HC Deb 07 December 1977 vol 940 cc1470-520
Mr. Raison

I beg to move Amendment No. 346, in page 19, line 29, leave out 'prepare guidelines' and insert 'issue directions'.

The Second Deputy Chairman

With this we may take Amendment No. 348, in page 20, line 21, leave out 'guidelines' and insert 'directions'.

Mr. Raison

We have now two hours in which to consider three clauses that are extremely important and unquestionably require a very thorough Committee stage examination. These are not clauses which are just open and shut. They involve a great deal of detail. They are exactly the sort of clauses for which, in a sense, we have the Committee system. To have to gallop through them, as we are having to do today, is completely monstrous. I particularly regret that there will not be time for proper examination of Clause 40, which I think is of the greatest possible importance.

The effect of Amendment No. 346, together with Amendment No. 348, is to change the phrase "prepare guidelines" to "issue directions". This refers to the guidelines which, under the Bill, are to be given by the Secretary of State to—I assume—the Scottish Secretary, in regard to the Scottish Development Agency and certain other agencies or for certain other purposes listed in the clause. Because of the great pressure on our time, I intend to be very brief. I believe that there are other amendments and debates which should take up more time.

This is an important clause. It is essential that we obtain from the Minister a clear idea of exactly what is meant by "guidelines" and exactly what they are meant to do. The question that one needs to ask the Minister first is whether "guidelines" are the same thing as "directions"—except that the word is used in a rather more delicate way.

If one looks at other Acts of Parliament—indeed, the Acts of Parliament to which reference is made here—one finds that the wording in them is "directions". In this case we now have this word "guidelines". We are entitled to ask the Minister to tell us exactly what the difference is between "guidelines" and "directions", and why it was decided to use the word "guidelines" in this piece of legislation.

The subject matter of the clause covers one or two different Acts of Parliament. There is, first, the Scottish Development Agency Act 1975, to which my right hon. Friend the Member for Cambridgeshire (Mr. Pym) has just referred. The rubric to Section 4 talks of Power of Secretary of State to give Agency directions. Those directions are subsequently described as being of a general or specific character. Section 5 also confers powers to give directions in this case to do with the giving of "selective financial assistance." There are also, in other parts of the Act, further respects in which the Secretary of State has to approve proposals and in effect give directions.

Section 2 of the Highlands and Islands Development (Scotland) Act 1965 says. The Secretary of State may … give to the Board directions of a general character as to the exercise and performance of their functions, and the Board shall give effect to any such directions. What really happens under this Bill? Does the Secretary of State give guidelines to the Scottish Secretary who then has, as it were, inherited the powers which at present the Secretary of State has to give directions of a general character, or whatever it may be? In other words, will the Minister tell us what is really envisaged?

Is it envisaged that the Secretary of State for Scotland, sitting either in London or in Edinburgh, wherever he is, will say to the Scottish Secretary "These are the guidelines under which you will operate ", and that the Scottish Secretary will then inherit, as it were, from the Secretary of State the duty of giving these particular directions? If that is the case, clearly it is rather a nonsensical procedure.

The directions which the Scottish Secretary will have the power to give under these Acts of Parliament will inevitably be liable to be of a somewhat bogus nature, because they will have been determined by the guidelines already given to him by the Secretary of State in the Whitehall Government. We ask the Minister exactly what the position is.

Once again, this makes the point that we are talking about the most incredible muddle. It seems to me that the ideal answer to this problem is that we should not give these economic powers to the Scottish Assembly at all. After all, it was inherent, as I understood it, in the strategy of this whole operation that, whereas the social policy powers would go to the devolved Scottish Assembly, the economic strategy would remain with the United Kingdom as a whole.

These provisions are an example of the way in which the Government have deviated from the principle under which we all understood them to be operating. Therefore, the best answer is that these powers should not be transferred to the Scottish Assembly at all. Failing that, it seems to me—this is the purpose of our amendment—that it would be very much better to stick to the familiar phrase "directions" than to introduce this rather vague and uncertain concept of "guidelines".

I ask again whether the word "guidelines" has any meaning different from that of the word "directions". The purpose of our amendment is to substitute "directions", because they are a clear and familiar concept to which we are all used. "Guidelines" is a hazy concept. Guidelines have about them a rather equivocal flavour. They sound as though they are not really meant to be taken all that seriously—though in this case they have a punch attached in that the Secretary of State is able to impose them. I hope that the Minister will answer these questions.

Finally, although I am very dubious about the clause, at least it is superior to Clause 40, because under this clause the Whitehall Government have the power ultimately to lay down Government policy, whereas under the next clause, which deals with incomes policy, we have the incredible situation in which the Scottish Secretaries would have to do no more than pay regard to national incomes policy. This is not the moment at which to debate that, but if ever there were a chance to produce complete and utter chaos and appalling friction, t is to be found in Clause 40.

Mr. James Sillars (South Ayrshire)

I object to the amendment. I see no difference in practice between "directions" and "guidelines". I do not know that we can accept that one cannot take the word "guidelines" very seriously. If we were to consult the members of the Fire Brigades Union, I believe they would quickly tell us that guidelines can be directions. I am not going into that dispute, but simply use it as an indication that guidelines are what the person who determines them wants them to be. He determines what they mean, and they can mean directions. If the Secretary of State for Scotland in any future Administration were to lay down guidelines for the Assembly, they would in effect be directions.

It is interesting that the hon. Member for Aylesbury (Mr. Raison) did not object to the Secretary of State's operating guidelines or directions with the approval of the Treasury". That acceptance of the Treasury's approval causes my main concern about the amendment. The hon. Gentleman seems to accept that the Treasury is quite a wise body of opinion and that we in Scotland should be happy to accept Treasury guidance or directions.

Mr. Dalyell

My hon. Friend will accept that this attitude on Treasury guidance means a separate State, because if one does not accept Treasury guidance, one is then another country.

Mr. Sillars

I do not think that that necessarily follows, although I should be happy to accept a separate Scottish State within the European Economic Community, because that is not equal to separatism, as I am sure my hon. Friend, who is one of the most intellectually honest members of the Parliamentary Labour Party, would be the first to agree.

It does not necessarily follow that even within a devolution settlement, which the Minister of State proposes in the Bill, one needs to have the Treasury dictating every aspect of policy. The quicker my hon. Friend and the rest of the Parliamentary Labour Party realise that the Treasury is not the fount of all wisdom and that it should get its fingers out of all sorts of pies, including industrial relations, the better the prospect for the Parliamentary Labour Party to remain on this side of the Chamber after the next General Election rather than, as now seems likely, on the other side.

From 1960 to 1977–17 years—we have had two Governments in power. We have had nine years of Labour Government and eight years of Conservative Government. Throughout that period Treasury Ministers have been guided, or in my view sometimes directed, by the mandarins in the Treasury. The mandarins have certainly guided or directed the prospects and performance of the Scottish economy, which is in a shambles today. It is suffering from a process of de-industrialisation, rising unemployment and lack of opportunity for our young people.

Over those 17 years it has not mattered much to us in terms of the performance of the Scottish economy whether there has been a Labour or Conservative Government in power, except that I must say in favour of Harold Macmillan's period in office that that was the time when we had direction of industry—probably against the advice and guidance of the Treasury—to the Fort William pulp mill, the Ravenscraig steel mill and the motor car plant in Renfrewshire. I know that I shall carry the right hon. Member for Farnham (Mr. Macmillan) with me in paying a compliment to his father.

From 1960 to 1977 the Treasury has manipulated Minister after Minister and Chancellor after Chancellor. I am always astounded at how my right hon. Friend the present Chancellor can keep coming to the Dispatch Box and saying "I got it wrong last time, but this time I have got it right". In one of his 14 Budgets, or whatever the number is, he will confess that he got it wrong last time but say that he will certainly get it right this time. [HON. MEMBERS: "Hear, hear."] I thought that I would carry the Conservative Party with me at least on that, and if the members of the Tribune Group were present, I am sure that I would have carried them with me as well. I am always astonished by the breathtaking panache with which the present Chancellor can forecast and boast. The only equivalent I know is Ally MacLeod, but, unlike the Chancellor, he has something to boast about.

8.15 p.m.

I think that I am fairly accurate in expecting that the Opposition as well as the Government will accept Treasury and Westminster control of the Scottish Development Agency, which is in essence what the amendment talks about. Such control would mean that the SDA was a Scottish puppet on a Westminster string. But one can never be sure until polling day exactly what the hon. Member for Glasgow, Cathcart (Mr. Taylor), on the Opposition Front Bench, will say.

My hon. Friend the Minister of State is more predictable. I think that he will argue that Treasury control, Treasury guidelines, directions or whatever, must be retained on the basis that we must maintain the essential unity of the United Kingdom, to use a well-worn phrase.

The Government and some hon. Members falsely believe—I think that my hon. Friend the Member for West Lothian (Mr. Dalyell) is guilty of this as well—that unity must be cemented by total uniformity, total harmonisation and the universal application of economic and fiscal policies. They can recognise no worth in deviation or variety, in applying different solutions to different problems which arise in different parts of the United Kingdom, whether Cornwall, the Midlands of England, or the constituency of the hon. Member for Inverness (Mr. Johnston). They fail to accept that one can apply different solutions to the different problems that crop up because of the geographical and economic differ ences between different parts of the island of Britain and Ulster.

Mr. Jim Craigen (Glasgow, Maryhill)

Surely the existence of the Highlands and Islands Development Board and the Scottish Development Agency argues for the fact that there is a varied approach within the United Kingdom. I say to my hon. Friend "Be fair."

Mr. Sillars

I intend to be more than fair. Anyone who examines the present guidelines in relation to the Scottish Development Agency will not find the Scottish Office allowing the SDA to depart from what the Department of Industry and the Treasury would regard as policies essential to the unity of the United Kingdom and non-competition between economic regions within it. I shall deal with the question of non-competition a little later.

Mr. Craigen

When my hon. Friend does so, I think he will agree that even within the EEC there is now a reappraisal of the question of competition among its different areas.

Mr. Sillars

If the EEC takes as long to reappraise the regional policy and its application as it has in altering the common agricultural policy, my hon. Friend and I will be here with beards 12 feet long and basically nothing will have changed if we rely on changes in the Community.

My hon. Friends the Members for Glasgow, Maryhill (Mr. Craigen), West Lothian and the Minister of State, and even the hon. Members for Cathcart, Ayr (Mr. Younger) and all the rest will probably defend one position or the other—guidelines or directives. It might be acceptable to someone such as myself if they could say that we should accept the wisdom, control and direction of the Treasury because there is proof positive that it has worked to the benefit of the Scottish economy, but that is far from being so.

There are various regions in the United Kingdom—for present purposes I put Scotland in this context, and hope that I do not offend the SNP in doing so—in which there has been a continual rise in seasonally adjusted unemployment since August this year. There is a degree of growth in the United Kingdom economy, but we are witnessing it in the traditionally rich areas. The old imbalance between Scotland and some other development areas is beginning to emerge once again.

It is interesting that in the South-East, East Anglia, the South-West—which is strange—the East Midlands, the West Midlands, Yorkshire and Humberside there has been a diminution of seasonally adjusted unemployment, but in the North-West, the North of England, Wales, Scotland and Northern Ireland there has been an increase. The old patterns of imbalance between Scotland and the rest of the United Kingdom are being reestablished. That means that we shall be first into the next recession, which might come sooner than the Chancellor has forecast. We are last in and first out. It is a continuing process of debilitation.

Some people have argued the Treasury and Department of Industry view that the harmonisation policies have worked in the special development areas. But last month the special development areas had 61 per cent. of total unemployment in Scotland. Out of the Scottish unemployed of 185,000 about 112,000 were in the special development areas. That particular Treasury and Department of Industry policy is not working.

With regard to the current level of unemployment in each special development area in Scotland, in West Central Scotland—the major problem in the Scottish economy at present—in November 1972 there were 71,663 people unemployed. There are now 98,157 people unemployed in that part of the Scottish economy. In Strathclyde the percentage increase in unemployment from November 1975 has been 491. That is a jump in total numbers from 73,000 to 109,000.

In the special development areas, unemployment in Dundee and Arbroath has increased by 110 per cent. between the Labour Government coming in, in March 1974, and October 1977. In Dundee, in the period between 1964 and November 1977, there has been a 288 per cent. increase in unemployment, in Glasgow a 95 per cent. increase in unemployment, and in Edinburgh a 311 per cent. increase in unemployment. I do not think that anyone will argue that the Treasury finger was ever off the button in that period. One could go on and on demonstrating the lack of the Treasury's ability either to guide or direct the Scottish economy towards full employment.

What about the Labour Government's The Labour Party's election manifesto says on page 12: Labour will do whatever is necessary to bring full employment to Scotland. We shall not rest until everyone in Scotland has the opportunity of a decent, well-paid job. If the Labour Government intended to do whatever was necessary to bring about full employment, why has Scottish unemployment doubled in the period since Labour took office in March 1974? There is no point in the hon. Member for Ayr getting terribly excited about the possibility of putting this in his election address, for if we examine his party's performance, we find that in the Conservative election manifesto—the separate one, if I may so term it—there was a promise in 1970 about "a better tomorrow". That was the promise. It has been a long nightmare and we have never reached the dawn.

Coming back to Labour—I do not think that the Conservatives are as irrelevant as some hon. Members may think—

Mr. Small

Is that the intention—to come back to Labour?

Mr. Sillars

There is no intention of that.

Mr. George Younger (Ayr)

I am sure that the hon. Member for South Ayrshire (Mr. Sillars) wishes to be fair. He has given some excellent figures which demonstrate that unemployment was much lower under the Conservatives than under the Labour Government. Surely he should give credit to the Conservative Government.

Mr. Sillars

I do not give credit to any party which left office with higher unemployment than when it came into office. That is the projection of Scottish unemployment from the mid-1950s onwards, irrespective of the Government in power.

I have already given credit to the Conservative Administration of Harold Macmillan, in that it certainly directed employment to some areas of the Scottish economy, but I do not want to dwell on that unless I should upset the hon. Member for Glasgow, Cathcart (Mr. Taylor), who might believe that it was a Socialist phase inside the Conservative Party. If the Labour Government are doing whatever is necessary, why is the policy not working?

Mr. Teddy Taylor (Glasgow, Cathcart)

I hope that the hon. Gentleman will accept that as a result of the four years of good work of the Conservative Government between 1970 and 1974, Scotland's relative unemployment position within the United Kingdom improved and continued to improve. But in the last 18 months it has got worse.

Mr. Sillars

I am just a simple working-class lad from Ayrshire who is totally unimpressed by someone who can demonstrate to me that rising unemployment is not in fact rising unemployment. It does not matter a tuppenny bit to my constituents that during the time that the hon. Gentleman's Government were in power the relativity was changing one way or the other, if more and more of them were going on to the employment exchange.

The use of the relativity statistic is an escape route employed by the hon. Gentleman. It is employed by the Secretary of State for Scotland as well. He has also got the bug. It is an escape from the reality, which is that, no matter what the situation happens to be under either Government, unemployment rises in absolute terms.

But we are not dealing with statistics; we are dealing with ordinary people, and that is what counts more than anything else. If the hon. Member for Cathcart and the Secretary of State for Scotland are to go prancing round the country at the next election saying that Scottish unemployment is round about the 180,000 or 200,000 mark, but that there is no need to worry because, relatively speaking, the position is better than ever before, there will be fewer votes cast for them.

Conservative Members seem to want to stop me from coming back to the performance of the Labour Government. I do not know whether it is because they approve of their policy. But I intend to return to the election manifesto, in which there is talk of Labour doing whatever is necessary to bring full employment to Scotland. Have the Labour Government done that? There must be something wrong with the mechanism of government and economic management if the Government have done their best and, instead of their policy working, Scottish unemployment has increased by about 111 per cent. since Labour came to office.

As to the pledge that the Labour Government would not rest until everyone in Scotland had the opportunity of a decent well-paid job, the Government must have had sleepless night after sleepless night.

I quote next from the book "Scotland 1980", which I know the hon. Member for Cathcart regards as a dreadful publication. I shall quote from a part which at least my hon. Friend the Minister of State will not regard as having been written by someone whose opinions are not worth much one way or the other. It is the section produced by John Firn, who is not a member of the Scottish National Party. I am told that he is a member of the Labour Party. I believe him to be, but I stand open to correction. In the book he has pointed out that By mid-1976, manufacturing's share of total employment had fallen below 30 per cent. for the first time in living memory, and well over 110,000 manufacturing jobs had been lost since the mid-1960s. Later he goes on to talk about private enterprise, and this will interest the hon. Member for Cathcart. He writes: If manufacturing is less than 30 per cent. of total employment in 1980—and by mid-1977 it is already well below trend—and if the indigenous share of that manufacturing remains about the level of the mid-1970s, then it could mean that only about 12 per cent. of total employment was in the private manufacturing sector. This is a truly insignificant level, and much bigger below that of the United Kingdom as a whole, and of the other small countries such as Norway, Sweden, Finland or Denmark, with which Scotland is often compared. Indeed, there must be grave doubts about the ability of a sector that size to play a major part in the type of strong, export-orientated, industrial growth strategy that is required in Scotland. That is why we are talking about the Scottish Development Agency. I wish that we were talking about the whole public sector. If I tried to deal with that, I should be out of order. If the private sector cannot or does not have the ability to engineer the necessary recovery in terms of growth strategy in the Scottish economy, we must of necessity examine the public sector as the only solution—or the only potential solution—to the economic and unemployment problems in Scotland.

In examining the public sector one must make reference to the Scottish Development Agency, which is a weapon—I use that term advisedly—which could be used for the extension of the public sector and to make the public sector much more dynamic and job-creative than it now is.

Mr. Teddy Taylor

Will the hon. Gentleman not accept that almost every single White Paper published on the Scottish economy has shown that the biggest slump in jobs in Scotland has been in the State-controlled industries?

Mr. Sillars

Yes, and I think that the fault has been that the public sector in Scotland has not been given positive encouragement to play a dynamic rôle in the comunity. That applies also to the guidelines which constrict the Scottish Development Agency, and which were laid upon it by my right hon. Friend the Member for Kilmarnock (Mr. Ross), who had a fit of Conservatism on the night that he finally put his name to those particular guidelines. They were described in The Scotsman at the time as "impeccably capitalistic" and that is a fair assessment of them. I want the Treasury's guidelines to be removed from the Scottish Development Agency and to allow the Scottish Assembly to determine its total remit.

Some hon. Members from the North-East of England and elsewhere might object and say that we cannot allow the Scottish Development Agency such free rein and free authority because it would damage some of the development areas in England itself. I regard that as absolute rubbish. If we can engineer the Scottish economy so that it fully absorbs the present spare capacity in terms of industry and labour, that will do nothing but good for the other regional parts of the United Kingdom economy.

8.30 p.m.

If, for example, we get the Scottish economy into full employment, the purchasing power of all the people in Scotland is immensely increased. Scotland does not have a consumer-oriented economy, but if it starts to buy consumer goods, that must immediately begin to benefit the consumer-oriented economy south of the border.

That in itself will have a beneficial effect. If we so engineer the situation in Scotland that we take the Scottish economy into full employment—no more shall we suffer the gibes of being the "subsidised Scots" inside the United Kingdom. We shall be able to make a net contribution to, and not take from, the general pool of resources and cash available within the United Kingdom.

I believe that the only hope for the Scottish economy is economic self-management and resource self-management. I do not think any Unionist or centralist at Westminster can refute that, because all the evidence is there of total incompetence in relation to the performance of the Scottish economy. I see the Scottish Development Agency as a marvellous potential tool for changing the direction and the present trends within the economy.

Mr. Russell Johnston

Will the hon. Gentleman confirm that what he is essentially saying is that the central Government guidelines to which the SDA should be subject are total budgetary control without any detailed control other than that?

Mr. Sillars

I am arguing within this particular devolution setting. I shall give the hon. Gentleman an example. Unfortunately, it is not a good example and I shall explain why in a moment. I shall embarrass the Minister of State as well. I refer to the regional employment premium.

Had we still had the regional employment premium, we should have had about £78 million for labour subsidy in Scotland. Because of the principle of uniformity and harmonisation, there was no variation in which one could use the regional employment premium. We could not give £6 in Galloway, £1.50 in North Aberdeen, £9 in Inverness, or £6 in Clydeside. It is part of my argument that if the United Kingdom Government sets the macro-amount for any sector of the economy or any major activity by subsidisation—

The Second Deputy Chairman

The hon. Gentleman must not overlook that we are dealing with Amendment No. 346, which is reasonably narrow. There may be a debate on "clause stand part" in due course, in which case what he is saying may be relevant.

Mr. Sillars

I think I was led astray. I think that the example I am giving to the hon. Member for Inverness (Mr. Johnston) is in order. Under the Treasury guidelines or directions that we are likely to get, I expect that the Treasury will be opposed to the kind of flexibility that I was describing with regard to the application of regional policies. I shall not go on about the REP. However, I remind the Minister of State that, although he was a great champion of REP when in opposition, he has not said very much about it since the Labour Government abolished that part of regional policy.

I think I am in order in saying that the debates on the Bill have pointed to the fact that there is conflict between Edinburgh and Westminster built into almost every clause. Hon. Members on both sides of the Committee have talked about the heat, conflict and conflagration that will flow from that. I think we are talking about a real landmine.

Mr. Dalyell

A field of landmines.

Mr. Sillars

Some landmines are bigger than others. I do not think it is even a booby-trap. It is a major land-mine in the Bill and in the relations that will have to be established between Edinburgh and Westminster.

The root of Scottish politics has always been about jobs. If one studies the election manifestos, the election addresses and the speeches and the debates on Scottish television—Grampian and BBC programmes on current events—one sees that jobs tend to dominate the Scottish economy and the performance of Scottish industry. If one thinks of the powers to be given to the Assembly, there is only one area in which the Assembly can properly engage in the industrial planning of Scotland, and that is through the Scottish Development Agency. It is the guidelines that will determine the Assembly's ability to engage properly or in a frustrated manner, and that will then begin to build up waves of resentment against Westminster.

For example, the guidelines will be set by the Secretary of State for Scot land with the consent, and all the rest, of the Treasury. Let us suppose that the hon. Member for Cathcart, who has a predilection for Conservative Right-wing policies, were Secretary of State for Scotland. Let us suppose that the Scottish Assembly decided that, because of the importance of the public sector, it was necessary to have the power and the right to buy its way into firms in the private sector in order to protect or expand the Scottish economy. Because of the hon. Gentleman's particular political philosophy, I think that he would object, because that is anathema to the hon. Gentleman.

Let us suppose that the Assembly decides that the SDA should have a remit to establish inventive public enterprise in various sectors of the economy—let us take timber as an example. Let us suppose it decided to give the SDA the remit to vary incentives, not necessarily to bring in firms externally in competition with the North-East of England, but to permit a growth of indigenous industry. I would take a bet from anyone that the hon. Member for Cathcart would not be able to resist the temptation of saying "No". If the guidelines did not permit him to say "No", I am sure that he would change those guidelines or the directive in the amendment in order to say "No".

Let us suppose we have a Left-wing radical Socialist Scottish Assembly, which means that it will not be the Labour Party, which wanted to do a whole range of things. The hon. Member for Cathcart, as a Right-wing Conservative Secretary of State, would say that we had the onset of Socialism in Scotland which would ultimately sweep south of the border.

Mr. Dalyell

That example does not apply to the hon. Member for Glasgow, Cathcart (Mr. Taylor). The hon. Member for Edinburgh, North (Mr. Fletcher) or the hon. Member for Ayr (Mr. Younger) would be in exactly the same position, because their supporters so require them. It is not just a question of bogies from Cathcart. Any Opposition Member would be forced by the political situation to do precisely that. That is why the hon. Gentleman is quite right in saying that this is one of the many landmines.

Mr. Sillars

I find it difficult to conjure up the vision of the hon. Member for Edinburgh, North (Mr. Fletcher) leading the Conservative Party, either north or south of the border. That is why I concentrated on the hon. Member for Cathcart. It happens to be my opinion that that would happen—

Mr. Dalyell

Any moderate man.

Mr. Sillars

My hon. Friend is probably right—if there were a Conservative Administration in power and it believed that a Left-wing Socialist Assembly would create sufficient elbow room for Socialism to come into England and thereby infect other parts of the United Kingdom.

I ask hon. Members to consider the hypothetical situation where a Scottish industry was in trouble. The most obvious place for that industry to go would be the Scottish Development Agency. I do it in my own constituency. I am sure that any hon. Member representing a Scottish constituency faced with industrial problems goes to Lewis Robertson and asks the SDA to make an examination to see whether it can help. We are bound to do that.

In such case the industry will go to the Assembly and the Assemblymen will say "Yes" and that they believe that X is the solution but, unfortunately, that the guidelines to do not permit the application of that solution. What happens then is that the Assembly passes a motion, probably unanimously, irrespective of the party political make-up of its Members, demanding a change in the guidelines. That goes to Westminster, and then it becomes the political judgment of people like the hon. Member for Cathcart, or whoever happens to be Secretary of State at the time. If they are unreasonable and say "No", a potentially explosive political situation developes between the Assembly and Westminster and develops unnecessarily, because the position taken at Westminster will be the position that would be taken now in terms of that policy, and it is a failed policy. So it would be foolish and unnecesary, although that would not stop people down here.

That is one of the reasons why I am opposed to this amendment and intend to vote against it. I shall not take part in the "Clause stand part" debate, although I hope that the clause will be defeated as well.

Mr. Dalyell

There is a rider to this. Not only would it be an approach to the Secretary of State. The Assembly, conscious of its own dignity, would short circuit this position. The Chief Secretary, Prime Minister, or whatever he called himself, would be knocking at the door of 10, Downing Street on these issues. That would lead straight to the situation, and more, that my hon. Friend describes.

Mr. Sillars

That might be the case.

Mr. Norman Buchan (Renfrewshire, West)

That is exactly what some of us have been trying to tell my hon. Friend the Member for South Ayrshire (Mr. Sillars) for several years when he was busily bashing us for saying so.

Mr. Sillars

One of the reasons that made me change my mind was when I witnessed the performance of my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) as a member of two separate Administrations. He is a classic example of the raging Left-winger when in opposition and at Tribune meetings who becomes a normal moderate Minister when he is in the Government. When he was in charge of Scottish land for two or three years in the Scottish Office, I do not think that there was a square centimetre ever taken into public ownership. I came to this House having been spellbound by the rhetoric and oratory of the Left-wing Member for Renfrewshire, West over the period when I was not a Member. Then I discovered that it was not the case when he was in Westminster, and I thought that it was better to go to Edinburgh. I make that confession to my hon. Friend. He is one of those who have helped to convert me since I came to Westminster.

I am delighted to have carried so many hon. Members with me in my argument, and I anticipate that they will vote against the amendment. More importantly, I hope that they will vote against the clause when it is put to the Committee.

Mr. Crawford

Doubtless the hon. Member for South Ayrshire (Mr. Sillars) is as surprised as I am to find the Conservative Party supporting an amendment which uses the phrase "issue directions" to a State or semi-State body. It is very interesting. But I' suppose we should not be all that surprised. After all, the Conservatives voted against the override provisions in Clauses 36, 37 and 38. I am delighted that they did so. Presumably they knew what they were doing when they voted against them.

8.45 p.m.

Mr. Pym

Of course we knew what we were doing. The hon. Member must not misrepresent it, although he may take pleasure in doing so.

Mr. Hector Monro (Dumfries)

He always misrepresents things.

Mr. Crawford

The hon. Member for Dumfries (Mr. Monro) said that I always misrepresent things. I am stating a fact. The Conservatives voted against Clauses 36, 37 and 38—the overriding clauses. I do not know why they did. I am not privy to the counsels of the Conservative Party, but they voted against the override provisions of the Bill.

On the amendment, I take my text from yesterday's university match at Twickenham, about which there was an article by Mr. Gwynne Walters, a well-known Welsh referee, who describes how a fellow countryman meted out heavy punishment in the first few minutes of the game. He says that "he reprimanded the player, but the opposing captain told him not to worry because his team needed stimulation. This team was providing that stimulation."

The Scottish National Party has had plenty of stimulation from the Conservative Party during the debates on the Scotland Bill. We have had the hon. Member for Aberdeen, South (Mr. Sproat) saying that unemployment in Merseyside is higher than on Strathclyde. I am delighted to inform him that he is wrong. The figures are 10.8 per cent. for Strathclyde and 8.9 per cent. for Merseyside.

Mr. Iain Sproat (Aberdeen, South)

I went to the Library just three minutes ago and got the latest figures. They are Strathclyde 10.1 per cent. and Merseyside 11.7 per cent. In Glasgow the figure is 9.1 per cent. and in Liverpool it is 12.1 per cent.

Mr. Crawford

The hon. Member is talking about relativities. He should go to some of the employment exchanges in the East End of Glasgow, where he would find unemployment over the 30 per cent. mark.

The hon. Member also said last night We were not able to discuss exactly how the Assembly could do it, but I should imagine, for example, that the people of England or this House might say 'We shall not bail out this miserable Scottish Assembly which has landed itself with millions of pounds of debts'". We are told that we are going to be bailed out by our own money, and we are supposed to be grateful for it.

The Scottish National Party was also stimulated by the speech earlier tonight of the hon. Member for Bury St. Edmunds (Mr. Griffiths). I was interested in his speech, so I took down his remarks, which were inflammatory. He said: England, although slow to anger, will come to realise what is being done, and English anger will be fierce. That is a very serious statement.

The Second Deputy Chairman

I think that the hon. Member is overlooking the fact that we are dealing with an amendment on a rather narrow front.

Mr. Crawford

I take your point, Mr. Godman Irvine. The point about what is happening in Scotland was put best yesterday by my hon. Friend—I hope that I may call him my friend—the Member for South Ayrshire (Mr. Sillars) when he spoke in the context of the Scottish Development Agency and Scottish business confidence. He said: Our business men do not believe that if they are stood on their own feet in the Scottish context they will be able to manage as they do now under the patronage and tutelage of people in the Westminster setting. They might be surprised by their own ability at the end of the day."—[Official Report, 6th December 1977; Vol. 940, c. 1177, 1189.] This is the answer to the hon. Member for Glasgow, Cathcart (Mr. Taylor) and other Front Bench Conservatives.

As far as Scotland is concerned, the chamber of commerce is against us; this body and that body are against us; everyone is against us except the Scottish people. We have the stimulation of Scotland being treated in these debates like a beast in the market place. We cannot suffer it much longer. I know now how Parnell and the Irish Party must have felt in the last century in the House of Commons.

I come to the analogy between the Scottish Development Agency and the Irish Industrial Development Authority. The Irish body has been successful to the extent that 10 years ago exports of manufactured goods were worth £200 million and now they are worth some £2,000 million. The Scottish Development Agency must be made as strong as the Irish authority. Also, we want to see a venture capital wing of the Scottish Development Agency.

In the latest SDA report, we see the following: Scotland has an unduly low proportion of companies whose ownership and management are Scottish-based, and the Agency would wish to foster indigenous industry and to encourage a long-term increase in the proportion of such companies.… The concern for indigenous companies relates partly to the need that younger men of talent should see wide career opportunities in Scotland, so that enough of them may stay to enrich the management pool and society generally. The Scottish Development Agency will not be able to undertake this task if the Conservative amendment is carried—and I know that my hon. Friend the Member for South Ayrshire will agree. Despite the views of the hon. Member for Renfrewshire, West (Mr. Buchan), I must tell him that my hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) and my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Reid) will confirm that at their meeting with the STUC that body wanted to see the Scottish Assembly as an economic power with control over the SDA. I was at that meeting with the STUC and that was what its general secretary, Mr. James Milne, said.

Mr. Buchan

This was not what was said by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) in the House. Not only does the STUC want economic powers for the agency, but so also do the Government. The hon. Gentleman must not twist the situation in that way.

Mr. Crawford

I cannot become involved in internal quarrels between the Labour Party in Scotland and the STUC.

Mr. John Smith

Since the hon. Gentleman referred to the STUC, and since the Government have discussed these matters directly with that body on a number of occasions involving areas of devolution, I assure the hon. Gentleman—there should be no mistake about it—that the decision of the Government to transfer executive, but not legislative, responsibility for industrial affairs on the part of the Agency and the consequent guidelines were fully appreciated and agreed to by the STUC.

Mr. Crawford

My understanding of our meeting with the STUC was that it wanted to see legislative devolution as well. If the Minister says that the STUC does not want legislative devolution, that is fair enough, but that was not what I understood from that meeting.

Let me return to the amendment. If directions are issued by the House, I believe that the SDA will not be able to fulfil its functions. Let me quote from the SDA report, page 6: If we think in terms of the complete and effective regeneration of the Scottish economy—and the Agency ought indeed to think in such terms—it must be said that the amount allocated by statute will not be sufficient. Measured against the total need, or against the total of current annual relevant investment, and assuming a period of perhaps five years, £300 million will not cover the full requirement". If the House of Commons is to issue directions to the SDA, it will not get the powers it needs. The Chairman of the SDA, Sir William Gray, who was quoted in the Press the other week, said that the Agency should have access to the revenue from Scottish oil.

Whether or not the amendment is carried, I put it to the Committee—again, I am sure that my hon. Friend the Member for South Ayrshire will agree with me—that in time the Assembly will take over control of the SDA. That will follow as night follows day. Indeed, I am sure that the hon. Member for West Lothian (Mr. Dalyell) will agree with that statement.

Now the SDA is concerned about scaremongering stories put about by the Conservative Party to the effect that once self-government comes several companies will move out of Scotland. It behoves the Conservatives, if they know the names of those companies, to name them. If they cannot do, they should hold their peace.

Mr. Teddy Taylor

Will the hon. Gentleman say in what way the SDA expressed those views to him? When I had a meeting with that body, it expresed no such view. It certainly named no major industrialists or trade unionists who take the view that SNP policy will help to preserve jobs in Scotland.

Mr. Crawford

I do not think I should answer the second part of that question. I was saying that, if the Conservative Party cannot name the companies which intend to pull out of Scotland, it should hold its peace. We know what has happened to the steel industry in Scotland.

Conservatives have refused to mention those 40 foreign banks which have come to Scotland in the last 10 years or so. Those were years when the SNP was on the up and up. The Swiss Bank is the latest one to arrive, and it will begin operations on 9th February. It is not for me to issue invitations, but if the hon. Gentleman wants to come the Swiss Bank will be delighted to have him at the opening. I suggest that this is the situation and that the international banking community is voting with its feet.

I have more news for the hon. Member for Cathcart, again in the context of the SDA. He will be as concerned as I am about the possible takeover of one or two investment trusts in Edinburgh. I have here a letter from the deputy-chairman of the Scotland Association of Investment Trusts, which says: A loss of international investment expertise accumulated for almost a century in many cases will not be easily replaced in Scotland and you can appreciate that should there be many more such bids it will be difficult if not impossible to offer a career structure in investment management. Although our numbers in terms of personnel may be small the husbandry of the country's overseas assets over many years has brought disproportionately large returns in invisible earnings. As an analogy, it is worth remembering that apart from the General Accident the composite insurance industry has had no head office management or investment expertise in Scotland since the take-overs of the late 1950s and early 1960s. If the amendments in the spirit and the words that the Tory Party have tabled in Amendment No. 346 are agreed, there will be even more centralisation of decision-making over the Scottish economy, away from Scotland. The hon. Member for Cathcart had better bear that in mind.

Mr. Teddy Taylor

Will the hon. Member say whether the passing or otherwise of this amendment would affect the policy of the National Coal Board pension fund in bidding for the Scottish Investment Trust?

Mr. Crawford

I am delighted to hear the hon. Member for Cathcart promoting the pension fund of a London-based nationalised industry. I suggest that any Scottish Government, if it were interested in its own entrepreneurs, would put grave restrictions on that.

Mr. Alexander Fletcher (Edinburgh, North)

Will the hon. Member for Perth and East Perthshire (Mr. Crawford) answer the question straight for once?

Mr. Crawford

Does the hon. Member for Edinburgh, North (Mr. Fletcher) wish to intervene?

Mr. Fletcher

I have just done so.

Mr. Sillars

I am getting a wee bit worried about the hon. Member for Perth and East Perthshire (Mr. Crawford) referring to me as his hon. Friend when he is defending Scottish capitalism. Is he saying that in his view no Scottish Government would allow, for example, a Scottish-owned organisation or a Scottish Coal Board to operate in the way that he is condemning? If he is saying that, he cannot call me his hon. Friend.

Mr. Crawford

I can still call the hon. Member my hon. Friend. He cannot impute these things to me. A strong SDA and a strong Scottish economy are complementary, and the SNP will brook no interference in the SDA by this House of Commons or the Treasury in Great George Street.

Mr. Buchan

I am grateful to the Chair for being called, because I have not been in the Chamber for a great length of time. However, I heard some of the arguments on previous occasions and I came in to hear the latter end of the speech of the hon. Member for South Ayrshire (Mr. Sillars) about the economic problems that this Bill would cause.

I want to pick up some points that the hon. Member for Perth and East Perthshire (Mr. Crawford) has just made in an incredible speech. He initially claimed that the trade unions, working-class organisations and business organisations were all against the SNP.

The hon. Gentleman quoted Roosevelt without naming him, when he said that all except the people were against the nationalists, but he was wrong there as well. All the polls show that only 25 to 28 per cent. of the people of Scot and support the SNP and that half those reject its policy. According to a Sunday Mail poll, 53 per cent. of SNP voters rejected the party's policy—so the Scottish people are now against the SNP.

9.0 p.m.

The next thing that I want to pick up is the hon. Member's attempt not to restate the untruths that were stated in the House three weeks ago in relation to the Scottish TUC position, but to retreat from that, though, at the same time, to attribute the blame to the STUC. Indeed, the hon. Gentleman has virtually accused the STUC of lying. Following the statement by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) that the STUC backed the SNP on where it was going in general and in relation to economic powers, the STUC issued a statement flatly denying any such thing. If the SNP Members reiterate that claim, they are accusing the STUC and, above all, its Secretary of lying. Is it any wonder that everyone in Scotland is against them? They appear to be against everyone else.

The trouble with SNP's claim for access to Scotland's own resources in relation to oil is that it is not even-handed justice. The SNP seeks access to Scotland's resources in one respect, but also to the rest of the United Kingdom's resources in every other respect.

The hon. Member for Perth and East Perthshire failed to see, as did the hon. Member for South Ayrshire, who does not so much argue a case as proceed by a series of pronunciamentos, the real nature of the beast, the real nature of the economy that we have to deal with. It is the nature of the economy that makes the assertions of the hon. Member for South Ayrshire correct when he points out the likelihood of an explosive situation arising here, but wrong in the conclusion that he draws.

When I intervened and got a proper clobbering from the hon. Member for South Ayrshire for my pains, I wanted simply to make the point that some of us have been saying this for a long time. I have certainly been saying it in articles since 1971 and since before then in speeches.

Mr. Sillars

Does that mean that the hon. Gentleman will vote against Clause 39 standing part of the Bill?

Mr. Buchan

Will the hon. Gentleman let me make my own speech as I allowed him to make his? We shall deal with that matter when we reach it. At the moment we are on a narrow point.

The hon. Member for South Ayrshire was right in his analysis that there is a danger of arguments over the economic situation, whether we have guidelines or directives, but his answer was wrong when he said that therefore we must achieve totally separate control within Scotland. The hon. Gentleman has failed to understand the nature of modern capitalism, of the British economy and of proper working-class responses. The trouble with his speech was that he made one slightly ashamed of the term "Socialism". Above all, Socialism depends upon concrete analyses of situations and not upon a series of assertions. I have heard the hon. Gentleman's speech many times, though his peroration was rather better than usual: it was quite good.

Mr. Sillars

How can the hon. Gentleman say that he has heard my speech before when he was not here to hear it and there is no broadcast of our proceedings? Is that not an absurd position for him to take, along with all his other absurd positions?

Mr. Buchan

I thought that the hon. Gentleman was brighter than that. I have heard the speech many times. I knew what the hon. Gentleman was saying, because he has said it many times before.

The real task is to make an analysis of the economy. I did not decide to speak until I came into the Chamber about 15 minutes ago, but I have some figures that I should like to give the Committee. In 1910 the top 100 companies in Britain controlled 15 per cent. of our GNP. That is not many companies. There would probably be 100 companies in South Ayrshire alone. In 1950 the top 100 companies also have interlocking director-GNP. In the next 20 years up to 1970 the top 100 companies moved to a position of controlling more than 50 per cent. of the economy, and by now they probably control something of the order of two-thirds of it. In other words, the graph, which moved very slowly for half a century, has suddenly jumped, and there has been a greater and greater conglomeration of power into fewer and fewer hands, because the 100 top companies also have interlocking directorships. Therefore we have a great accumulation of power in a small number of hands.

My second point is the vast accumulation of power and wealth of the multinational companies, which now have sufficient power to be able to overthrow a medium-sized State such as Chile. That is what happened in Chile through the operations of ITT. When I had to fight to help to save Chrysler and to retain Chrysler in Scotland, I remember meeting Mr. Riccardo, the chairman of Chrysler Corporation, and asking him how he valued Chrysler's assets in Britain. He told me "Now they are valueless". "In that case", said I, very cleverly, I thought, "you cannot object if we say that we will take them into public ownership with compensation at your own valuation"—in other words, zero.

What I did not know in saying that we should take them over for nothing, on his own evaluation, was that he himself was saying "Please take them over, and I shall pay you £30 million to do it." He recognised that the problem to him in relation to ownership or retention of Chrysler in the United Kingdom, let alone in Scotland, was the question of penetrating the United Kingdom market. He could penetrate the market through Dodge in America, Chrysler Simca in Europe, and Colt and others in Japan. That was what he wanted access to. I felt like someone who has hit someone over the head on a dark night and been surprised when he did not fall down and then discovered when the light came on that he had been wearing a steel helmet. When we have reached the stage where the ultimate threat of taking over such companies is valueless, we see that these companies have immense power. This was a medium-sized multinational company.

Given the background of the conglomeration of power and wealth in the hands of a small number of people and companies, and given the colossal power that can be exerted by a multinational company, which can destroy an economic system by its pricing policy, for example, I believe that one of the reasons for the Chrysler economic crisis was that Chrysler was selling British-made cars to a Swiss subsidiary at a low mark-up because of the beneficial tax system in Switzerland. The high rate of corporation tax in Britain, led to cars being sold here at a high mark-up, thereby reducing the apparent profits coming to the United Kingdom.

Given that kind of ability to over-ride the taxation system of a medium-sized power such as ours, we can see the problems that could face us in Scotland. This is not just because Scotland would be a small nation. That is irrelevant to the argument. The real point is that over the period from 1910 until now there has not only been this colossal intermingling of power within capitalism itself, but there have been inter-locking companies intermingling throughout every industry.

The First Deputy Chairman (Sir Myer Galpern)

The hon. Member for Renfrewshire, West (Mr. Buchan) used the word "irelevant" about some argument that he was adducing. What he has said since I assumed the Chair has nothing to do with the very specific amendment before the Committee, which is concerned with whether there are to be guidelines or directions. Even though we have until 11 o'clock, I ask the hon. Gentleman at least to be relevant to the amendment.

Mr. Buchan

The relevance of my argument will now become apparent, because as soon as we consider the question of guidelines or directives in one area of Britain, we recognise that we are dealing with an economy that is closely integrated throughout the United Kingdom. The question, therefore, becomes whether this can best be done by directives or guidelines, which is what I am examining.

There is a second intermingling, not only the intermingling within capitalism but an intermeshing between Government and the economy. The result is that, although one could have argued for us to have Home Rule in 1910 with guidelines or Home Rule in 1910 with directions, it is now a far more complex business, for the truth is that, even if we were to crack this question and create the sort of separate economy argued for by the hon. Member for South Ayrshire and the hon. Member for Perth and East Perthshire, there would still not be effective power. The power would still be exerted by the basic United Kingdom economy, of which nine-tenths would be dominated solely by another independent Government, dominating our one-tenth because it is intermingled.

Let me give some examples to show how difficulties would arise. At one end of my constituency we have shipbuilding. With one-quarter of the capacity of the British shipbuilding industry, Scotland has one one-tenth of the Great Britain population. In a situation where there were no guidelines or directions in relation to the United Kingdom but only unrestricted rule by the nine-tenths English-dominated United Kingdom economy, we could not expect to see any intervention to direct a greater proportion of shipbuilding orders to that quarter of the shipbuilding industry which exists in Scotland. We should get no more than cur share in any matters under Government control.

Next, in the middle of my constituency there is Chrysler. I could not have saved Chrysler—[HON. MEMBERS: "Oh."]—I could not have helped or argued to save Chrysler in the situation which I have described were we not part of an integrated United Kingdom economy. The one thing which would have gone was Linwood. That was very apparent, from the standpoint of the amount of profit rundown, and no separate Government could have stopped that because the production could have been done, and done more efficiently—not socially efficiently but more effciently from a capitalist point of view—in Coventry. Thus, shipbuilding would have been hit, and Chrysler would have been hit.

At the top end of my constituency we have Babcock and Wilcox. This is an industry—the point is closely relevant to the amendment—which has only one basic customer, the Central Electricity Generating Board. We can sell some exports, and that is good. We can do some private work, and that is good. But Babcock and Wilcox would close tomorrow were it not for orders coming from the Central Electricity Generating Board.

The CEGB is a nationalised industry. If we were to have a separate Scottish economy and a separate Scottish central electricity generating board as well as an English central electricity generating board, nine-tenths of production would come from England and one-tenth from Scotland. The English would quite rightly apply pressure for orders to go to English factories, just as we, including my hon. Friend the hon. Member for South Ayrshire and the hon. Member for Perth and East Perthshire, would press that orders for the Scottish electricity generating board should go to the Scottish factory. The difficulty is that the Scottish factory could have only one-tenth of our existing orders. We could not survive on that. The factory would die.

Thus, at each end of my constituency and in the middle there would be a massive clobbering by unemployment. I am not prepared to chant "Freedom through suffering". I am not prepared to say to people thrown on the dole "Never mind about the policies advocated by the hon. Member for South Ayrshire and the hon. Member for Perth and East Perthshire, you have your freedom."

Mr. Sillars

It is the hon. Member's Government.

Mr. Buchan

I am not prepared to say that, and this is where the failure of the argument becomes clear, because it has not been pushed through to an analysis of the nature of the animal with which we are dealing. We must therefore reject the case put by the hon. Member for Perth and East Perthshire, and we must reject it especially because he uses it in aid of the kind of Socialist analysis argument advanced by the hon. Member for South Ayrshire.

We are, therefore, now left with the Tory Party. I think that I am right there, because the Liberals have gone. The Tory Party has very little basic concern for liberating people to have more control over their own affairs. I say in passing that the best way of liberating and giving more democracy to the people of Scotland would be massive public ownership of the industries of Scotland allied to an extension of democratic power and democratic control by the people of Scotland.

When the Tories and those who think like them talk of liberty, they mean liberty for the few. I do not believe that there is liberty for the many without the ownership and control of the economy by the working people. That is the perspective.

9.15 p.m.

What is the concern of the Tory Party? It is concerned with the detestation of handing out power in that way, of allowing even decentralisation under democratic control to extend via the Assembly. The hon. Member for South Ayrshire is seriously wrong in thinking that we can deal with our own economy by giving total economic power to the Assembly. The Tory Party is equally wrong, but not so dangerously wrong.

Mr. Sillars

Where is it that I am wrong if I argue pretty much the same case as the hon. Gentleman? Is he arguing that power to the Assembly translated into the public ownership of the commanding heights of the Scottish economy would not be in the interests of the Scottish people? If so, he is contradicting himself again.

Mr. Buchan

I thought that I had already given an explanation. It seems that I shall have to adopt words of one syllable. I thought that I had explained that even if we gave such powers to the Assembly our economy would still be dominated and affected by economic decisions because of the nature of our highly integrated economy, through the intermeshing of capital and the intermingling of Government structures. The decisions would still be made in the financial and power institutions of London even if we had a totally separate economy. There are the examples of Babcock and Wilcox, Chrysler, and the shipbuilding industry.

Mr. Sillars

That is not the point. I thought that the hon. Gentleman argued that the only solution to the Scottish economy was total public ownership of that economy. If there is total ownership of the Scottish economy in the public sector, that means that it will no longer be affected by the intermeshing and vertical and horizontal integration of which he speaks.

Mr. Buchan

On the contrary, it would still be mightily affected by that intermeshing and integration. That would be the position even if we had total public ownership of the heavy electrical engineering industry. If Babcock and Wilcox were taken into public ownership, we should still have no power in terms of the United Kingdom economy. That is a fact that must be faced. To say otherwise is to create an illusion.

We must get our hands—I thought that this is what the hon. Gentleman was in business to do—not merely on the economic levers of power, but on the economic levers of real power. I do not want levers that do not control. I want them to mean something when I have them. That means that we must have effective control over the whole United Kingdom economy. If not, we shall be in the classic position of a neo-colonial State. We shall have all the trappings of statehood but none of the effective power.

That is the greatest illusion that we could offer to the people of Scotland. It would bring about the cataclysmic crackup that I think the hon. Gentleman wants. It would not lead to Socialism.

Mr. Alick Buchanan-Smith (North Angus and Mearns)

I shall return to the real subject-matter of the amendment. There is no doubt that my hon. Friend the Member for Aylesbury (Mr. Raison) in moving the amendment has, not for the first time in our debates, put his finger on the key section of the clause relating to the controls that will be exercised in respect of the economic and industrial powers in Scotland, especially those that are exercised through the Scottish Development Agency and the Highlands and Islands Development Board. It is right that the clause should be debated, and right that it should be debated in relatively broad terms. It turns on the central issue of economic and industrial powers.

I wish that the hon. Member for Renfrewshire, West (Mr. Buchan) and the hon. Member for South Ayrshire (Mr. Sillars) would keep their ideological arguments, which are not necessarily directly relevant to the amendment, for discussion elsewhere and allow those who wish to discuss the effect of these provisions on Scotland the opportunity of doing so.

We can get ourselves into a muddle in discussing economic and industrial powers. With respect to my hon. Friend the Member for Aylesbury, I think that in strengthening by replacing "guidelines" with "directives" we are touching on one of the main areas of conflict between the Assembly and the United Kingdom Government.

This is one of the most sensitive areas in which conflict is most likely to arise. I wonder, therefore, whether we are dealing with it properly by a system of guidelines and directives. Unless the Assembly has a real kind of discretion in the exercise of economic and industrial power, this will contribute to the failure of the kind of devolution we have in mind.

We have to consider whether such guidelines and directives are necessary to begin with. The exercise of economic and industrial powers will be circumscribed in any case by the block grant from the United Kingdom Treasury. Therefore, to the extent that discipline will have to be exercised in the interests of the overall management of the United Kingdom economy, I believe that it will exist anyway in relation to the block grant and negotiations on it. I seriously question whether the detail of that clause and the amendment is necessary.

I get particularly worried when I hear the hon. Member for Renfrewshire, West, because he seems to want centralised control of the British economy—

Mr. Buchan

indicated dissent.

Mr. Buchanan-Smith

I am afraid that it is implicit in a great deal of what the hon. Member says. I know the reasons behind his argument, but his argument leads to a greater degree of central control, and I am opposed to that. The Highlands and Islands Development Board and the Scottish Development Agency have enormous powers concerning regional development. Regional development will flourish and succeed where there is variety within the policy. If it is too closely restricted by guidelines and directives, the variety will be lost.

The genesis and seeds of regional policy are to be found in Northern Ireland, where regional policy as we know it was initiated. The policy was under the control of the devolved Government at Stormont, and it was because of that control that successful regional policy was developed in the Province. That was one of the most successful aspects of Northern Ireland's devolution. When we came to introduce regional policy in Scotland, the first area in Britain to be given it, we applied many of the principles and practices that had been evolved in Northern Ireland. Eventually we extended them to the North of England and other areas.

We must, therefore, see variety in the exercise of the powers through the HIDB and the SDA, and with that variety we shall secure a more effective regional policy and a more effective Assembly and Executive. If hon. Members believe that with this form of devolution we must be able to exercise restraint on the economy, that restraint already exists in the financial provisions in the Bill. We do not have to write in more conflict-provoking provisions.

Dr. Jeremy Bray (Motherwell and Wishaw)

I apologise to the hon. Member for Aylesbury (Mr. Raison) for not being present when he moved the amendment, but from the speech which has just been made I can gather the hon. Member's general tone. I shall not continue the arguments of my hon. Friends who have made powerful speeches on the Scottish economy generally. I shall address myself to the narrower implications of the amendment.

I look forward to hearing my hon. Friend the Minister reply to the debate and give his definition of "directives" and "guidelines". The word "guidelines" is used in several places in the clause, one of which effectively defines it. Clause 39(1) lists the circumstances under which guidelines are to be given, and subsection (4) states that A Scottish Secretary shall exercise the powers with respect to which guidelines are prepared under this section so as to give effect to the guidelines. I am not entirely persuaded that guidelines are the type of things that one should "give effect to". "Follow" would be a more relaxed word. That would be better than "directions".

I think that there is a substantial difference in intent. It is not only a matter of using a variable "X" and saying that one must follow "X" in two different places in the clause. The argument about whether the Secretary of State should give rigid directions, perhaps on a narrow range of matters, or broader guidelines on a wider range of matters is well illustrated by the guidelines under which the Scottish Development Agency operates. They are contained in an annexe to the annual report of the Scottish Development Agency which, I understand, has been circulated to hon. Members. They have a wide range.

Before discussing that issue in particular, I should like to discuss more widely the rôle that guidelines have played in important aspects of government, and well beyond the Government. One of the most important statements on guidelines published by any Government in the last 20 years was the White Paper on the economic and financial objectives of nationalised industries which was published by the Conservative Government in 1971. It is an admirable document reflecting the work of a Select Committee.

For the first time, and to the shame of the Labour Party, that document really defined the job of the nationalised industries in this important respect. In terms of defining the long-term marginal costs, pricing criteria and the required rate of return of new investment, it concentrated the minds of the nationalised industries after a period of chaos and confusion under a Conservative Government who did not like nationalised industries and did not know what to do with them. A marked improvement in morale in the nationalised industries followed that White Paper.

Guidelines need not necessarily be declarations from a Government. One of the important guidelines for the retail trade was the ingenious discovery by the Rochdale Pioneers. They decided that one could run a decent business by allowing customers to take shares and, after a short period, collect a "divi". That guideline made it possible to build a massive retail enterprise.

Another and less happy guideline, which came from sources other than government, was the guidance on competition credit control by the Bank of England. That was made when the recent Conservative Government were in power and it was disastrous. It was perhaps an example of how guidelines cannot be avoided. Those guidelines were wrong, but some guidelines were needed to carry out the Government's intentions.

9.30 p.m.

The Agency is very close to the ground, and properly so, in its practical problems of handling many very small companies. It has to be extremely flexible in the way in which it works, but at the same time it must satisfy the public and the House of Commons that it is acting broadly in the public interest and under the intentions of the Government. I give two examples.

A small firm in my constituency found itself clobbered because its valuation of stocks was knocked for six by a major change in the major commodity which it purchases. It lost overnight some £10,000 of its working capital of no more than £100,000. It went to a Scottish bank, explained the situation and asked for an increase of £10,000 in its overdraft limit. Far from being able to grant the increase in overdraft, the bank said that it would have to cut the limit by £10,000 because there was less asset cover. That is the kind of treatment that small enterprises are getting from joint stock banks in Scotland today.

Needless to say, that firm very promptly changed its bank, but, following inquiries, I am afraid that the banks generally declared that they would not expect their managers to exercise a wider discretion in the matter. The firm went to the SDA, and I am glad to say that it received the necessary loan to enable it to develop in a way which has not only preserved but increased the number of jobs that it is providing in an industry in which it is extremely well established. If a bank had taken the trouble to look at the firm's books, it could easily have justified the loan.

My second example concerns the situation which will be in the Scottish newspapers tomorrow—the position of Smiths Industries factory in Wishaw. It has been a major employer on my constituency for many years, making the 24-hour mechanical alarm clocks which have been on every chimneypiece in the land. But mechanical clocks are being clobbered by quartz crystal and the factory has lost virtually its whole business. It is struggling to get going in a new area, but it will be able to provide employment for only a tiny proportion even of the reduced labour force of the factory.

In such a case, with a large labour force with a particular set of skills, and the firm's technology having evaporated overnight, one has to ask "How do we keep this enterprise alive?" The problem requires great ingenuity and flexibility, not only from the SDA but from the Government and from other private companies. It is the sort of matter that one must be able to deal with and respond to quickly and flexibly and under agreed principles which do not screw up the argument. Argument over a long period means that by the time one makes a decision the situation has gone rotten. One must act quickly in such circumstances and without long arguments on principle which can so easily bog down boards of directors and Ministers.

The avoidance of bogging down in argument on principle is what guidelines are about. The guidelines of the SDA broadly apply the means by which it has been possible for the Agency to make a lively start. Undoubtedly, under the experience of working, and in the relations between the Agency and the Government, those guidelines will develop.

The provisions in the Bill for the development of guidelines are simple: they require only an order which provides an opportunity to give endorsement to the philosophy of developing guidelines. It is wholly right that those guidelines should be clarified in the relationships between this place and the Assembly.

Finally, I come to the question of whether, in order to maintain the ecomic unity of the United Kingdom, there needs to be social uniformity across the regions and as between the rest of the United Kingdom and Scotland. I do not myself take the view that if there were freedom of a very high degree in the ecomic activities of the Assembly it would produce an undesirable state of affairs, least of all in industrial development, if the Assembly were able to have under the present Bill the block grant, and under—as I hope—the powers for which the Assembly will be asking some powers of taxation.

If the Assembly chooses to spend the money on a stupid, extravagant project, it will have to raise it in taxation or it will not be able to spend that money on other causes which might be very much more effective.

I give an example of where, if moneys were now spent by regional development agencies, we would not have the present structure of financial incentives that would give the structure of capital incentives in the development areas in this country. The Scottish Development Agency, given the sums of money which at present go to capital-intensive industry in Scotland, would never spend that money on chemical and oil industries, nor even on steelworks in my own constituency. It would go into ways of creating the jobs needed at a very much lower cost in terms of capital per man, if one's purpose is to create jobs. That, as every hon. Member who has spoken in the debate has made clear, will be a very major preoccupation of the Assembly.

Therefore, I would prefer to see the range of public expenditure in industrial development that is committed to the care of the Assembly widened, not solely because I think it important that the Assembly should have powers to become politically viable but because it would produce a more efficient economic use of resources.

I think that, with the explanations which no doubt my hon. Friend the Minister will be giving in due course, the wording of the clause is perfectly satisfactory. I am absolutely confident that the amendment is not acceptable because it entirely misses the point about the rôle of guidelines in the relationships between the Government and bodies such as the SDA. If, however, there is some clarification of precisely the way in which guidelines are to be followed—followed, rather than given effect to—I shall be very interested in what my hon. Friend has to say.

Mr. Monro

I am very glad that my hon. Friend the Member for Aylesbury (Mr. Raison) tabled this amendment and was lucky enough, under this infamous procedure, to have it called. It is very much at the heart of the Bill and something that Members of Parliament can be particularly interested in, because the impact of the SDA is something in which we shall be very much involved in relation to our constituencies in Scotland. Of course, through the Secretary of State and this parliamentary control, we, too, will be involved to an extent here in the operation of the SDA if the Bill is passed and subsequently approved in a referendum.

I think that it is fair to say—this follows on from what the hon. Member for Motherwell and Wishaw (Dr. Bray) was saying—that the Members of Parliament from Scottish constituencies have, in a comparatively short time, built up very valuable working relationships with the SDA. I hope that in certain contexts this will continue.

I must right away say to my hon. Friend the Member for Aylesbury that I would not particularly want to support his amendment, because if we are to have this clause in the Bill as it is, I think that we ought to have the control and guidelines from the Secretary of State. I accept that my hon. Friend has no doubt tabled the amendment as a probing amendment so that we can find out the intentions of the Minister.

It was also important in an earlier debate to discuss the whole issue of the SDA and the Minister's guidelines in the context of the present high unemployment in Scotland, which we Members of Parliament think it important to bring down as soon as possible. If that is to be done in part through the SDA, the chosen instrument of the Government, it must have power to carry out its operations and we must continue the Secretary of State's present power to set the guidelines read out by the hon. Member for Motherwell and Wishaw. These will affect the operations conducted from its headquarters in Glasgow.

As other hon. Members have said, there will be the constraint of the Treasury guidelines coming to the SDA through the Secretary of State. That in itself will be a control. We shall be interested to hear over what time the Minister expects to have this control over the SDA. Is it to be over the period of a Parliament, or would he expect to have much closer control, almost month by month, or major incident by major incident, of what investment the SDA might make at any one time?

We must discuss this matter in the context of the amendment and the clause. If I were starting from scratch I should much prefer to see the major industrial development in Scotland, crucial as it is, carried out by an extension of the Scottish Economic Planning Department, which has been most successful in continuing the able work of the Department of Trade and Industry. I believe that enlarged Scottish Office control would be more effective than the present system, but we must discuss what we have, and that is the SDA. I hope that the Minister will go into detail, because this is one of the crucial clauses for the long-term future of Scotland, which is bound to revolve around the country's industrial development.

The SDA has made an impressive start, although there are one or two aspects with which I am not in sympathy, such as the purchase of companies and the insistence on an equity shareholding as a condition of providing loan capital.

Dr. Bray

There is no insistence on an equity shareholding as a condition. If the hon. Gentleman asks the SDA, it will be able to quote him a number of instances in which it does not have equity.

Mr. Monro

I did not want to mislead the hon. Gentleman or the Committee. There is not 100 per cent. insistence, but now and again the SDA is very keen to have an equity shareholding in return for a loan. That is not strictly how I should like to see what is essentially a Government Department becoming involved in an industry.

If we are going as far as we are, it is right that the Government control and guidelines are maintained, and therefore I do not want to see the amendment made. But it has given us a valuable opportunity to discuss the issue and to highlight in the context of industrial development in Scotland, particularly with the SDA guidelines, how complicated the whole matter is becoming when we should be looking for simplicity.

9.45 p.m.

With the Highlands and Islands Board, the Scottish Development Agency, and the continuing operation of the SEPD and the local authority development committees, it often seems to take longer for industrialists to decide whether to go ahead with a development project. Here, again, I hope that within the guidelines the Secretary of State will insist that the SDA moves as rapidly as possible to a conclusion on whether financial assistance is to be made to any particular industry.

If this were a Bill in which we were initiating constructive progress, I should like to see it being brought forward to enhance and develop the authority of the SEPD and to maintain further control in that direction, rather than between the Secretary of State and the SDA. But that is not the way the Bill is drafted, and we have to take it as it is. If it is put this way, on balance I think that we should not accept the amendment.

Mr. Dalyell

I think that the House of Commons would look collectively ridiculous if we were to leave Clause 40, on national pay policy, and all that that entails, for discussion in the House of Lords and did not get round to it here. I hope, therefore, that there will be time for Clause 40 tonight, and I shall make an effort in that direction.

I am amazed by the attitude of the Conservative Front Bench. I can just possibly understand some of the Conservatives' reasons, but that they should vote against Clause 36 indicates to me that they must be out of their collective minds, or off their collective nuts. But perhaps it is not for me to criticise how people vote, and I shall therefore confine myself to asking my hon. Friend the Minister of State two questions.

The first concerns subsection 2(d). He knows that I represent the new town of Livingston, and I am asking for a factual view of how new towns such as Livingston, East Kilbride, Glenrothes and so on will be responsible to a United Kingdom Treasury, and what relations they are to have, under the clause, with the Scottish Assembly.

My second question relates to something that we discussed in some detail last night. Surely the amendment as to whether we have guidelines or directions turns in part on how the Civil Service is likely to interpret guidelines and directions, and here again I ask the Minister of State for a factual answer. How do civil servants interpret guidelines and how do they interpret directions? Is there not an argument for making it crystal clear that these are in fact directions? If the civil servants' priority loyalty is not to United Kingdom Ministers but to Ministers in the Scottish Assembly, and if these are to be guidelines, surely any sense of control of this kind, either from Great George Street or Whitehall, becomes a sheer illusion.

I attach very great importance to whether these are guidelines or directions precisely because of this issue of the double loyalty of the Civil Service. If they are to be guidelines, frankly, I believe that civil servants working for Ministers in the Assembly will feel very free to take rather lightly anything coming from Great George Street, the Treasury, or Whitehall.

I am sorry that my hon. Friend the Member for South Ayrshire (Mr. Sillars) is not here, but I must say that it is not very fait to say that people such as myself who put forward views of this kind are great centralisers. Let us be acquitted of this, because some of us believe in bringing government closer to the people through the regions. This can be done by various modifications of existing economic policy.

Let us not say that there are centralisers and devolutionists. It is not as simple as that. When it comes to the devolving of power, people like myself claim that we are the best devolutionists of all, because we are devolving to units smaller than the Scottish Assembly.

Do not let us have this argument at this time of night. I have to defend myself against glib slogans, but that is not the argument. There are different ways of going about the devolving of our decision making. I therefore ask what in terms of the amendment is the likely effect on the Civil Service.

Mr. Sproat

My hon. Friend the Member for Aylesbury (Mr. Raison) and the hon. Member for West Lothian (Mr. Dalyell) have rightly concentrated on the precise meaning of the word "guidelines" and why that particular word should have been chosen as opposed to "directions". That is indeed at the heart of the matter. Although it might seem rather a fine shading, we all know that the truth resides in nuances. We have to get clear exactly why the nuance which distinguishes "guideline" from "direction" is being used here.

One of the reasons why the Government have chosen to use the word "guidelines" with regard to what the Scottish Secretary is to take from the Secretary of State—not necessarily what the SDA has to take from the Secretary of State—is that the use of that word allows the Minister of State to pretend to those who want to see the maximisation of freedom of action of a Scottish Assembly that power is not being held tightly for very long. At the same time he can pretend to those who want Parliament to retain control that, because they are guidelines, control is being retained in Parliament.

Therefore, the Minister is trying to tread a rather uneasy wire. On the one hand he is trying to throw sops to the SNP and his SNP-inclined supporters while at the same time trying to tell the majority of the Cabinet and his right hon. and hon. Friends on the Beck Benches: "Do not worry. We shall have control of the guidelines after all." I am paying the hon. Gentleman a compliment by attributing to him the possession of a certain subtlety of mind.

Mr. Budgen

We should prefer the truth.

Mr. Sproat

My hon. Friend puts a rather harsher interpretation on it. But this question has already been answered during the debate.

The hon. Member for South Ayrshire (Mr. Sillars) said that guidelines did not need to be toughened up in the way that the amendment proposes. He said "Look at the firemen. They have guidelines. They had to stick to 10 per cent. They were only guidelines but they are being ground into the dust and at the end of the day they will have to accept the 10 per cent." The hon. Gentleman was therefore saying that we should not strengthen the guidelines.

But the fallacy in that argument is that of comparing the powers of the Scottish Assembly with the powers of the firemen's union. The reason why the firemen will in the end accept their guidelines is that the power of public opinion will compel them to do so. But in Scotland the Assembly will be manipulating public opinion. Therefore, the Assembly will not have to give in to those guidelines if it does not want to do so. That was the fallacy in the argument of the hon. Member for South Ayrshire.

My hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) said that we need not worry about the fact that the word "guidelines" was very vague. My hon. Friend the Member for Glasgow, Hillhead (Mr. Galbraith) will certainly notice that it is those most in favour of that which we most detest who are in favour of the word "guidelines".

My hon. Friend the Member for North Angus and Mearns said that the word "guidelines" was all right because, under the block grant system and through that system, there would be a tight financial rein put on a Scottish Assembly and that we did not have to go further for that reason. But, as the hon. Member for Motherwell and Wishaw pointed out, the block grant will not be the only source of finance available to a Scottish Assembly. Even if it were, I should not agree with my hon. Friend. But there are powers, which, alas, we did not have time to debate because of this obscene guillotine, to vary taxes in Scotland and to require local authoritiesc to increase rates in Scotland, so the Scottish Assembly will indeed have power to vary taxes—

The First Deputy Chairman

Will the hon. Gentleman tell me why we should be discussing this clause when the Committee has an amendment before it?

Mr. Sproat

My hon. Friend the Member for North Angus and Mearns pointed out that the word "guidelines" was sufficiently strong because, under the block grant, the Government would be able to control the Scottish Assembly. I was pointing out that his argument was fallacious because the block grant was not the only means of raising money and that taxation was another.

But, either way, if it wanted to the Scottish Assembly could get round the block grant—either by raising more money in Scotland are even by borrowing money outside Scotland, with the consent of the appropriate Minister of the Crown. But I have no doubt that, if it was for a Socialist reason and we had a Socialist Secretary of State, it would be permitted. After all, who would he be to forbid a Scottish Assembly going down that path? I believe that the guidelines are not strong enough, and that is why I support the amendment.

However, the main question that I should like the Minister of State to answer concerns what would happen if the Scottish Assembly ignored the guidelines. I know that he will say that he believes it will be a responsible body. That is one of his arguments. I do not dispute that, but what if the unthinkable happened and an Assembly said that it did not accept the guidelines?

We heard in the interesting speech of the hon. Member for Perth and East Perthshire (Mr. Crawford) that the SNP would brook no interference in the rights of a Scottish Assembly over the SDA.

Mrs. Winifred Ewing (Moray and Nairn)

Hear, hear.

Mr. Sproat

I am glad to learn that I have not misrepresented the hon. Member for Perth and East Perthshire, bearing in mind how he misrepresents so many other hon. Members.

The SNP says that it will seek to get round these guidelines. I want the Minister of State to say what would happen if, with a Socialist Secretary of State here, a Socialist Administration in the Scottish Assembly, for reasons of wishing to extend nationalisation or for other reasons dear to the hearts of a Socialist majority in this House, wished to break the guidelines.

Mr. John Smith

The hon. Gentleman raises the question of a Scottish Administration not complying with the guidelines. He will be aware of the power available to the Secretary of State under Clause 37. Unfortunately, he voted against it, so he voted against the very provision which would operate to achieve the action that he requires.

Mr. Sproat

I was voting against the fact that the Government, by their imposition of the guillotine prevented any debate on this important matter. This is what we were voting about.

In any case, quite apart from that, the fact of the matter is that if the Socialist Scottish Assembly set its heart on breaking the guidelines, either it would be allowed to do so and that would go against the spirit and the letter of this Bill, or it would not be allowed to do so and we should have the discord, dispute and the rest of the aggravation that we Conservatives have been predicting. The Minister of State called us Cassandras the other night—

Mr. John Smith

indicated assent.

10.0 p.m.

Mr. Sproat

The Minister says "Yes", showing that his knowledge of mythology is as bad as his knowledge of politics. The thing about Cassandra was that she was always right. Here again we go back to the rock-like immovable problems that are a recipe for disaster, discord, dispute and endless conflicts between Westminster and Edinburgh. This will lead to the break-up of the United Kingdom.

Mr. Small

The hon. Member for Aberdeen, South (Mr. Sproat) referred to Cassandra. I shall not follow him along that line. I will take the line of the artist with a brush drawing this clause, and I think that the young Goya would be the best comparison.

Goya looked towards private patrons, one of whom was the Duke of Wellington. That painting is beautiful and is internationally recognised as one of quality. As time went on private patrons removed themselves from this area and artists went to asylums for their models. We are dealing here with guidelines and the Secretary of State giving directions. A patron can give directions to an artist about what he wants.

In the context of this Bill and its relationship to the Scottish Development Agency we are dealing with the Old Testament of the past and the New Testament of this clause. The matter of preparing guidelines is interesting and the SDA has been taken in totally. The chairman, Sir William Gray, was on the hustings with me for 14 years and he is a constituent of mine. What is the Agency's job? It is to provide economic stimulation in terms of regeneration in Scotland. The whole idea of the SDA in its short active life has been to make it a viable institution, and for that purpose it must have a degree of freedom over its own activities.

I am very doubtful about the Secretary of State or the Treasury laying down guidelines for the SDA and saying that it should have directions. Direction is a most difficult thing. I have been directed all my life to read the Bible, but I could solve the National Debt if I could put a tax on knowledge of the Bible.

This is a straightforward attitude of the SDA becoming viable. If the Treasury gets its hands on the SDA, it is likely to bring in such a restrictive climate as to take away the solid body of the institution. The SDA, which is operating for the benefit of the Scottish population, should have a degree of freedom rather than be directed. Its relationship with the sleeping warriors and whoever else will vote in the referendum is important. I cannot give any guarantee about votes for this Bill. We have all the brains, the lawyers and the clever men in this place.

If I were a Freud or a Jung, or a McGlashan or a MacDougall, I could come along here and give a lecture on psycho-analysis—

The Second Deputy Chairman (Mr. Bryant Godman Irvine)

I am grateful to the hon. Member, but perhaps he could return to the amendment.

Mr. Small

I am dealing with the guidelines.

Mr. Douglas Henderson (Aberdeenshire, East)

Since the hon. Gentleman has now turned to psychoanalysis, can he tell the Committee how the Conservative Party can put forward any view on the existence of the SDA when it is on record as wanting to abolish it?

The Second Deputy Chairman

Perhaps the hon. Gentleman will leave the subject of psychoanalysis.

Mr. Small

I am very tempted, Mr. Godman Irvine, to deal with the shortcomings of the Tory Party. I do not really know what is the true SNP attitude to the Bill. I was seeking to deal with the directions or instructions to be given to those who will operate these matters on behalf of the SDA and the Highlands and Islands Development Board. I only hope that they will have full freedom to promote developments that will give a great stimulus to the Scottish people. I wish to pay tribute to any institutions which will have that effect.

Mrs. Margaret Bain (Dunbartonshire, East)

I could not hope to take up the interesting remarks of the hon. Member for Glasgow, Garscadden (Mr. Small). On the other side of the political spectrum, I find it most difficult to understand the Conservative point of view on this matter. We all know the Conservatives' record of opposition to the Scottish Development Agency and their wrecking attempts during the passage of that legislation. We all know how little the Conservatives are concerned over the economic welfare of Scotland. Conservative Members sought to vote out Clause 36. Having joined together to defeat Clause 1, one would have thought that they now realise what they are doing.

Mr. Michael Clark Hutchison (Edinburgh, South)

The hon. Lady might like to know that I am prepared to vote against every clause in the Bill.

Mrs. Bain

That news comes as no revelation to anybody in the Committee.

Let us try to examine what the policy of the Conservative Party is on this aspect. We are dealing with decentralisation versus centralisation. What is peculiar about the Conservative case is that Conservative Members are arguing for strong centralisation. The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) had the courage to say that he felt there should be a variety of economic policies operating in a United Kingdom context. He joins with us in our opposition to the amendment, and we hope that we can look to other sensible Conservative Members to go through the correct Lobby. If the Conservative Party is seeking to deny freedom to a Scottish body to operate in a Scottish context, that is something that the SNP will not tolerate.

Let me try to deal with the economic power of the SDA. That Agency was set up to eradicate many of the economic difficulties in Scotland. Many of us believe that the Agency does not have sufficient powers or adequate money allocated to it, but we believe that at least it is a step in the right direction. Much as we should like to see the powers of the Agency expanded—and they will be expanded—we do not want to see the Agency limited in development by the advent of Conservative daydreams.

It is difficult for many of us to listen to arguments advanced by those who pretend to support economic power to be given to the Assembly but who try to justify the status quo. Fundamentally, their view is based on seeking to justify the situation as it is. However, there are 200,000 people in Scotland who do not work, and it is difficult to justify the remarks of the hon. Member for Renfrewshire, West (Mr. Buchan) when so many Scots people are on the dole.

I should like to quote some statistics set out in yesterday's Official Report at col. 602 of Written Answers. We there see the figures of the percentage increase in unemployment between March 1974 and October 1977. In that period, the figure in Leven and Methil increased by 91.1 per cent. In Livingston there has been the highest increase, of 257.9 per cent. The same statistics show that by 10th November 1977 9,435 youngsters in Scotland had never had a job since leaving school. In Strathclyde Region, which contains my constituency, there were 73,407 unemployed in November 1975 while in 1977 the figure was 109,456—an increase of 44.1 per cent. In Central Region, which is an important area for my constituency because of the commuter aspect, there were 5,786 people unemployed in November 1975 and 7,696 in November 1977—an increase of 33 per cent. No doubt the Central Region statistics will increase following the announcement affecting training colleges in Scotland.

Mr. Teddy Taylor

Will the hon. Lady answer the question that I put to her hon. Friend the Member for Perth and East Perthshire (Mr. Crawford), who failed to answer? Does she know of any industrialist or trade union leader in Scotland who thinks that this utterly deplorable state of affairs would be improved if her party's policies and separation were implemented?

Mrs. Bain

I cannot think of anyone in Scotland in that category who sees much hope in the Tories coming to power, in view of their attitude to public expenditure and the fact that the Conservatives have failed to publish their policies for people in Scotland—in contrast to the Scottish National Party. We are not afraid to put our policies before industrialists and trade unionists.

Mr. Crawford

No doubt my hon. Friend is aware that the hon. Member for Glasgow, Cathcart (Mr. Taylor) refused to answer when I asked him to name the companies which, he alleges, will leave Scotland on independence. He refused to do so.

Mrs. Bain

No doubt the hon. Member for Glasgow, Cathcart (Mr. Taylor) likes to look at the example of Seagram in Quebec, which said that it would withdraw if Rene Levesque won a majority, but when that happened Seagram was the first to say that it would stay. This kind of scaremongering is irrelevant to the Scottish scene.

The Under-Secretary of State for Scotland (Mr. Harry Ewing)

This is an important point on unemployment figures. Since the hon. Lady has mentioned the Central Region and seems to be projecting the argument that in any independent, separate Scotland there would not be unemployment, no doubt she will not mind my asking, when the scarcest commodity in the industrialised world is a new job, how a country with 5½ million people would be able to compete for new jobs against highly industrialised and larger nations. If she believes that it could do so, will she tell me why unemployment in Sweden, which has a population of 7½ million, is now going up when, for fairly obvious reasons, there is a recession right through the industrialised world?

Does the hon. Lady expect Scots—especially those in the Central Region, which has a United Kingdom-based industrial economy, not a Scottish-based industrial economy—to believe that in a separate Scotland they would be able to compete for new jobs against all these industrialised nations?

Mrs. Bain

The length of the hon. Gentleman's intervention reveals his sensitivity on this issue. I have never said that independence would be an immediate panacea for the problems of Scotland, but we have confidence in our ability to progress alone and to use our resources in a skilled and professional way in the economy, with the kind of planning that is necessary. We look at the examples of other small nations, and in referring to Sweden the hon. Gentleman should have updated himself because unemployment there is now 3 per cent. If unemployment were 3 per cent. in Scotland, there would be a lot of happy people because it would be a lot lower than it is now.

The onus is still on the centralist parties in the House of Commons to prove that their system works, because it is obvious to all the unemployed in Scotland and in the deprived areas that it does not. I want to quote one more statistic before I close. This is not just temporary unemployment in Scotland. In October 1974, 21,178 people had been out of work for more than a year. By 1977, the figure for that sort of long-term unemployment had reached 44,292. With that kind of record, what right has the House to try to tell us that its system is good for us? It is a scandal and a curse on humanity to see what is hapening to our country.

The hon. Member for Aberdeen, South (Mr. Sproat) spends all his time chasing unemployed people who need social security benefits. For him to try to deny to the people of Scotland the right to manage their economic affairs is ridiculous. He should be here listening to the debate and trying to justify himself. The hon. Gentleman was so confused in his speech that he ended up being able only to shout and bluster.

The amendment is an attempt to emasculate a Bill that is hardly very virile in the first place.

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