' rising sun ' flag since the beginning of the century. Is that the way to cook the market? Is that free trade, or is it direct Government intervention?

I am all in favour of playing to the rules, but the Secretary of State for Scotland knows that the advantages of Hunterston—and we applaud the announcement this afternoon about the ore terminal—relate to getting bulk cargoes of all types. This means relating capacities to achieve cheap bulk cargoes to the shipping industry. This is what the Japanese have done. They have looked at their economy and seen that they are importers of bulk cargoes. Therefore, they are capable of cooking world order books, carriage rates and shipbuilding prices. Although the Japanese moaned when the Europeans retaliated and gave fixed-price contracts, they followed suit and, even with the revaluation of the yen, are still giving fixed-price contracts. That is why I have asked the Secretary, of State a number of times whether this Government feel that British shipowners would be capable of giving fixed price contracts for a reasonable time ahead. I doubt it, not because of the competence of the industry, but because we have great difficulty in competing with the Japanese and with the structure of the Japanese market.

We need a commitment that the Government will develop the port facilities at Hunterston not just for an ore terminal but for other cargoes. We want from the Secretary of State an assurance that if there are any port facilities developed at Foulness, Dungeness or anywhere else in the South-East, he will oppose the proposals in the Cabinet and resign if his opposition is not carried. Certainly he ought to do that. That is what should happen if these developments are carried out.

Let me now deal with the one bright spark in the Scottish economy about which the Secretary of State speaks at every conceivable opportunity. I refer, of course, to North Sea oil. I hope that the right hon. Gentleman will go to the conference at Aviemore in February and say what the Government intend to do to give Scotland a broader-based petroleum technology. I hope that the right hon. Gentleman, instead of speaking pleasant platitudes to industry, will say what the Government intend to do. We know that there are possibilities in developing rigs, and so on, but we must also recognise the immense possibilities in the construction of highly specialised ships. Whether they are built on the Clyde, Upper or Lower, or elsewhere is not my concern. There might be a case for liquefied natural gas carriers to be built on the Clyde. However, at the height of the U.C.S. crisis we had an assurance from the Secretary of State for Trade and Industry that the proposed feasibility study would look at the market for liquefied gas carriers. The Ministers in that Department should know that this is a growth market and a highly complex one. Other countries are building liquefied natural gas carriers. On behalf of the industry, we want to know whether the Government are urging shipowners to have these vessels built in the United Kingdom.

The Government have placed some orders in terms of defence contracts, and some yards on the Clyde and in the East of Scotland have obtained these orders. However, in Dundee especially there is still a regional crisis of high unemployment. Although Robb Caledon has received orders, there is still a possibility of redundancy in yards associated with the Group.

Mr. Harry Gourlay (Kirkcaldy Burghs)

Is my hon. Friend aware that unless Robb Caledon gets an order from the Admiralty very shortly a very serious redundancy problem will arise in Burntisland where two or three years ago the yard went into liquidation with the loss of about 800 jobs? Now there are only 80 persons employed there, and even their jobs are in jeopardy unless something is done very soon.

Mr. Douglas

My hon. Friend indicates a specific problem. It may be that the good offices of the Department can be used to ensure that some of the work that Robb Caledon takes on board is dispersed not only to the Burntisland yard but to the Dundee yard, in view of the present high level of unemployment. The male rate is running at 12.3 per cent., and the local figure is 9.8 per cent. of the insured population of Dundee and Broughty Ferry.

I want an assurance from the Government that this complicated type of vessel will be built in the United Kingdom. The relationship between naval and civil construction for this type of vessel is very close. Our naval expertise has been used to give a British company some advice so that it could have this type of ship built in France. Shell has ordered seven liquefied natural gas carriers but they are not being built in the United Kingdom. Instead, they are being built in France. Future ships should be built in the United Kingdom.

We tend to look upon unemployment and some of the problems of retraining in terms of statistics. They are not statistics. A young man sat opposite me at my surgery on Saturday morning. He is unemployed, and he is getting £6.45. This is his budget: £4.50 goes to his parents, El goes on travel and fees for further education, and 50p goes to a shoe club, where he pays for clothing. He has 45p to himself. He came to see me to ask whether he could get assistance in the form of some payment towards his further education fees so that he could sit an examination. That is the face of unemployment in Scotland, and it is no use our talking in platitudes about retraining to young men like that who are the salt of the labour force. I am sure that other hon. Members can relate similar stories which show that young unemployed people are willing to be retrained and go into other industries if the jobs are available.

We have to cure this problem of unemployment, and I challenge the Government to state that they are committed to full employment and to the right to work. If they do not, the democratic structure of this nation is in peril.

7.56 p.m.

Miss Joan Hall (Keighley)

I am sorry that the hon. Member for Birmingham, Northfield (Mr. Carter) is no longer present, because I was interested when he spoke about the cutlery at the Birmingham Chamber of Commerce coming from Hong Kong. When I visit various firms I am always interested to see how much of their machinery comes from overseas. Employers talk to me about their problems and difficulties, and always I inquire why the firm has bought its machinery from overseas. In reply I usually get a rather coy grin and the explanation that it was not produced in this country, that it was cheaper to buy abroad or that the foreign supplier gave a better delivery date. To such a statement I reply, "Are you not sure that there is not a lesson to be learnt about the reason for your problems: someone is producing cheaper and giving a better delivery date?" Often I am surprised how readily people agree. Some of the firms which complain most are some of the biggest supporters of foreign industry in preference to British-produced goods.

I make no apology for talking about unemployment as it affects my constituency, especially in engineering. On 10th January of this year, the official unemployment figures for the wholly unemployed in the Keighley employment area were 1,866. That figure represents 6.4 per cent. of men and women workers, and 9.2 per cent. of men. It is the highest figure since the war. In my area since the war there has been virtually no unemployment, and it comes as a greater shock and a more serious problem to those who suddenly find themselves unemployed than to those in areas which unfortunately have experienced higher unemployment over the years. I may say that the unemployment is mainly in textiles and engineering.

I want to raise a number of points in connection with unemployment in Keighley. The first is that we have a tradition of good labour relations. A number of people have found themselves out of jobs because people in other parts of the country have demanded too much out of a cake which does not grow. It has not been the jobs of those other people which have been put in jeopardy; it has been those of my constituents. We are in a fairly low-wage area. My constituents probably work for companies which are parts of larger concerns. When other people grab too much, certain areas have to be shut down and frequently the people who have not grabbed have to pay the price. That has happened to certain people in my area.

I also regret, because I do not think it has been advantageous to Keighley, the mad rush over the last few years for mergers and the consequent thought that because something was big it was automatically the best. For too long we have had too much discriminating legislation against small companies. This has particularly hit companies in textiles. What has happened is that a close company has had to sell out and a large concern has taken over with a fanfair of trumpets saying that the jobs are secure and it will modernise the mill. Sure enough, five or eight years later, due to a change in world conditions, the factory in Silsden or in Keighley will be shut down and very good employees will find themselves out in the very cold unemployment market. I hope that the Government will take due note of the Bolton Committee's excellent report which has made some good suggestions, some of which have been put into effect; but a great many more will need to be implemented to help the smaller companies, particularly in Keighley.

When one examines the unemployment figures, for all our civil servants and all the forms which people have to fill in, it is difficult to get a real breakdown showing how they affect one's own area. One gets a total, but what does it consist of? It would be much more important to have a breakdown than the over all figure.

I find that older people particularly have little desire—the hon. Member for Birmingham, Northfield (Mr. Carter) mentioned this point—to change from one industry to another when they have spent their working lives in one sphere and probably in one factory, because often it means that they have to travel further afield. The skilled man particularly is usually prepared to wait until something turns up in his own locality. This often goes on for as long as six months, when the earnings-related benefit comes to an end. Of course while he has his redun- dancy payment—which, if he has worked for one company for many years, can amount to a goodly sum—he can hang on longer. But at the end of six months, if he has not got a job he has to look further afield.

One of the biggest assets which encourages a worker to change his attitude is the wife who is left at home, who gets fed up with the man being round the house all day. At the end of six months, particularly if she is working and their income suddenly drops, she will probably say, "Get a job. Stop saying you want it in your own skill. Just get a job." This is one of the greatest contributory factors to getting people to change from one occupation to another.

Mr. David Lambie (Central Ayrshire)

Will the hon. Lady tell us what the unemployment rate was in her constituency in June, 1970?

Miss Hall

I do not have that figure. I have only the present figures. The more figures one gets, the more complicated they become. I have the figures for the present situation in Keighley. That is what interests me now, not history.

I should like to turn to the more serious deep-seated problem which has much longer-term serious consequences, namely, the unemployment of people over the age of 50. This matter was mentioned by my hon. Friend the Member for Walthamstow, East (Mr. Michael McNair-Wilson). From the figures for Keighley it is difficult to estimate, but it is believed that half the unemployed people in Keighley who have been unemployed the longest are over 50. The Government's announcement about retraining will help. I disagree with my hon. Friend the Member for Walthamstow, East on this score. If the retirement age is 65, a maximum of 15 years' working can certainly give a very good return. After all, many people wish to continue working after they reach the age of 65. I certainly do not believe that because a man is over 50 he should not be retrained. I hope that the announcement tomorrow will help this class of person.

Mr. Michael McNair-Wilson

My point was that I suspected that industry will think such people are not worth retraining and that the State might take the same view.

Miss Hall

I thank my hon. Friend. My next point is that often those over 50 are a great deal more reliable, more honest and loyal—[An HON. MEMBER: "More honest?"]—definitely—than some of the younger people who are more inclined to take than to give. Many employers tell me that they are better than some of the younger people.

I am interested in the retirement age. I have had a letter from the Keighley Trades Council which asks for the retirement age to be reduced to 60 for men and to 55 for women. I disagree on one point. I think that it should be the same for both men and women. I do not think that there should be discrimination between the sexes on retirement age. I think that the time will soon come when it will be lowered from 65 to 60.

My right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser), who is not in his place at the moment, mentioned the importance of industrial development certificates. We have far too much rigidity. We have special development, development, intermediate or full employment areas. Surprising as it may seem, Keighley is in the full employment class with an unemployment rate of 6.4 per cent.

Mr. Gordon A. T. Bagier (Sunderland, South)

Will the hon. Lady tell us whether Keighley had full employment in 1970 when the present Government came to office?

Miss Hall

As I said earlier, I am talking about January, 1972. Keighley now has this high unemployment rate and it is a so-called full employment area. We do not ask to have our status changed; we ask that those companies which are successful and want to expand should be allowed to do so. One particular company in my constituency, which has expanded over the last nine months and taken on 200 employees, is very successful and wishes to expand further, but it has been told that it must go to a town in a so-called development area, where it already has a branch, where the unemployment rate is much less than in Keighley and where the Department of Employment has admitted that the appropriate type of labour is not available. If we were not in the Chamber of the House of Commons I would be very rude. What I will say is that when a successful firm is not allowed to expand when and where it wishes, we are in a barmy situation. I hope that we might have a more fluid situation regarding development areas and I.D.C.s.

I should like to end with some comments about the machine tool industry because this plays a very important part in my constituency. The main problem is the stagnation of the home market. I should like to put forward a suggestion, which I hope the Minister will consider and answer. This has been put to me by many manufacturers. What is going on in the Royal Ordnance factories? Why is so little known? Why cannot we have more re-equipping? How many machines in the Royal Ordnance factories are British and how many are foreign? Is there not a potential here for modernisation which at the same time could help the depressed British machine tool industry? It seems to be a sphere rather of the unknown. Many manufacturers would like a bigger and better opportunity for putting British machinery into the Royal Ordnance factories.

I should also mention the Common Market. At present the duty on numerically controlled lathes is 8 per cent., and on standard lathes the duty is 7 per cent. to all E.E.C. countries. Contrary to what was said by the hon. Member for Northfield, my machine tool and engineering people look forward to the challenge, but they are worried about the unknown subject of V.A.T. They do not pay purchase tax on machine tools, and it is increasingly difficult for them to plan and budget ahead not knowing what the situation will be when V.A.T. is introduced. I appreciate that that is not something on which the Minister can pronounce tonight, but this uncertainty should be voiced because it makes it difficult to plan for the long term.

There is uncertainty in engineering generally because of the collapse of the national pay and disputes procedure between the Engineering Employers' Association and the Confederation of Shipbuilding and Engineering Unions. The engineering unions have put in a pay claim for an increase of about £700 million. The employers say that that would add 40 per cent. to their costs and increase prices by up to 15 per cent., and negotiations have broken down. The situation is serious for the engineering companies. I hope that the problem will be resolved because at the end of the day the people who suffer are all those who are involved in engineering—that is, in almost every constituency but particularly mine.

8.11 p.m.

Mr. Gordon A. T. Bagier (Sunderland, South)

It gives me a certain amount of pleasure to follow the speech of the hon. Lady the Member for Keighley (Miss Joan Hall) because my early career in local politics was in Keighley. Indeed, I had the pleasure of serving on that local council for about four and a half years. Because this is a short debate I must leave the pleasantries there.

The hon. Lady says that she makes no apology for raising the problem of unemployment in Keighley. I can understand her chagrin, because Keighley had not known unemployment, even during the 'thirties, until about 18 months ago. It is since the hon. Lady's Government took charge in 1970 that there has been this escalation of unemployment in areas such as Keighley.

My hon. Friend the Member for Birmingham, Northfield (Mr. Carter) spoke at length about the unemployment problem in Birmingham, and he makes no apology for doing so. The apology he ought to make is for having to speak at all today, because until 18 months ago unemployment in his area was almost unknown. There is no doubt that the Government have something to answer for.

What is the background to this remarkable number of unemployed? It is not that the Government took on a £800 million deficit in the balance of payments. It was not that they took on something which had to be put right. They took over the largest balance of payments credit that any incoming Government have ever had, and by a remarkable amount of ingenuity they have managed to bring about unemployment to a level which means that my colleagues from the North-East, Scottish and Welsh areas, who used to vie with one another for the eye of the Chair in debates of this nature, are having to compete with hon. Members from Birmingham, Keighley and elsewhere. That is the truth of the matter, and we have to look in some depth at why that has happened.

The basis of the real hardship of unemployment is still tied up with regional policy. I believe that when, as we hope, the basic economy is given some lift, the problems to which hon. Members have referred will quickly be solved by a soak-up. That has generally been the case during the periods of boom and bust of the post-war era, but in the development areas the problem has remained. When the "Birminghams" and areas in the South-East started to catch cold, the regions caught pneumonia.

During their period of office the Labour Government, in their wisdom, introduced a system of investment grants. The idea was to bring new industries to areas and to coax to those areas industries from Birmingham and the South-East. In my region alone about 120,000 mining jobs have disappeared, to say nothing of reductions in shipbuilding, engineering, and various ancillary trades.

My right hon. Friend the Member for Sunderland, North (Mr. Willey) dealt with the shipbuilding industry. On Wear-side we are pretty proud of our shipbuilding complex. It has managed to keep its nose above water, due to good staff, good management, good relationships and so on. Apart from the SD14s providing continued employment, I do not think that the shipbuilding industry can look forward to a great deal of extra employment, so we have to look for something different.

If we consider the problem in terms of development area policy, I think that we have to judge the matter on results. I think that the Minister would agree that that is fair. Let us consider what happened in the past and what is taking place now. One of the damning figures of the Government's policy came out last Friday showing the result of the Government's I.D.C. policy. Dealing with the Northern Region the Newcastle Journal said: Area covered by I.D.C.s takes a tumble and it went on to say that the areas dropped by 27 million sq. feet last year. It is the figure released by the Department of Trade and Industry, and I hope that the Minister will accept it as correct.

In my own region the percentage of I.D.C.s dropped steadily during the year, from 1.7 in the first quarter, to 1.5 in the second quarter, and down to 0.7 in the third and last quarters. The figure for this year is 4.6 per cent., compared with 7.8 per cent. in 1970, 9.2 per cent. in 1969, and 11.4 per cent. in 1968. If those are not damning figures about the effect of the Government's policy on industrial development certificates, I do not know what are.

The Minister may say that that is a trend, that there has been a general rundown. I cannot say that, because in October, 1970, the Government made a deliberate policy decision to change over from investment grants to investment allowances, and from that time the figures began to take a deep dive. From that moment onwards there was a big change in the thinking of industry about moving to the development areas.

I have to charge the Government with the fact that by a policy decision they made this big difference to industry. I am not speaking purely as a politician. I am a member of the Executive Committee of the North-Eastern Development Council, which has done a study of these things. From time to time we brought outside industries to our meetings so that we could get their opinion. It was their view that the changeover was too drastic. There was no time lag. The Government did not say that the change would take effect from, say, a date 12 months hence. Instead, they announced that they were changing from grants to allowances immediately.

Mr. Albert Booth (Barrow-in-Furness)

At a stroke.

Mr. Bagier

As my hon. Friend says, "at a stroke". That group of three words is a saying which I am sure the Government will regret for the whole of their period of office, short as that may be.

When we brought outside industry to our meetings we liked to think of what could be done in a practical way to help. Recently a meeting was held with representatives from industry in the North-East and from organisations such as Anglo Great Lakes Corporation Ltd., George Angus & Co. Ltd., Caterpillar Tractor Co. Ltd., Clarke Chapman John Thompson Ltd., Foster Wheeler John Brown Boilers Ltd., I.C.I. Ltd., Plessey Telecommunications Group Ltd., British Railways, and some of the nationalised industries. We came to the conclusion that there were certain things that the Government could do. I will try to be constructive as well as critical.

I appeal to the Minister to ask his Department to give the go-ahead immediately for the Sizewell B scheme, which could have a tremendous effect on employment in the North-East, and also for the Redcar steel complex scheme. The Government should also accelerate their capital expenditure in British Petroleum, in its exploration of the North Sea for oil and gas. This also would have its side effects on the steel industry.

I would also ask the Government, in these huge orders, which take a long time to come to fruition, to stop doing things in stops and starts and to start thinking in terms of programmes five, 10, 15 or 20 years ahead, rolling programmes which could give people employment prospects and work in these very large industries which should not be subject to the whims of government.

The Government should also consider how much thought, finance and direction they can put into the fight against environmental pollution, something from which the North-East and Scotland, which both did their share in providing the wealth of this nation, have suffered for a long time. It is not too much to ask for public money to put that right.

We have argued at great length about the merits of investment grants as opposed to allowances. Why can we not have a little elasticity, and use both? Why not ask industry which it would prefer—

Mr. Dan Jones

They made a decision.

Mr. Bagier

Yes, but the Government made this decision without any consultation with industry. In the name of the unemployed, will the Government now reconsider?

Mr. Jones

What I meant was that industry has been asked and the C.B.I. is in favour of grants, not allowances.

Mr. Bagier

I could not agree more—

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

indicated dissent.

Mr. Bagier

The Minister shakes his head, but in our consultations with local industry we have come to the conclusion that there is a case for grants in some cases and allowances in others. I am asking for less rigidity. The Government should think of the unemployed.

Parts of our problem is a continuing shake-out. Every week we see news of fresh redundancies. I read in the Newcastle Journal that Vickers is to lay off some more, that 181 men will be laid off by an engineering firm following 215 sackings last month, and that another 80 men were made redundant at Stocks-field recently. This is a continuing factor to which the Government must face up.

The regions do not lightly view the prospect of unemployment. The Minister should examine these detailed cases that I have mentioned, including the tremendous spending power of the Government, which can influence the regions, infrastructure and industrial orders. If they think more about people and less about the statistics, they may come up with some of the right answers.

8.24 p.m.

Mr. Robert Adley (Bristol, North-East)

The hon. Member for Sunderland, South (Mr. Bagier) will, I know, excuse me if I do not follow his argument too deeply except to take up his point about our needing fewer statistics in our speeches. I want to make a brief speech and deal with one specific item which may help us in our attempts to find a long-term solution to the unemployment problem. This is not a constituency speech or even really a regional speech. I want, however, to take as an example one industry which can help—the tourist industry.

Many speakers in today's debate and our debate last week have emphasised the need for changed attitudes and the need to realise that we should look more to the creation not just of new and more jobs but also of jobs in industries which have not figured largely up to now in the preoccupation of the Government.

I was interested in the remarks of my hon. Friend the Member for Hastings (Mr. Warren) and my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) about the need to look for the development of new industries, which clearly will need labour. One of the hardest things that we have to face is that, however many opportunities the Government may provide for retraining, far too many people will not turn their minds to pastures new. The Government, if they have a duty here at all, should fight for the hearts and minds of men and women to make them realise that profitable and worthwhile employment is available in this country, but not necessarily in the traditional industries, in areas such as the North-East, in which they have always sought employment in the past.

I am not so simply referring to finding men to serve as waiters in hotels. Development of the tourist industry calls for major infrastructural works which can provide not only new but long-term and varied employment. Unemployment is a human problem. Men seek a good job, security and prospects for themselves and their families, and the tourist industry can provide these forms of security.

It is also coincidental—or perhaps not—that many of the areas of highest unemployment have great unexploited tourist potential—Wales, Scotland, the North-East and the South-West. I have a request for the Minister which I have made to him more than once before. That is, that industrial development certificate policy should not be related purely to industry in what I consider to be the old-fashioned sense of the word. Will the Minister yet again consider the idea of creating tourist development areas where Government assistance can be related to the tourist development potential?

I want to quote some figures which illustrate my point that there are jobs available in the hotel and catering industry in areas like the North-East but the tourist industry finds it difficult to attract people. Last week the Caterer and Hotel-keeper produced some information about two symposia which were held recently in Darlington and Newcastle-upon-Tyne. The object of the symposia was to attract young men to the industry and to persuade them to train for long-term employment in it. In Darlington, which has 1,700 unemployed, three people turned up for the symposium. In Newcastle-upon-Tyne, which has over 4,000 unemployed, only 11 people turned up for the symposium. As the Caterer and Hotel-keeper says, other equally depressing results have been obtained in other parts of the country.

This leads me to ask how accurate the statistics about job availability are. My hon. Friend the Member for Bury and Radcliffe (Mr. Fidler) has a Question down for Thursday, when he is To ask the Secretary of State for Employment how many of the 100,000 unfilled vacancies in the hotel and catering industry have now been filled. If there are 100,000 vacancies in this industry, that fact illustrates my point better than any words of mine could.

Mr. Bagier

The present job ratio in the North-East is 30 persons chasing every vacancy, whatever the notified vacancy situation is.

Mr. Adley

Are we sure that the statistics of notified job vacancies are accurate?

Mr. John Biffen (Oswestry)

It is well known that in many employment areas prospective employers do not notify vacancies to the Department of Employment.

Mr. Adley

I am grateful to my hon. Friend for confirming what I have said. One company quoted in the Caterer and Hotelkeeper—namely, Swallow Hotels—has 72 vacancies for youngsters in the North-East. The controller of the company, having noted how few young people attended the symposium, is quoted as saying this: Either the youngsters do not want to work or, more likely, the proper information about the industry is not getting to them. If we only had a chance to talk to them I am sure we could interest them in a service industry career. We spend far too little time in government and in the House talking about the tourist industry. In the 18 months I have been in the House we have spent a great deal of time discussing the coal industry, the steel industry and the shipbuilding industry. We have never had a set debate on the tourist industry other than the occasional debate which has arisen as a result of an hon. Member being lucky in the Ballot.

Although unemployment is in many cases an attitude of mind—[HON. MEMBERS: "Oh."] I phrased that badly.

Mr. Dan Jones

The hon. Gentleman did indeed.

Mr. Adley

Although the cure for unemployment requires a change in the attitude of mind so that people can be persuaded to take jobs in new industries, the Government have a major duty to bring about just this change in attitude of mind. I, too, look forward to the statement to be made tomorrow by my right hon. Friend the Secretary of State for Employment.

Despite the amount of time that some of us in the South-West spend talking about the aircraft industry and agriculture, the catering and hotel industry is, of the local industries, the major employer of labour in the South-West. I urge my right hon. Friends to do all they can to bring to the attention of everyone on the unemployed list the availability of so many unfilled vacancies in the hotel and catering industry.

8.35 p.m.

Mr. Ian Campbell (Dunbartonshire, West)

The hon. Member for Bristol, North-East (Mr. Adley) has brought to the attention of the House an industry which, I agree is often neglected, and which is of some importance in my constitutency also, but I ask him to forgive me if I concentrate more on the industrial side, as this is where our main problems lie today.

The right hon. Member for Stafford and Stone (Mr. Hugh Fraser) and other hon. Members opposite have spoken in favour of investment allowances and of the continuation of the regional employment premium. This has been a constant cry from our side of the House for some time, but it has been ignored by the Government until now. I hope that the Minister will tell us whether the Government are having a change of mind on the matter.

Another matter raised several times today is the allocation of industrial development certificates. This gives considerable worry to those of us who come from special development areas or development areas, for we now see the trend to push for industrial development certificates in areas where unemployment has not been high until a short time ago. The right hon. Member for Stafford and Stone argued that, with British entry into the E.E.C., if firms in these areas do not have permission to develop there, they will move to the Continent to set up their factories. It is one of our great worries in Scotland that there will be this movement all the time nearer to the large market on the Continent of Europe.

I congratulate the Secretary of State for Scotland on his announcement about the Hunterston project today. We have been waiting for it for a long time. About three years ago I was a member of the Lower Clyde Development Group, set up by the then Labour Government in cooperation with the local authorities. It produced the Metro-Weddle Report, financed equally by the local authorities and the Government. Several excellent reports were produced, only to lie on the table all that time. We had seminars at all the universities, and there was great excitement, but it has taken the Government three years to act.

Only last year, Labour Members had a meeting with the Clyde Port Authority, which was appealing for action at that time and saying that, if the project were on the table in Holland, we would have gone ahead long ago and then looked for work. We did not need to wait until we had a particular propect to fit into it. If the deep water facilities were there, we should have attracted projects to it. I hope that this will now happen, once the scheme gets into full swing.

As time is short, I shall concentrate on one other industrial problem; namely, the state of affairs in the Plessey company, again in the news now, though for a different reason. I refer to Plessey in Alexandria. The factory, the Royal Naval Torpedo Factory, was taken over from the Government in January, 1971, and within six months the Plessey company announced that it would close.

Mr. Gordon Campbell

I think that the hon. Gentleman gave the wrong date. He should have said 1970, should he not?

Mr. Ian Campbell

No. There was a partial occupation, so to speak, with the two parties working side by side in 1970, and then, on 4th January, 1971, I was present when the Under-Secretary of State for Development, Scottish Office, the hon. Member for Ayr (Mr. Younger), handed over the keys to Ples- sey. Within six months, the company announced that the factory would be entirely closed.

This was a factory given away on bargain-basement terms by the Labour Government. In some ways, hindsight shows that there should have been a guarantee sought from the firm that work would continue at the factory. But, as I say, closure was soon announced. In fact, it closed in October. There was then the sit-in by the workers, which has been going on for five months.

The workers took that action to prevent removal of the machinery from the factory, and they were successful in that objective. Over the past month or so negotiations have been taking place between the workers and the new company set up by Plessey and Lyon industrial group, and we now have the happier outcome that the situation has been resolved. Plessey and Lyon together are to create a new industrial estate in the factory. A certain number of jobs has already been agreed, and an engineering firm is moving in. A joint committee has been set up, consisting of representatives of the new firm and the workers, to sponsor incoming industry that will use the machinery in the factory, which would have been removed but for the workers.

Is that the lesson for the future? Should we all have sit-ins or take-overs? The situation in the Fisher-Bendix factory is very much in our minds. There the management's action has been stayed, and the situation is to be reviewed in a year. There have been references to the U.C.S. work-in today. I am sure that the Clydebank yard and perhaps the Scotstoun yard would have gone by now but for the work-in. In all these instances the workers have given management time to pause and consider. By the action of the workers a new dimension has been added to the industrial picture.

Why should such action be necessary to make firms think? What about redundancies that go unchallenged? One of the answers to the problem was given by my right hon. Friend the Leader of the Opposition in the debate on 24th January, when he suggested that: …where in. the future factory closures are announced or redundancies declared,…the Government should require prior notification to the Department concerned …"—[OFFICIAL REPORT, 24th January, 1972; Vol. 829, c. 1022.] He also said that a group representing all local interests should look into the problem and see what action can be taken to resolve it. That would give everyone a chance to consider such problems, including their social aspects. If that proposal were put into practice it would be a major step forward in the proper assessment of redundancies and closures.

8.43 p.m.

Mr. Ian MacArthur (Perth and East Perthshire)

The hon. Member for Dunbartonshire, West (Mr. Ian Campbell) has told us something of the Plessey situation in his constituency which will be of great interest to the House. He has shared great worries with his constituents over the past few months. I know how difficult the Plessey situation has been, and I am sure that every hon. Member will join the hon. Gentleman in hoping that the future for the factory is now really secure and brighter for those who work there, particularly in view of the factory's chequered history over recent years.

I join the hon. Gentleman in congratulating my right hon. Friend the Secretary of State for Scotland on the good news he gave us today about the Hunterston terminal. I hope that it may point to further development later but it is excellent news in itself. The hon. Gentleman made a very courteous and proper reference to what my right hon. Friend said but he was alone in doing so among Labour hon. Members. I was sorry to see that my right hon. Friend's statement did not even raise a smile from them, not a flicker, let alone a cheer. Perhaps the reason is that they prefer to travel hopefully rather than to arrive. But it is such a pity that as they come they trail such clouds of gloom, because the position in Scotland, although extremely serious, is not one of gloom.

I shall give some reasons why I believe that, but first I want to say something about the Opposition's Motion. Few people will pay serious attention to it, certainly in Scotland. We remember the Opposition's so-called plan for expansion in Scotland, an example of the planned economy we were to expect. In their pre-election White Paper, grandly styled "The Scottish Economy 1965 to 1970", the Labour Government held out the prospect of 60,000 new jobs in Scotland. We did not get the 60,000; we lost 82,000. The Labour Government were off target by 142,000 jobs. When the Opposition now point to the intolerably high level of unemployment in Scotland, it would be better if they were to recall that had they fulfilled the promised prospect of 1966 there would have been 142,000 more people at work in Scotland in 1970.

All that is bad enough, but the Labour Government went on to promote a surge of inflation which quickly brought unemployment in its wake. Most of our economic problems spring directly from the galloping inflation and mounting unemployment bequeathed to a sorry Britain by the Labour Government who ran away. Today's Motion by right hon. and hon. Members opposite is, in effect, a Motion of censure on themselves. My right hon. Friend has pointed out that the inflation we suffered directly affected unemployment in the industries listed in the Motion because of the economic uncertainty it created. It affected employment also by producing a large shake-out of labour by industry.

The right hon. Member for Bristol, South-East (Mr. Benn) quoted correctly and quite fully from a leading article in The Times of last Saturday. I do not disagree with the point of his quotation. But the article touched on the point I have just made. It pointed out that by 1970 the large publicly owned industries had been 'shaking out' for years and the steel industry had started on the process. Private employers, it said began a great shake-out in mid-1970. I suggest that the reason for that great shake-out was the growing effect of soaring wage settlements at the time. I suggest further that the reason for that rate of wage inflation then and later was the Labour Government's total retreat from their own prices and incomes policy in the months before the 1970 General Election.

Mr. Benn

The hon. Gentleman has quoted from the same leading article that I quoted. If he reads it fully he will find that the leader writer does not share his view of the bequest of inflation by the Labour Government. He says, indeed, that most of the wage increases were granted by private industry, and it is difficult to see how it could have done so with a view to securing the re-election of the Labour Government.

Mr. MacArthur

I am not misrepresenting the article. I am giving my suggested reason for the shake-out and why it happened. I repeat that it happened because of the intolerable escalation of wage settlements created by the Labour Government's total abandonment of their prices and incomes policy in the months immediately before the 1970 General Election, when the Labour Party was trying to curry electoral favour.

Mr. James Hamilton (Bothwell)

The Labour Government's prices and incomes policy was not supported by the then Opposition. I am sure the hon. Gentleman himself voted against it on many occasions.

Mr. MacArthur

What I remember voting against very well was the succession of orders laid by the Labour Government when they found that they had acted illegally and were requiring the House to legalise their illegality. That I did not support and never would support.

The right hon. Member for Bristol, South-East quoted from the leading article in The Times when he said that business confidence, in the sense of new investment and willingness to create new jobs, was unusually low at the moment. It certainly is, but the critical words are "at the moment". I believe that investment will turn upwards as the Government's measures work through the economy. They must turn upwards, and no doubt this need is at the centre of the mind of my right hon. Friend the Chancellor of the Exchequer as he approaches his Budget statement.

The balance in all this is very delicate, because of the narrow margin between the economic conditions required for a short-term boom and those required for long-term sustained growth. I hope that there will not be too much talk of a boom, because that would bring renewed inflation in its train and would not gain the confidence for investment that we require. The spur to true confidence is surely the prospect of cautious but sustained long-term growth.

The tax cuts of £1,400 million a year which have been introduced by the Government have started to revive the economy. The cuts in purchase tax and S.E.T. were the first tax cuts directly affecting prices for nearly 10 years and consumer demand is rising as a result, as all the indicators show and as anyone with commercial experience knows perfectly well.

A vast injection of cash by the other Government measures to stimulate the creation of jobs is also having an effect. I suggest, however, that the extra jobs which will be created by the injection of cash into the economy by Government measures—that is, acceleration of construction projects and the like—should be regarded as measures to tide over the situation until genuine economic growth takes place. I say this because the extra projects for which these extra funds were provided have to be substantially completed by March, 1973, and the jobs are therefore largely short term, although they are needed urgently and they will ease the position until genuine growth brings about a genuine fall in unemployment.

My right hon. Friend the Secretary of state referred to the enormous growth in productivity. With some 400,000 fewer people at work, Britain is producing rather more than before. It is an upsurge in productivity which bodes well for future growth in Britain, but it has helped in itself to exacerbate the current unemployment position. We want higher productivity, but we also want the unemployment figures to fall.

In the preoccupation of all of us with the proper use of the resources of the country we should always remember that the greatest and most precious natural resources we have is the people of the country, and we simply cannot afford to tolerate a situation in which many hundreds of thousands of people are unemployed when they should be—and, I trust, soon will be—producing profitably for the benefit of the nation.

The fact that productivity has gone up as it has points to a problem that still remains. It is that there is a substantial margin of slack which still has to be taken up before manufacturing capacity is fully stretched. Putting aside seasonal influences, it is only at the point when manufacturing capacity is fully stretched or nearly so that we can expect the true level of unemployment to fall. Particularly in Scotland we look for growth in the United Kingdom economy because it is only growth in the total economy that can produce growth in Scotland.

Whatever the pattern of inducement may be, it cannot bite unless industry is mobile, and it will not be mobile without the certainty of true growth. We have to face the fact, unpalatable as it may be, that the nature of employment in Britain has been changing and will continue to change. No longer will it be possible for a man necessarily to follow in the skills of his grandfather and father. I look forward eagerly to the statement we are to hear tomorrow about retraining. I hope that we will also consider whether we do enough to help with the mobility of labour. Are the transfer and resettlement grants administered by the Department of Employment really effective? Are the criteria too restrictive? Are the travel and removal allowances adequate?

The right hon. Member for Bristol, South-East spoke about the challenge of competition from the Common Market. He might have said more about the challenge of opportunity. There will be great opportunity for Scotland because it will be seen not only as Scotland in the United Kingdom but as Scotland within Europe. I welcome the work that my hon. and right hon. Friends are doing to attract foreign capital and investment for Scotland. I believe that we can offer an environment for work which few areas in Europe can match.

8.57 p.m.

Mr. Tam Dalyell (West Lothian)

I want to use the limited time I have to comment in a shorthand fashion upon five complex and difficult decisions.

The first concerns the nuclear power industry and the results of the committee headed by Peter Vintner. This is a difficult matter, and it is no use pretending otherwise. It would be unacceptable to many of us if the leaks are true and the British nuclear power industry is to go American. It may well be that the steam generating heavy water reactor is the reactor of the future combined with a prototype fast breeder reactor. Not just for patriotic Scottish reasons, many of us would like to see whatever permutation is finally arrived at including a place for the prototype fast reactor at Dounreay in the 1980s.

What is absolutely essential is that we do not mess around with one-off projects but stick to some coherent plan, whatever plan may be reached. The trouble besetting the British nuclear industry has been chopping and changing and not settling on one plan. I hope that whatever comes out of Vintner a coherent plan is announced and that we stick to it, measuring it to whatever happens in Europe, because it is crazy to do this out of the context of Europe.

The second decision which has a direct bearing on the debate arises out of the American offer of British participation in the space shuttle. I do not have time to go into the merits or demerits of this, only to say that the Government will have noted that in the memorandum we had from the S.B.A.C. it was pressed upon us that we should participate in the American project. It will not be news to the Secretary of State for Scotland to hear that this is not an eccentric or esoteric matter for Scottish industry. It is vitally important because the electronics industry of much of Scotland will not remain in the forefront of technology unless British participation is accepted.

I am in no doubt that we shall have to do this with our European partners, and I hope that it will be made clear to M. Lefevre and his colleagues, acting as co-ordinators in the European response, that we are keen to participate at an early stage. If we do not participate, let us be under no illusion that Japan will and British industry will lag behind in many important respect. I therefore hope that the Minister will give an immediate reaction on what the Government are doing, and if he can add to the answer given early in January by the hon. Member for Eastleigh (Mr. David Price) I shall be grateful.

The third issue has already been mentioned in the debate; namely, the V/STOL and STOL project. V/STOL will probably present problems for years to come. Therefore, I wish to conduct the argument in terms of STOL. I am glad that the Secretary of State for Trade and Industry has come into the Chamber because he takes a personal interest in this matter. We are under no illusion that this matter must be dealt with on a multinational basis, with each country agreeing to certain landing specifications. It is important, and not only for the aircraft industry, that decisions on the future of STOL should be announced fairly soon. For Scottish Members, such a system would have enormous personal benefit.

Fourthly, I wish to raise the question of environmental action and to put a direct question to the Secretary of State for Scotland. He will know from the debate on the Consolidated Fund Bill of 16th December and from a debate answered—and I make no complaint about this—by the Leader of the House and subsequently by the hon. Member for Ayr (Mr. Younger) that a detailed plan for urban conservation has been put forward on behalf of the Scottish Civic Trust and the Scottish National Trust. I do not claim that it is a panacea but it has two major advantages. The first is that it can bring employment quickly because it is a labour-intensive scheme. The second is that it would employ many people in kindred trades where there is an easy transfer of skill, even from ship repairing. That is the claim of the Scottish Civic Trust, and it seems to me fairly realistic. I hope that the Secretary of State, after all the favourable noises made by the Under-Secretary of State in the House on previous occasions, will be able to put forward some kind of realistic plan in the next few weeks.

Fifthly, the nub issue, referred to by the hon. Member for Keighley (Miss Joan Hall), concerns the Bolton Committee's report on small firms. This is very important in the context of employment in the engineering industry. I confine myself to asking the Government to give time for a debate on it and, even better, to take fairly speedy action on its less controversial suggestions.

Finally—because my hon. Friend the Member for Burnley (Mr. Dan Jones) has a great deal to say—I should like to make one other comment—

Mr. John Rankin (Glasgow, Govan)

who is called is a matter for the Chair.

Mr. Dalyell

Many hon. Members will have experienced over the weekend the shock of what is happening in the coalfield. Many hon. Members are better qualified to talk about this matter than I am, but are we sure that it is right to deny benefit to single men in the mining industry? Let us recollect—

Mr. Rankin

On a point of order. I am sorry to intervene, but—

Mr. Dalyell

I have been waiting all day to speak.

Mr. Rankin

So have I—or most of the day. I have just heard nominated as the next speaker an hon. Member who came into the Chamber long after I did. Is that in order?

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

That is not a point of order.

Mr. Dalyell

I hope that the Government are keeping under review the situation of single men in the coal industry. It will be within their recollection that there was enormous bitterness during the Pilkington strike precisely on this point. I warn them gently that unless some kind of favourable conclusion comes from their continuing review of the situation of single men in the coal industry there will be real trouble. I hope that that trouble can be avoided.

Mr. Deputy Speaker

Mr. Dan Jones.

Mr. Charles Loughlin (Gloucestershire, West)

On a point of order, Mr. Deputy Speaker I ask you whether it is in order for an hon. Member of this House to nominate the subsequent speaker—

Mr. Deputy Speaker

Order. There has been no nomination of the next speaker by any Member of this House. The hon. Member knows the time is late. He should not occupy the time of the House with a frivolous point of order.

Mr. Loughlin

I am sorry, Mr. Deputy Speaker, but, further to that point of order, it is a point of order which deals with the procedures of this House, and, although I do not want to protract any debate which diverts from the main debate, I am prepared to do it in the defence of the minority interests in this House. I follow the point taken by my hon. Friend previously, and I ask you, Mr. Deputy Speaker: is it in order for an hon. Member to nominate the subsequent speaker? It is within the recollection of the House that a statement was made nominating the subsequent—

Mr. Deputy Speaker

Order. I have already stated that no hon. Member in my hearing has nominated a subsequent speaker. The hon. Member is now using precious moments of the time of the House to say something which sounds rather like a frivolous point of order.

Mr. Loughlin

Further to the point of order, Mr. Deputy Speaker. HANSARD will prove whether I am correct or not. My hon. Friend the Member for—

Mr. Deputy Speaker

Order. The hon. Member is for the third time referring to something which I have ruled is not a point of order, and to something which an hon. Member did not say.

Mr. Loughlin

I am very sorry, Mr. Deputy Speaker, but you can rule on a point of order only in accordance with the procedures of this House, and Mr. Deputy Speaker cannot determine that an issue is a point of order or not a point of order except in relation to the procedures of this House. I make this submission to you, that it is the prerogative of the Chair to say who the next speaker or any speaker in this Chamber is to be. My hon. Friend the Member for West Lothian (Mr. Dalyell) referred to the subsequent speaker. HANSARD tomorrow will prove this. What I am asking you, Mr. Deputy Speaker, in the light of his calling on my hon. Friend the Member for Burnley (Mr. Dan Jones), is how it is possible for one hon. Member to nominate the subsequent speaker. Now you can deal with my point of order.

Mr. Deputy Speaker

It is not a point of order. Mr. Dan Jones.

9.9 p.m.

Mr. Dan Jones (Burnley)

I intend to speak for no more than five minutes. I shall try to keep to that time. I have taken a certain amount of exception to the fact that the debate has been dominated by Scottish affairs. With all due respect to that part of the country—and I certainly pay all due respect to it and to its entitlement—there are other areas in the country which are suffering very much from this vicious anti-social complaint, that is, unemployment.

I am going to refer, very briefly, to the intermediate areas, in particular to Burnley and north-east Lancashire. The area has suffered catastrophically in this century from the decline in the textile and coal industries. Today's debate is germane to the problems of those industries, inasmuch as their economic and industrial solvency depends substantially on engineering. There was much more that I wanted to say about this, but the clock is against me.

The House should understand that since the war gas turbines for aero-engines have been produced in Burnley. We have in addition some of the finest dough-making machines. Aero accessories and automobile accessories are made in Burnley. Burnley is now predominantly an engineering town. That is why I took exception to the Secretary of State for Scotland who, in opening the debate, concentrated so much on Scotland and did not refer to this area. I hope that the Minister for Industry will give some time and attention to it.

I impress upon the Minister the importance of the Mark II version of the RB211. There is much that I should like to say on that point, but time is not with me. I hope that when the Mark II comes up for Cabinet consideration sympathetic attention will be given to it.

I hope, too, that the suggestion about the machine tool industry made by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) will receive consideration. If the Government have the confidence in the future that they have expressed—and I want to believe them—they can show their confidence by earmarking parts of the machine tool industry for public ownership and placing them in the development and intermediate areas.

Will the Government seriously consider the reintroduction of investment grants rather than investment allowances? The Secretary of State for Trade and Industry, whom I am glad to see here, knows very well that the C.B.I. long ago came down in favour of grants rather than allowances. It is not for me to tell him what is the thinking of the C.B.I. He has been a member of that august body for many years and he knows perfectly well that these chaps know what they are talking about in terms of industrial expansion. I hope, therefore, that the Government will reintroduce investment grants rather than allowances. I apologise to the House for having to speak at such a rate but I have the time factor in mind.

9.13 p.m.

Mr. Bruce Millan (Glasgow, Craigton)

I am grateful to my hon. Friend the Member for Burnley (Mr. Dan Jones) for cutting short his remarks. The Opposition make no apology for returning today to the theme of unemployment. As my right hon. Friend the Member for Bristol, South-East (Mr. Benn) said in opening the debate, we intend to pursue this question until we get satisfactory answers and satisfactory action from the Government.

There was a misunderstanding on the Government side at the outset that there was to be a Scottish emphasis in the debate. That was not our intention. Although I shall start my speech by referring to Scotland, the debate today was intended to be, and on our side has been, a debate taking in the problems of the industries mentioned in the Motion over the whole country. Nevertheless, I am grateful that the misunderstanding enabled the Secretary of State for Scotland to make his statement about the ore terminal at Hunterston which we on this side of the House very much welcome.

There has been confusion about the ore terminal. Sometimes it has seemed to be a definite project and at other times there has been uncertainty, not least because of uncertainty in the Government's handling of the steel industry as a whole. We are happy to have the announcement of the British Steel Corporation today. As my hon. Friend the Member for East Stirlingshire (Mr. Douglas) said, this is only a start and we are interested in much more major developments at Hunterston than even the ore terminal.

The industries with which we are dealing today are in a sense basic to our industrial prosperity, not only in terms of the employment they provide—something like four and a half million—but also because they take up a large part of the capital investment of this country. Therefore, their prosperity is important, not just for those industries but for the strength of the economy as a whole.

It has been remarkable that we have had a series of speeches from both sides of the House which have been both critical and constructive. They have had as their general theme the desperate need for the Government to take immediate action on our engineering and capital-intensive industries.

The facts about unemployment are well enough known. Unemployment in the industries with which we are dealing today has gone up from about 95,500 in June, 1970, to 204,000 in December, 1971. As my right hon. Friend the Member for Bristol, South-East said in opening the debate, the number of vacancies has also gone steadily down. Even in the most favoured parts of the country there are now several men chasing every job: and in areas like Scotland there is a very large gap between the unemployment and vacancy figures. This is bad enough, but there are a number of other factors in the situation which make it even more critical.

If we take the question of engineering orders, there was a time a month or two ago when the Prime Minister, the Chancellor of the Exchequer and right hon. Gentlemen on the Government side in general were seeing a chink of light in respect of an improvement in engineering orders. That proved to be no more than a chink of light because the latest figures published in the Trade and Industry Journal on Friday last week show that in the period of three months from September to November, 1971—the latest period for which figures are available—compared with the previous three months there was not an improvement, but a further deterioration in the situation. In regard to new orders, home orders were up in that period by about 1 per cent.; export orders were down by 14 per cent.; total orders were down by 3 per cent. Deliveries in the three-months period show a deterioration of 2 per cent. over the previous three months, and the total order book for the industry at the end of November was 1 per cent. down as compared with what it was at the end of August.

Then there is the background to the problem in this country. I admit it does not date simply from June, 1970, but has a very much longer history. This relates to the problem of a lower rate of investment to gross national product in this country as compared with many countries whose industries are our competitors overseas. The Prime Minister gave the figures in a speech last week in the unemployment debate. Japan has an investment rate as a percentage of gross national product of 35 per cent.; in the countries of the Six the rate is 23 per cent.; and in the United Kingdom the rate is only 18 per cent.

This makes all the more tragic the present state of the engineering industry. As for the number of new jobs, some figures were given in a Written Answer last Friday by the Department of Trade and Industry. It can be seen that the number of new jobs involved in industrial development certificates given in 1971 was one-third down compared with the 1970 figures. These were the figure not simply for development areas, but for the whole of the United Kingdom—and they are very serious figures.

If we look at the prospects for the future and not just at the present situation, we see that the picture is extremely dismal. The C.B.I. Financial Trend Survey of September, 1971, showed that the capital investment expectations of industry were such that only 24 per cent. of the people who replied to the survey expected to spend more on plant and machinery over the next 12 months than they had spent over the previous 12 months. In regard to buildings the percentage of people who expected to spend more was only 16 per cent. compared with the previous period. The Financial Times survey in December produced equally dismal figures.

There is no sign yet of a real upturn in capital investment—and hon. Members opposite have made this point as firmly as we have—or of any upturn at all in the economy. This is despite the fact that it is the Government's intention to enter the Common Market on 1st January, 1973. For obvious reasons I shall not go into the merits of that tonight. As my hon. Friend the Member for Salford, West (Mr. Orme) said, it may be that some industrialists in this country are holding back investment because they hope to invest on the Continent of Europe. That would be an extremely dismal prospect. But even if it is not as bad as that, if we take the most favourable interpretation of this it still means that British industry has not yet got the message that the Government are trying to put over that it should be investment more to take advantage of the opportunity which the Government say will be available when we enter the Common Market.

We on this side, of course, are opposed to entry. Whatever we think about it, it still remains true that if we enter Europe in a situation in which industry has not prepared itself and has not invested to take advantage of the opportunities, the economic effects of entry for this country are bound to be extremely disadvantageous in the short term as well as in the longer term.

In the Secretary of State's speech today, we had trotted out again what is now a very tired excuse about the inheritance of the present Government in June, 1970. It was remarkable and significant that, with the inevitable exception of the hon. Member for Perth and East Perthshire (Mr. MacArthur), not one hon. Member on the Government side gave that as an excuse for the Government's record in the past 18 months. They all accepted the seriousness of the position, and no one tried to excuse the situation for the Government by pretending that it was one that the Government had inherited in June, 1970. I hope very much that the Minister for Industry will turn his mind exclusively to the situation that we have now and to the problems that we have. I hope, too, that he will answer the points put to him from both sides of the House.

I want to set out a number of general considerations which the Government should have in mind and to illustrate them by reference to specific industries. The first affects the Government's attitude towards industry, especially those branches of industry on which our real prosperity depends. It is absurd for the Government to have even the lingering feeling that they should disengage themselves from private industry. There is an interesting example of how absurd this is in the recent Report of the Select Committee on Science and Technology about the computer industry. I hope that at some stage the House will have an opportunity to debate that Report at length. That all-party Committee makes the simple point which I hope that the Government accept not just for the computer industry but for industry generally that, if we want to see industry prosper, it requires more and not less Government assistance, more and not less Government intervention and more and not less planning. That is a lesson which the Government give no sign of having learned, not just about the computer industry but about their relations with industry as a whole.

My second general point is that it is very important that we should protect the industry that we have in this country already. This point was made effectively by the right hon. Member for Stafford and Stone (Mr. Hugh Fraser). It does not make sense not to protect and enhance the industry that we have already. Again, the computer industry is a good example. I noticed in The Times the other day a report that the Government "think-tank" apparently is studying whether we need a computer industry in this country at all. I hope that that report is inaccurate. It seems criminal that any Government should even consider a proposition of that kind. Considering the amount of money already spent on the computer industry and considering that we are one of the few nations outside the United States which have a viable computer industry, we ought to be giving it every support and encouragement and not thinking whether we need to maintain the industry at all.

We had another example in the aircraft industry with the RB211. Again, I hope that we shall have a separate opportunity of debating the White Paper which was published about ten days ago. There is no indication in the White Paper of what we know to be the fact, that the Government had decided to write off the RB211 completely. That was the situation which we had last February. All of us will remember the appalling speech by the Minister of Aviation Supply on 8th February, 1971, in which he said that it was the Government's intention to write off the RB211 completely.

The Government were saved from themselves in a sense by pressure in this House and elsewhere. Yet, at the end of the day, the contract was saved by only one vote in the United States Senate. The whole incident damaged British industrial prestige considerably. Now that we have seen the White Paper it is extremely doubtful, to put it no higher, whether the Government have saved any money. If they had gone in and handled the situation in a different way, the project could have been saved without the expenditure of Government money greater than they are committed to by the White Paper.

The RB211 incident is a good example of the Government's original doctrinaire intention of contracting out altogether, but being forced to change their mind by pressure both here and elsewhere.

Unfortunately, the same kind of thing has not happened to the same extent—I mean the Government being forced to change their mind—in the shipbuilding industry. In this respect I agree absolutely with everything that was said by my right hon. Friend the Member for Sunderland, North (Mr. Willey). This was another instance where the Government decided to disengage. We had a long period of uncertainty after the General Election. We had the dismantling of the Shipbuilding Industry Board and the general impression by the Government, which persists to this day, that they were not interested in seizing the opportunities for the British shipbuilding industry which are available in world demand at the present time.

Other nations with shipbuilding industries have not taken this attitude, as my right hon. Friend pointed out. They have supported their industries and subsidised them, whether in the Common Market, France and Italy, or Japan, where 100 per cent. of Japanese orders go to Japanese shipyards compared with only about a third or a quarter in the United Kingdom. In all these other countries they have the message that if they want to remain in the league of industrial leaders they have to support the industries which they already have.

We had the abolition of investment grants for shipping at the same time as investment grants were abolished elsewhere—contrary, incidentally, to the recommendation of the Rochdale Committee that if investment grants were abolished equal incentives ought to be given to the shipping industry.

I was amazed that the Secretary of State for Scotland this afternoon quoted the order book of the shipbuilding industry at the end of December, 1971, without pointing out that in terms of compensated tons, which is the real comparison to make, the orders by British shipowners in 1971 were only a third of what they were in 1970. British shipowners attribute this tremendous falling-off of orders to the abolition of investment grants for shipping. This will have an ultimate effect on the balance of payments. It has an effect at the moment on our shipbuilding industry. It is desperate for the shipbuilding industry that we do something about financial incentives to shipping so that we can get the increased orders which we will need if the industry is not to fade away in two or three years.

Turning to U.C.S., we are very glad to see the initiative that was taken by the trade unions in their recent visit to the United States of America. The Secretary of State for Scotland this afternoon mentioned the interests of the Marathon Company in the Clydebank Yard, and it is this yard which is the key to the solution of the U.C.S. problem. I thought that it was ungracious of the Secretary of State to refer to that without saying that the Marathon initiative springs directly from the visit of Mr. McGarvey and his colleagues to the United States. It is not something that happened by Government initiative.

Mr. Gordon Campbell

I in no way detract from what the hon. Gentleman has said, but I was pointing out that there were a number of other interests involved. When Mr. McGarvey went to the United States it was to make contact with the people who had previously been concerned, but who apparently dropped out. A number of interests have been involved. The Government have been trying to attract as many firms as possible which might be interested in taking over this yard.

Mr. Millan

That is not the impression that we have had on this side of the House, nor is it the impression on Clyde-side. The fact remains that the Marathon interest, which is the most hopeful thing that has happened with Clydebank, came from a trade union initiative, and I thought that it was very bad that the Secretary of State could not bring himself even to mention that.

As regards the general employment situation, the fact that there are still 7,000 men employed in U.C.S. and that redundancies have been kept down to 1,000 is no thanks to the Government. If the original Government proposals had gone through, by this time most of the workers there would have lost their jobs. They are in work because of the determined action of the workers and the trade unions concerned—

Mr. Campbell

rose—

Mr. Millan

I shall not give way. That determined action has been supported—

Mr. Campbell

Will the hon. Gentleman give way?

Mr. Millan

No. The right hon. Gentleman took a rather long time to say very little.

I hope that we shall not get from the Minister tonight what we had from the Prime Minister last week—merely an exhortation. The Prime Minister appealed to private industry to invest more because, he said, the situation was going to improve. He had nothing new to offer it. He had no new proposals to make. He was merely making an appeal to private industry to invest more.

That was bad enough, but when the Under-Secretary of State for Trade and Industry wound up the debate on the machine tool industry on 22nd December he admitted that the situation in the industry was critical and that the Government had nothing to offer it. He concluded by saying: I conclude by hoping that the machine tool industry will have a happier year than it has had in 1971."—[OFFICIAL REPORT, 22nd December, 1971; Vol. 828, c. 1525.] That was very charming, but as the industry had had the worst year in its history it could not have a worse year in 1972. They were merely words.

There has been nothing constructive to help the machine tool industry. What that industry and others with which we are concerned want from the Government is not exhortation, not just an appreciation of their problems, but real action to help them to get over those problems.

A number of things are necessary if we are to create confidence in industry and elsewhere and if we are to give industry the stimulus which hon. Members on both sides of the House have pressed on the Government today as being urgently required. First, there is a need for the establishment of the I.R.C., either as it was before, or another version of it, to do the job of restructuring industry, a job which industry is not able successfully to do itself.

The second thing which is necessary—and this again has been supported by both sides of the House—is a return to the investment grant system. There is no doubt that the change from investment grants to tax allowances has had a disastrous effect, particularly in the development areas. That is know in the industry and in the House. The Government will not admit that the change was an error of substantial proportions which has very considerably affected industrial confidence. There is a desperate need for the Government now to reverse that decision.

There is also a need to do something in the machine tool industry. A number of proposals have been made today—retooling the Royal Ordnance factories, orders by nationalised industries and so on. There is the question of the Swedish system of capital expenditure tax certificates, which should also be considered.

Obviously, there is a variety of ways. Another way would be free depreciation for industry generally in buying machine tools for a limited period. Provided that it was combined with the restoration of investment grants, one could maintain the differential between the development and the non-development areas. But however the Government do this, there is a serious problem here. Unless something is done about the machine tool industry quickly, the boom, if it comes—we all hope that it will—will come so late and the industry will be so run down that the additional machine tools which will then be required for capital equipment will come not from the British industry but from abroad. That is the great danger which hon. Members opposite as well as on this side have pointed out today.

I hope that the Government will reconsider their attitude towards advance factories. Many advance factories are unoccupied but if the Government are really convinced that better times are coming, that capital investment will improve and that industry will soon want to expand, one of the best ways in which they could express their confidence is by starting now a further programme of advance factories, so that when capital investment begins to pick up again, or we begin to have mobile industry looking for expansion opportunities, these factories will be available in the development areas. The Government should now say that they made a mistake over the regional employment premium and that it will continue beyond 1974. This would give the development areas a tremendous stimulus.

None of these suggestions is particularly original. The tragic aspect of the present situation is that these suggestions have been made continually from this side of the House, by outside commentators and even by hon. Members on the Government side for a considerable time. But there has been no real sign yet that the Government are willing to adopt any of these suggestions. We shall keep coming back to this problem until the Government produce satisfactory solutions.

We do that because we appreciate that we face here not just an economic problem but also a human problem of absolutely appalling proportions. All of us, representing the interests of our constituents, have a right to bring that problem to the attention of the Government, to persist in our criticism of them and to persist in bringing this matter to the attention of the House until eventually we get a satisfactory response from the Government. I therefore hope that the House will support the Motion.

9.39 p.m.

The Minister for Industry (Sir John Eden)

At the beginning of his speech when he wound up for the Opposition in a similar debate last week the right hon. Member for Bristol, South-East (Mr. Benn) fairly recognised that we are attempting to grapple with immensely difficult problems in the nature of the present high level of unemployment. He said: …it would be foolish for any of us to suppose that they can be solved at the wave of a wand."—[OFFICIAL REPORT, 24th January, 1972; Vol. 829, c. 1091.] I am grateful to the right hon. Gentleman for that. I remind the House of what the right hon. Gentleman said then because it seemed that some hon. Members today, particularly the right hon. Gentleman himself, were trying to make out that there was some obvious tailor-made solution which would put everything to rights. I do not doubt hon. Members' sincerity in that. All of us must surely wish that there could be some quick answer to the deep-seated process which has brought insecurity, indignity and unhappiness to so many homes. If caring could do it we would have found the cure many months ago.

But, as the right hon. Gentleman said, it is not as easy as that. It is an immensely complex matter, and this fact was well illustrated in the wide range of subjects touched on in this debate, which was intended, I believe, to be slightly more concise than last week's debate. The industries mentioned during the course of the debate have ranged from the aircraft industry, the shipbuilding industry, the steel industry, and heavy engineering, to the newer technologies which were especially mentioned by the right hon. Gentleman. The regions represented during the course of the debate have stretched from Scotland to the North-East and the West Midlands, and even the problems of Walthamstow have been mentioned.

The nature and scale of the present unemployment is widely recognised as being a most serious and complex problem. To put it right we need, first, to know and to understand what has been happening, not just in the past few months, but at least over a number of years; and we need to know why it has been happening. To find the causes of the present high level of unemployment we need to go back to the policies of the previous Government. As we do so, it will be seen how in three areas in particular they directly contributed to the recent widespread loss of jobs and closing of plant.

I do not accuse members of the previous Government of wanting unemployment or of trying to create it, any more than they would surely do so of us; but I do accuse them of failing to recognise in terms of job security the consequences of their own policy, the full miserable harvest of which we have been reaping in the past few months. They apparently need to be reminded of one or two facts, particularly now when they are calling for a greater stimulus to be given to expansion than that which has already been given.

First, it was the Labour Government which quite deliberately followed a policy of slow growth, a policy in which they were distressingly successful, achieving a growth rate of less than 15 per cent. overall in six years with a low point of less than 2 per cent. a year in the last two years.

Now by comparison there is a real prospect of an annual rate of increase in domestic demand of 4 per cent. to 5 per cent. sustained over a number of years ahead. Provided that the price competitiveness in international markets is maintained, there is no reason why this rate of growth should not be achieved.

Second, the Labour Government deliberately set out to squeeze company profits, to tax individual earnings, and to load an additional burden against employment in the service trades at the very moment when they should have been doing precisely the reverse. By comparison we have already reduced taxation by £1,400 million in a full year and we have halved the selective employment tax. I heartily agree with the comments of my hon. Friend the Member for Hastings (Mr. Warren) about the damage that that particular brand of taxation did.

Third, the previous Government also, towards the end of their time, deliberately, almost cynically, unleashed the full force of indiscriminate wage inflation. The equation of deflation, excessive taxation and uncontrolled wage inflation has inevitably led to job loss and shut-down. We are paying today a heavy price for the policies of yesterday's men. The policy of slow growth had consequences for demand directly affecting the level of investment in the years that followed. This has been clearly seen in, for example, the industry referred to by my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser), the electricity supply industry. The reduced forecasts of demand attributable to the previous Government's policies of slow growth have meant fewer orders for manufacturers of switch-gear and turbo-generators. The cutback has had a most damaging effect on the heavy electrical, boiler making and heavy fabricating industries, and this has had a direct impact on employment in those industries. A sharply reduced order book from the domestic electricity supply industry has meant fewer jobs in the manufacturing companies as the backlog has worked through.

To counter this effect, the present Government took direct action by bringing forward the start of a new power station, advancing by many months the placing of orders for its construction, its plant and its equipment. The hon. Member for Sunderland, South (Mr. Bagier) asked about Sizewell B. As he knows, the choice of a power station is primarily a matter for the Central Electricity Generating Board, but I should tell him that Ince B was chosen in this case to enable an earlier impact to be felt on the employment figures than would otherwise have been the case, since Ince B is a repeat order. While on the subject of power stations, perhaps I may tell the hon. Member for West Lothian (Mr. Dalyell) that I hope to be able to answer some of the points which he raised when I move the Second Reading of the Electricity Bill tomorrow.

There is no doubt that the fall back in employment opportunities in certain sectors of heavy industry has had a serious impact in the regions. In this context we heard again the voice of the Midlands through the mouth of the hon. Member for Birmingham, Northfield (Mr. Carter) and of my right hon. Friend the Member for Stafford and Stone. In the Birmingham area, about one in 10 applications for industrial development certificates have not been granted. It is an extremely difficult balance of judgment to weigh the needs of areas such as those which have been represented in today's debate against those of the older industrial conurbations which are desperately in need of any mobile industry which can go there and bring new employment opportunities.

I well understand why the hon. Member for Dunbartonshire, West (Mr. Ian Campbell) was worried at some of the comments made on this score. But I agree with my hon. Friend the Member for Bristol, North-East (Mr. Adley) that there is considerable scope in all this for the tourist industry and the prospects which it can open up in terms of new employment. The service industries generally can offer tremendous new outlets for employment in the regions, and this prospect will be increasingly seen as our economy expands in the years ahead.

Many of the areas where our older industries are concentrated know from their past experience that slow growth leads to higher unemployment. That has invariably been so, but this time there was the additional factor of wage inflation which has made the position much worse. The previous Government deliberately stoked up the fires of wage inflation. The right hon. Lady the Member for Blackburn (Mrs. Castle), in her notorious "The power is on the shop floor" speech, was guilty of incitement of the most irresponsible kind. Having failed in her own attempt at containment, she went right over to the other extreme and actively identified herself with the exaggerated claims for higher wages, as have most members of her party since then.

Mr. Eric S. Heffer (Liverpool, Walton)

rose—

Sir J. Eden

Now it appears that they are prepared to go to almost any length, openly backing industrial action in order to push harder on a front where they know an advance can only cause damage, an advance which for a time when they were in office and had some sense of responsibility they were so determined to do their best to check.

The consequences of the previous Government's policy on wage inflation are still with us. We see them most clearly in what has happened to the shipbuilding industry, where the hoped for benefits in fixed-price contracts have been swamped in rising costs. To counter this, and the falling order book in the industry, we have brought forward about £80 million-worth of new naval shipbuilding orders. The home credit scheme, which started at £200 million, now stands at £700 million and will shortly be raised to £1,000 million. The industry has been given all the assistance promised under the Geddes programme, and more. In spite of what has been said by Labour Members, the present Government postponed the dissolution of the Shipbuilding Industry Board, the terminal date of which was written into the previous Government's Act.

Both Opposition Front Bench speakers have referred to the position of U.C.S. But the hon. Member for Glasgow, Craigton (Mr. Millan) must have known perfectly well that we made it clear in August that the main burden of redundancies would not take place before the end of the year. He also knows that many attempts have been made to find suitable interested parties to put in a bid for the Clydebank yard. I readily pay tribute to the work of Danny McGarvey, who I am sure will acknowledge the way in which we have co-operated. The firm of Breaksea Tank Ships asked us not to come forward with any assistance which the Department might be in a position to give, because it was not quite ready for it. But Marathon Manufacturing Company certainly is interested. I had an interesting discussion with it last Friday. The amount of Local Employment Act assistance that might be available for it is certainly not the decisive factor, and hon. Members delude themselves if they think it is. The firm made clear to me that what matters most to it is to be able to maintain its delivery schedules, which are extremely tight with the sort of product it intends to manufacture. Therefore, the most important thing for it is the agreement on working practices, without which it probably would not be prepared to proceed.

Faced with mounting costs, many companies have inevitably found themselves with virtually no room for manœuvre. There was a limit to the extent to which they could pass on in higher prices the extra costs incurred. That way played straight into the hands of our competitors. In most cases it was a self-defeating exercise, leading to renewed claims for higher wages. In any case, there was a limit to the amount of extra wages they could finance. The previous Government's deliberate policy of squeezing company profits was taking its toll. That has had serious consequences for companies' cash flow, leading directly to low investment performance, and has hit particularly hard the capital goods industries. The machine tool industry is no exception. That industry has been mentioned by the hon. Members for Salford, West (Mr. Orme), Burnley (Mr. Dan Jones) and others.

Mr. Douglas

rose—

Sir John Eden

The machine tool industry has been very hard hit, It is always last to be affected by any downturn in the economy and, regrettably, seems also to be the last to be affected by any upturn. But one thing is quite clear, that the competitiveness of the industry is very sound, the quality of the product is very good, and the figures show—

Mr. Douglas

rose—

Hon. Members

Sit down.

Sir J. Eden

I have much more of the debate still to answer.

The figures clearly show the extent to which the machine tool industry has been able to beat competition in markets overseas. Obviously this—

Mr. Benn

rose—

Sir J. Eden

Very well, if the right hon. Gentleman will be quick.

Mr. Benn

I am grateful to the hon. Gentleman. Before he sits down, can he tell us the date when he estimates that unemployment will be reduced to the level which the Government inherited from their predecessors?

Sir J. Eden

I was talking about the machine tool industry.—[HON. MEMBERS: "Answer."] Very well. If it is the intention of hon. Members opposite to stop me from finishing my speech, let them by all means shout; let them by all means make ridiculous exhibitions of themselves tonight, as they did the other night. There are many points in the debate which I am trying to answer and I shall continue to try to do so.

Obviously, in the machine tool industry and the rest of British manufacturing industry this is the ideal time for the older plant to be replaced, and certainly there is every indication that expansion is well on the way. One of the key areas in this is the motor car industry. The new car registrations are at a record this year. Last year was also a record for them. This indicates record sales. Hon. Members opposite who are so keen to jeer at these things may well ask themselves how it is that the previous record year for new car registrations and car sales was 1964. What, one may ask, was happening between 1964 and 1971? They were the years of the locust eating into the vitality of our industry. I will tell the right hon. Gentleman that investment has been taking place in European countries because demand for motor cars has been greater there, and it is to stimulate the demand for cars over here that we have deliberately geared our new policy to stimulating growth in the consumer industries.

Mr. Ron Lewis (Carlisle)

rose—

Sir J. Eden

All the measures that we have been taking are designed to increase general consumer spending power in the knowledge that the goods that are bought will benefit the engineering industry generally and will be reflected in bigger orders for the component industries.

Our aim is clear. It is to get growth under way to absorb the unemployment and to provide new job opportunities for those at present out of work. We will do this in a way which will avoid overloading, and it will be spread forward over a three-year period. The foundations for growth are there and opportunities are better for investment than they have ever been. Our industry is increas-

ingly competitive. It is making better use of its resources. New initiatives in training are about to be announced. We are shortly to have access, on equal terms with our competitors, to the expanding European market. Thanks to the measures that the Government have already taken, demand is being re-invigorated and confidence is returning.

Question put, That the Amendment be made:—

The House divided: Ayes 304, Noes 276.

Division No. 47.]	AYES	[10.0 p.m.
Adley, Robert	Dalkeith, Earl of	Hayhoe, Barney
Alison, Michael (Barkston Ash)	Davies, Rt. Hn. John (Knutsford)	Heath, Rt. Hn. Edward
Allason, James (Hemel Hempstead)	d'Avigdor-Goldsmid, Maj. -Gen. James	Heseltine, Michael
Amery, Rt. Hn. Julian	Dean, Paul	Hicks, Robert
Archer, Jeffrey (Louth)	Deedes, Rt. Hn. W. F.	Higgins, Terence L.
Astor, John	Digby, Simon Wingfield	Hiley, Joseph
Atkins, Humphrey	Dixon, Piers	Hill, John E. B. (Norfolk, S.)
Awdry, Daniel	Dodds-Park, Douglas	Hill, James (Southampton, Test)
Baker, Kenneth (St. Marylebone)	Douglas-Home, Rt. Hn. Sir Alec	Holland, Philip
Balniel, Lord	Drayson, G. B.	Holt, Miss Mary
Barber, Rt. Hn. Anthony	du Cann, Rt. Hn. Edward	Hordern, Peter
Batsford, Brian	Dykes, Hugh	Hornby, Richard
Beamish, Col. Sir Tufton	Eden, Sir John	Hornsby-Smith, Rt. Hn. Dame Patricia
Bell, Ronald	Edwards, Nicholas (Pembroke)	Howe, Hn. Sir Geoffrey (Reigate)
Bennett, Dr. Reginald (Gosport)	Elliot, Capt. Walter (Carshalton)	Howell, David (Guildford)
Benyon, W.	Emery, Peter	Howell, Ralph (Norfolk, N.)
Berry, Hn. Anthony	Farr, John	Hunt, John
Biffen, John	Fell, Anthony	Hutchison, Michael Clark
Biggs-Davison, John	Fenner, Mrs. Peggy	Iremonger, T. L.
Blaker, Peter	Fidler, Michael	Irvine, Bryant Godman (Rye)
Boardman, Tom (Leicester, S.W.)	Finsberg, Geoffrey (Hampstead)	James, David
Body, Richard	Fletcher Cooke, Charles	Jenkin, Patrick (Woodford)
Boscawen, Robert	Fookes, Miss Janet	Jennings, J. C. (Burton)
Bossom, Sir Clive	Fortescue, Tim	Jessel, Toby
Bowden, Andrew	Foster, Sir John	Johnson Smith, G. (E. Grinstead)
Boyd-Carpenter, Rt. Hn. John	Fowler, Norman	Jones, Arthur (Northants, S.)
Braine, Bernard	Fox, Marcus	Jopling, Michael
Bray, Ronald	Fraser, Rt. Hn. Hugh (St'fford & Stone)	Joseph, Rt. Hn. Sir Keith
Brewis, John	Fry, Peter	Kaberry, Sir Donald
Brinton, Sir Tatton	Galbraith, Hn. T. G.	Kellett-Bowman, Mrs. Elaine
Brocklebank-Fowler, Christopher	Gardner, Edward	Kershaw, Anthony
Brown, Sir Edward (Bath)	Gibson-Watt, David	Kilfedder, James
Bruce-Gardyne, J	Gilmour, Ian (Norfolk, C.)	Kimball, Marcus
Bryan, Paul	Gilmour, Sir John (Fife, E.)	King, Evelyn (Dorset, S.)
Buchanan-Smith, Alick (Angus, N&M)	Glyn, Dr. Alan	King, Tom (Bridgwater)
Buck, Antony	Godber, Rt. Hn. J. B.	Kinsey, J. R.
Bullus, Sir Eric	Goodhart, Philip	Kirk, Peter
Burden, F. A.	Goodhew, Victor	Kitson, Timothy
Butler, Adam (Bosworth)	Gorst, John	Knight, Mrs. Jill
Campbell, Rt. Hn. G. (Moray&Nairn)	Gower, Raymond	Knox, David
Carr, Rt. Hn. Robert	Grant, Anthony (Harrow, C.)	Lambton, Lord
Channon, Paul	Gray, Hamish	Lane, David
Chapman, Sydney	Green, Alan	Langford-Holt, Sir John
Chataway, Rt. Hn. Christopher	Grieve, Percy	Legge-Bourke, Sir Harry
Chichester-Clark, R.	Griffiths, Eldon (Bury St. Edmunds)	Le Marchant, Spencer
Churchill, W. S.	Grylls, Michael	Lewis, Kenneth (Rutland)
Clarke, Kenneth (Rushcliffe)	Gummer, Selwyn	Longden, Gilbert
Clegg, Walter	Gurden, Harold	Loveridge, John
Cockeram, Eric	Hall, Miss Joan (Keighley)	Luce, R. N.
Cooke, Robert	Hall, John (Wycombe)	McAdden, Sir Stephen
Coombs, Derek	Hall-Davis, A. G. F.	MacArthur, Ian
Cooper, A. E.	Hamilton, Michael (Salisbury)	McCrindle, R. A.
Cordle, John	Hannam, John (Exeter)	McLaren, Martin
Corfield, Rt. Hn. Frederick	Harrison, Brian (Maldon)	Maclean, Sir Fitzroy
Cormack, Patrick	Harrison, Col. Sir Harwood (Eye)	McMaster, Stanley
Costain, A. P.	Haselhurst, Alan	Macmillan, Maurice (Farnham)
Critchley, Julian	Hastings, Stephen	McNair-Wilson, Michael
Crouch, David	Havers, Michael	McNair-Wilson, Patrick (NewForest)
Crowder, F. P.	Hawkins, Paul	Maddan, Martin
Curran, Charles	Hay, John	Madel, David
Maginnis, John E.	Price, David (Eastleigh)	Sutcliffe, John
Marples, Rt. Hn. Ernest	Proudfoot, Wilfred	Tapsell, Peter
Marten, Neil	Pym, Rt. Hn. Francis	Taylor, Sir Charles (Eastbourne)
Mather, Carol	Quennell, Miss J. M.	Taylor, Edward M. (G'gow, Cathcart)
Maude, Angus	Raison, Timothy	Taylor, Frank (Moss Side)
Maudling, Rt. Hn. Reginald	Ramsden, R. Hn. James	Taylor, Robert (Croydon, N.W.)
Mawby, Ray	Redmond, Robert	Tebbit, Norman
Maxwell-Hyslop, R. J.	Reed, Laurance (Bolton, E.)	Thatcher, Rt. Hn. Mrs. Margaret
Meyer, Sir Anthony	Rees, Peter (Dover)	Thomas, John Stradling (Monmouth)
Mills, Peter (Torrington)	Rees-Davies, W. R.	Thomas, Rt. Hn. Peter (Hendon, S.)
Mills, Stratton (Belfast, N.)	Renton, Rt. Hn. Sir David	Thompson, Sir Richard (Croydon, S.)
Miscampbell, Norman	Rhys Williams, Sir Brandon	Tilney, John
Mitchell, David (Basingstoke)	Ridley, Hn. Nicholas	Trafford, Dr. Anthony
Moate, Roger	Ridsdale, Julian	Trew, Peter
Molyneaux, James	Rippon, Rt. Hn. Geoffrey	Tugendhat, Christopher
Money, Ernie	Roberts, Michael (Cardiff, N.)	Turton, Rt. Hn. Sir Robin
Monks, Mrs. Connie	Roberts, Wyn (Conway)	van Straubenzee, W. R.
Monro, Hector	Rodgers, Sir John (Sevenoaks)	Vaughan, Dr. Gerard
Montgomery, Fergus	Rossi, Hugh (Hornsey)	Vickers, Dame Joan
More, Jasper	Rost, Peter	Waddington, David
Morgan-Giles, Rear-Adm.	Royle, Anthony	Walder, David (Clitheroe)
Morrison, Charles	Russell, Sir Ronald	Walker, Rt. Hn. Peter (Worcester)
Mudd, David	St. John-Stevas, Norman	Walker-Smith, Rt. Hn. Sir Derek
Murton, Oscar	Sandys, Rt. Hn. D.	Wall, Patrick
Nabarro, Sir Gerald	Scott, Nicholas	Walters, Dennis
Neave, Airey	Scott-Hopkins, James	Ward, Dame Irene
Nicholls, Sir Harmar	Sharples, Richard	Warren, Kenneth
Noble, Rt. Hn. Michael	Shelton, William (Clapham)	Wells, John (Maidstone)
Nott, John	Simeons, Charles	White, Roger (Gravesend)
Onslow, Cranley	Sinclair, Sir George	Whitelaw, Rt. Hn. William
Oppenheim, Mrs. Sally	Skeet, T. H. H.	Wiggin, Jerry
Orr, Capt. L. P. S.	Smith, Dudley (W'wick & L'mington)	Wilkinson, John
Osborn, John	Soref, Harold	Winterton, Nicholas
Owen, Idris (Stockport, N.)	Speed, Keith	Woodhouse, Hn. Christopher
Page, Graham (Crosby)	Spence, John	Woodnutt, Mark
Page, John (Harrow, W.)	Sproat, Iain	Worsley, Marcus
Parkinson, Cecil	Stainton, Keith	Wylie, Rt. Hn. N. R.
Peel, John	Stanbrook, Ivor	Younger, Hn. George
Percival, Ian	Stewart-Smith, Geoffrey (Belper)
Peyton, Rt. Hn. John	Stodart, Anthony (Edinburgh, W.)	TELLERS FOR THE AYES:
Pike, Miss Mervyn	Stoddart-Scott, Col. Sir M.	Mr. Reginald Eyre and
Pink, R. Bonner	Stokes, John	Mr. Bernard Weatherill
Pounder, Rafton	Stuttaford, Dr. Tom
NOES
Abse, Leo	Clark, David (Colne Valley)	Ellis, Tom
Albu, Austen	Cocks, Michael (Bristol, S.)	English, Michael
Allaun, Frank (Salford, E.)	Cohen, Stanley	Evans, Fred
Archer, Peter (Rowley Regis)	Coleman, Donald	Ewing, Henry
Armstrong, Ernest	Concannon, J. D.	Fernyhough, Rt. Hn. E.
Ashley, Jack	Conlan, Bernard	Fisher, Mrs. Doris (B'ham, Ladywood)
Ashton, Joe	Corbet, Mrs. Freda	Fitch, Alan (Wigan)
Atkinson, Norman	Cox, Thomas (Wandsworth, C.)	Fitt, Gerard (Belfast, W.)
Bagier, Gordon A. T.	Crawshaw, Richard	Fletcher, Raymond (Ilkeston)
Barnes, Michael	Cronin, John	Fletcher, Ted (Darlington)
Barnett, Guy (Greenwich)	Cunningham, G. (Islington, S.W.)	Foot, Michael
Barnett, Joel (Heywood and Royton)	Cunningham, Dr. J. A. (Whitehaven)	Ford, Ben
Baxter, William	Dalyell, Tam	Forrester, John
Beaney, Alan	Darling, Rt. Hn. George	Fraser, John (Norwood)
Benn, Rt. Hn. Anthony Wedgwood	Davidson, Arthur	Freeson, Reginald
Bennett, James (Glasgow, Bridgeton)	Davies, Denzil (Llanelly)	Galpern, Sir Myer
Bidwell, Sydney	Davies, Ifor (Gower)	Garrett, W. E.
Bishop, E. S.	Davis, Clinton (Hackney, C.)	Gilbert, Dr. John
Blenkinsop, Arthur	Davis, Terry (Bromsgrove)	Ginsburg, David (Dewsbury)
Boardman, H. (Leigh)	Deakins, Eric	Golding, John
Booth, Albert	de Freitas, Rt. Hn. Sir Geoffrey	Gordon Walker, Rt. Hn. P. C.
Bottomley, Rt. Hn. Arthur	Delargy, H. J.	Gourlay, Harry
Boyden, James (Bishop Auckland)	Dell, Rt. Hn. Edmund	Grant, George (Morpeth)
Bradley, Tom	Dempsey, James	Grant, John D. (Islington, E.)
Broughton, Sir Alfred	Devlin, Miss Bernadette	Griffiths, Eddie (Brightside)
Brown, Bob (N'c'tle-upon-Tyne, W.)	Doig, Peter	Griffiths, Will (Exchange)
Brown, Hugh D. (G'gow, Provan)	Dormand, J. D.	Hamilton, James (Bothwell)
Brown, Ronald (Shoreditch & F'bury)	Douglas, Dick (Stirlingshire, E.)	Hamilton, William (Fife, W.)
Buchan, Norman	Douglas-Mann, Bruce	Hamling, William
Buchanan, Richard (G'gow, Sp'burn)	Driberg, Tom	Hannan, William (G'gow, Maryhill)
Butler, Mrs. Joyce (Wood Green)	Duffy, A. E. P.	Hardy, Peter
Campbell, I. (Dunbartonshire, W.)	Dunnett, Jack	Harper, Joseph
Cant, R. B.	Eadie, Alex	Harrison, Walter (Wakefield)
Carmichael, Neil	Edelman, Maurice	Hart, Rt. Hn. Judith
Carter, Ray (Birmingh'm, Northfield)	Edwards, Robert (Bilston)	Hattersley, Roy
Castle, Rt. Hn. Barbara	Edwards, William (Merioneth)	Healey, Rt. Hn. Denis

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

Main question, as amended, put:—

The House divided: Ayes 304, Noes 276.

Division No. 48.]	AYES	[10.13 p.m.
Adley, Robert	Biffen, John	Buchanan-Smith, Alick (Angus, N&M)
Alison, Michael (Barkston Ash)	Biggs-Davison, John	Buck, Antony
Allason, James (Hemel Hempstead)	Blaker, Peter	Bullus, Sir Eric
Amery, Rt. Hn. Julian	Boardman, Tom (Leicester, S.W.)	Burden, F. A.
Archer, Jeffrey (Louth)	Body, Richard	Butler, Adam (Bosworth)
Astor, John	Boscawen, Robert	Campbell, Rt. Hn. G. (Moray&Nairn)
Atkins, Humphrey	Bossom, Sir Clive	Carr, Rt. Hn. Robert
Awdry, Daniel	Bowden, Andrew	Channon, Paul
Baker, Kenneth (St. Marylebone)	Boyd-Carpenter, Rt. Hn. John	Chapman, Sydney
Balniel, Lord	Braine, Sir Bernard	Chataway, Rt. Hn. Christopher
Barber, Rt. Hn. Anthony	Bray, Ronald	Chichester-Clark, R.
Batsford, Brian	Brewis, John	Churchill, W. S.
Beamish, Col. Sir Tufton	Brinton, Sir Tatton	Clarke, Kenneth (Rushcliffe)
Bell, Ronald	Brocklebank-Fowler, Christopher	Clegg, Walter
Bennett, Dr. Reginald (Gosport)	Brown, Sir Edward (Bath)	Cockeram, Eric
Benyon, W.	Bruce-Gardyne, J.	Cooke, Robert
Berry, Hn. Anthony	Bryan, Paul	Coombs, Derek
Cooper, A. E.	Howell, David (Guildford)	Page, Graham (Crosby)
Cordle, John	Howell, Ralph (Norfolk, N.)	Page, John (Harrow, W.)
Corfield, Rt. Hn. Frederick	Hunt, John	Parkinson, Cecil
Cormack, Patrick	Hutchison, Michael Clark	Peel, John
Costain, A. P.	Iremonger, T. L.	Percival, Ian
Critchley, Julian	Irvine, Bryant Godman (Rye)	Peyton, Rt. Hn. John
Crouch, David	James, David	Pike, Miss Mervyn
Crowder, F. P.	Jenkin, Patrick (Woodford)	Pink, R. Bonner
Curran, Charles	Jennings, J. C. (Burton)	Pounder, Rafton
Dalkeith, Earl of	Jessel, Toby	Price, David (Eastleigh)
Davies, Rt. Hn. John (Knutsford)	Johnson Smith, G. (E. Grinstead)	Proudfoot, Wilfred
d'Avigdor-Goldsmid, Maj. -Gen. James	Jones, Arthur (Northants, S.)	Pym, Rt. Hn. Francis
Dean, Paul	Jopling, Michael	Quennell, Miss J. M.
Deedes, Rt. Hn. W. F.	Joseph, Rt. Hn. Sir Keith	Raison, Timothy
Digby, Simon Wingfield	Kaberry, Sir Donald	Ramsden, Rt. Hn. James
Dixon, Piers	Kellett-Bowman, Mrs. Elaine	Redmond, Robert
Dodds-Parker, Douglas	Kershaw, Anthony	Reed, Laurance (Bolton, E.)
Douglas-Home, Rt. Hn. Sir Alec	Kilfedder, James	Rees, Peter (Dover)
Drayson, G. B.	Kimball, Marcus	Rees-Davies, W. R.
du Cann, Rt. Hn. Edward	King, Evelyn (Dorset, S.)	Renton, Rt. Hn. Sir David
Dykes, Hugh	King, Tom (Bridgwater)	Rhys Williams, Sir Brandon
Eden, Sir John	Kinsey, J. R.	Ridley, Hn. Nicholas
Edwards, Nicholas (Pembroke)	Kirk, Peter	Ridsdale, Julian
Elliot, Capt. Walter (Carshalton)	Kitson, Timothy	Rippon, Rt. Hn. Geoffrey
Emery, Peter	Knight, Mrs. Jill	Roberts, Michael (Cardiff, N.)
Farr, John	Knox, David	Roberts, Wyn (Conway)
Fell, Anthony	Lambton, Lord	Rodgers, Sir John (Sevenoaks)
Fenner, Mrs. Peggy	Lane, David	Rossi, Hugh (Hornsey)
Fidler, Michael	Langford-Holt, Sir John	Rost, Peter
Finsberg, Geoffrey (Hampstead)	Legge-Bourke, Sir Harry	Royle, Anthony
Fletcher-Cooke, Charles	Le Marchant, Spencer	Russell, Sir Ronald
Fookes, Miss Janet	Lewis, Kenneth (Rutland)	St. John-Stevas, Norman
Fortescue, Tim	Longden, Sir Gilbert	Sandys, Rt. Hn. D.
Foster, Sir John	Loveridge, John	Scott, Nicholas
Fowler, Norman	Luce, R. N.	Scott-Hopkins, James
Fox, Marcus	McAdden, Sir Stephen	Sharples, Richard
Fraser, Rt. Hn. Hugh (St'fford & Stone)	MacArthur, Ian	Shelton, William (Clapham)
Fry, Peter	McCrindle, R. A.	Simeons, Charles
Galbraith, Hn. T. G.	McLaren, Martin	Sinclair, Sir George
Gardner, Edward	Maclean, Sir Fitzroy	Skeet, T. H. H.
Gibson-Watt, David	McMaster, Stanley	Smith, Dudley (W'wick & L'mington)
Gilmour, Ian (Norfolk, C.)	Macmillan, Rt. Hn. Maurice (Farnham)	Soref, Harold
Gilmour, Sir John (Fife, E.)	McNair-Wilson, Michael	Speed, Keith
Glyn, Dr. Alan	McNair-Wilson, Patrick (New Forest)	Spence, John
Godber, Rt. Hn. J. B.	Maddan, Martin	Sproat, Iain
Goodhew, Victor	Madel, David	Stainton, Keith
Gorst, John	Maginnis, John E.	Stanbrook, Ivor
Gower, Raymond	Marples, Rt. Hn. Ernest	Stewart-Smith, Geoffrey (Belper)
Grant, Anthony (Harrow, C.)	Marten, Neil	Stodart, Anthony (Edinburgh, W.)
Gray, Hamish	Mather, Carol	Stoddart-Scott, Col. Sir M.
Green, Alan	Maude, Angus	Stokes, John
Grieve, Percy	Maudling. Rt. Hn. Reginald	Stuttaford, Dr. Tom
Griffiths, Eldon (Bury St. Edmunds)	Mawby, Ray	Sutcliffe, John
Grylls, Michael	Maxwell-Hyslop, R. J.	Tapsell, Peter
Gummer, Selwyn	Mever, Sir Anthony	Taylor, Sir Charles (Eastbourne)
Gurden, Harold	Mills, Peter (Torrington)	Taylor, Edward M. (G'gow, Cathcart)
Hall, Miss Joan (Keighley)	Mills, Stratton (Belfast, N.)	Taylor, Frank (Moss Side)
Hall, John (Wycombe)	Miscampbell, Norman	Taylor, Robert (Croydon, N.W.)
Hall-Davis, A. G. F.	Mitchell, Lt. -Col. C. (Aberdeenshire, W)	Tebbit, Norman
Hamilton, Michael (Salisbury)	Mitchell. David (Basingstoke)	Thatcher, Rt. Hn. Mrs. Margaret
Hannam, John (Exeter)	Moate, Roger	Thomas, John Stradling (Monmouth)
Harrison, Brian (Maldon)	Molyneaux, James	Thomas, Rt. Hn. Peter (Hendon, S.)
Harrison, Col. Sir Harwood (Eye)	Money, Ernie	Thompson, Sir Richard (Croydon, S.)
Haselhurst, Alan	Monks, Mrs. Connie	Tilney, John
Hastings, Stephen	Monro, Hector	Trafford, Dr. Anthony
Havers, Michael	Montgomery, Fergus	Trew, Peter
Hawkins, Paul	More, Jasper	Tugendhat, Christopher
Hay, John	Morgan-Giles, Rear-Adm.	Turton, Rt. Hn. Sir Robin
Hayhoe, Barney	Morrison, Charles	van Straubenzee, W. R.
Heath, Rt. Hn. Edward	Mudd, David	Vaughan, Dr. Gerard
Heseltine, Michael	Murton, Oscar	Vickers, Dame Joan
Hicks, Robert	Nabarro, Sir Gerald	Waddington, David
Higgins, Terence L.	Neave, Airey	Walder, David (Clitheroe)
Hiley, Joseph	Nicholls, Sir Harmar	Walker, Rt. Hn. Peter (Worcester)
Hill, John E. B. (Norfolk, S.)	Nicholls, Sir Harmar	Walker-Smith, Rt. Hn. Sir Derek
Hill, James (Southampton, Test)	Noble, Rt. Hn. Michael	Wall, Patrick
Holland, Philip	Nott, John	Walters, Dennis
Holt, Miss Mary	Onslow, Cranley	Ward, Dame Irene
Hordern, Peter	Oppenheim, Mrs. Sally	Warren, Kenneth
Hornby, Richard	Orr, Capt. L. P. S.	Wells, John (Maidstone)
Hornsby-Smith, Rt. Hn. Dame Patricia	Osborn, John	White, Roger, (Gravesend)
Howe, Hn. Sir Geoffrey (Reigate)	Owen, Idris (Stockport, N.)	Whitelaw, Rt. Hn. William

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

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

Resolved, That this House, recognising the problems of heavy industry following five years of almost total economic stagnation, welcomes the steps Her Majesty's Government have taken and are taking to restore confidence in the economy, with the object of providing increased employment, greater price stability and a sound base for future expansion.