HC Deb 20 February 1980 vol 979 cc479-588

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

4.52 pm
The Secretary of State for Scotland (Mr. George Younger)

I am very glad that a day has been found by the Government upon which we can debate the state of the Scottish economy. To a certain extent it is a bit of a departure that this is so, because during the previous Government's term of office no Government day on the Floor of the House was devoted to a discussion of the Scottish economy. The only two days that we did have, I think, were asked for by the right hon. Member for Western Isles (Mr. Stewart), although an Adjournment debate was requested by Mr. Jim Sillars. All the other debates were in Opposition time in the Estimates debates upstairs. I suppose that one should be sympathetic towards the previous Government. They were perhaps anxious to have as little as possible said about their deplorable economic record. Nevertheless, I am glad that we have time today.

We have started this debate rather late and there are many who wish to speak. Therefore, it will not be possible for me to cover every aspect of the Scottish economy in the time available to me. I will try to cover those aspects that I hope will be of most interest to hon. Members, but if there are points upon which I do not touch and to which hon. Members would like answers, I am sure that my hon. Friend the Under-Secretary will hope to catch the eye of the Chair and will answer as many questions as he can.

There is no doubt whatever that the economies of the Western world are going through a very difficult time. The general state of world trade and lack of world economic recovery is the most important and serious factor against which any kind of policy for economic expansion in this country must operate. Therefore, we must now look at how the Scottish economy is faring against what is a very difficult economic background generally.

I should first point out that there are huge variations in how things are going within Scotland. Some parts of Scotland are doing very well, particularly where North Sea oil is a major factor, whereas other parts—such as our older heavy industrial areas in West Central Scotland and Dundee—have very serious problems which are deep-seated and not easy to solve. One of our top priorities must be to concentrate help in these areas to ease the human problems and to build a new industrial base for those areas.

We all know that since the war there has been continuous loss of employment in traditional manufacturing industry. The fact that Scotland has a large concentration of that type of industry has made our difficulties greater and caused our unemployment rates, at various times, to he as much as double the national figure. Since 1970 we, like the rest of the United Kingdom, have suffered from a considerable loss of competitiveness vis-a-vis our overseas competitors and an increasing penetration of imports into our own markets.

Manufacturing output in the United Kingdom is now no higher than it was in 1974, and since 1975 exports of finished manufactured goods have risen by less than 12 per cent. against an increase of 65 per cent. in imports of such goods. Over the five years from 1973 to 1978 our average growth rate in the United Kingdom fell below 1 per cent. a year—less than half that achieved by France or West Germany.

While North Sea oil contributed significantly to an improvement in Scotland's relative economic position in the early 1970s, from about 1976 Scotland has done significantly less well than the United Kingdom as a whole. Unemployment in Scotland has risen in comparison with unemployment in the United Kingdom as a whole. The total industrial output has risen at a slower rate in Scotland than elsewhere—just over 1 per cent. Between 1975 and 1978 compared with 4 per cent. in the United Kingdom—and there is a similar pattern for manufacturing output alone.

Against those worrying figures there is one surprising feature that we sometimes overlook, which is that even in these difficult times there has been a continuous growth of employment. The total number of people in employment in 1979 was about 35,000 greater than in 1970; that was brought about by the loss of 128,000 jobs in the manufacturing, primary and construction sectors and was more than balanced by a gain of 161,000 jobs in the tertiary sector. But in net terms these new jobs were insufficient to provide employment for all the additional people who came on the labour market during that period. That is why the unemployment rates have risen, to the great concern of successive Governments. That is a matter that has not been referred to sufficiently often and it is a factor that we should bear in mind.

When we took office in May of last year we faced a difficult and deteriorating situation and an acute need to create a climate in which the rate of generation of new jobs could be enhanced. We inherited the aftermath of a rash of major industrial closures which had taken place under the previous Administration and we were faced with further closures which had become inevitable by the time the previous Government demitted office—for example, Goodyear, SKF, Pye, Monsanto and Prestcold. At the same time, companies were experiencing acute problems as a result of the rising level of wage settlements, the events of last winter, and a severe squeeze on their liquidity.

The future of the Scottish economy depends crucially on changing its balance by encouraging the productive and wealth-creating sectors and allocating a higher priority to them. It is their success and their profits which pay for all our public spending programmes. It is because these sectors have been declining under the previous Government's policies that we must now reduce our public spending. This readjustment is painful for us all. No one likes to offer reduced services to his constituents. But at least there is one great benefit that has come about as a result of the events of 1979 and the last general election. It is now common ground between the two main parties in the House that public spending simply could not continue at the rate planned by the previous Government. The right hon. Member for Heywood and Royton (Mr. Barnett) and the Shadow Chancellor himself are both on the record on this matter, and although they now oppose every cut in expenditure, as parliamentary life requires, they are nevertheless clearly committed to cutting their own spending plans, should they ever need to face such a situation again.

Of course it takes time to make changes. We have been trying to do the equivalent of stopping a runaway train. But industry in Scotland can now read the clear signal that the Government recognise that it must have the priority now. We do not intend to impose any bureaucratic Government planning agreements, new regulations or interference. We will set industry in Scotland free to get on with the job of satisfying the customers.

It often occurs to me that we have spent so much time over the past few years arguing between ourselves and trying to sort out our internal troubles that in many cases we have forgotten and ignored that key person, the most important VIP for the Scottish economy—the customer. I hope that both managment and unions will be brought together and will understand the wishes and the needs of the customer. If that could be done, a great many of our industrial problems would be solved and many of the new markets that we seek would be satisfied.

Mr. Norman Buchan (Renfrewshire, West)


Mr. Younger

If the hon. Gentleman does not mind, I shall not give way. I am rather reluctant to give way today because many Members want to speak, and I know from experience that if one gives way it prolongs one's speech.

We have already made an important move in the right direction. Our first priority must be—and the last Government always said that it was their priority too—the reduction of the rate of inflation. The fiscal and monetary policies which are designed to this end are critical to everything that is important to Scottish industry. This is neither easy nor painless. We have never pretended or deluded ourselves that this could be done quickly with immediate results. For the time being it has meant that we have interest rates that are very much higher than we would wish. We are well aware of the impact that this has on individuals and industry, but the House should understand that, however painful that is, the alternative is worse. The alternative is to allow inflation to proceed unchecked with all the disastrous consequences that that would have on jobs, employment and future prospects.

The success of the strategy that I have described will be the major determinant of Scotland's economic performance, and it is based on letting industry get on with the job itself. But this is not to say that there is no scope for constructive Government involvement with industry. However, Government must not prop up or encourage the development of non-viable enterprises, because that does nothing to create lasting employment: In fact, it acts as a brake upon the kind of industrial change which we need if we are to overcome our current malaise, and it can severely damage the profitability of successful industry. In the present circumstances the Government have a genuine and valuable role to play in, for example, redressing the regional balance of the United Kingdom by seeking to attract viable projects into areas of greatest need and by providing, through their agencies, some of the facilities required by industry in such areas.

The first step that we took on coming into office was to consider how the policy instruments that were available to us could be made useful and effective, more cost-effective and more consistent with the overall aims of industrial policy. I should like to mention four of these in particular—regional policy, the Scottish Development Agency, the Highlands and Islands Development Board and the special employment measures.

We inherited a regional policy the most outstanding quality of which was its lack of discrimination. Almost half of the country was designated as assisted areas. Projects there were eligible for selective assistance from the taxpayer whether or not such support was necessary to secure their development. Such a policy, in a period when the quality of mobile investment available was shrinking, fell far short of being effective, and by placing extra and unnecessary burdens on the taxpayer, it penalised successful industry as well. It was clear to us that the hallmark of any successful and effective regional policy must be firmly to discriminate in favour of those areas where the need was greatest.

Mr. Robert Hughes (Aberdeen, North)


Mr. Younger

I think I will press on. I am sure that the hon. Member will be able to intervene later. I do not wish to be unco-operative, but it will take far too long if I give way.

Mr. Hughes


Mr. Younger

I shall give way just this once.

Mr. Hughes

On 19 July last year, the Secretary of State announced that there would be a special survey of the way in which the oil industry was affecting the economy of North-East Scotland. When will he announce the result of the deputation that went to see his colleagues in the Department of Industry? That deputation asked that there should be no change of status in the North-East until the report from the special survey had been made. Did not the Secretary of State try to con us then, and will he come clean now?

Mr. Younger

I appreciate the hon. Member's great concern about this matter, but I still think that such interventions will delay my speech. The study which I commissioned is under way and we shall get the results as soon as possible. I assure the hon. Member that he will be informed of them as quickly as possible, because I know of his interest.

The point about regional policy is that its resources must be concentrated on the areas of greatest need, and assistance must go to operations which would not be developed otherwise and which offer the prospect of secure and productive employment.

Some people have suggested that the changes that we have made will inhibit development in Scotland as a whole. Those people have not looked at the facts. Scotland now has a greater proportionate share of the industrial population living within special development areas than before—37 per cent. now as against only 30 per cent. before—and in recognition of the very severe difficulties of West Central Scotland we have extended that special development area to include Kilmarnock, Troon, Ayr and Largs. The level of assistance in SDAs remains at its former level. It now has a stronger pulling effect for providing jobs in those areas than it had before. That is something that I hope everyone will welcome. I emphasise that regional policy is not about stimulating industry generally. By its very nature it is about discrimination in favour of those areas where there is greatest need. That is why I suggest that the present balance of the new policy is better than the old.

I fully appreciate the concern of areas which are being downgraded, and I will be watching very carefully how this turns out. In that way any adverse effects can be taken into account in the revision that we have promised to all areas that are being downgraded by more than one step before the final step is taken in July 1982. Regional policy must be discriminating if it is to work. Those in the areas that are being downgraded have the complete assurance that a further review will take place before the final step is taken, and I hope that everyone will produce the necessary evidence and views so that we can make sure that the decisions taken are the right ones.

The second subject that I wish to discuss is the Scottish Development Agency. We have always acknowledged that the agency has a major role to play in the regeneration of Scotland's industrial infrastructure and the provision of facilities for industry, particularly in the form of industrial estates. But we were concerned at the extent of the agency's powers of investment in private industry, and at the distortion which these powers could cause, both in sectors where the agency was active, and in the overall priorities of the agency itself. The agency's previous guidelines encouraged it to see itself as an investment bank for Scotland with ancillary rehabilitation and factory-building powers. We see it, by contrast, as a mechanism for the provision of facilities for industry, with its investment powers ancillary to its other functions and its operations co-ordinated closely with the other private and public sector bodies which work in this field.

We were concerned also about the extent to which the previous Government had provided resources for the agency which the agency simply could not use, thereby pre-empting expenditure for which provision had to be made by the taxpayer from other worthwhile projects. In 1977–78, the agency underspent its budget by no less than 30 per cent. and in 1978–79, which, although I suppose it is not connected, was widely expected to be an election year, underspent its budget by a staggering 41 per cent. We were determined to put the agency's finances on a more realistic footing and, despite the expenditure cuts that we have had to make, it will still have significantly more to spend in real terms in the present financial year than it has ever succeeded in spending before.

That is a declaration of our confidence in those who work for the agency and the job that it can do for the economy. We have revised the agency's industrial investment guidelines to require greater private participation in agency investment and we are discussing with the agency new guidelines for the provision of sites and premises that will also encourage private participation. I am confident that, with these new and better defined priorities, the agency will have a greater prospect of contributing effectively to economic growth.

Two tasks of the agency that I regard as particularly important are the coordination of inward investment promotion and the encouragement of small firms. I support the comments made recently by the agency's chairman that it is no good complaining of foreign investment lost to Ireland and elsewhere. We must sell aggressively the broad range of advantages that Scotland has to offer. It is to the small firms sector in particular that we must look for the high growth companies of the future. The agency continues to provide advice, counselling and facilities for small firms, and financial backing, whether by way of loans or equity purchase, continues to be available for worthwhile, viable projects.

Within Scotland, too, the Highland and Islands require special and expert attention. We made clear before coming to office that we would continue to support the work of the HIDB. We see the board's programme of assistance for small businesses and enterprises as an important component of a policy to strengthen this area of the private sector. Soon after taking office, we increased the board's grant for the present financial year by £2.5 million to £17.3 million to enable it to draw out to the full the potential for private investment in its area. Provision for the board must take account of all public expenditure objectives. As regards the HIDB and the SDA, it remains the fact that no viable project has yet had to be turned down because of shortage of funds to back it. That is a satisfactory situation. I hope that it will continue.

The special employment measures of recent years are recognised as important and helpful, particularly for those young people who find themselves unable to get jobs. But we have had to make some changes. As the House knows, we have decided that the small firms employment subsidy, which is the least cost-effective way of producing additional jobs, should be discontinued and that the qualifying age for men under the job release scheme should revert to 64. But we have retained the most effective of the Manpower Services Commission's special employment measures and we are expanding the youth opportunities programme to provide additional work experience and training opportunities for the young unemployed.

Mr. Dick Douglas (Dunfermline)

When the Secretary of State for Employment discussed this issue in the House, he gave some global figures. Is a breakdown of these figures available for Scotland?

Mr. Younger

I note the hon. Gentleman's point. I shall try to get those figures for him. My hon. Friend may wish to cover the point. What is important is that the youth opportunities programme is being expanded under this Government.

In addition to the job release scheme that I have mentioned, there is the special temporary employment programme, the temporary short-time working compensation scheme, community industry, training in industry, the job introduction scheme and, of course, the youth opportunities programme that I have mentioned. Over 43,000 people in Scotland were participating in all these programmes in December 1979. I have no doubt that the programmes were a great help to them.

I have already referred to the situation that we faced on taking office regarding closures. My hon. Friend and I have taken the greatest trouble to do everything possible, in each example of a major closure, to find any way of continuing operations and protecting the firm or the jobs. We have had numerous consulta- tions. Between us, we have had over 50 meetings and consultations about various closures. I accept that it is the first duty of the Scottish Office and the Government generally to do anything within their power to assist a firm in trouble to weather the storm and to achieve a viable future, if at all possible. That was our approach to the problems of all these major closures.

In some cases, we have had a measure of success. We were actively involved in discussions—these have been mentioned in the press in recent days—leading to proposals for a joint venture involving Wiggins Teape and Consolidated Bathhurst Inc of Canada at the Fort William pulp mill. I am hopeful, too, that an agreement will shortly be finalised for the takeover of the Marathon yard at Clydebank by a French company which offers bright hopes for a prosperous future. There are Firm expansion projects which will do much to strengthen our industrial capacity and secure employment.

More recently, Caberboard Limited of Cowie announced a major new project of £6 million to establish a new line in medium density fibre board—a particularly welcome example of expansion in our wood industry. There is also major expansion on the way in electronics, to which I will refer, and we know of others that are being actively considered. Efforts to encourage investments are thoroughly worthwhile and will continue. There is a steady stream of inquiries, and my officials have been visiting the United States, in particular, to negotiate offers of financial incentives

Mr. Donald Dewar (Glasgow, Garscadden)


Mr. Younger

I must press on. I know that the hon. Gentleman's intervention will be brief if he says so, but there are other hon. Members who wish to speak.

In other cases that we inherited, less was possible. But we made considerable efforts to ease the effects of closure. In the case of Massey-Ferguson, we did everything possible in the early days to see what could be done, with the excellent co-operation of the work force, which has done a tremendous job for its factory and community. A new company has been established, Moorfield Manufacturing, with the assistance of Massey- Ferguson itself. In the case of Singers, my hon. Friend and I had a number of meetings with those concerned. There has been a major initiative through the working party at Clydebank. There will be many issues to follow up in order to help the community.

I should like to turn now to areas of some opportunity in the Scottish economy and areas which can benefit fully from some of the economic policies I have described. I have been pleased recently by CBI surveys indicating that industry regards export prospects in Scotland as generally stronger than in the United Kingdom as a whole. While unemployment is high, the number of notified vacancies—very much an understatement of the true position—is also high. We are giving our attention to ways of reducing the mismatch that these figures reveal—for example, through encouragement of liaison between industry and education, through improvements in the training system and through encouraging flexibility in the Labour Party—I mean the labour market. There is not much flexibility there, is there? That would be a real event. [An HON. MEMBER: "That is coming".] If it is coming later, that is indeed good news. It would be the best news of all.

We have in train a review of the Employment and Training Act, and the Manpower Services Commission is looking at vacancies that are hard to fill to see what can be done to help. A study is also taking place into the supply of electronics engineers and the difficulty experienced in recruiting them.

I should now like to refer to oil, petrochemicals and microelectronics, and to say more about small firms. Some 60,000 to 70,000 jobs have been created in Scotland as a result of North Sea activity. Oil exploration on the United Kingdom continental shelf had dropped to alarmingly low levels when we took office. We have taken decisive action to increase the pace of activity, including the ending of "farming in" rights for BNOC and our proposals for a seventh round of licensing. These measures are stimulating increased exploration and assuring the continued flow of our oil and the maintenance of many jobs dependent on it.

With the announcement before Christ-was of the orders of the Magnus and north-west Hutton fields—on which Highland Fabricators and McDermotts are to be congratulated—all five Scottish platform yards have work in hand. The nature of the industry makes peaks and troughs inevitable, but we are determined that the United Kingdom yards, and the United Kingdom industry generally, should continue to receive a full and fair opportunity to compete for work. I am confident that Scottish yards will respond to that.

In addition to the jobs created through the provision of capital equipment and a wide range of services to the oil industry, there is also the employment provided at the onshore facilities, such as those at Sullom Voe, Flotta and St. Fergus. There are also encouraging developments downstream. The Shell-Esso development at Moss Morran will provide employment for 3,500 at peak construction time and, in the long run, around 350 permanent jobs, with considerably more in prospect should further downstream developments follow.

The Government are determined that the nation should secure maximum benefit from North Sea resources, and one important strand in that is the potential for petrochemical development founding on the feedstocks which are available. Recognising this, we have already taken steps to restrict gas flaring, and last July my right hon. Friend the Secretary of State for Energy announced a study by Mobil and the British Gas Corporation into the prospects of a new gas-gathering line. This is not the moment to anticipate its possible outcome, but there is every chance that it will provide industry with valuable new opportunities. Scotland's geographical proximity to the oil and gas fields, together with the other advantages which we have to offer, places us in a strong position to benefit from such future expansion.

Companies that have established themselves in Scotland from abroad have done much to reinforce Scotland's claim to be a major centre of advanced technology and a supplier of advanced products throughout the world. There is a growing emphasis on microelectronics, the applications of which have a critical part to play in improving products, processes and systems throughout industry and which have the major potential for growth in the coming decade. The quest for investment from foreign microelectronic firms should not overshadow the need to encourage the expansion of firms already here.

The expansion plans announced by many of the microelectronics companies in Scotland, such as National Semiconductors, Motorola and Hewlett-Packard, to name but three, express a solid note of confidence in Scotland as a place in which to establish and grow, and an increasing commitment to research, design and development here. The Government will continue to do everything posible to encourage such growth, and to spread the use of microelectronics applications throughout industry. One way in which we hope to stimulate that is through a new microelectronics applications centre, which is at present the subject of a study commissioned by the SDA. However, the Government can do only so much. The main responsibility must lie with the industry. I was particularly encouraged, therefore, by the establishment of the Northern United Kingdom Circuit Group, which should do much to bring manufacturers of printed circuits and their users closer together.

Small firms are critical to industrial recovery. Recent research has endorsed the view that they have a significant role to play in the job-creation process but that the rate of creation has been lower here than in many of our competitor countries, such as the United States, Western Europe and Japan. We have already done much to implement the programme that we announced in our manifesto by reducing the administrative and legislative burdens on small firms and increasing incentives for entrepeneurs. We have reviewed employment legislation, and the Employment Protection Act is being amended to lengthen the qualifying period for unfair dismissals and to reduce the period of notice for small redundancies. The original provisions were a major discouragement to firms to take on new staff and increase the number of jobs.

We published a consultative document in September on company accounting and disclosure, proposing a much reduced amount of financial and accounting information that small firms need disclose. We introduced fiscal measures in the Budget designed to enable businesses to reward hard work, initiative and success. We are examining ways of increasing the availability of funds for small firms, following the Wilson committee report, and we are considering the scope for further fiscal measures that will offer the right sort of incentive and we are reviewing the capital taxation system as it impinges on small firms.

It is important to bear in mind that the Scottish economy depends not only on the big industrial centres, where many of the problems exist, but on rural areas. The rural economy is of great importance to large areas of Scotland.

Mr. Gregor MacKenzie (Rutherglen)

The Secretary of State has indicated that he is to stop the small firms employment subsidy, because it is not cost-effective, and that he is examining schemes that will assist small firms financially.

I have had representations, as, I am sure, have many of my hon. Friends, about financial assistance to small firms. Would it not have been better if the right hon. Gentleman had made an advance announcement about the financial help that he proposes to give? Will he make a further comment as quickly as possible about how he intends to give small firms a little cash, because that it is what they need most?

Mr. Younger

I appreciate what the right hon. Gentleman has said. We would have been more reluctant to withdraw the subsidy if we had not examined it and found that it did not do its job or give value for money. That is not a criticism of its introduction, but it was not a properly thought out scheme. It was not a bad idea to bring in the subsidy, but it does not meet the need for which it was intended. We are therefore looking at other methods to try to help small businesses. I accept that, as the right hon. Gentleman said, they need attention and assistance to enable them to expand.

Mr. Dewar

Will the right hon. Gentleman give way?

Mr. Younger

No. I must press on. The hon. Gentleman may think that I have something against him, but that is not so.

It is important for small firms in rural areas to get help, but it is also important that agriculture should be given assistance. Our proposals, and the assistance that we have been able to give agriculture, have been a tremendous help at a difficult time. In the past nine months we have devalued the green pound on three occasions and the farming industry has near parity with its competitors in the EEC.

The industry can look forward with confidence in the knowledge that the Government recognise the importance of a healthy, viable and prosperous farming sector. Other aspects of Government policy, such as easing restrictions on bus licensing, will be of benefit to the rural areas.

Of course there are problems in the great industrial centres in both shipbuilding and steel. After the tragedy of the long Hunterston dispute, which was the most senseless and self-defeating dispute that I can remember, we have the tragedy of the steel strike, and the most modern steel industry in Western Europe has been lying idle for much of the past year. I hope that the management and the unions will get together to solve the dispute with the greatest possible speed.

We have a difficult situation to deal with in shipbuilding, but the Government have made a clear statement and made funds available for a restructuring of the industry. There are encouraging signs that in a difficult situation all those concerned are doing all that they can to get the industry back on to a footing that it can cope with and at the right level for the demand that is available for it to satisfy.

I must draw my remarks to a close. If there are other matters that hon. Members wish to raise I am sure that they will be answered later by my hon. Friend the Under-Secretary. We are considering the Scottish economy at a time of great difficulties throughout Western Europe. The policies of the previous Government were given the maximum chance, for five years, to succeed. They had the full life of a Parliament and every resource that they could command, but, in spite of all the great words, the previous Government's handling of the Scottish economy was disappointing and disastrous.

When I left the Scottish Office at the beginning of 1974, the seasonally adusted unemployment figure in Scotland was 85,000—3.9 per cent. When I returned in May last year the unemployment rate was 165,900. It had doubled under the previous Government.

Mr. Dennis Canavan (West Stirlingshire)

We know what it is now.

Mr. Younger

The hon. Member is quite right. He is quoting a different figure but that figure is still lower than it was under the previous Government in January 1978. The hon. Gentleman should remember that.

In July 1979 there were no fewer than 24,737 school leavers on the unemployment register, against the highest total under the previous Conservative Government of 8,200. It is no exaggeration to say that by April 1979 everyone in industry was demoralised and overwhelmed by regulations and restrictions and so-called planning agreements, and the Government's only response was to pour in more and more public money which they could not afford and which almost broke the back of the Treasury.

During that time the Government ignored the advice from industry, chambers of commerce, the CBI, and from all the organs of economic commentary throughout the nation. The only objective of all this spending of public money was resistance to change.

The strategy now being adopted is to lift the burden of excessive public spending which has held back that productive industry upon which we all depend. Our policy is to encourage productive industry to expand and to do better in future. We propose to help every viable project with resources such as those of the SDA and to help those people affected by the rundown of old industries—the people who are least able to help themselves.

Our strategy is to concentrate regional policy on the areas which have the greatest need and which have the largest numbers of unemployed. Many Labour Members represent those areas, and I hope that they welcome our strategy. That strategy is to create real jobs wherever we can, not phoney jobs which are no good to anyone and which cost the public money we can ill afford.

If the hon. Gentlemen believe that that is merely what I want they should study the comments, articles and studies published throughout the media which deal with economic matters. They will find that this is exactly what industry wants. It is what the commentators want and it is what the vast majority of economic advice suggests. That is the strategy on which the Government are embarked, and if only we could get greater public acceptance of the need for change the Scottish economy would be greatly helped.

The greatest vice that we have had to deal with in recent years—much further back than the last five years—is resistance to change. In a changing world, when our customers and their needs are changing and where worldwide competition is definitely changing to our disadvantage, we must face up to change in Scotland. We must welcome change by making it an ally and not an enemy. If we can do that in the Scottish economy we shall be able to build upon the vast amounts of money that have been spent to assist recovery from our old industrial past. We shall be able to create new jobs that are productive and which will be good and worthwhile jobs. That is the Government's policy and we intend to achieve its objectives.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Before I call the next speaker, may I say that I realise that this is an important Scottish debate and that, though interjections enliven a debate, no fewer than 29 right hon. and hon. Gentlemen have indicated that they wish to speak. I therefore appeal for brief contributions.

5.33 pm
Mr. Bruce Milan (Glasgow, Craigton)

I am glad that we are having this debate on the Scottish economy, and I am grateful to the Secretary of State for Scotland for providing the time for it.

That having been said, however, my congratulations to the right hon. Gentleman and, because there was not a single thing in his speech which gave any encouragement to the Scottish economy, to those at present unemployed or to those who are likely to become unemployed during the next few months.

The unemployment total is now above 200,000, and will inevitably increase. This debate takes place against the gloomiest economic background and the gloomiest prospect for Scotland that I ever remember since I came to the House. Everything done by the Government in the last nine months has made matters worse, and there is no indication that the Secretary of State has even an inkling of the disastrous effects of the Government's policies on Scotland and the even more disastrous effects that they will have if they continue along the same lines.

The right hon. Gentleman said that we should look at the United Kingdom economy as a whole. I am perfectly happy to set this debate against the general background of the United Kingdom economy, because, inevitably, the Scottish economy to a considerable extent depends for its success on what is happening in the United Kingdom as a whole.

Let us, therefore, look at the way in which the Government have handled the United Kingdom economy during the last nine months. The new monetarist and market economy policies are the basis of the Government's activities. How have they worked? Inflation at 18.4 per cent. is exactly twice as great as it was a year ago. That is the first result of the Government's policy. A disastrous Budget brought an increase in VAT and the Government have caused rent and rate increases—not just in the Lothian region but in the Borders and everywhere else—as a result of the RSG settlement. The Government have given deliberate instructions to the gas and electricity industries to put up prices by figures that go well beyond the current rate of inflation. However, they will not be well beyond the rate of inflation that we are likely to encounter in a few months.

Interest rates are at a record level and yet the Secretary of State for Scotland expects industry to invest when we have a minimum lending rate of 17 per cent. We cannot get investment under those circumstances. The right hon. Gentleman mentioned the CB1 expectations on exports. If he looks at the CBI survey for Scotland published in January, he will find that in every branch of economic activity the CBI outlook for Scotland is the gloomiest that we have seen as far back as I can remember. I do not believe that we have ever had a gloomier survey from the CBI in Scotland. That gloom is the result of the interest rates I have mentioned and the high rate of inflation.

Unemployment in Scotland is now over 200,000 and it will increase. Last month the figures rose in a single month by no less than 23,000 and the seasonally adjsted figures by nearly 6,000 in a single month.

The right hon. Gentleman inherited an unemployment situation that I freely admit—as I have always done—was far too serious. Nevertheless, in the final period of the last Labour Government we had, month by month, been edging the unemployment figures down and with that inheritance the figures during the first few months of this Government continued to decrease.

An inevitable swing has taken place because of Government policy. We saw the first impact of those policies in the January figures. The right hon. Gentleman is lucky that we have had this debate today, because when we see the unemployment figures for February—to be published in a week's time—I confidently predict that they will be considerably higher and more serious than even the January figures.

The number of unemployed school leavers has also risen, and all this takes place against a background of accelerating factory closures in Scotland. Closures have now become such a commonplace that they hardly make news any more. We now have the worst record of factory closures that I can remember.

In an answer given to my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) concerning the Strathclyde region only, we were told that in December there were 5,345 redundancies. If one looks at the monthly figures for 1979 one can see an accelerating trend since May as a result of the Government's policies. As well as the 5,345 jobs lost in December, 3,937 have already been notified in Strathclyde. That notification was given towards the end of 1979 and indicated that those jobs would be lost in 1980. The situation will become worse.

The Government could at least use the instruments available to them to try to mitigate the effects of the closures and disastrous unemployment figures. However, in the current year the £500 million planned by the Labour Government for the Manpower Services Commission has been cut by £140 million, to £360 million. The chairman of the Manpower Services Commission, in evidence to a Select Committee, said that the Government cuts had reached such a level that the MSC would no longer be able to carry out its statutory obligations. Yet the Secretary of State pretends that he is in favour of mitigating the effects of unemployment in Scotland. The MSC's work is directed towards the development areas. A cut of £140 million in one year is bound to have substantial effects on Scotland's employment prospects.

One has only to think of the steel industry to understand the results of the Government's handling of the economy. The Government's policy is said to be one of non-intervention. In reality it is one of intervention in its crudest form, because of the financial guidelines that it imposes upon industry. The Secretary of State for Industry blames Sir Charles Villiers and Sir Charles blames the Secretary of State for Industry. Both men have culpably mishandled the dispute and have made it more difficult and bitter. It will have lasting effects on the steel industry, not least in Scotland. The new Employment Bill will embitter industrial relations even more.

The Government have failed in their incomes policy. According to figures published today, incomes increased by 19.6 per cent. in the past year. That is under a Government that believes in a free-for-all and a free market economy. The inflation rate is 18.4 per cent. We have debated cuts in local authority spending, cuts in education, and cuts in school meals, milk and transport. We have debated cuts in the housing programme and in the health services. The Under-Secretary of State assured us only the other day that we need not worry about the National Health Service because so long as we increased prescription charges it would be safeguarded. However, the number of hospital beds is being reduced and the children's hospital in Glasgow has to resort to raffles to raise money for essential services.

That is the background. The financial benefits from North Sea oil have been flowing in increasing quantities, and yet the Government's economic record is appalling. Let us not believe that we are in a temporary difficulty. Let us not believe that this is only the first step and that after the economy has gone down a little it will recover with a gigantic bound. That will not happen. All the forecasts, from Government and independent sources, are that the economic situation will become worse. The forecast is that industrial production will fall in the current year. The question is whether it will fall by 2 per cent. or 3 per cent., or more. Every indication is that inflation will become worse and that it will not stop before it reaches 20 per cent.—and it may go much higher than that.

On Monday, The Times gave us the Government's forecast for unemployment. The forecast is that in a year the number of unemployed will be more than 2 million. The last Government estimate was that unemployment would reach 1.6 million. That was serious enough. The figures are based on detailed, region-by-region forecasts. That means that there must be a Government forecast of unemployment in Scotland for January next year. It would be interesting to hear that figure from the Under-Secretary of State. Of course, he will not give us that figure. If we receive any information about anything from him it will be a precedent.

We can, however, work out the figures. Unemployment in the United Kingdom will be 24 per cent. in a year's time. At present 200,000 people are unemployed in Scotland. In a year unemployment in Scotland will total 250,000. Scotland suffers disproportionately and that must, therefore, be a minimum figure. Unless steps are taken soon to reverse Government policy we may be sure that unemployment in Scotland will total between 250,000 and 300,000. If the Secretary of State wants to deny that I give him the opportunity now. He knows that he cannot deny that figure. He knows that that is the prospect for January next year. The right hon. Gentleman can intervene to confirm or deny what I say. That rate of unemployment is inevitable, because of Government policy.

The engineering industry forecasts a fall in demand of no less than 20 per cent. It is a key industry in Scotland. The construction industry is experiencing its worst period since 1951. The indications are that the construction industry is on a downward course, which will mean the loss of thousands of jobs in Scotland.

We are told that the Government are looking for more cuts in public expenditure. We shall be told shortly where those cuts are to fall. Housing is most likely to be affected by the cuts, although the housing programme is at its lowest level for more than 20 years. Wherever the cuts take place they will lead to a loss of jobs in Scotland.

The present situation is a direct consequence of the Government's first Budget, which was based on the proposition that by their giving tax cuts to the rich the economy would take off and become prosperous. The irony is that the policy is so successful that we are told that there will be no more tax cuts in the next Budget. The Government have already shot their bolt. The tax cuts for the better off have, in real terms, benefitted only those with incomes of more than £15,000 a year. The tax cuts will not be repeated, but the penalties of increased VAT, increased inflation and public expenditure cuts, which have been borne by ordinary people in Scotland in the last nine months, will continue to be borne for a long time.

The other irony is that despite all their action, the Government have not the slightest idea what will happen to the PSBR in the current year. They do not know whether it will go up, down or sideways. They do not know whether it it good, bad or indifferent whether it goes up, down or sideways. In a nutshell, the Government's economic strategy has completely collapsed only nine months after they came to power.

We are told that there are divisions in the Cabinet and that there are some hawks and some doves. It would be interesting to know whether the Secretary of State is a hawk or a dove. To me he seems more like a lame duck. In this position we want Scotland protected and, indeed, expect Scotland to be protected.

In recent years every Government, even Tory Governments, have done as much as possible, in difficult economic circumstances, to maintain benefits and protect the most vulnerable areas of the country. That has not happened under this Government. Scotland is in a difficult economic position. The problems are serious. There will be a difficult period ahead. We expect some initiative from the Government for the protection of Scotland.

Let us consider the record. The Secretary of State always presents regional policy in an agreeable manner. When listening to him this afternoon one might have thought that regional assistance in Scotland had been increased by the Government. The reality is that four areas in Scotland have been upgraded, as was mentioned by the Secretary of State, but no fewer than 42 areas have been downgraded. It would have been nice if the Secretary of State had read out a list of the areas downgraded as well as a list of the areas upgraded.

The Government reduced the grants for building, plant and machinery from 20 per cent. to 15 per cent., which affected every development area. There was a deferment in the payment of regional aid, which cost Scottish industry £40 millon in the past year. The changes announced last July meant that regional aid was cut from £150 million to £105 million a year, which is a reduction of 30 per cent. It is no wonder that Scottish industry does not wish to invest.

Mr. Ian Lang (Galloway)

The right hon. Member obviously feels strongly about regional aid. Has he forgotten that in 1977 the previous Labour Administration, almost overnight, abolished the regional employment premium? That militated strongly against Scotland, which received almost 50 per cent. of the total. The effect was about £75 per employee in Scotland compared with £42 per employee in England. That led directly to a loss of 20,000 jobs.

Mr. Milian

The previous Tory Government announced that they would abolish the regional employment premium in 1974. It was not abolished, because a Labour Government were returned to office at the 1974 election. I hope that every hon. Member will be in favour of a strong regional policy.

The regional employment premium was replaced by other benefits to industry. The reductions in expenditure in the current year have not been replaced. They were not the only savings that were made at the expense of Scottish industry. The hon. Member for Galloway (Mr. Lang) should ask Scottish industrialists. what they think about the Government's action on regional policy.

The SDA budget has been reduced for the current year, and the Govern- ment have produced industrial guidelines that the Secretary of State has admitted are intended to make the industrial activities of the SDA an ancillary function, whereas they were previously the prime function of the SDA.

Mr. Younger

indicated dissent.

Mr. Millan

That is true. The provision of factories, while important, could be done, and was being done, by other agencies. The industrial investment function of the SDA was its prime objective. The Secretary of State has cut the budget not only in the current year but in the next year.

I wish to draw the attention of the House to one interesting event. In an equivalent debate to this on 4 February, the Secretary of State for Wales announced that the WDA would receive an additional £48 million over the next two years to deal with the difficult economic and industrial circumstances in Wales. It would have been encouraging for Scotland if the Secretary of State had been able to announce this afternoon that additional money would be available to the SDA. The right hon. Gentleman has a record of unmitigated failure in these matters. On any issue that arises where Cabinet decisions are involved, the Secretary of State loses out. If an additional £48 million is to be provided for Wales, why is there not something additional for Scotland?

Mr. Younger

I would have thought that the right hon. Gentleman would know from his own intelligence that there is a vast problem of steel closures in Wales. I am glad that the Government have been able to provide money to help Wales.

I made it clear in my speech that the SDA had more money than it could spend. It will have more money to spend in real terms this year than it has ever had before.

Mr. Millan

That is an interesting answer. The right hon. Gentleman has confirmed what I said. Wales is to receive additional money because of its serious industrial problems. The right hon. Gentleman obviously does not think that Scotland has serious industrial problems, while the rest of us believe that Scotland has extremely serious industrial problems. If he were doing the job for Scotland that he ought to be doing he would have obtained additional money for the SDA. We have heard another confession of failure from the right hon. Gentleman.

What success has the right hon. Gentleman had on the question of small firms? I do not remember a speech of the right hon. Gentleman in which he has not said "If only every small firm in Scotland would engage one additional employee, the Scottish unemployment problem would be solved". That is about as sensible as saying "If every small firm in Scotland dismissed one employee, unemployment in Scotland would be doubled".

The small firms employment subsidy was directed specifically towards small firms taking on additional employees—something that the Secretary of State said he was anxious to encourage. The subsidy meant that for a small firm taking on additional employees there would be a payment for 26 weeks of £20 per week for each additional employee. One would have thought that that was exactly what the right hon. Gentleman wanted. How-every, the small firm subsidy has been abolished. The right hon. Gentleman had the impertinence to say that it was not a cost-effective scheme. What are the Government putting in its place? The answer is, absolutely nothing.

That is not the end of the story about the way in which the Government have treated industry in. Scotland. They say that they wish to encourage small firms. The encouragement in Scotland is the removal of the small firms employment subsidy. We all wish to encourage oil-related industry in Scotland. When the Government came to power they inherited from the outgoing Labour Government the interest relief grant scheme, which had been an important financial inducement to industry in Scotland. It enabled Scotland to build up the amount of oil-related employment to between 55,000 and 60,000 jobs. Some months ago the Government announced that because of EEC pressure they intended to abolish the scheme from 31 March 1980. When the House was in recess they announced that they were abolishing it retrospectively from July last.

The scheme has been abolished because the Government wished to save money and because there was pressure from the EEC. They are spineless in their dealings with the EEC. The French Government have not lifted the lamb ban, yet France was one of the countries agitating within the EEC for the abolition of the interest relief grant scheme, and the Government caved in. That scheme has been lost. It was an important scheme from the point of view of encouraging oil-related jobs in Scotland.

We had the fiasco of the Civil Service dispersal programme. It is now to produce only 1,400 Ministry of Defence jobs, but we are not even sure that we are to get them. If we do, it will be in 1986. In any case, long before that there will be Civil Service reductions in Scotland of more than 4,000. That will be several times more than the additional Civil Service jobs that we are to get under the Civil Service dispersal programme.

There was the Inmos project, which was started by the Labour Government. The understanding was that the first manufacturing part of the project was to be in a development area. The Government did not try to get the first part of that project sited in a development area: it went to Bristol. I mean no disrespect to Bristol, but that scheme should have gone to a development area. When I wrote to the Secretary of State and pointed out that there was an undertaking by the previous Labour Government that that scheme would go to a development area, I got back what I think the Prime Minister would call a "wet" letter saying that this was a matter for the management of Inmos, and that it had nothing to do with the Government.

These are important jobs in the microelectronics industry. The right hon. Gentleman mentioned this matter as being very important. Jobs that should have gone to Scotland or to another development area have gone to a non-development area. The right hon. Gentleman did not even put up a fight for them, and he wrote this extremely complacent and silly letter to me.

We have had that kind of response on numerous occasions. We had it in regard to industrial closures. The Secretary of State said that he was unhappy about the closures, that he was anxious to do everything possible—apart from anything positive—that they are terrible tragedies, and that he would do everything possible to get alternative jobs. The right hon. Gentleman this afternoon mentioned one or two instances where he has been able to step in and be helpful. Consider the examples that he gave. First, Marathon. Marathon would not have been there unless it had been rescued three times by the previous Labour Government—the last occasion being a month or so before the general election.

Caberboard, at Cowie, was rescued by the previous Labour Government. But the right hon. Gentleman has been able to come in with a secret press conference. A notice was issued to the press to the effect that if representatives would meet the Under-Secretary on a particular day he would have something of tremendous importance to tell them. It was so secret and important that he could not tell them in advance. It turned out to be Government money going into a project started by the Labour Government.

Mr. Canavan

Does my right hon. Friend agree that it was absolutely disgraceful that the Minister should use that press conference to launch an attack on the trade union movement and to claim that the existence of the factory at Cowie was a victory for the German company over the trade union movement? If it had not been for the tenacity of the trade union movement and the parliamentary pressure that my colleagues and I put on the previous Labour Minister of State at the Scottish Office, there would have been no capability for manufacturing chipboard at Cowie at all.

Mr. Millan

My hon. Friend is absolutely right. I remember the meetings that I had with him when the original difficulties arose at that factory.

On all these matters we have little sign of real initiative and enterprise by the Government. A working party has been established, and we welcome that. I suppose that that is better than no working party at all. My hon Friend the Member for Dunbartonshire, Central (Mr. McCartney) tells me that the Clydebank working party does not have an office there. Not one job at Singers has been replaced, despite the efforts of the working party. Indeed, no new jobs have been created to replace the lost jobs at Massey-Ferguson, in Kilmarnock, despite the efforts of trade unions and others.

The moral is that we must fight for the retention of every job in Scotland. If we adopt the attitude that it does not matter if jobs go as long as we can get jobs to replace them, we shall be fooling and deluding ourselves. That in turn will lead to disillusionment among trade unions and others. Alternative jobs are difficult to obtain. If they can be obtained, they should be obtained whether or not we are losing jobs. Scotland is losing jobs at an extremely worrying rate. The Government make a fetish of nonintervention, although every industrialised country in the West—and Japan, and other countries—adopts an industrial interventionist policy. Without an interventionist policy there will be no hope for the United Kingdom, and there will certainly be no hope for Scotland.

During the election we forecast—and the Scottish electorate supported us—that the return of a Tory Government would mean industrial disaster for Scotland. The only respect in which we were not accurate at the election was that the disaster happened a good deal sooner than we expected last May.

We need a complete reversal of Government policy in the widest area of economic strategy, particularly in the industrial area. Unless we have that reversal of policy Scotland will go into an irreversible industrial decline. That will be the legacy left to Scotland by this disastrous Tory Government.

Several Hen. Members


Mr. Speaker

Order. As the House saw, more than 30 right hon. and hon. Members hope to participate in a debate that will last about three hours before the closing speeches.

6.7 pm

Mr. J. Grimond (Orkney and Shetland)

If we are to improve economic performance in Scotland and put a curb on inflation we must, as the Secretary of State said, reduce the non-productive use of resources, especially by public authorities.

I should like to make several points on that matter. First, it is reasonable to give local authorities more flexibility. However, it seems unreasonable to tell them that they cannot spend the money that they raise. Much local authority expenditure could be eliminated to the advantage of the community. But if a local authority is prepared to raise money on the rates and does not come to the taxpayer. I do not see why it should not be allowed to do so.

I hope that we shall have an assurance from the Government that they will not penalise authorities which have been economical in the past, but in view of the manner of the cuts they may end up by doing that.

I should also like an assurance that the Government will not give special grants for large unproductive capital projects, such as the building of offices. There are some signs that they are willing to do that. Services are being cut while offices and staff increase.

The cuts in general are not cuts but reductions in extra money provided by the Government. I was alarmed by one remark made by the Secretary of State, and I hope that in winding up the debate, the Minister will put it right. The right hon. Gentleman seemed critical of the Scottish Development Agency because it underspent. One of the most disastrous aspects of the grants system is that every authority believes that it must spend to the absolute maximum, whether or not it has any good projects. I hope that the Government will congratulate the SDA on not pouring out public money if it has no viable projects before it. In this regard, too, I hope that the Government are looking at the grants system, which is extremely wasteful.

The Secretary of State pointed out that 60,000 jobs had been created in Scotland through oil and oil-related industries. I hope that we shall be told whether these are jobs for Scotsmen. For example, at Sullom Voe, in my constituency, at least half the workers in oil-related jobs do not come from Scotland. Are these 60,000 jobs for Scotland or for Britain?

Incidentally, with regard to the future of the various grants that are being tailed off, I hope that the Government will find means of discriminating between regions. The regions with oil-related industries will require grants in four or five years, when the oil construction period is over, and possibly later when the oil itself is running down. I suspect that the grants will probably continue and then tail off, but in some regions that may be the wrong way round.

If we are to have a reduction of Government assistance to some areas—I do not complain about that—it is all the more necessary that we should look at the services in those areas, particularly transport. High transport costs and the difficulties of moving goods are handicaps under which the Scottish economy labours. There is great scope for expanding train services throughout Scotland. I regret the closing of some of the services in the Borders and in the North-East of Scotland.

The Secretary of State mentioned the importance of tertiary industries, among which is tourism. I am not a wholehearted enthusiast for the indefinite extension of tourism. I sometimes feel that we need an anti-tourist board as well as a tourist board. However, it undoubtedly brings much money into many parts of Scotland, particularly the Highlands.

The railways north of Inverness are museum pieces. It is amusing to travel on them, but profoundly irritating. They are no better than they were 100 years ago. I am told—I hope that it is not true, and perhaps the right hon. Member for Western Isles (Mr. Stewart) will correct me—that at one point the crew have tea during the journey, leaving the train and going to a neighbouring farmhouse. I cannot swear to the truth of that, but sometimes one would think that it is so. The train stops not only at every station, but frequently between stations.

I should like sleepers to run north of Inverness. I am amazed at the time that journeys take. It still takes five or six hours to cover 120 miles. I am also amazed at the apparent lack of effort by the railways to gain more of the goods and livestock traffic. Because of the increasing cost of petrol, the railways have a great opportunity in the rural areas of Scotland. As the Secretary of State said, the rural economy is of prime importance to Scotland.

Mr. Robert Maclennan (Caithness and Sutherland)

As a fellow sufferer on the line about which the right hon. Member is talking, may I ask whether he acknowledges that when the matter is raised with the Government they treat it as a matter for the management of British Rail, and British Rail treats it as a matter of cash limits imposed by the Government? The latter seems to be the more plausible explanation.

Mr. Grimond

I am obliged to the expert on railways. Whoever is ultimately responsible, I feel that improvements could be made.

There has been a great deal of road and motorway building in the centre of Scotland, but it is still largely unjoined to the roads to the South. There are some gaps between the main motorways in England and those in Scotland.

In my view, the airways will price themselves out of ordinary business in Scotland. They will soon be used entirely by expense account travellers and public officials. Incidentally, I welcome the offer of a grant of £2.5 million for the Highlands and Islands airports, and I hope that the Government will say more about how it is to be divided up. It is a step in the right direction.

British Airways have made nine increases in fares to Orkney and Shetland in the last four or five years, ranging from 7½ per cent. to 15 per cent. That is far in excess of inflation. In spite of numerous courteous explanations from the nationalised organisations, I still think that their policies are wrong. For instance, British Airways have enormous traffic to Shetland in oil, but it is creamed off to charters. The scheduled services are not gaining the profits that could be made. The CAA says that it is charging the oil companies for the new terminal at Wilsness in Shetland but it should be making a large profit on the whole aerodrome at Sumburgh. British Airways should be making such a profit from its monopoly position that it could afford at least to hold the fares on scheduled services and to hold airport charges. The CAA proposals for increases in airport charges are astronomical. The CAA and British Airways are putting too much extra expense on the ordinary traveller. They should be making a profit out of the oil companies.

Scotland suffers from the same disease as the rest of Britain. State Socialism, with its enormous nationalised industries, has failed, not only because it is incompetent, but because it has made no difference to industrial relations. One of the promises of nationalisation was that it would improve industrial relations. It does not happen. Too many trade union leaders seem to spend their time disrupting production, instead of improving it. Sometimes the unions seem to be set on a course of mass suicide. That is not inevitable. It has been shown, not only by small firms, but by some large firms, that if a business is broken up into manageable units and there is contact with the labour force, extremely good working relations can be established.

There are at least three large international companies in Scotland which have good working relationships—Occidental Oil, IBM and ITT in the Borders—and which are bringing about the sort of change in the economy which the Scottish Office wishes to see. They work in small units, and they are careful to carry the labour force with them when they are introducing new techniques. Good relations with labour can be established in many ways. One way that is particularly appropriate to Scotland should be the encouragement of industrial co-operatives. I do not say that they will solve our troubles, but that is a good way of associating the workers in ownership and management of their business and giving them a real interest in it. After all, it is they who depend upon it for their livelihood.

A good deal of management is virtually a bureaucracy. It moves from place to place. It is not interested in the community. Co-operatives will not mean that workers will run the business or manage it, but they will have a say in appointing the management, and have continual interest in how it performs. Increasingly, workers are wanting to be treated more as owners than as mere hands. It would be sensible to make some parts of nationalised industries into co-operatives. It would be sensible to encourage workers to put redundancy payments into their own businesses. Some are willing to do that. It would be sensible to give MG cars, for instance, to the workers, and to give other parts of the nationalised industries back to the people who work in and depend upon them. Such a development would be peculiarly appropriate to Scotland, which has a long tradition of a more widespread democracy than England.

The group of co-operatives in Man-dragon, in Spain shows what can be done if the sort of patriotism that has erupted in Scotland during the last four or five years is harnessed not only to political but to industrial effort. Instead of seeing their savings siphoned off to Madrid, instead of seeing their business closed down by Madrid, the Basques have taken the matter into their own hands and have put their savings into their own businesses. They have 66 successful co-operatives, financed by their own bank, all of which are controlled by the workers. That is the sort of development that I should like to see.

The previous Government set up the Co-operative Development Agency. There is the Scottish Co-operative Committee, and I am chairman of an organisation called Job Ownership Limited—JOL. We all work to the same end. As we are in favour of co-operation, we co-operate together. But we need changes in taxation, more Government support and other changes in legislation.

I am not saying that that is the only way of running industry, but the appalling situation that exists in British industry, in which the trade unions and the management are at perpetual loggerheads, must be broken down. One way of doing that is to get the workers to put their energy and ability into making industry more efficient, instead of disrupting it.

I should have thought that my proposals would be in accord with Government policy. They would improve it. They would not run contrary to it. I do not think that the Government can be satisfied that they have got their finger on the real difficulty. It will not be cured by financial means. The trouble with the economy is political and industrial.

6.19 pm
Mr. Alex Pollock (Moray and Nairn)

It is timely to have this debate about 10 months after the Government came into office. We all recognise that the Government have major economic problems, and only a political simpleton would suggest that there are instant solutions to them. That is recognised by the country at large, and that is why there is still a tremendous ground swell of good faith among people in Scotland for the attempts that the Government are making—

Mr. Canavan


Mr. Pollock

In Moray and Nairn, and in many other parts of the country. It is important to remember that if we are to maintain that good will the people who are prepared to give us their backing must have a strong sense of reassurance about the future direction of the country. What concerns me, after these 10 months, is the slight hint of anxiety and worry on the part of certain people who are otherwise happy to back the Government but who are concerned about the implications of certain aspects of their policy. I should like to touch on one or two of those aspects.

The farming interests in Scotland are puzzled about why, with their production record, which is second to none, they are not doing as well as they should be. The fishing industry is in a parlous state. It is worried about how it will rescue itself and get back on fair and level terms. Perhaps more serious than those worries are those of people in rural areas about the future of the institutions that are essential for the existence of a healthy rural economy. I am referring not only to pure economics but to the ancillary opportunities that are necessary to keep people in the countryside.

Today we have seen a mass lobby by the sub-postmasters. They are not concerned only for their jobs and those of their employees. They recognise that the changes could have harsh consequences for the social fabric of small communities.

Another area of worry, upon which I shall dwell for a moment, centres on the future of health provision in the rural areas. My hon. Friend the Under-Secretary is well aware of the problems that are faced in the Grampian region. There is the prospect—I am happy to say that it remains only a prospect—that a number of small maternity units will be closed. This is not simply a question of cash. It has much wider ramifications. If there are to be such closures, many men who work in the distilleries and on the farms will find that their wives are not prepared to take the risk of remaining in isolated communities far from medical help.

I should like to give an incidence from my personal experience. In early December of last year my wife, who was expecting our second child, went into labour in the early hours of the morning. We had the choice of taking her from Forres to Raigmore hospital in Inverness or, if the labour was more rapid than we expected, to take her a quarter of a mile up the road to the cottage hospital. In the event we made it to Rakemoor and the child was delivered there, but if the delivery had been more rapid and sudden and the cottage hospital had been closed down my son could well have been born in a layby. We do not wish to lose that sort of facility in the rural areas, and therefore I sound a note of caution to the Government. They should have regard to the full implications, in social and democratic terms, of the closure of maternity units.

For the same reasons, we must be careful to maintain facilities for the mentally handicapped. Social cohesion applies not only to the mentally sound, but perhaps more especially to those with mental problems. Families in rural areas who have to contend with difficult weather conditions in winter would be most reluctant to face the prospect of being able to see their children in, say, Aberdeen only infrequently rather than being able to see them at locally-based centres.

There is a prospect that the west district of the Grampian health board will be dismantled under the restructuring programme. I assure the Government that the west district works well and that it has the confidence of local medical practitioners. It has a sound record of administration, and it has the co-operation of specialists and GPs alike. To put that at risk by an obsession with a policy of centralism would do more harm to medical provisions at local level.

The conclusion that I wish the House to draw from my remarks is that people in rural communities recognise that there are times when a price has to be paid for the provision of essential public services, but that they are not prepared to accept the removal of those facilities themselves. That is a cost that is much more expensive than pure economics. I hope that my hon. Friend the Under-Secretary will give us the necessary assurances that the Government do not intend to preside over the future depopulation of the rural areas and turn them into tourist traps. I hope that he will tell the House that the Government are committed to make sure that every effort will be made to retain the full provision of services that are needed to keep the rural areas healthy and viable.

6.26 pm
Mr. James Hamilton (Bothwell)

I have heard many debates on the Scottish economy since I came to the House. I have heard many Secretaries of State opening such debates. I must honestly confess that the speech of the Secretary of State for Scotland tonight was the most depressing one that I have heard in all the years that I have been in the House of Commons. There seems to be no hope at all for Scotland.

Reference has been made to the Scottish unemployment figures. I should like to refer to the figures for Lanarkshire, with reference to a question that I recently put to the Under-Secretary of State for Scotland who has particular responsibility for industry. At 10 January, in Lanarkshire, 24,042 people were unemployed. That represents 13 per cent. of the insurable population in North Lanarkshire and 12.3 per cent. of the insurable population in South Lanarkshire. The tragic part of that is that 1,960 of those unemployed persons are school leavers. With the present Government's policies—if they have any policies—the outlook for school leavers is bleak. The Government have departed from the proposal, under the job creation scheme, of people retiring. They have increased the age from 62 to 64, which means that many young people will find it more difficult to find employment.

Reference was made to a forecast by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). The forecast predicted that by 1981, 2 million people will be unemployed in the United Kingdom. On the basis of past figures, we can assume that by 1981 about 300,000 or 350,000 people will be unemployed in Scotland. The Government have reduced grants to industry by £225 million. The reduction for Scotland is £45 million. In the past, Scotland has operated on the basis of receiving one-tenth of the grant allocation, yet the £45 million represents one-twentieth. That means that the Secretary of State for Scotland, at Cabinet level, has not been fighting for the interests of Scotland. That is to his eternal shame. He now has the opportunity to put forward the strongest possible case for the Scottish economy.

I know that we are in keen competition with Eire as far as jobs are concerned. I also know that the previous Labour Government had difficulties. When we speak of redundancies we do not refer to the now common policy of natural wastage. Virtually every day of the week redundancies are announced. Those redundancies are put down to natural wastage. Those jobs will never be redeemed or filled again.

I am particularly concerned about the construction industry. We are now clamouring for more houses and more schools. In my area and that of my right hon. Friend the Member for Lanarkshire, North (Mr. Smith), two major schools have been axed by a regional council simply because money has not been made available by the Treasury. That will not be of any educational advantage to our children. Nor will it help the construction industry.

My next remark might be taken as criticism of my trade union colleagues. During the past two or three years, many companies—particularly in the private sector—have inflated the redundancy payments that are permissible under Government schemes. Before I came to the House we fought for every possible job. However, those made redundant now receive tangible redundancy payments. The fight is therefore lost before we begin. I therefore say to my trade union colleagues that we shall live to regret this practice. It is not in the interests of jobs in Scotland.

We have not given sufficient attention to the distributive trades, many of which serve a useful purpose. They supply many jobs. The other week I was talking to a representative of one of the distributive trades in my constituency. I discovered that the rent for his premises had been increased by 134 per cent. I have re-feted to that for a good reason. The Government should recognise that the Scottish Development Agency is now examining the rents of those who have been in factories for between 20 and 25 years.

One industrialist told me that the figure that he has received will mean an increase of 600 per cent. in the rent now paid. That refers to one, of the large industries in Lanarkshire.

If that trend is allowed to continue, many firms will move from larger factories into smaller factories. There will be a contraction in the work force. It will also cause great difficulty to the export drive. I hope that the Government will take cognisance of that. I hope that they will hold discussions with the Scottish Development Agency and that they will curtail these severe increases to the best of their ability.

During the past two or three weeks many of us have made references to the retraining of personnel. I visited a skill-centre. I recognise that that is not within the province of the Secretary of State for Scotland, but he should be interested. As I went round the skillcentre I noticed an area for training horizontal borers. Before embarking on that course one must be a tradesman. There is a shortage of horizontal borers in Lanarkshire. Many industrialists are allowed to sponsor individuals so that they may attend those courses. I am attempting to be constructive. I hope that the Government will give some attention to these issues when they are discussed at Cabinet level. We cannot afford to close skillcentres in any part of Scotland.

Mr. Ernie Ross (Dundee, West)

Will my hon. Friend also remind Conservative Members of the success rate of skill-centres? The skillcentre in Dundee has a success rate of 70 per cent. when placing individuals in jobs after training. This is a crucial area of concern.

Mr. Hamilton

That is the point that I have been making. Reference has also been made, quite correctly, to the steel strike. Lanarkshire and Ayrshire suffer tremendously from the dispute. Many of us have told the Prime Minister, the Secretary of State for Industry and the Secretary of State for Scotland—who is a member of the Cabinet—that unless there is Government intervention those men will not return to work. The sooner they get that into their brain boxes the better. The Government say that no more money is available. However, the TUC has done everything humanly possible. Jim Mortimer and his team have also done everything humanly possible. At the moment, ACAS has got them round the table. The Secretary of State for Industry must be seen to be active. The steel industry is one of the basic industries in Scotland. If we lose that industry, ad the others will fall by the wayside.

Steel closures have taken place throughout the United Kingdom. A tube section of that industry is in my constituency. Unless we get a multi-pass mill within the next five years we shall witness the demise of the tube-producing section in Scotland. The Government must pay attention to that. They tell us that £450 million has been set aside for the social consequences of redundancy and for future developments. The Secretary of State for Scotland seems to be deeply concerned about the Scottish economy and unemployment. I hope that he will make the necessary move within the Cabinet so that the BSC decides to spend that money.

It is not all a dismal story. Many of the companies in my area have success rates. The hon. Member for Edinburgh, North (Mr. Fletcher) went to America amidst a great deal of razzmatazz. He returned and told us that many jobs and companies would come from America. When the hon. Gentlman winds up the debate I want him to tell us how many companies and jobs are coming. During his visit he did a great disservice to the Scottish Development Agency. He played it down tremendously. As a result of this Government's policies the Scottish Development Agency is not given the recognition that it deserves.

I am aware that many of my colleagues wish to participate in the debate. I therefore ask the Minister to give us the answers that we seek. He should give them truthfully, for a change. If he is truthful with us—if that is humanly possible—he may get some co-operation from us at the end of the day.

6.39 pm
Mr. Michael Ancram (Edinburgh, South)

I enjoy listening to speeches from hon. Gentlemen who served in the previous Government. It is difficult to work out whether they speak with such seriousness because they do not remember what things were like when they were in Government or because they continually have nightmares when they do.

I hope that the hon. Member for Bothwell (Mr. Hamilton) will forgive me if I do not follow him. I wish to be brief and raise a specific issue that affects the pros- perity and job prospects of people in my constituency, the city of Edinburgh and the whole Lothian region—the rate increase of 43 per cent. announced by the Labour-controlled Lothian regional council yesterday. On any view, that increase is unjustifiable, damaging and irresponsible.

I have listened carefully to the arguments put forward to justify it. [Interruption.] I am sure that the hon. Member will be able to comment in winding up. I believe that when he knows the facts he will agree that the increase is unjustifiable, damaging and irresponsible.

Mr. Buchan

I shall not be able to comment in winding up. The hon. Gentleman is perpetuating the gross hypocrisy that we hear from the Government Front Bench. The Government impose cuts on local authorities. When those authorities seek to defend their communities, which necessitates increasing rates, the Government attack them. I am surprised that the hon. Gentleman copies that behaviour.

Mr. Ancram

The hon. Gentleman repeats the arguments put forward by Lothian Labour regional councillors yesterday. I do not find such arguments convincing.

Councillor Peter Wilson had the courage to resign, because he realised that the increases were unjustifiable. It is interesting to note that there are such people in the Labour Party in Edinburgh.

The increase in unjustifiable. I do not believe that Lothian region has made any attempt at economies. We hear talk of trying to avoid damaging cuts, but there appears to have been not attempt to cut out waste in the duplication of effort between region and district. There is no sign of attempts to cut unnecessary spending in Lothian region's own empire.

Last year Lothian region's staff establishment went up by 1,300, which was 200 more than the region's projected figure at the beginning of the year. In a year of growth that figure is substantial, but, at a time when other regional councils in Scotland are trying to make economies, it indicates that the region made no attempt to cut spending.

We should also consider unnecessary projects. I am accused of raising this topic all the time, but I shall raise it again. The region is spending £250,000 on an escalator at Haymarket station at a time when there are far higher priorities. If the money is spent, it should be spent on projects with higher priorities.

Even the Labour-controlled council in Strathclyde has made efforts to economise. The Secretary of State will recognise those efforts.

What does Lothian regional council do? The hon. Member for Renfrewshire, West (Mr. Buchan) argued that the region is forced to put up rates because of Government policies. However, Lothian opts for new growth. It spends extra money at a time when other authorities are at least trying to make the economies that the Government seek.

The council is showing contempt of ratepayers' pockets. I do not believe that that will go unnoticed by the people in the city of Edinburgh and the Lothian region. The authority may feel that people in council estates will not notice, because they pay their rates and rents jointly. They will think that it is part of a rent rise. From letters that I have received over the past two weeks, I believe that the district elections in May will prove that wrong.

The increase is damaging. It will have a serious impact on job prospects in Edinburgh. The other day, the Edinburgh chamber of commerce predicted that, if the rate increases went ahead, 4,000 jobs would be lost within the city.

The right hon. Member for Glasgow, Craigton (Mr. Millan) mentioned special development area status. Lothian region is arguing, because of job difficulties, to retain its development area status. It now appears to be demonstrating a disregard for retaining jobs.

I am sure that hon. Gentlemen will will have read the report in The Scotsman that senior industrialists in the city of Edinburgh say that such rate increases will make them think seriously about their industries within the region.

It is often forgotten that it is not only the well-off who pay rates. The people hit hardest by rate increases will be those at the bottom of the scale, who have a full rate rebate but who will have to bear the increase. We hear much about Socialist compassion from the Opposition Benches. Where can that be seen here? The increase is irresponsible.

Mr. Gavin Strang (Edinburgh, East)

Does the hon. Gentleman accept that, without the increases, there would be substantial rises in bus fares, cuts in jobs for home helps, teachers and other workers, and cuts in services in the region? Will he face the fact that his Government's decision to downgrade Edinburgh's special development area status will do far more damage and make it virtually impossible to attract new investment in the years ahead?

Mr. Ancram

I have made it clear all along that I shall seek to ask the Government to reverse the decision on development area status. It is now far more difficult to argue that when Lothian region has shown that it has no interest in maintaining jobs.

It is fascinating that we never hear from the hon. Gentleman or from councillors in Edinburgh who are promoting the rate increases of intentions to cut back on administration, bureaucracy or waste. That is where savings can be made.

Mr. John Home Robertson (Berwick and East Lothian)

Will the hon. Gentleman give way?

Mr. Ancram

I shall not give way, as I do not wish to detain the House for long.

I believe that local government was given autonomy on the understanding that it would operate responsibly. We are seeing here a misuse of that autonomy, which has dangerous implications. It is a direct and apparently uncontrollable attack on the policies of an elected Government. It is an expensive political manoeuvre by the Labour group on Lothian regional council, with the ratepayers again footing the bill.

Mr. Robertson

Will the hon. Gentleman give way?

Mr. Ancram

I have given way to other hon. Gentlemen and I wish to continue.

All individual liberties in life are circumscribed within the bounds of responsibility. All autonomy given to local government must be on the same basis. Where irresponsibility rules and power runs amok, as appears to be the case in Lothian region, and where people can be hurt by the political whims of local government, without redress or control—[HON. GENTLEMEN: "Oh!"] Hon. Gentlemen may say "Oh!" but they should talk to the ratepayers.

The whole system requires to be looked at again. It is no philosophical argument. It is a real and immediate problem, which the Government cannot afford to overlook. I welcome the Secretary of State's response to the increase yesterday, but if his existing powers to take action are not sufficient he must seek new ones.

Mr. Robertson

Will the hon. Gentleman give way?

Mr. Ancram

If the prosperity and prospects of the people of Lothian region are not to be irreversibly damaged, the Secretary of State cannot afford to wait. He must act swiftly. I hope that the Minister will confirm that that can and will be done.

6.50 pm
Mr. Allen Adams (Paisley)

I listened with great interest to the Secretary of State's list of alleged economic successes in Scotland since he came to power. I think that we can deduce from the tenor of his argument that if a man opens his back kitchen on St. Kilda to produce milk bottle tops and employs a man and a dog, that will be regarded as a major economic success and a breakthrough for Scotland. Such were the trivia that the Secretary of State was speaking about, picking out minutiae in industrial expansion which have not meant anything in real terms for industrial expansion in Scotland.

One hesitates to use the word "capitalism" in this building in case the roof falls in and the clocks stop, although one might suppose that the clocks have already stopped for many Members on the Government Benches. I shall substitute the words "market forces", which seem to be more socially acceptable. The one thing that has failed Scotland has been market forces. The one significant factor that has consistently and persistently let Scotland down has been private enterprise. The biggest of these private enterprise companies have resisted most attempts by all Governments to push, to pull, to cajole or to direct them into Scotland. In fact, at the moment, most of them cannot get near enough to Brussels or to the cheap labour markets in Taiwan and Korea.

The decline that has occurred in the traditional private sector in Scotland—and we must be honest with ourselves—can to some extent be laid at the door of our fellow Scots—the people who owned the shipyards, the foundries, the engineering works and the mills, and who made a great deal of money from the sweat of our fathers' brows but never reinvested a penny of it. Today, many of our manufacturing concerns are operating antediluvian machinery in Dickensian buildings. Small wonder that they cannot compete, whilst their owners are still waving their Union Jacks, or their Saltires, or whatever it might be, and telling us that it is nothing to do with them. According to them it is the fault of the lazy workers, yet they are merrily investing their profits abroad in Japan, Korea and elsewhere. The manufacturing concerns in those countries then sell their products to us and put our workers out of a job.

I worked in the shipyards for a little while and I can remember cursing the Renfrew ferry at half-past seven o'clock on cold January mornings on my way to shipyards in which the Japanese, had they gone to work in them, would not have produced a canoe. The shipyards are a very good example, because their owners made a fortune in the post-war boom. After so much shipping had been sunk during the war, a great deal had to be put in its place. The owners made a fortune, but they never reinvested a penny in the shipyards, and whereas once we had 13 shipyards on the Clyde, we now have three. This is not the fault of the workers. It is another classic example of the failure of private enterprise to invest in the Scottish economy.

Another more recent example is that of Singer at Clydebank. No wonder it could not compete. The factory needed not a few million but perhaps £10 or £15 million invested in it to make it competitive.

The Government are saying that they believe in the dynamic effects of private enterprise. Could they spell out precisely to the Scottish people what they mean by the dynamic effects of private enterprise and of private capital? Can they point to one example of a major manufacturer coming to Scotland of his own free will, with neither State aid nor State support? Can they give me one example of private enterprise coming to the aid of Scotland in that way?

Mr. Iain Sproat (Aberdeen, South)

The hon. Gentleman says that free enterprise has failed Scotland. Is he not aware that the biggest success story in Scotland has been the provision of 60,000 jobs as a result of North Sea oil, and that 97 per cent. of the investment in North Sea oil comes from free enterprise? That is the classic example of free enterprise working in Scotland.

Mr. Adams

I think that the hon. Member should research the oil industry a little more, because if he does he will probably find that British Petroleum has played a significant part in what has happened and that many of the oil companies are making their present profits with State assistance.

Mr. Buchan

Does not my hon. Friend think that God also helped a little?

Mr. Adams

There is no doubt that private enterprise did not put the oil there in the first place. I agree with my hon. Friend that our present situation with regard to North Sea oil is due more to good luck than to guile.

Mr. Younger

If it had been left to God the oil would still be under the sea. Due to private enterprise it has been brought up and used.

Mr. Adams

The private enterprise that is producing the oil has not been averse to taking public money to help it to produce it. I think that I made that point when answering the hon. Member for Aberdeen, South (Mr. Sproat).

What we in Scotland need is not a reduction in regional grants but a major expansion of them. As I tried to illustrate, private industry responds to Scotland's needs only when it receives grants and direction from the State. We want more of that from this Government, not less.

Nor do we need the closure of training centres for our young people. Youth unemployment in Scotland is a national disgrace. What we should have seen from the Government is an expansion of the programme to help train young people for industry, rather than a diminution of that service. This is an absolute disgrace, for which the Scottish people will not forgive them.

We do not need a reduction in public expenditure in local government, which is now one of the major employers in Scotland. It provides many essential services for the sick and the elderly, and with a population which has a higher percentage of elderly people in it every year, we need major expansion of this work. One would have thought that the Government would learn a lesson from President Roosevelt, who saw that one of the ways out of the depression in America in the 1930s was to spend money in the public sector. One way of doing this would be to put more money into direct labour forces in local authorities. It cannot be argued that there is nothing to do in housing in Scotland. We still have one of the worst housing records in Europe, and by investing in that sector we would improve that record and at the same time alleviate the problem of unemployed building workers. It seems to me outrageous that whilst so many of our fellow Scots live in appalling housing conditions we have building workers on the dole.

The Government have not learnt many basic lessons from the past. They have not learnt that one of the ways out of economic recession is by investment in the public sector. They certainly have not learnt that private enterprise has failed Scotland miserably in the past and that the only way the Scottish economy will recover is by State aid, State support and State direction.

We should learn also from the Irish experience. The Government ought seriously to consider giving major tax concessions to industry willing to come to Scotland. There must be a major expansion of the new electronics industry. I do not accept that this industry has expanded to any extent in Scotland. I should like to see the Government becoming involved in the microprocessor industry in Scotland, although that might sound a little doctrinaire for them. However, I do not think that that kind of industry will come to Scotland of its own volition. It will have to be pushed, pulled and cajoled.

The basic feature of private enterprise is that it gravitates to where it can get raw materials more quickly and more cheaply, and to the major markets. Two examples are the South-East of England and the centre of Europe. Those are two natural gravitational pulls. The job of a responsible and reasonable Government is to counteract those pulls.

7 pm

Mr. Barry Henderson (Fife, East)

I was astonished to hear some of the comments made by the hon. Member for Paisley (Mr. Adams). They represent such fundamentalist, old-fashioned and out-dated Socialism that even some of his hon. Friends would not want to go far along his route.

Mr. Canavan

We do not want capitalism.

Mr. Henderson

I am a modem style capitalist. I hope that the hon. Member for Paisley will forgive me if I do not take up directly his line of thought.

First, I shall make a few comments which I hope my hon. Friend the Under-Secretary of State will pick up when he replies. I shall refer to East Fife specifically before considering how the situation may be impacted by a number of national policies.

The strength of the economy in East Fife is the diversity of employment and the number of small businesses in the area. Many of them are owner-managed, and none has more than 500 employees on one site. The hon. Member for Berwick and East Lothian (Mr. Home Robertson), who seems to have joined the Tribune Group below the Gangway, extracted with great skill a fortnight ago at Scottish question time an answer from my hon. Friend that contained important figures that indicated that in his constituency unemployment has been reduced significantly since the Conservative Government came to power. I am happy to say that the same is true in my constituency. I suspect that that is so for similar reasons—namely, the effectiveness of small businesses and private enterprise working effectively even in difficult times.

Agriculture remains the backbone of the economy in East Fife. I hope that my right hon. Friend the Secretary of State will use all his considerable influence in the Cabinet to reduce the effect of capital taxes and to remove the threat to the family farm, which still remains following the economic measures of the Labour Government.

I am sure that my right hon. Friend will also bear in mind the considerable concern that exists within the fishing industry. I am sure that he has that in mind as he was visited recently by some of my fishing constituents. It is essentially a free enterprise and profit-sharing industry. It is a hazardous industry. There is no living in the industry unless fish are landed and sold. I know that my right hon. Friend is conscious of the deep crisis that has suddenly hit the industry. I hope that he will move with speed to make a positive response to the crisis that faces the industry.

My right hon. Friend mentioned the prospects of a major microelectronics application centre. I look forward to seeing that development in Scotland. I hope that my hon. Friend will be able to assure me that the important merits of Fife for the centre of such a development will be properly recognised. I note that the hon. Member for Fife, Central (Mr. Hamilton) is in the Chamber. The hon. Gentleman represents among other places Glenrothes new town, which has many of the facilities that a microelectronics centre will want to have around it. In East Fife we have St. Andrews university, a major centre of excellence. It is possible that there is nowhere in the world doing more advanced work on the materials on which chips are based.

Mr. Canavan

Fish and chips?

Mr. Henderson

I must tell the hon. Gentleman that the chairman of the Potato Marketing Board lives in my constituency. I was referring to microelectronic chips and microcircuits. As I have said, we have a centre of real excellence and expertise at St. Andrews. Across the bridge at Dundee there are considerable resources at the University, which would be helpful to the development of microelectronics in Scotland.

Glenrothes, St. Andrews and Dundee form a triangle that would provide an attractive home for the development to which my right hon. Friend referred. In addition, we must not lose sight of the environmental attractiveness of the area, which would attract the sort of person who might want to come from outside to contribute to the development. I hope that my right hon. and hon. Friends will ensure that the Fife area is carefully considered.

My hon. Friend the Under-Secretary of State will be aware that the regional development policy announced by the Government and the changes in development area status were not entirely welcomed in East Fife. However, I find the carping criticism of Labour Members intolerable. The fact is that the policy and the changes in status were good for Scotland as a whole. My constituency has not been helped, but I recognise that Scotland has benefited considerably from the changes in development status that were announced by my right hon. Friend.

We have received assurances from my right hon. Friend the Secretary of State for Industry as well as from my hon. Friend the Under-Secretary of State for Scotland that the Scottish Development Agency will not be prevented from doing its work within the East Fife constituency. I ask my hon. Friend to use his good offices to encourage the SDA, which currently has a commitment to provide advance factories at two sites in North-East Fife, to give an indication of the completion dates. One of them is at Cupar Road, Newburgh. It is time that the SDA indicated when it might be completed. The other factory is at Cupar itself. The site has only recently been acquired. In the light of the changes that are taking place, it is important for these advance factories to be completed as soon as possible so that the district has some positive industrial development to offer. We have the skills and the talents.

Mr. Gordon Wilson (Dundee, East)

And golf courses.

Mr. Henderson

Indeed. One becomes so accustomed to the excellence of these facilities that one sometimes forgets that others are not so aware of them.

I do not wish to give the impression that I am making carping criticism of the SDA. Last year I was impressed by the way in which it, together with the North-East Fife district council and private enterprise, co-operated to bring the Dreher factory to the station site at Anstruther. That was an excellent example of how an advance factory in the right place at the right time, without necessarily long-term scope for Government money being pumped into the project, could bring about a satisfactory development of employment opportunities.

It is slightly unfortunate that the SDA leaflet which was published in February 1980, which describes some of the developments that it has available, does not feature East Fife, despite the fact that work had started. That is another reason why I hope that my right hon. Friend will draw the importance of the Agency's developments to the attention of the Agency. I hope that he will take steps to allay the fear that North-East Fife is the forgotten child of the agency.

The service sector of industry is also extremely important in my constituency. It accounts for about half the source of all employment. A healthy economic climate is required in which that sector of industry can prosper. For that reason, I should like to touch on some of the national policy aspects.

The first aspect is education. I was glad to hear my right hon. Friend refer to improved communication between the education system and industry. At the moment there is little doubt that the education system, particularly the higher education system in Scotland, is, in many ways, antipathetic to business and extremely sceptical about the benefits of profitable business. Our young people are not encouraged to look for a career in business as an honourable, effective and worthwhile way of earning their living and play their part in the community.

The education system has not encouraged the development in Scotland of entrepreneurial talent. Too many of those who should be leading the drive for the establishment of new and small businesses are encouraged to go into either nonproductive sectors of the economy or into very large companies, which often results in those people having to leave Scotland to further their careers.

The next major area upon which I should like to touch is communications. I hope that my hon. Friend the Minister will be able to give us some indication of when we can expect to see a more rapid development of the East Fife regional road. I hope that he has noted the economic effects of the unfortunate way in which we in Fife seem to be enabling the nationalised bus group to earn a substantial profit when that is used either to subsidise the taxpayer or other loss-making enterprises in the public sector.

Another aspect to which I should like to draw the attention of my hon. Friend is contained in a letter that I have just received from the general manager of British Rail (Scottish region). This causes me concern. The letter was written in reply to representations I made to him on behalf of constituents and others about the poor timekeeping on the Aberdeen to London route that runs through East Fife.

Timekeeping on that route has been extremely bad. The general manager made no secret of the fact that he is also concerned about the poor timekeeping on this route. He assures me that he is taking steps to try to improve this. He also drew to my attention that: quality and reliability are very much influenced by the ageing diesel locomotive fleet, the Diesel Multiple Units and carriages. Mostly, they are in the 18 to 20-year-old bracket and, frankly, it is becoming increasingly difficult to maintain such equipment at the peak of efficiency on demanding schedules. I notice that the Opposition are holding forth from a sedentary position. I hope that they will recall that that occurred during the last five years they were in Government and it is the kind of thing that has been allowed to continue.

The general manager continues: Indeed we know that an investment level some 30 per cent. higher than at present is needed just to replace outworn resources and we have repeatedly drawn this to the attention of successive Governments. He goes on to say: I cannot disguise my concern about the future of the provincial and local commuter services which, in large part, form the 'social' railway dependent on the Public Service Obligation 'Contract Price' paid by the Government. Those seem to me somewhat ominous words. It is clear that under the previous Administration, as with so many other aspects of the economy, there has been considerable neglect. The fact that they allowed the economy almost totally to stagnate for five years while they doubled public expenditure makes it more difficult for my right hon. Friend to do that which I am sure he would like to do. Nevertheless, I hope that my right hon. Friend will recognise the importance of communications to the Scottish economy.

My hon. Friend the Minister will be aware of the threatened and existing increases in air fares from Scottish airports. I am glad that the grandiose plans for a third London airport that have been sculling round for some time now have been scrapped in favour of the modest expansion of Stansted. However, I hope that my right hon. Friend, with his considerable knowledge of airports and the claims of Scotland's west coast international airport will ensure that everything possible is done to get the airlines themselves to disperse as far as is practicable from London direct services to North America and Europe. There is great scope for more of these services, not only from Scottish airports but also from other provincial airports in England.

It is also a cause for concern that the London-Scottish air fares seem to bear a heavy share of the burden of the costs of British Airways. I cannot remember having travelled on an empty shuttle for a long time. There is severe concern within the Scottish business community that the level of profit being made by British Airways out of the routes in and out of Scotland is unreasonable. That is disturbing, at a time when there are proposed increases in landing fees and security charges.

I should like some assurance that the security charges have been carefully checked. At times it seems that there are a lot of security people sculling around with nothing to do. As regards landing fees, I am told that the capital charges on new airport developments must be repaid over just seven years and that sale and lease-back arrangements are not allowed. I cannot imagine any other longterm capital building programe that is expected to show a return within seven years and I hope that my right hon. Friend will arrange to have that reviewed, if indeed what I have been told is correct.

One of the great characteristics of East Fife is that the population has very rarely gone on strike. The people earn their living by their own efforts, to a large degree. They work hard and they pay their taxes. As taxpayers they deeply resent the profligate use of their money in payments to those who ruin their own industries through actions that would never be contemplated by a significant part of the community in East Fife. I hope that the Government will continue to press for a reduction of State monopoly, for good housekeeping in the public sector and for the reduction of taxes that will give incentive to small businesses. In carrying out a vigorous programme of cutting public expenditure they will thereby help to cut the inflation rate and the interest rate that seriously affects small businesses.

I know that my right hon. Friend will seek to do all that he can to encourage small businesses. I hope that he will remember that it is no use offering complicated and subtle schemes to such people. The small business man has not the time or the resources to examine the small print. The message from small business men is "Keep it simple".

The most pressing need for small businessmen today is a reduction in the burdens placed upon them, rather than an increase in the amount of cash given to them. If the Government follow these lines they will secure more successful job prospects in Scotland generally, and in East Fife in particular, which are essential to maintain healthy and thriving communities.

I believe that the Government have started reversing the long-term trend of the previous Labour Government, who doubled unemployment in five years. We have seen the beginning of the long haul to recovery in the Scottish economy. I hope that the Government will pursue their efforts with great vigour.

7.21 pm
Mr. Gordon Wilson (Dundee, East)

If brevity is next to godliness, I am afraid that the hon. Member for Fife, East (Mr. Henderson) is destined for hell. However, I must say that we have all learned a lot about East Fife. I particularly welcome his remarks about Dundee being included in the "Golden Triangle" running from Glenrothes to St. Andrews to Dundee.

After listening to some of the speeches tonight one could be excused for not appreciating how bad things are in the Scottish economy. Unemployment is rising, output is stagnant and living standards are about to fall. If that happens the service industries will do badly during the coming year. The figure of 300,000 unemployed, which has been mentioned and which has not been rebutted by the Secretary of State, would be a disaster of the greatest magnitude and it would take the Scottish economy a long time to recover.

In the 10 months that the Government have been in power they have pursued some distinctive if not eccentric economic policies. They have raised the monetary philosophy to the point of idolatry. However, the problems that they saw emerging and for which they have given the monetary prescription have so far shown no signs of being cured. It is hardly surprising to find that in the Cabinet there are murmurings from those people who believe that the solutions that the Government have been pursuing will not do much good to the economy, but will, in fact, harm it. If that is so, the Scottish economy will suffer severely.

If, on the other hand, the solutions are correct and growth begins, we can be sure that Scotland probably will be the last to benefit from such a recovery. In the meantime, the prescription will do untold harm by causing large numbers of job losses, and that is something that no Scottish Member of Parliament wants to see, whatever his political party.

Having listened to the Secretary of State, I am very much afraid that he does not have any specific solutions. I am also afraid that his influence over Scottish matters in the Cabinet seems to be minimal. He had made it his prime resposibility to look after employment and to deal with the crises that occur, yet we always seem to end up dealing with the Under-Secretary of State for Scotland. I wrote a long letter to the Secretary of State in November setting out some suggestions for the Scottish economy, and I got a long reply back from the Under-Secretary which virtually came to nothing when it was analysed and boiled down. In other words, the Government were not prepared to put forward any suggestions or proposals that might help a city such as Dundee, which has considerable problems at present. I hope that when the closing speeches are made the Government will put forward some practical and positive suggestions.

The Secretary of State's primary responsibility should be economic. Regional policy, however useful and valuable, is essentially a policy of applying sticking plaster to a gaping wound. It is far better to have a healthy economy, which leads to growth. There are many arguments about the way in which that could be achieved, but I am afraid that the Government's policy will not lead to a solution.

Over the past 10 years three Governments have been in power. There was a Conservative Government, who lasted from 1970 until February 1974. Then there was a Labour Government, who lasted almost five years, until May last year, and now we have a Conservative Government again. In that period, under all Governments, we lost 128,000 manufacturing jobs in Scotland. I accept that new jobs are being created in the service sector, but that is not good enough. Although jobs are created in the service sector, we want to maintain in the Scottish economy a strong manufacturing presence, particularly in relation to products that are novel and for which a good market may exist. We cannot live off the service sector entirely. I know that in recent years in all advanced Western countries there has been a move from the manufacturing to the service sector, but in Scotland we have suffered far more than other countries. If the decay in the manufacturing sector continues we will end up without the broad span of industry that is required for the future.

The Scottish people have been cruelly deceived. Promises have been made by both political parties, but at the end of the day jobs have still been lost. It is not surprising, therefore, that there has been emigration. The root of our problems in Scotland is that when economic circumstances are hard people emigrate, and those who emigrate are invariably those with skills. They take their skills with them, and this makes it more difficult to create new industries in Scotland.

The Government must have a much closer look at the training facilities. In the Dundee engineering and training unit that is attached to the engineering industry, the number of boys being recommended or sponsored by the Manpower Services Commission has dropped, and yet there are plenty of boys who would be very willing to take up positions of that kind. It is Government funding that seems to be the problem there. For the last 10 years we have had pretty well a whole generation of Scots who have been denied the right to secure employment and economic stability.

An article appeared in The Scotsman today pointing out that instead of fighting for their jobs people now seem to rush for their redundancy money. I take to heart that point, which was made some three speeches ago by the hon. Member for Bothwell (Mr. Hamilton). There seems to have been a devastating effect on industrial morale, as people are more interested in the benefits that come with redundancy, knowing full well—this is the tragedy—that there may not be an alternative job for them. These skills are being lost to Scotland, as we have chronic redundancy taking place. As long as that sort of thing goes on in places such as Dundee, it is more difficult to bring about any sort of recovery. That is why I appeal to the Secretary of State.

The problems of the Scottish economy are many. This depressing debate has been brought about by the increase in unemployment.

It is a challenging situation. While countries with natural resources seem to be benefiting most, we in Scotland do not seem to be benefiting from the strategic position that we occupy in geographical terms or from our natural resources in the farming and fishing industries and in energy. I do not intend going off on an oil tack. I wonder sometimes why Scotland, with substantial and varied kinds of energy, should not be able to attract certain kinds of industry. It is a question, in strategic terms, that the Government might wish to examine.

The outlook, therefore, is bleak. It is hardly surprising that Mr. Teddy Taylor should be rushing to join the emigration trail to the South. Perhaps the only industry that seems likely to benefit these days is the carpetbag industry.

I do not wish to exclude the Labour Party from criticism. It has to be placed on record that during Labour's term of office, unemployment doubled and prices doubled. In that period, the rich got richer and the poor got poorer. Hearing the Opposition criticism of the Chancellor of the Exchequer, I could not help recalling—although I am opposed to Government policies—the report of the Royal Commission on the distribution of income and wealth, published recently, which said that the rich got richer and the poor got poorer in the first two years of the last Labour Government. Between 1974 and 1976 the top 1 per cent. of the United Kingdom population saw their share of the nation's personnal wealth climb, from 22.5 per cent. in 1974 to 24.9 per cent. in 1976.

The report also stated that in the same period those at the bottom end of the scale suffered because their share of personel wealth declined. That is the record of the Labour Government. When the present Secretary of State is attacked by his predecessor, it should be remembered that this year something like £2,090 million, according to Treasury estimates, in oil taxation, oil royalties, petroleum revenue tax and corporation tax, linked with Scotland's major natural asset off our coasts, will be given to the Treasury at a time when the Secretary of State and his colleagues, supported by Conservative Members, intend to cut public expenditure in Scotland.

Mr. William Hamilton (Fife, Central)

The hon. Gentleman put them there.

Mr. Wilson

We did not put them there. The hon. Member, who was antagonistic to the Scottish Assembly, has to bear responsibility for that. The record of his Government was a dirty one. The hon. Gentleman should be ashamed of that record. I would hesitate to be a member of a party with a record such as that of the former Labour Government. The hon. Gentleman and his colleagues consented to Scotland's oil resources being swallowed up by the Treasury instead of going into a special development fund, as the right hon. Member for Bristol, South-East (Mr. Benn), I believe, suggested at one stage.

If the Opposition fail to apply pressure for a share of oil revenues to come to Scotland they are letting down their constituents and condemning those constituencies to poorer educational facilities and the sacking of teachers. They are scared to claim Scotland's natural resources for the benefit of their own people. I would be ashamed to be a member of a political party that behaved in that way.

If any further criticism is required of the Labour Party, it can be found in an article by Professor Donald Mackay, published on 18 January 1979. It showed— and it has not been denied—that regional spending in Scotland had been reduced by 40 per cent., mainly through the sudden elimination of the regional employment premium. For a party that has always claimed to be in favour of investing State funds in the development of industry, that is nothing short of scandalous.

Our problems in Scotland are deep, hut, fundamentally, Scotland is a rich country. We must make sure that its resources are used for the benefit of its people and that its training facilities and apprenticeship systems are reviewed and renewed in order to get fresh skills on to the labour market. We have a tremendous job ahead.

I have no doubt that Scotland, in terms of people and assets, has the capability to forge a new life for itself in the 1980s and the 1990s. I am certain, however, that, following the experience of the last 10 years and longer, unless we achieve self-government Scotland will remain bottom of the industrial league.

7.35 pm
Mr. Ian Lang (Galloway)

It is a great pleasure to follow the Scottish National party spokesman. I say that, like many of my hon. Friends, with strong personal feelings, even though, because of the support that the SNP gave to the Labour party, we had to wait almost two years longer than we needed to have done to enjoy that privilege.

I find myself still reeling with astonishment at the sour and intemperate tone of the remarks of the right hon. Member for Glasgow, Craigton (Mr. Millan). If the right hon. Gentleman is at all economically literate—I give him credit by believing that he is—he must surely know that cause and effect in the management of national economies are almost always separated by many months. Thus, his strictures inescapably fall on his own conduct of Scottish affairs and not on those of my right hon. Friend.

Last week, the right hon. Member for Craigton said: If there is to be misery, it ought to be shared all round."—[Official Report, 1st Scottish Standing Committee, 12 February 1980, c. 228.] thus encapsulating Socialist philosophy at the one point where it actually conjoins with the Labour Government's record of achievement over the last five years. Perhaps even that is to do the Opposition more than justice. The late and sadly lamented Patrick Hutber put the matter more accurately when he described Socialist equality as: that euphoric state where everyone has less than everyone else. When it comes to spreading misery there are few to match the right hon. Member for Craigton, but his hon. Friends have echoed their miserable master's voice like a veritable Greek chorus of woe and incomprehension; and equality of misery was one thing that the right hon. Gentleman failed to achieve. Under Labour, we were all miserable but some were more miserable than others.

One of the miserable inequalities achieved by the previous Labour Government was the lamentable and inexorable trend whereby while productive tax-generating jobs in manufacturing industry vanished by the thousand, unproductive, bureaucratic, administrative jobs in the public sector, which consumed taxpayers' funds, proliferated. Fifty years ago only 7 per cent. of the work force was engaged in the public sector. Now that figure is nearer 30 per cent. In the past two years of supposed restraint by the previous Labour Government, the number of local government employees in Scotland rose from 245,000 to nearly 260,000 at a time when unemployment overall was scaling new heights.

I had occasion not long ago to make a telephone call to Strathclyde regional council. Finding the number in the telephone directory was the beginning of my problems. I found in the Glasgow directory alone for 1977 no fewer than 850 different lines and numbers connecting to that Council. One shudders to think what is the total number of lines now to that regional authority for the region as a whole.

Mr. Tam Dalyell (West Lothian)

The hon. Gentleman is dealing with Civil Service jobs. Does he favour bringing Civil Service jobs to Scotland? If he goes to help the Conservative candidate in Southend, what will he say there about the dispersal of jobs to Scotland?

Mr. Lang

I favour the dispersal of Civil Service jobs to Scotland. I am en- couraged by the robust championship shown by my right hon. Friend the Sectary of State. The hon. Gentleman's question would be better directed to the leader of the Liberal Party, who should be asked whether he associates himself with the comments of his hon. Friend the member for Liverpool, Edge Hill (Mr. Alton) as reported in The Scotsman today.

The cost to the economy of increased local authority expenditure is staggering and overwhelming. When one looks at the figures for Strathclyde—

Mr. John Home Robertson


Mr. Lang

In the interests of time, I cannot give way again. It is hardly surprising to learn that the figure of £444 million expenditure by Strathclyde regional council in the first year after reorganisation rose to £793 million last year.

Mr. Robertson

On that point—

Mr. Lang

My hon. Friend the member for Edinburgh, South (Mr. Ancram) has demonstrated the horrific expansion that has taken place in Lothian region, with the correspondingly frighteningly high anticipated increase in rates. Nothing could be more damaging to the recovery of the Scottish economy than the vicious and mindless rate increases being planned by Labour-controlled local authorities, literally driving businesses to the wall and employees on to the dole queue.

Mr. Robertson

Will the hon. Gentleman give way?

Mr. Lang

If Labour Members spent more time digesting my remarks and less time anticipating them they would find their intellects much better nourished.

My local regional council, Dumfries and Galloway, an excellent and efficient local authority, employs 34 fewer employees than it did at the time of regionalisation five years ago. But for the compulsory transfer of 46 staff by central Government on regionalisation, the total saving would have been 80. The costs of administration and management per head are well below the national average. Indeed, Dumfries and Galloway regional council has the lowest expenditure per head for 1979–80 of all the regional and island councils.

By adjusting the ratio of the needs and resources elements in the rate support grant, my right hon. Friend the Secretary of State has begun to do justice to such efficient authorities and I urge him to maintain his efforts in that direction.

I should like to draw attention to some rural problems that are no less acute for being less graphically visible than urban problems. Six jobs lost in a small community are as disastrous for that community and the surrounding area as 600 jobs lost in a larger community.

As my hon. Friend the Member for Moray and Nairn (Mr. Pollock) said so effectively, the whole rural way of life is in jeopardy. We still find there the self-reliance and sense of values to which the Conservative Party is attuned and we must not let them be undermined or lost. My right hon. Friend the Secretary of State has paid considerable tribute to the importance of small businesses and the farming communities in rural areas, so I shall not dwell on that.

Mr. George Foulkes (South Ayrshire)

While the hon. Gentleman is on the subject of farming will he indicate how the farming community is managing with the 22½ per cent. interest rates that it is having to pay, how the fishermen in the South-West of Scotland are looking forward to their boa's being laid up for the next three weeks and whether the Secretary of State has given him any hope with regard to the A75? All those problems affect the hon. Gentleman's constituency.

Mr. Lang

My first instincts were right. I should not have given way to the hon. Gentleman. It is obvious that he was not listening to my speech, for he has not raised points relevant to it.

I was referring to the need to revive certain industries related to agriculture. I draw particular attention to the dry stone walling industry which is reviving in my constituency. It 'takes about one ton of stones to build one yard of dry stone walling, or dry stone dyking as it is sometimes called. When one has to strip down and rebuild a wall it involves moving two tons of stones per yard.

The problem is that young apprentices coming into the industry cannot build sufficient lengths of wall to earn a day's wage, and the self-employed dykers cannot afford to take on apprentices unless they have outside help. Because the industry is not connected with the production of food, no grant is available from the agriculture training board. Nor is finance available from the SDA, which is mainly concerned with manufacturing related industries. The industry, being composed of self-employed individuals, clearly cannot fund its own training scheme.

I urge Ministers to look at the problems of the industry and others like it to see whether a more imaginative and flexible approach can be found, through the various organs of Government, to help it.

I should like to mention finally tourism, which is an increasingly important industry throughout Scotland. My own constituency is much involved and I think that we have the only regional tourist association in Scotland.

Foreign tourists account for only about 8 per cent. of visitors to Scotland, but for about 32 per cent. of expenditure. Their importance on the tourist scene can be readily appreciated.

The personal assistant of the chief executive of the Dumfries and Galloway regional council visited America recently and was astonished to find how little was known about Scotland and how little information was available on Scottish tourism. Indeed, in the far West they thought that Galloway was in Ireland.

I am not criticising the British Tourist Authority, which does a fine job, but its duty is to attract visitors to Britain and it is hardly surprising that it tends to concentrate on attracting them to London where larger amounts of money can be spent and to which they can be more easily attracted.

The Scottish Tourist Board is not allowed directly to advertise abroad. I urge Ministers to reconsider that restriction, because it is not satisfactory that in order to be allowed foreign advertising the regions must get together to advertise collectively or join the Scottish Tourist Board in advertising abroad. The board should have its own powers.

I trust that the Government will pay due attention to the important rural economy in Scotland and ensure that when the recovery comes our rural areas, which play such an important part in Scottish life, are able to share in that recovery.

7.46 pm
Mr. Martin J. O'Neill (Clackmannan and East Stirlingshire)

I should like to start with an apology, because in Committee I have been castigating the hon. Member for Fife, East (Mr. Henderson) for not speaking. I realise now that he was saving himself for the speech that he made earlier in this debate. If he is the face of modern capitalism I can see why we need to discuss the problems of the Scottish economy.

I wish to concentrate on the problem of unemployment. I hope that I shall be forgiven for not entering the pantomime exchanges that usually occur in such debates, with each side saying that its figures are better than those of the other side and when we are reduced to "Oh, yes they are" and "Oh, no they are not". I intend to look at the prospects for the Scottish economy in terms of unemployment.

I should like to draw the attention of the House to the report that appeared in the Fraser of Allander Institute bulletin last year which projected that there would be horrendous unemployment in Scotland by 1984. It predicted thousands more redundancies and many more in the dole queue. We have to look at what the Government intend to do about that and what Conservative-associated organisations think of the efforts of the Government to attack unemployment in Scotland effectively.

The present unemployment level of 176,000, seasonally adjusted from 203,000, is one which no one can accept. We are told that the number will start to fall in the next few months as the Government's policies begin to bear fruit, though, having listened to the Secretary of State's asinine platitudes, I can see nothing in the Government's policies to suggest that there will be any improvement.

The Fraser of Allander Institute started out with fairly conservative assumptions. For example, it assumed that it was likely that about 17,000 people a year would emigrate during the lifetime of the present Government. That is about 7,000 more than the Registrar-General's estimate, but the institute points out that it is likely that emigration will increase as the depression in the economy continues.

The report projects figures as far ahead as 1993. Over a five-year period it should be more accurate than some of the past projections.

The report shows that the Treasury forecasts that manufacturing industry will fall and that it is likely that there will be little job expansion in Scotland. It also argues that in the 1980s various changes in the birth rate will have resulted in an increase in the number of people looking for work, though it will start to level off by the latter part of the decade.

Its conclusions were clear. It said that between 1979 and 1984 registered unemployment in Scotland—unless action was taken—would rise by 50 per cent. It also said that the rise would be more marked among women than among men but that employment for women would be more steady. In manufacturing industry, where there would be a decline, employment for men would decrease.

The report made the point that, on the number of registered unemployed, the temporarily unemployed and the sick, some 358,000 people would be out of work in Scotland by 1984. These figures are depressing and worrying. However, a projection by the Cambridge Growth Project—which forecasts that by the year 2000 there could be 5,500,000 unemployed in the United Kingdom—would suggest that in Scotland something like 750,000 people would be out of work by the turn of the century.

While the long-term forecasts may be doubtful, against the background of potential unemployment of the order I have mentioned for Scotland in the mid-eighties we must listen to what the forecasters are saying. The CBI forecast in January pinpointed general uncertainties and said that those uncertainties were consistent with expectations of weaker demand and output, higher interest rates, continuing inflation and a strong exchange rate. That statement is tucked away in the CBI report, which has not received nearly so much attention as the noises made by the CBI last winter when the lorry drivers were on strike and when John Methven and Alan Devereaux said that the British economy was on the point of collapse.

We hear sometimes that trade unionists are not properly represented by their officials. If I were a businessman and people like Methven and Devereaux represented me, I would be most reluctant to pay my dues. They are failing to back the interests of British manufacturers.

Mr. Allan Stewart (Renfrewshire, East)

The hon. Member seems to be making a personal attack on me.

Mr. O'Neill

I am willing to make a personal attack on the hon. Member for Renfrewshire, East (Mr. Stewart) but I think it would be inappropriate in this place. Last winter CBI officials were less moderate than they are now. A slavish defence of the Conservative Government has been put up by the CBI this year, but it has not defended the interests of British business men and has kept quiet about the problems facing the British economy. The CBI industrial forecasts for Scotland have been increasingly depressing since the hon. Member entered the House. Since July 1979 the level of disillusionment in business has been at its greatest since October 1975. That probably coincides with the arrival of the hon. Member back in Scotland. The Allander report in in January this year.

Mr. Stewart

Surely the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) agrees that according to the most recent survey the key capital capacity utilisation figure has improved. Most economic commentators have always regarded that figure as one of the most important in the whole survey.

Mr. O'Neill

Other commentators on the British economy have been unanimously depressed by the figures. There is no way that Tory Members will convince the Opposition that British industry is on the verge of a boom and is about to expand.

We have had a Cook's tour through the constituencies of Scotland during the debate and I must plead guilty to going a little way along that road myself. In my own area we have seen the direct effects of Government policies recently.

I draw attention to the Glynwed Company which operates in Falkirk. Glynwed is a holding company that has taken over many firms in Britain, some of them local institutions like those in Falkirk that produce Raeburn and Aga cookers. Those cookers are supplied to institutional catering establishments. When the firms were laying off 400 workers management was asked the reason. It was said that the reason was a fall in demand for their product as a result of cuts in public expenditure. Perhaps it is unfortunate that it did not foresee that situation when it spent £10,000 in support of the Tory general election campaign.

There is almost total indifference on the part of the Government to the plight of the foundry industry in central Scotland. It took the ingenuity and the drive of the central region authorities to hold a symposium last week at which the problems of the foundry industry were discussed.

Direct Government action could be taken and in a short time 2,000 to 3,000 jobs could be created in the whisky industry. If the Government were prepared to follow up the action of the previous Administration and do something positive about stopping the bulk of whisky exports there could be a massive improvement in the glass and bottling industry in the area. The right hon. Member for the Western Isles (Mr. Stewart) made the point that the previous Government did not arrest those exports. But the previous Government did work towards compelling the EEC to ensure that the bulk of whisky exports were reduced. This Government have taken no advantage of that effort, and the minimal amount of work required to create 2,000 jobs in central Scotland has been left undone because of the indifference or the indolence of Ministers at the Scottish Office.

The Secretary of State along with other hon. Members spent a morning at the Scottish Knitwear Association, at which a very' strong case was made not for the protection of the industry but for the positive assistance that it needs. Since that meeting we have heard nothing from the Scottish Office, from the Department of Industry or from the Department of Trade about giving positive assistance to the Scottish knitwear industry. In that industry more than 1,000 jobs have been lost in the last year.

We would like the Under-Secretary of State for Scotland, the hon. Member for Edinburgh, North (Mr. Fletcher) when he has finished answering the questions of the hon. Member for Fife, East to tell us that in the near future we will get a reduction in interest rates to allow businesses to borrow and so expand. We hope he will tell us that we will get investment in the mining industry which would help it to mine the tremendous coal reserves in Scotland with comparative ease and which would transform the economy of certain parts of Ayrshire and Central Scotland.

We would like to see commitment to planned school training and a commitment to ensure that the Manpower Services Commission gets the support that it deserves. We would like to see the SDA restored to the role of industrial banker rather than that of industrial landlord to which it has been relegated. To get the jobs that will prevent unemployment from reaching the figure of 250,000 to 300,000—as quoted by The Times—we will need Government intervention and investment.

We must ensure that local government services are not cut. A few months ago some of us had the privilege of listening to a senior civil servant in the Scottish Office who said that there was no correlation between extravagance and high expenditure in local authorities. The hon. Member for Edinburgh, South (Mr. Ancram) should understand that the allegations about the profligacy of local authorities such as Lothian are total nonsense. Such bodies provide services which the Government are unwilling to finance.

We have been told of complaints by local business men. We did not hear complaints last year when local business men received big tax handouts as a result of the Budget. We are interested to know whether the rate increases that firms must now pay are in excess of the tax handouts by the Chancellor.

We want the Government to be removed, but that is a forlorn hope. In the short term we must have action to ensure that unemployment in Scotland does not become worse. So far there are no suggestions that will improve the situation. It will not improve until the Secretary of State resigns and we have a chance for a fresh start.

Mr. Canavan

On a point of order Mr. Deputy Speaker. Since the debate is about the Scottish economy and there are twice as many Labour Members representing Scottish constituencies as there are Conservative Members, is it possible for you to bear that ratio in mind when calling hon. Members to speak?

Mr. Deputy Speaker (Mr. Bernard Weatherill)

That can be borne in mind, but it is not the normal practice.

8.2 pm

Mr. John MacKay (Argyll)

I suggest that the hon. Member for West Stirlingshire (Mr. Canavan) sits and listens, as I had to when the Education (No. 2) Bill was in Committee. If he tempts me too much I may try to get my own back for the number of minutes that I had to listen to him.

The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) quoted oft from the Fraser of Allander Institute reports. I do not wish to go far along that road with him, because I treat that institute in the same way as I treat The Scotsman—a side office of the SNP.

Mr. Donald Stewart (Western Isles)

Is the hon. Member saying that these reports are not worth the paper on which they are written, although they are written by reputable academics?

Mr. MacKay

I did not say that. I said that I would not go too far with them because some of the reports are written by people who have close links with the SNP.

In April 1979 the president of the Fraser of Allander Institute described the Scottish economy as a sick man on drugs'". He suggested that the cure was to reduce its dependence on those drugs gradually. That gradualistic approach towards the withdrawal of Government help to all and sundry is adopted by my right hon. Friends in the Government.

The report said that there was little doubt that the Scottish economy was weaker in April 1979 than it had been in 1974. Before Opposition Members complain about the current levels of unemployment they should examine the figures and percentages. When the Labour Party took office, unemployment in Scotland was 95,600. By January 1978 it had risen to 203,000. That was an increase of 113 per cent. The hon. Member for Clackmannan and East Stirlingshire hopes that unemployment will not rise by 50 per cent. in the next five years. So do I. We hope also that we can do a great deal better than the Labour Government, which presided over an enormous unemployment increase. Scottish unemployment would be 374,000 if we did as well—or as badly—as they did when they were in office.

Mr. O'Neill

How long do we have to wait for the economic miracle?

Mr. MacKay

After five years of Labour Government we cannot expect economic miracles overnight. The hon. Member for Clackmannan and East Stirlingshire should know that, since he is an economist. It will be a long haul because the patient is very sick and will not recover overnight.

The Fraser of Allander Institute drew attention this year to the many disparate groups involved in industrial promotion in Scotland. I recommend to the Government a document issued by the Institute for the Study of Sparsely Populated Areas called "Concurrent Functions of Public Authorities in the Highland Region". The Highlands and Islands Development Board, the SDA, and the regional and local authorities compete to do the same job. We should simplify the system so that one person goes out to catch the industrialist with his rod and line, rather than have a whole batch of people who muddy the water.

All is not bleak. All is not black, although I am sure that the Opposition would like it to be so. The right hon. Member for Glasgow, Craigton (Mr. Millan) complained that South Wales was to receive £48 million extra. I am delighted that Scotland does not have the great problems experienced by Wales. I am glad that I can sit back and see the money going to South Wales. I should have expected Socialists to be prepared to see one part of our country which is in great need receiving particular help. Opposition Members seem to say that they wish Scotland was as badly off as South Wales so that it could receive the money instead.

In the last few months Chrysler and Talbot have proved that an industry with a bad reputation can, by its own efforts, improve its image, and after this morning's splendid news I hope that BL will be able to do the same. It is a tragedy that the steel industry seems determined to cut its own throat. We experienced the same thing last year at Hunterston. Much public money was invested, and yet it was unused for months on end.

Mr. Foulkes

Will the hon. Member give way?

Mr. MacKay

I shall not give way.

When I was travelling to London on the plane, I read the Glasgow Herald. It was worth reading, because for a change I read good news. It was headlined: Double shot in the arm for industry". and said: The gloom surrounding Scotland's industrial future lightened yesterday with the announcement of a double helping of good news. John Brown Engineering Gas Turbines, Clydebank announced a £7.4 million contract as Rolls-Royce outlined a £50,000 campaign aimed at bringing another 300 skilled workers to the Scottish factories by the end of the year, making about 500 in two years.

Mr. Norman Hogg (Dunbartonshire, East)

Will the hon. Gentleman give way?

Mr. Foulkes

Will the hon. Gentleman give way?

Mr. MacKay

I shall give way in a moment to the hon. Member for Dunbartonshire, East (Mr. Hogg). It does not do anybody any good to continue to harp on the bad news and never mention the good.

Mr. Hogg

Is it not the case that the good news refers to two State enterprises? That proves the case for State enterprises.

Mr. MacKay

That is exactly my point. When there is good news, all that the Opposition can say is that it concerns a State enterprise. I suppose that I am expected to say that it is bad news, and that it is good news only if it concerns private enterprise. That proves that Opposition Members are more concerned with scoring political hits than with looking after the economy of Scotland.

I shall try not to go through the highways and byways of my constituency, but I wish to mention the economy of the Highlands and Islands. I reiterate the remarks of my right hon. Friend the Secretary of State that the Government have increased the amount of money available to the Highlands and Islands Development Board to spend in the Highlands area this year.

We welcome the announcement that the Scottish Office is to continue to give a grant to the Civil Aviation Authority to allow it to continue operating the airports. Indeed, the grant is to be increased by £1 million. I hope that those who did not believe the statement by my hon. Friend the Under-Secretary on 18 December, when he said categorically that the Government would not allow the Civil Aviation Authority to withdraw from the airports, will have the good grace to thank him for his announcement this week.

Mr. Foulkes


Mr. MacKay

I shall not give way.

Mr. Foulkes

I am being discriminated against.

Mr. MacKay

I am indeed discriminating against the hon. Gentleman. He has only himself to blame.

The public and private enterprises in the timber industry form an important partnership to produce timber. We are delighted with two pieces of good news that we have heard recently. One concerns Caberboard at Cowie in Stirlingshire, and the other at Fort William, where Wiggins Teape and Consolidated Bathurst are going into partnership to open the pulp mill for new production. They will use many of the trees that we are growing at the expense of both taxpayers' money and private capital. Unfortunately, we shall always be dependent upon the import of trees and tree products, but we can, by our own efforts, help to lessen that dependence. I welcome the efforts of the Scottish Office and my hon. Friend the Under-Secretary. I thank him for his efforts to help those at Fort William to find alternative production for that factory.

I do not wish to divert my remarks to agriculture, but I must say that my farmers, though they are not exactly pleased with the present position, are a good deal more pleased than they were a year ago after five years of Labour Government. I hope that my hon. Friend the Under-Secretary will kindly tell his right hon. and learned Friend the Chancellor of the Exchequer that family farmers in Scotland wish for some action on capital transfer tax so that their family businesses can continue on the basis on which agriculture has to depend, namely, one generation after another.

I am sorry that my right hon. Friend the Secretary of State is not in the Chamber, because I know that he and I, together with the hon. Member for South Ayrshire (Mr. Foulkes), share a common interest in the Clyde fishing industry. Much work has been carried out on conservation in the Clyde area. The fishermen have looked after their fishing very well indeed. I wish to underline that we must not allow fishermen—not only from Europe but from other parts of Britain—to interfere with the tightly conserved fishing that has been built up on the Clyde estuary.

As an aside, I wish to emphasise the need for a fish processing industry and for the continuation of a product. Fish farming could give the fish processing industry an all-the-year-round trade, in addition to the fish that are caught in the wild. The Givernment must consider ways in which to help that important industry, especially with legislation. Fish farmers produce something that is different from that caught in the wild. They are often restricted by rules and regulations which were designed for fish caught in the wild and not for fish that are farmed.

An important industry in Scotland, especially in the Highlands, is tourism. I know that some hon. Members are not keen on tourism, or service industries in general. There are Left-wing economists, such as Professor Kaldor, who appear to think that service industries are second-rate. The father of economists—I do not know whether he would be proud to be called that—Mr. Adam Smith, castigated services such as the tourist industry by saying that they were services which perish generally in the very instant of their performance, and do not fix or realise themselves in any vendable commodity". I hope that my right hon. and hon. Friends take a more sensible and realistic view of the importance of service industries, especially tourism. In Scotland in 1978, £523 million was spent in the tourist industry, and 13.2 million tourists holidayed in Scotland. My constituency accounts for 10 per cent. of the figures. Over the whole of Scotland tourism accounts for 100,000 jobs.

There are problems in the tourist industry, which I have mentioned already in relation to the report on duplicated functions, which the Government ought to consider. There are too many fingers in the tourist pie. Regional and district councils all want their empires. The HIDB has a good track record, and the rest of Scotland should note the way in which it has encouraged those in the industry to establish a tourist network.

This month the chairman of the Scottish Tourist Board, Mr. Robert MacLellan retires. This is a good opportunity for the Government to appoint a chairman who will build on the work that has been done in the past, and who will view the tourist industry through new eyes at an important time in its history.

When the Government appoint the new chairman, they should consider also the whole question of the relationship between the Scottish Tourist Board, the English Tourist Board, the Wales Tourist Board and the British Tourist Authority. There is no doubt that they could co-operate under the umbrella of the BTA to advertise the tourist wares of Britain, to the benefit of all parts of the country.

It should be remembered that the tourist industry plays an important part in the rural areas, where, without tourism, there would be little industry. Those who knock tourism should remember that it is important. It is important for those who work in the industrial and urban areas of the country to be able to spend some parts of the year in the beautiful countryside, where they can enjoy relaxation and pleasures and enjoy living with country people. It is important that the rural economy is maintained in a good condition so that the tourists from the cities can visit a living countryside, rather than a dead one.

8.19 pm
Mr. William McKelvey (Kilmarnock)

I am glad to have the opportunity to speak in the debate. Like the hon. Member for Argyll (Mr. MacKay) I shall not go down the highways and byways of my constituency because we are discussing the Scottish economy.

I hope that I shall be forgiven if I mention that Kilmarnock, being in the so-called triangle of disaster, has had several heavy dunts recently, the most recent of which has been the complete disappearance of the Massey-Ferguson work force. The rundown of the work force has started, and 1,500 jobs will be lost within the next few months. That will put the Kilmarnock district figure up to 50 per cent. That is not only undesirably high, but absolutely intolerable.

I want to refer later to the effects of the multinationals—Massey-Ferguson, for example. I draw attention to the Scottish Economic Bulletin of August 1979 in which the Government's policy of propaganda was stated as follows: A marked switch in emphasis from taxes on income to taxes on spending should provide a substantial improvement in incentives to enterprise, innovation and efficient working. I should like to know when that is to begin. We have been waiting for some time for these entrepreneurs to appear in Scotland. They are not appearing in the Kilmarnock district, although one type of entrepreneur has appeared. I should like to refer to an advertisement in the Kilmarnock Standard last week, just prior to 1,500 starting to leave their place of employment. Some had worked at Massey-Ferguson for 30 years. It is Alex Young's fantastically low-priced redundancy money special". He is advertising motor cars. The advertisement suggests that a man should place a deposit now on the car of his choice and pay the rest when his redundancy money comes to him. This man is certainly innovative. I suppose that we could classify him as an entrepreneur. I should describe him not as galvanised or electrified, but as a brass-necked "redundavulture". We have such vultures hanging over Kilmarnock waiting to grab people's money. But they are very short-sighted. That redundancy money and Kilmarnock's economy will not last long. Indeed, before very long this particular firm may find that people in Kilmarnock have no further money to buy motor cars and accessories and Alex Young himself will be facing redundancy. It would be bad enough if he were advertising British cars, but I notice Japanese and other foreign cars in the advertisement. People are being encouraged to buy Japanese cars with British redundancy money and to put British Leyland workers out of work. So the circle goes on.

Scotland has always had a difficult unemployment situation. However, it has been sporadic, because there have been periods of recovery. This time the opposite is the case. We have a chronic, bitter joblessness which appears to have no limit. I think it was the chairman of the STUC who said "When in the name of God is it going to end?", because redundancy notices were appearing week after week.

Redundancies no longer make headline news. Redundancies of 1,500 are commonplace in Scotland and barely take up a two-inch paragraph in local newspapers. It has to be something sensational before it hits the headlines. The sacking of a convener or a commotion on a picket line apparently creates more interest.

A jobless figure of 200,000 has been mentioned. The latest figures, although not available for this month, will indicate well over 200,000 in Scotland. If hon. Members can visualise Hampden Park almost at capacity, the unemployment figure is twice that. For 1981, which is but a year away, the forecasts are in the region of 300,000. That will be a catastrophic waste of manpower.

I want to dwell quickly on the multinationals. They have not received much attention so far in the debate. A great deal of the Scottish economy now depends upon the whims of the multinationals. I have discussed with the Secretary of State and other Ministers the power that the multinationals wield over us. We have seen examples of it in the Ayrshire district. We have massive redundancies at Massey-Ferguson, Skefco and Monsanto. All those companies argued at the time that they were concerned not so much with the Scottish economy as the British economy.

We now find that Massey-Ferguson, the only producer of big combine harvesters in this country, has transferred to the French market. The latest word on the grapevine is that 200 workers are to be made redundant in Marquette and a further 400 in Beauvais in France. Massey-Ferguson, having transferred the work, is now starting to lay off in that area.

The capitalist crises of the Western World first affect Scotland, then British industry, and finally European industry. The multinationals must bear the responsibility because of the way that they have operated in these countries. They build up the work forces and then leave with no social responsibility.

The tragedy is that we welcome the multinationals. We must, because we are desperate for entrepreneurs. Our entrepreneurs are not putting money into Scotland—certainly not in the Kilmarnock area. I know business men in Kilmarnock who have invested in South Africa and Taiwan. The industries on which Scotland depends are being starved of the finance that they desperately require. It goes to Taiwan. People in the knitwear industry last week told Members of Parliament that a sweater bearing a Shetland wool label was arriving on the dockside from Taiwan priced at 95p. Scotland's knitwear industry cannot compete with such products. Until we restrict these imports and ensure that the money goes into the Scottish economy, not abroad, we shall not prosper.

We must bring about a change in the Scottish economy from the Friedmanite monetarist policies. It might be argued that the Tory Government have a mandate to impose such policies on the people of England, but they should not be imposed upon the people of Scotland, because they did not vote Tory. They voted Labour. Therefore, they should be given special consideration. It is not that I would keep that special consideration for Scotland. Being a good Socialist, I should like the same to apply to England. Nevertheless, as the English voted for a Tory Government, they should suffer the consequences. However, some credence should be given to the way that the Scottish electorate voted.

Mr. Allan Stewart

Therefore, the hon. Gentleman will presumably agree that the previous Labour Government—indeed, every Labour Government except possibly one in the last generation—had no mandate to rule England.

Mr. McKelvey

I thought that this was a debate on the Scottish economy. I was prepared to extend it to England. Of course, if that is the situation, we could develop the argument region by region. If so, the hon. Gentleman must agree that the northern parts of England would have to be lumped into Scotland. The North of England has loyally, consistently and persistently voted Labour. Therefore, what the hon. Gentleman said would be correct for the South of England, and it deserves what it gets. But, even those areas are now beginning to squeal. The point that I was trying to make was that we are on the extremity and that the problems of the Scottish economy have magnified. We are being centralised now not with the Midlands, but with the European concept.

If anyone can say that our arguments—I am anti-Common Market—have not borne fruit, I should like to meet him. In Scotland these days one can never find anyone who voted Tory, let alone anyone who voted for British membership of the Common Market.

The problem in introducing this English-type Tory philosophy in Scotland is that we are given the same type of propaganda: we should all be one big happy family. That is the Tory machine propaganda. Members of the family must work together, they must work in unison and they must all tighten their belts. We are told that there can be no increase in public expenditure and that the purse strings must be tightened. If we were the Waltons, we might work in that fashion. But we do not work in that kind of fashion as a family. When workers are being made redundant, and when they are being told to tighten their belts, those who have money are investing it for themselves, not for the rest of the family.

The family image in Scotland has evaporated almost overnight. It exists only amongst those in Scotland who were deluded into voting Tory, on the false promise that there would be a change in taxation which would solve all their economic ills. That will not solve our economic ills, either in Scotland or in Britain. There is only one way in which to solve those economic ills. I ask all voters in Scotland, particularly those who voted Labour, to write to all their counterparts in England on the next possible occasion, and try to get support for the Labour Party in the next election. That would be the first step in introducing sensible Socialist progressive policies to end our economic ills.

Secondly, to free us from Friedmanite monetarist policies, we should have a planned strategy on multinational companies. We realise that there will be difficulties, but we have lost thousands of jobs to Southern Ireland because that country was able to offer better inducements—in many cases to the tune of £4,000 per job. There should be an immediate programme on selective import controls. If there is not such a programme, there is no hope for either the British or the Scottish economy.

Thirdly, there should be a massive increase in public expenditure, and a reversal of the Tory cuts. That is the only way in which to stabilise the economy and to halt unemployment. If the Tories do not halt unemployment, I have no doubt as to what will happen at the next General Election.

8.33 pm
Mr. Allan Stewart (Renfrewshire, East)

I shall not comment at any length on the speech of the hon. Member for Kilmarnock (Mr. McKelvey), except to say that I expect that a certain section of his speech will be quoted again and again by whoever is adopted as the SNP candidate for Kilmarnock.

I should like to start by saying what I intended to say in an intervention during the speech of the right hon. Member for Glasgow, Craigton (Mr. Millan), when he attacked the Government on the dispersal of Civil Service jobs. He has the most incredible brass neck to attack the Government on that issue. His Government were in power for five years, and they did not disperse a single job to Scotland. All that Scotland got from his Government were five years of hot air on the issue—not a single job.

I should like to comment on the way in which the right hon. Gentleman reacted to the intervention of my hon. Friend the Member for Galloway (Mr. Lang) about the termination of the regional employment premium. He seemed to be telling the House that the ending of REP was a great personal victory. We look forward to seeing a chapter in his memoirs—"My Cabinet Victory; the end of REP". That was a deplorable method of changing a regional policy.

I am not arguing whether REP should have been phased out, but it was not phased out. It was cut, in effect, retrospectively, without consultation and without warning. The right hon. Gentleman took £80 million out of Scottish industry overnight. That is the difference between the changes in policy of the present Government and the previous Government. I welcome the changes of the present Government and the way in which they are being phased over a sufficiently long period to allow industrialists to react and to adjust.

As for the references of the right hon. Member for Craigton to the industrial policies for Scotland and his constant reference to the need to beef up the SDA, we know what the Socialist plan for Scotland is. Scotland needs more Scofiscos—that is what it amounts to.

I welcome the changes that have been made to the guidelines of the SDA. If any company in the private sector had the record that the SDA has had with its subsidiaries—every one of which made a loss last year—the shareholders would be asking many questions about that company.

More generally, I should like to pick up the points made by my hon. Friend the Member for Argyll (Mr. MacKay).

Mr. Ernie Ross

Before the hon. Gentleman leaves that point, will he comment on the financial management of the Chrysler corporation before it was tossed in with Britain?

Mr. Stewart

I am not sure what the relevance of that point is. The Chrysler Corporation's jobs are still there and my hon. Friend the Member for Argyll has referred to the efforts that are being made in Linwood to recover from that difficult position. I pay tribute, as he paid tribute, to both the management and the employees at Linwood.

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)


Mr. Stewart

I shall not give way to the hon. Gentleman.

Mr. Ewing


Mr. Deputy Speaker (Mr. Richard Crawshaw)

Order. The hon. Gentleman does not appear to be giving way and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) must resume his seat.

Mr. Ewing


Mr. Stewart

I shall not give way to the hon. Gentleman. I have already given way to the hon. Member for Dundee, West (Mr. Ross) and there are many other hon. Members trying to speak in the debate.

My hon. Friend the Member for Argyll and the hon. Member for Kilmarnock referred to criticisms that have been made of the institutional structure in Scotland for attracting inward investment. That problem will be examined by the Select Committee and it would be out of order for me to refer to it. I hope that the Government will not make any decisions ahead of the report of the Select Committee. However, I am concerned to hear reports that the SDA will be opening offices here, there and everywhere. The Scottish Council did a tremendous job in attracting inward investment into Scotland without any overseas offices.

The question of the microelectronics industry is obviously one of considerable importance for Scotland. Today in Scotland there was an important conference on the industry and its applications. That conference was organised by the Scottish TUC, the CBI, SCOTBEC and SCOTEC. I believe that Opposition Members should pay more tribute to what is being done by both sides of industry in Scotland to try to meet Scotland's problems.

I should like to ask my hon. Friend the Under-Secretary some questions about the urban development corporations and the enterprise zones. I hope that he will be able to tell us where the Government stand on those matters, which have received an immense amount of publicity. In East Kilbride there is an excellent team on the urban development corporation, which has done a tremendous job. As a result of East Kilbride's reaching its target, that sort of effort will be available elsewhere. Many people of all political persuasions believe that my right hon. and learned Friend the Chancellor of the Exchequer put forward an excellent proposal when he made his speech in Glasgow about enterprise zones. Indeed, we have a temporary enterprise zone in Glasgow every weekend. It is called "The Barrows". If any hon. Member thinks that there is no enterprise left in Glasgow, he should get up early one Sunday morning and visit the Barrows. There is plenty of enterprise there. As I have said before, inside every moonlighter there is a small firm waiting to break out. There is plenty of enterprise in Glasgow and in the West of Scotland. The people need incentives in the form of lower taxation, less regulation and less restrictive planning procedure throughout Scotland. If we go down that path, jobs will come. No one pretends that that will happen overnight. However, if we free enterprise, provide incentives and reduce regulations, those jobs will come.

8.40 pm
Mr. Norman Hogg (Dunbartonshire, East)

When I began to prepare my remarks, I was filled with gloom. Every forecast and every economic projection for the Scottish economy in the near future and in the medium term, was gloomy. There seems to be little to be cheery about. I gained little encouragement from looking at any of the figures or projections. Indeed, all the economic forecasts agreed that there would be a recession. They all said that output would fall. They all thought that unemployment would rise and that living standards would at best stagnate. They all forecast that inflation would continue to rise for several months. The Treasury says that there will be a 2 per cent. contraction in the economy in 1980.

Against that background we can only conclude that the situation in Scotland is extremely worrying. So far, the Government's policy has achieved only a fall in output of 2 per cent. in the United Kingdom. That was the position at the end of 1979. Consumer spending in 1979 was down by 4 per cent. Retail sales were down by 6 per cent. I have listened to Conservative Members and they have tried to present this as a success story, as something to be pleased about. However, hon. Members are entitled to ask when Ministers expect to see a buoyant economy. They promised a buoyant economy during the election of May 1979.

We have been freed from the restrictions of high taxation. We have been freed also from the planning restrictions that the hon. Member for Renfrewshire, East (Mr. Stewart) mentioned. The hon. Gentleman made demands upon his Government. However, the Government claim to have met those demands in the Budget of last year. That claim was made in statement after statement on policy by senior members of the Cabinet. If we have been freed from the shackles that were imposed on the economy by the Labour Party, we must ask where that supposed success is. The success seems to have evaporated. Indeed, it never existed.

Mr. Ernie Ross

My hon. Friend mentioned the statement made by the hon. Member for Renfrewshire, East (Mr. Stewart). The hon. Gentleman indicated that the economy had expanded. He referred to the Barrows in Glasgow. However, 80 per cent. or 90 per cent. of the goods sold in the Barrows are imports. They in no way help the Scottish economy.

Mr. Hogg

I confess that I am a frequent visitor to the Barrows. My hon. Friend pronounces the word "Barrows" wrongly. However, he comes from Dundee and can be expected to get these things wrong. My hon. Friend is perfectly correct. The goods sold in the Barrows are all imports. I went to Petticoat Lane last Sunday afternoon, and that was a mistake as well.

I shall return to the serious point that I was endeavouring to make. There has been no rush to invest. We were promised that people would convert the money released from direct taxation to promoting growth. We were told time and time again by Conservative Members that it would produce investment. That has not happened. We were told that people would convert the opportunity given to work harder and earn more, produce more and unlock the forces of economic growth, into building a thriving economy. That has not happened. In winding up, the Minister must tell us what has happened and why the economic policies to which he and his colleagues subscribe have failed so miserably.

Mr. Foulkes

Will my hon. Friend give way?

Mr. Hogg

I shall give way to my hon. Friend because I should hate to discriminate against him.

Mr. Foulkes

I am glad that someone is willing to give way to me.

Will my hon. Friend confirm that the position is quite the reverse from that predicted by the Government? Instead of new enterprises opening up, in the past six months in Scotland 30 major and innumerable minor firms have closed.

Mr. Hogg

That is absolutely the case. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) can also relate problems in his constituency over closures. We have heard about Kilmarnock, so the problem is not limited to west central Scotland. It exists throughout Scotland. The Secretary of State presides over that scene, and the Minister will be faced with the task of explaining it away—I hope, in a short time. I shall move on, so that we can reach that exciting part of the evening's events.

The Government's record is deplorable. Unemployment in the United Kingdom stands at 5.9 per cent. and at 7.7 per cent. in Scotland. There are only 16,824 job vacancies in Scotland. One hon. Gentleman presented that fact as something to be pleased about. Inflation is running at 18.4 per cent., and much of that has been unleashed by this Government's measures. In an effort to maintain living standards, earnings are increasing, and that is making inflation worse. The Government plough on with their policy of cutting public expenditure, but it has already been shown to be a failed strategy.

There is a total lack of growth in private manufacturing. There is substantial evidence to suggest that for every job lost through public expenditure cuts a job is also lost in the private sector. Government Members should have regard to that when they go to their constituencies to argue the case for cutting public expenditure.

We are witnessing longer dole queues, less retail spending, less demand on manufacturing and, consequently, less investment. The Government are determined to cut the Civil Service and to make cuts in local goverment. They are cutting education and social work. On top of that, public service charges are being increased. The Government have increased gas prices by 30 per cent., and increased electricity prices and postal and telephone charges. We are expected to believe that that is a recipe for economic progress and growth.

The Government are oblivious to the needs of the economy, especially in regard to Scotland. In Scotland we must take positive steps to attract jobs. The Government offer doctrine and policy but no positive action. There is mounting public anxiety about the vacuum of lost jobs in our traditional industries and the apparent inability of the Government to secure new jobs in new industries.

I expect that all hon. Members saw the article in the Sunday Mail on 10 February, which illustrated that fact. The Sunday Mail did Scotland a service by drawing attention to the Irish success in attracting joss in the electronic industries, with 97 new firms last year and in electronics a total of 4,655 jobs. Perhaps when the Government spokesman comes to wind up, he will comment on what has happened in Ireland.

Without wishing to deal with what the Select Committee may find, I think it will be helpful to this House, in its future consideration of the Scottish economy, for it to be able to refer to the report of the Select Committee on inward investment. The Under-Secretary must turn his attention to the problems of inward investment and must explain why the strategy of this Government has failed. We want to know when and how the Government will achieve a growth in the economy. We are entitled to know their plans for reducing unemployment. We are entitled to know how they intend to expand the manufacturing sector and what positive steps they are taking to do so. We are entitled to demand that they call a halt to the cuts in public expenditure, because these are not in the interests of the well-being of the Scottish economy.

8.51 pm
Mr. David Myles (Banff)

I shall be brief, and, I hope, constructive. After listening yesterday evening to tedious and unconstructive speeches, I had thought that I might be treated to something rather better today. I thought that at least the hon. Member for Dunbartonshire, East (Mr. Hogg) would plough a new furrow; instead he remained firmly fixed in the old one that every hon. Member on the Opposition Benches has turned over. Perhaps I can plough some new land and be constructive.

Because the majority of people in Scotland live in the central belt and are or have been engaged in the factory production type of industry, any debate on this subject is liable to concentrate on the problems of such people and to assume that any solution to the problems of the Scottish economy must be found here, ignoring the vast areas of Scotland that have not engaged in such industry. This is a well worn path, bestrewn with failures. In voting for a Conservative Government, the people in the North-East of Scotland expected that there would be a fresh approach. I am sure that in time there will be. Time is the important thing. Hon. Members on the Opposition Benches forget that they had five years in which to put the economy into the mess that we are trying to get it out of today.

By definition, regional development grants are selective on a geographical basis. I understand that if we stick to such regional grants it is quite logical to concentrate them, together with more aid, in the areas of highest unemployment. This is, however, far too broad a solution of our problems, with the increased mobility of labour that our new housing policy will make possible. Would it not be more sensible to give aid and encouragement to viable and worthwhile industries wherever they may be, and irrespective of size? I suggest that it must be better—I admit that administratively it is much more difficult—to get 1,000 small firms to employ one extra person than to initiate one doubtful enterprise with 1,000 employees.

I apologise to my right hon. Friend if he has said that in all the recent speeches that he has made on the Scottish economy. However, it shows that great minds think alike. Surely that approach would create more stability and insure us against sudden disastrous unemployment problems, such as those that we are now experiencing, as a result of the uninspired and—I put on my spectacles—myopic thinking of our predecessors.

The Government were elected on a platform of encouragement for small businesses. Let us honour our commitment. As my hon. Friend the Member for Moray and Nairn (Mr. Pollock) told us, we must support the sub-postmasters. Is that approach possible? I believe that it is.

I cannot complete my speech without mentioning farming. If every farm were to employ, on average, one more person—there is no doubt that they could do just that with advantage to production and efficiency—unemployment would be reduced by about one-sixth. That is worth thinking about. We want to support agriculture and make it expand. How many of us know of small business—for example, plumbers, electricians, painters, joiners—

Mr. Allan Stewart


Mr. Myles

My hon. Friend says "Moonlighters?" However, there are many such tradesmen running one-man businesses who are grossly overworked. They dare not take on outside labour, because of the enormous difficulties that may ensue. Can we not encourage the use of the many unused farm buildings in the countryside in Scotland to house small enterprising endeavours? I know of a thriving rubber stamp-making plant that is so housed, and it is most successful. Of course, there are many rubber stamps on the Opposition Benches. I urge my right hon. and hon. Friends to seize on this new strategy and to encourage increasing employment in areas of proven worth.

As I have already reported, Moray district is envisaging only a 1p in the pound rate increase. Another attractive home for small enterprising endeavours is the Banff and Buchan district, which is proposing a reduction in rates by 2p in the pound for the second year in succession. Who said that we forced local authorities to increase their rates? Surely authorities such as the two that I have cited are those in which we should be encouraging expansion and making even more attractive, rather than withdrawing such help and encouragement, to which they have become accustomed.

Lastly, I make a plea for the whisky industry. Perhaps it is a plea that should be directed to my right hon. and learned Friend the Chancellor of the Exchequer. The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) told us, in his selfish way, that we had to stop exporting bulk whisky. If we do that we shall stop the production of whisky to a certain extent. Two massive maltings have just been erected in Banffshire and I do not want to see whisky production halted or cut down in that area.

Do not let us kill the goose that laid this lucrative liquid egg. If possible, let us encourage not only the distilling but also the storage and bottling of this valuable product in such suitable surroundings.

9 pm

Mr. Jim Craigen (Glasgow, Maryhill)

I am glad that the sense of humour of Hamish Watt lives on. Listening to the Secretary of State for Scotland this afternoon I thought that he was even more relaxed than usual. Perhaps the news at the weekend that Teddy Taylor has possibly found a seat in the Home Counties helped. If he is successful, and the track record of the Scottish Office continues in its present form, it is possible that the Prime Minister will decide that the safest seat for a Tory Secretary of State for Scotland is in the South of England.

Yesterday the Department of Employment gave me figures showing that 63,000 redundancies have been notified to that Department since the general election, although 14,500 of them have been withdrawn. In other words, 920 establishments have been threatened with the prospect of redundancy or have closed since the general election. Bad as the unemployment figures are, I think that the Secretary of State must share the growing concern about youth unemployment and the rising number of young people who are out of work. The figures for those under 25 years of age show that youth unemployment is running at more than double the average for all age groups.

The problem is becoming much more acute for those who have been out of work for a long time. There is a part of my own area for which the planners have come up with figures showing that more than one-third of the male population and one-fifth of the female population has been out of work for one year.

I hope that the Minister will give a firm Government commitment to the Mary-hill corridor project. As he knows, this is a project which is shared between the constituencies of my hon. Friend the Member for Glasgow, Kelvingrove (Mr. Carmichael) and myself. One of the features that is now coming out in the local plans is the need to provide more jobs for this area. For years the planners argued that there were insufficient suitable industrial sites. They are now, hopefully, trying to make amends for past sins and attempting to increase the number of areas zoned for industrial development.

One point that keeps coming up time and again is the high percentage of unqualified, unskilled and unwanted labour within the community, which seems to make nonsense of the closure of the skillcentres on Clydeside. Two years ago I went to see the chairman of the Manpower Services Commission in Scotland and tried to convince him of the need for a skillcentre in Maryhill. I also saw my right hon. Friend the Member for Rutherglen (Mr. MacKenzie), the then Minister of State, Scottish Office. I must have put forward a good case, because I see that Rutherglen has been selected as the site for a relocated skillcentre in Clydeside. The fact remains that there is a considerable need for the improvement of retraining facilities in the area.

While I welcome the extent to which the Youth Opportunities Programme is to be expended, I believe that the Minister should realise that this scheme is not entirely elastic, and there are limitations to its expansion in the years ahead. In giving a commitment—as I hope the Minister will tonight—about the Maryhill corridor project, the Minister must realise that co-operation here between the Glasgow district council and the Strathclyde region already has the backing of the Scottsh Office because of work that was done when my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and my hon. Friends the Members for Glasgow, Queen's Park (Mr. McElhone) and for Glasgow, Provan (Mr. Brown) were at the Scottish Office. They brought to fruition this much smaller and more manageable area than that in Gear.

One of the developments that I welcome is the introduction of small factory units. I hope that the Minister will be sympathetic to cases where the Scottish Development Agency is trying to introduce such units. Inevitably there are problems which arise over the higher costs of building these factories, but there is a considerable demand.

While paying tribute to the SDA, which has done a reasonable amount of work in my area, especially on environmental improvements, I must point out that I had occasion to involve the agency in assisting a firm in my constituency that wanted to expand its present premises. One can imagine my concern when I heard recently that the SDA had mentioned the possibility of that company relocating at the Singer site. I do not send the SDA along to my constituency so it can persuade firms to leave. I send it along to help to encourage them in their plans for expansion.

I refer to the question of enterprise zones, which were mentioned by the hon. Member for Renfrewshire, East (Mr. Stewart). It does not really matter where these zones are located, but I hope that we will not see a game of musical chairs in West Central Scotland. If favourable conditions are created in one area of West Central Scotland, industry may be encouraged to move from present locations in other parts of west-central Scotland to that favoured area. That would cause a great deal of concern in this House.

The reason why the particular company got in touch with me, asking for SDA assistance, was that it found that Scottish banks were not interested in investing in manufacturing. I gather that some foreign banks are more interested and that they are prepared to put themselves out in a way that Scottish banks are not. We all know that technology has increasing access to capital, but in terms of employment prospects it is not labour-intensive. I believe that the problem will become more acute as pension and insurance funds become more centralised and lack of investment decisions has its impact in areas such as the West of Scotland.

I doubt whether the Minister has properly evaluated the impact of his current policy of selling council houses, which will have a considerable effect on money supply. If, as seems highly likely, the local authorities are unable to fill the gap, the banks, which are already under Government pressure, may be asked to step in.

I had wanted to make one or two points about microelectronics, but time does not permit.

We have welcomed investment from the United States in west-central Scotland over the years. Now, it seems, we are looking to Japan. I hope that we can also import an idea that the Japanese practise in bringing together their hanks, Government, employers and trade unions in a co-operative effort to determine the areas that can be made winners for Japanese industry. There is, at the moment, a terrible fog over Government policy in trying to provide more jobs for west-central Scotland. It is a great pity that so much Government energy seems to be devoted towards disengagement at a time when the Government cannot afford to be operating in neutral gear.

9.11 pm
Mr. Harry Ewing (Stirling, Falkirk and Grangeinouth)

One of the problems faced by the Opposition in this debate is that we have been anxious to criticise the Government for their economic, industrial and employment policies, while not wishing to give the impression that we ever expected that they would be capable of delivering more than they have delivered since 3 May. As my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said in opening the debate for the Opposition, we always knew that the Secretary of State and his Under-Secretary, the hon. Member for Edinburgh. North (Mr. Fletcher), did not have the ability to run the Scottish economy and did not understand its basic problems. It is perhaps unfair to us to expect the Secretary of State and his hon. Friend, without that ability, to come to grips with the problems of the Scottish economy. In criticising the Government, I should not wish to give the impression that we expected any more from the Secretary of State or from his hon. Friend the Under-Secretary, but, as my right hon. Friend the Member for Craigton said, it is a tragedy that the disaster has taken place much sooner than we had expected.

Another tragedy of the debate has been the astonishing complacency and the almost cavalier attitude of Government Back Benchers to the economic problems of Scotland. It is as if those problems did not exist. The hon. Member for Edinburgh, North is now styled as "Minister for Industry" in the Department. I am sure that a great deal of expenditure was incurred in changing the letter headings. For every day, including Saturday and Sunday, that the Minister has been in charge of industry and employment in Scotland 138 people have lost their jobs. If that is a record of which the Minister wishes to be proud, I hope that he will justify it when he winds up the debate. It is an outrageous and disgraceful record for any Minister that 138 people—

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)


Mr. Ewing

The Minister will get plenty of time to wind up the debate. I shall give way in a minute. It is a disgraceful record that for every day of his ministerial career so far 138 people should have lost their jobs.

Mr. Fletcher

I suppose that the hon. Gentleman is suggesting that I should be ashamed of the fact that the total is not nearly so big as that achieved by his party when in office.

Mr. Ewing

If I have learnt one thing since going into opposition, it is to anticipate the rather silly interventions of the hon. Gentleman. I have the figures. They were given by his right hon. Friend the Secretary of State on 17 July in the Scottish Grand Committee. When talking about the unemployment figures his right hon. Friend said: in other words, an additional 1,300 unemployed for every month".—[Official Report, Scottish Grand Committee, 17 July 1979; c. 12.] The monthly figure for the Tory Government—the Secretary of State had better be quiet—since they came to power is over 4,000 a month. The Minister has the impertinence and the cheek to interrupt me and suggest that, somehow, our figures are worse than theirs. On the evidence of his right hon. Friend the Secretary of State on 17 July, the increase in unemployment under the Labour Government was 1,300 a month. The figure in last month's Department of Employment's statistical bulletin was 4,500. A total of 138 people have lost their jobs for every day that the Ministers have been in power. It is a disgrace, but it is no more than we have come to expect from the Government.

The Under-Secretary was on Radio Forth on the day before he went to America and he criticised Scottish workers, saying that we were our own worst enemies, were too strike prone and that industrial output was disgraceful. Those were the words of a Minister who was about to leave to sell Scotland to America. What an ambassador for Scotland! It is little wonder that the hon. Gentleman came back with no jobs—a promise made and a promise broken.

The hon. Gentleman told us that regional policy would be meaningful. He said in Committee on the Industry Bill that the most meaningful aspect of regional policy was the IDC policy and that it did not cost anything. The limits on the IDC policy are now so high as to be meaningless—another promise made, and another promise broken.

The Under-Secretary told us that the SDA would be able to play a more meaningful role in the Scottish economy and Scottish industry, but he proceeded to prescibe the limits under which the SDA could invest—another promise made, and another promise broken. The Under-Secretary has made and broken more promises than has George Best.

Mr. Bill Walker (Perth and East Perthshire)

I am interested in the hon. Gentleman's comments about promises, because I recollect that the Labour Party manifesto of 1974 said: The Labour Party does not promise anything in this Manifesto which cannot be achieved in Scotland in the next 5 years. The first and overriding priority facing Scotland in the next 5 years will be to create more and better jobs". The Labour Government doubled unemployment. Is that keeping promises?

Mr. Ewing

I do not want to slap down the nice hon. Member for Perth and East Perthshire (Mr. Walker) in the same way as I slapped down the Under-Secretary. The Secretary of State admitted that there were more people in work when the Labour Government left power in 1979 than there were when he left the Scottish Office in 1974. Indeed, that confession was the only bright spot in the right hon. Gentleman's speech.

The continual bleating that when the Secretary of State left power in 1974 unemployment was only 86,000 is inaccurate.

Mr. Walker

Will the hon. Gentleman give way?

Mr. Ewing

No. I have already given the hon. Gentleman a lecture, and one lecture in an evening is enough for any hon. Member from Perth and East Perthshire to absorb.

When we came to power in February 1974 about 300,000 people in Scotland were on a three-day working week, we had come through a Christmas when there were no lights on the Christmas trees and when old folk were sitting in cold homes and dying of hypothermia. That was the situation that we inherited—not the record that the Secretary of State claims to have left behind him in 1974.

Mr. Younger

Will the hon. Gentleman give way?

Mr. Ewing

I shall give way to the Secretary of State provided he is prepared to admit that when we came to power in 1974 the whole of the Scottish economy was on a three-day working week.

Mr. Younger


Mr. Ewing

Will the right hon. Gentleman admit that?

Mr. Younger

The description given by the hon. Member is accurate. There were fewer people out of work in 1974 than there were when he left office. That is the measure of the hon. Gentleman's achievement.

Mr. Ewing

I am grateful for the admission of the Secretary of State that there were 300,000 people on a three-day working week in Scotland in February 1974. I hope that we shall hear no more rubbish about the record of the right hon. Gentleman when he left the Scottish Office.

An impression has been given that the effects of the Government's regional policy, such as it is, will not be felt until August of this year. Every Minister in the Government knows that that is not true. The day on which the announcement was made that about 40 areas would be descheduled under the Government's proposal, companies decided to take their investment decisions against the background of that announcement. We have already seen the impact of the Government's decision in the Borders, and the problems cannot be brushed aside. A textile firm in the Borders has abandoned expansion because the area is to lose its regional development status. That will continue to happen throughout Scotland in the 42 areas that have been de-scheduled.

I hope that the Minister will not pretend that the decision to deschedule those areas will have no effect on industrial development. The decision will have a disastrous effect, and the tragedy of this debate is that the only people who are not worried about the Scottish economy are the Secretary of State and his hon. Friends. We know that all the commentators and economists in Scotland are desperately worried about the Scottish economy, and the investment intentions of Scottish companies—as published by the CBI—are very worrying. On average, well over 40 per cent. of companies in Scotland see a less bright future in the next four months than compared with the previous four months, and that pattern will be repeated.

The only new jobs that have been created by anyone loosely connected with the Government—and I mean loosely connected—have been created by the hon. Member for Aberdeen, South (Mr. Sproat). He has bulldozed his right hon. and hon. Friends into producing 1,000 snoopers to pry into social security cases. They are to be equipped with soft shoes and binoculars, and no doubt both of those items will be imported. They will not even have been manufactured in this country. The only new jobs that we shall see—not only in the Scottish economy but in that of the United Kingdom—are the 1,000 snoopers' jobs which the hon. Member for Aberdeen, South has succeeded in convincing his right hon. and hon. Friends should be created.

I have noticed that at regular intervals during the last few months Ministers from the Scottish Office have been attending the official openings of projects that were started under the Labour Government. I do not complain about that. When we came to power in 1974 we had the pleasure of attending the official openings of projects started by the Conservative Government. However, once the official openings have been exhausted, and if Ministers are invited to attend all the closures that will take place as a result of Government policy I can assure them that they will not have sufficient days or hours in the week to attend those closures.

I was astonished that the hon. Member for Renfrewshire, East (Mr. Stewart) showed such abysmal ignorance of his constituency. The Chrysler factory would no longer exist if we had left it to the Conservative Party. When the Labour Government mounted their rescue operation in the last Parliament, Conservative Members voted against it with one exception—the late revered Miss Harvie Anderson, who refused to vote with the Opposition. I doubt whether her successor would have had the good sense to do that. The same applies to shipbuilding. When we attracted the Polish shipbuilding order we were pilloried by the present Secretary of State and his hon. Friends.

The hon. Members for Moray and Nairn (Mr. Pollock), for Banff (Mr. Myles) and for Fife, East (Mr. Henderson) argue in favour of public expenditure cuts, provided that they do not take place in Moray and Nairn, Banff and Fife, East. They do not care what happens to the other 68 constituencies in Scotland. That is symptomatic of what is happening on the Tory Back Benches. Tory Members have cold feet when they see the impact of the Government's policies on their constituencies.

Mr. Henderson

I said that although the change in development area status had not been beneficial in East Fife, I recognised that it was a positive help to Scotland as a whole.

Mr. Ewing

We can place on record that the hon. Member for Fife, East believes that the change in development area status will be good for Scotland as a whole. In a year's time, when unemployment is over 250,000, I shall give the hon. Gentleman a good meal of his own words, and no doubt he will suffer from indigestion.

I was interested in the comments about St. Andrews university and it being a centre for electronics study. According to the Minister's press release, that university did not even take the trouble to submit proposals.

Reference has been made to the increase in funds for the Welsh Development Agency. Hon. Members have said that Wales has more serious industrial problems than Scotland. It is no part of our argument to say that Wales should not receive additional funds. We are delighted that the Principality is fortunate to be represented in the Cabinet by a Secretary of State who obviously has the interests of his country at heart.

That is more than we can say for the Secretary of State for Scotland. Unemployment in Scotland, on every count, is worse than it is in Wales. We shall not tolerate the Secretary of State telling us that the Welsh problem is worse. He either does not know what the problem is, or he does know and is hoping that no one finds out. The seasonally adjusted unemployment figure for Wales in January was 7.5 per cent. The Scottish equivalent figure was 7.7 per cent.—worse than the Welsh figure. The crude figure for Wales was 8.3 per cent. and for Scotland 8.9 per cent. I am not arguing that Wales should not receive the £48 million, but I am arguing that the Secretary of State for Scotland should have been aware of the serious nature of the problem in Scotland.

The right hon. Gentleman should have gone to the Cabinet and not only backed his right hon. Friend the Secretary of State for Wales but argued the Scottish case for an increase in the amount of money available to Scotland to deal with its problems, especially those in the West of Scotland, Clyde, parts of Glasgow, the Dundee area, and so on. From earlier remarks made by the Secretary of State, it is obvious that he did not know that the unemployment figures for Scotland were worse than those for Wales. It is an outrage that he did not know the true position in his own area.

It would be wrong of any Opposition speaker, when winding up a debate, not to try to help the Secretary of State. He does not have the ability to help himself. As well as suggesting that he should resign—I know that he will not do so—I wish to make a few other suggestions. I hope that he will argue in the Cabinet for the Scottish economy to be protected from the worst effects of the Government's policies.

Before I continue with my suggestions I wish to tell the hon. Member for Dundee, East (Mr. Wilson) that I heard half of his speech. I missed the half in which he attacked the Labour Party. The Tory Government is as much a creation of his party as it is of the voters south of Birmingham. It is the height of impertinence for him to pretend to the people of Scotland that he is not as much responsible for the Tory Government imposing their policies on Scotland as are the voters south of Birmingham.

I wish to continue with my assistance to the Secretary of State. He must return to his Cabinet colleagues and obtain a reversal of the decision on regional policy. The incident that I have mentioned about the Borders area is an example that will be repeated throughout Scotland. We cannot afford to have that happen. I hope that the Secretary of State will argue the case for the retention of the regional development areas as they are at present.

We are not arguing that regional policy should remain static. As regional policy becomes successful it demands change. We are arguing that, in a deteriorating situation—as is the case in the Scottish economy—the present protection for those areas should be retained. With the £225 million saving on regional policy, it is not insignificant that the Secretary of State gave up 20 per cent.—£45 million—to his Cabinet colleagues. That is an extraordinary percentage for a Secretary of State to give away.

Because most unemployment begins in the construction and building industries and works its way through various other industries, there is a great and urgent need for a building package to be released as soon as possible.

In case the Secretary of State thinks that that would involve new money, I must tell him that it would be a direct transfer of unemployment benefit into the economy in the form of a building package. There is a great need to modernise schools, to continue the hospital building programme, and to continue the thermal insulation programme.

I understand that the Government are considering ending the thermal insulation programme. I hope that that is only a nasty rumour and that it will not be confirmed. Half of the local authority houses in Scotland remain to be insulated. The British Gas Corporation, as a result of the price increases forced upon it by the Government, will make £600 million profit next year. A small part of that profit should be spent on thermal insulation. That will also protect jobs in the manufacture of thermal insulation material and in its installation. I hope that with the building package, with thermal insulation and with the regional policy, I have given the Minister sufficient to go back to his colleagues and argue that Scotland is a special case.

In case the Secretary of State thinks that it is only I who is arguing a special case for Scotland, I direct his attention to an article in the Sunday Mail by Teddy Taylor, who now works as a reporter for that newspaper. In his column on 9 December 1979, speaking about the appointment of the new chairman of the Scottish Development Agency, Robin Duthie, Teddy Taylor said: First, he must attract the new and growing industries to Scotland to take up the slack of the declining traditional firms. Second, he must make sure that the factories and other facilities are available for home and overseas firms contemplating expansion. And third, he must keep banging at the doors of Whitehall to remind them that Scotland has special problems of its own which call for special remedies. I could not have put it better to the electors in Southend, East, and I hope that in quoting Teddy Taylor I have convinced the Secretary of State and his hon. Friend that there is a great need for the kind of measures for which even Teddy Taylor was calling no later than 19 December last year.

I turn to skillcentres. It is an absolute disgrace that the Government are running down training programmes. The Minister will no doubt tell us that Rolls-Royce is looking for 200 workers. Of course it is, but it cannot find them, because there are not sufficient trained personnel and the Government are cutting back on training programmes. The Minister seems determined to do as much damage as possible to the economy. Everything to which the right hon. Gentleman has turned his hand has gone sour. Even the team that he supports is to be relegated this year. He is probably the most unsuccessful Minister to walk through the doors not only of new St. Andrew's House, but of old St. Andrew's House.

I hope that the Secretary of State has got the message that we are all deeply and seriously concerned about the state of the Scottish economy and the way in which the Government are allowing it to drift. I urge my right hon. and hon. Friends, when it comes to showing our disapproval in the Division Lobby, to join me in voting against the Government.

9.38 pm
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)

Listening to that knock-about speech by the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), I find it difficult to believe that he is seriously concerned about anything—certainly not the serious economic situation that the Government inherited from the previous Labour Government and about which he had remarkably little to say.

The hon. Gentleman made a number of points towards the end of his speech which he offered as free advice. I am old enough to know that one should not readily accept free advice.

The hon. Gentleman said that the Government should change their regional policy because of the disastrous effects that it would have on the Scottish economy. In evidence he produced a cutting from The Scotsman of Monday. In effect, the hon. Gentleman said that regional policy should be changed because of one unknown textile company in the Borders. We do not know what company it is. We believe that it is as much to do with market conditions in the textile industry throughout the United Kingdom that this investment may not be taking place as with any part of regional policy.

The hon. Gentleman referred to skill centres. The study that is taking place in Scotland and elsewhere in Britain by the Manpower Services Commission was instituted by the previous Labour Government, of whom the hon. Gentleman was a member. It is a matter not of reducing the number of places, but of looking at the distribution of skillcentres and seeing how to apply them better to the needs of various parts of the country. He produced the usual sort of Labour spending list, ignoring the fact that after five years of Labour government it is not simply a matter of the till being empty, but that Britain will have to borrow vast amounts for many years.

In changes that we have made on regional policy, we have tried to direct the greatest amount of help to those areas where it is most needed. As a result, there are now more special development areas in Scotland than there were under the previous Government. The purpose of regional policy is to try to direct aid where it is most needed.

I refer to the opening speech of the right hon. Member for Glasgow, Craigton (Mr. Millan). I am glad that he accepted the need to put the debate in the context of the United Kingdom economy. That is obviously right. As my right hon. Friend the Secretary of State said in his opening speech, the record of the previous Labour Government speaks for itself. The position is serious, a point made by the hon. Member for Dunbartonshire, East (Mr. Hogg). It is not simply a matter of the last nine months of Conservative government. The position has been serious for the last nine years. Manufacturing output today is at the same level as it was in 1974, despite the fact that wages have more than doubled. That statement cannot be repeated too often. Since 1975, as the Secretary of State pointed out, exports of manufactured goods from the United Kingdom have risen in volume by 12 per cent., while imports of manufactured goods have risen by about 65 per cent. in the same period.

When Labour Members make speeches in the House—no doubt directed towards the press at home and their constituents —and produce a shopping list, they would he doing their constituents a better service if they were also to point out the seriousness of the economic position which faces every part of the United Kingdom. In Scotland, as Labour Members should know and should remember, unemployment almost doubled between 1974 and 1979. But the right hon. Member for Craigton is not all bad. He kindly contributed a caption summing up his term of office. In his own words, it was "A record of unmitigated failure".

The right hon. Member for Orkney and Shetland (Mr. Grimond) surprised me when he talked about jobs for Scotsmen in the oil industry. Obviously Scots have an advantage by being on the spot when the Manpower Services Commission advertises vacancies for all sorts of jobs throughout Scotland. Perhaps the right hon. Gentleman was thinking about the fact that there is a large immobile working population in Scotland. That is one of the challenges faced by the Government in trying to make dramatic changes in housing policy and giving people the opportunity to buy their council house as a means of encouraging labour mobility.

The right hon. Gentleman also referred to air services. I, too, find it difficult to understand why people who travel regularly by air should subsidise those who travel once a year. I am afraid that I cannot give him the answer to that question. It is a matter for another Minister.

Both he and my hon. Friend the Member for Argyll (Mr. MacKay) mentioned the Highlands and Islands airport. My right hon. Friend the Secretary of State announced a subsidy of £2.5 million to the Civil Aviation Authority in 1980–81, compared with the £1.5 million offered by the Department of Trade in 1979–80. That should enable the CAA to reduce at least some of its charges.

The hon. Member for Glasgow, Mary-hill (Mr. Craigen), my hon Friend the Member for Argyll, the hon. Member for Bothwell (Mr. Hamilton), and my hon. Friend the Member for Renfrewshire, East (Mr. Stewart) raised the question of inward investment. There are two main issues on the subject on which I should like to comment.

First, should we seek to compete for internationally mobile investment? This question is sometimes raised because of fears that Scotland will become a "branch factory" economy, overdependent on the changing strategies of multinational corporations. That was impled in the criticisms of the hon. Member for Kilmarnock (Mr. McKelvey).

The closures of Singer and Massey-Ferguson and other large corporations are used as evidence for that view. My reply to that is that Scotland has gained considerably from overseas investment, particularly over the past 30 years. Over a quarter of the 250,000 new jobs created in Scotland since 1950 have been in companies from overseas. These firms have brought with them to Scotland new and progressive management styles, modern products and processes, invariably good industrial relations and considerable benefits to the economy as a whole. In short, we cannot afford not to pursue every avenue open to us to secure new internationally mobile investment for Scotland.

Mr. Buchan

I wonder whether the Minister will comment on the comparative figures of the inflow and outflow of industrial investment in the United Kingdom.

Mr. Fletcher

I shall come to the more up-to-date position later in my remarks.

It is absurd to suggest, as has been said in a number of circles, that we in Scotland should choose between indigenous investment and investment from overseas. The fact is that we need both. They are perfectly compatible with each other and they are equally essential to the development and growth of the Scottish economy.

Mr. Millan

No, they are not.

Mr. Fletcher

I do not know how well the right hon. Gentleman reads the Scottish press, but if he reads it he will find comments about that. [Interruption.] I hope that Opposition Members will contain themselves for a moment.

The second question is whether the organisational arrangements that currently exist for promoting Scotland overseas and securing inward investment to Scotland are satisfactory.

The right hon. Member for Craigton is a great mutterer. He was not listening to much of the debate, or he would have known that several hon. Members raised these very questions. If he is not interested, perhaps he will keep quiet and let others listen.

Inward investment in Scotland is the responsibility of the Secretary of State. The Scottish Office negotiates the package of financial incentives appropriate to each case, and for the attraction and promotion of inward investment the statutory agencies working in this field—the SDA, the HIDB and the new towns—are also responsible to the Secretary of State. They work to guidelines that we have given them, and I am therefore satisfied, as is my right hon. Friend, that we have an effective and co-ordinated approach to inward investment.

The Scottish Office also maintains contact with the commercial departments of the British consulates in the United States of America and elsewhere, and I am glad to put on record our appreciation of the considerable contribution that they continue to make to the Scottish economy.

The hon. Member for Dunbartonshire, East referred to the Irish Industrial Development Authority and to Ireland generally. As hon. Members will know, the Republic of Ireland has had considerable success in the attraction of industry from abroad. Much comment in Scotland has focused on the part played in this success by the Republic's Industrial Development Authority, as compared with the SDA. Such a comparison is completely misleading. It is claimed that the IDA combines the functions of the Department of Industry, the SEPD and the SDA, with the inference that, by comparison, our organisation is terribly cumbersome. However, the Scottish Office acts for the Department of Industry in Scotland and the SDA is responsible to the Secretary of State. Again, I am satisfied that we have a coordinated approach, under the control of the Secretary of State, which is working well and which is appropriate to Scottish conditions.

It is also quite illusory to suppose that the Irish success is simply—or perhaps principally—a matter of the structure and organisation of the IDA. The financial package on offer is likely to weigh more heavily with a potential investor. In this area, although financial assistance in Scotland is substantial, the combined financial and fiscal incentives offered by Ireland cannot be matched by Scotland. In the financial area Scotland is constrained by more rigorous EEC limits and, in the fiscal area, by policy considerations. I am surprised that the hon. Member for Stirling, Falkirk and Grangemouth did not know that. His party was in government long enough to have found such things out. Grants and tax relief are not everything.

It should not be forgotten that Scotland enjoys considerable advantages over Southern Ireland. It has a long tradition in the manufacturing industry and an excellent supply of skilled and adaptable labour. It has a highly developed education system, which has close links with industry. There are eight universities in Scotland and many more technical colleges. That ensures a constant supply of highly qualified managers, engineers and technicians. We also have an established infrastructure, with good communications and transport facilities. These points usually rate just as highly with potential investors as does the whole question of financial incentives.

My hon. Friend the Member for Moray and Nairn (Mr. Pollock) and my hon. Friends the Members for Banff (Mr. Myles) and for Galloway (Mr. Lang) were right to mention the services and facilities in rural areas. In recent years we have learnt that big is not beautiful. A healthy rural economy can come only from a healthy British economy. This is the whole projection of Government policy. The hon. Member for Bothwell complained about reductions in regional development grants. He will know that Lanarkshire is still very much part of the special development area. The regional development grants in Lanarkshire are still at 22 per cent. They will continue at 22 per cent. under Government policy.

Mr. Robert Hughes

The Minister may recall that his right hon. Friend said that a special study would be made of the North-East of Scotland in relation to the oil economy. He may also know that a deputation covering every local authority from the Grampian area—and that includes many of his political friends—has argued that no changes should be made until the study has been completed. When will we get an answer to that question? Why can we not have one tonight?

Mr. Fletcher

The hon. Gentleman has not attended much of the debate. I should not have given way to him. However, the study of the impact of North sea oil on indigenous industries in areas such as Aberdeen is under way. It should be completed before 1982 and before changes in policy are finalised. That is the commitment that was made.

Mr. Bill Walker

I should like to take this opportunity to mention regional policy, because it is important to my constituency. [Interruption.] I hope that Opposition Members will listen. Perth has been downgraded. I approve of that. We do not have an unemployment problem in the city of Perth. I also approve of the decision to upgrade Blairgowrie, where there is an enormous unemployment problem. The community cooperative in Blairgowrie is a splendid example of local people working together.

Mr. Fletcher

My hon. Friend has been very realistic in two respects. He has given a great deal of personal leadership to the community project in Blairgowrie. I certainly wish him well. I only wish that some of his realism in terms of regional policy would spread to Opposition Members. It would help their constituents, as well as those of everyone else.

My hon. Friend the Member for Edinburgh, South (Mr. Ancram) mentioned the increase—

Mr. Ewing

I am grateful to the Minister for giving way. I am anxious to appeal to him before he replies to his hon. Friend. He should not reply to the hon. Member for Edinburgh, South (Mr. Ancram), because he made his speech but did not have the courtesy to listen to any other speech. He has returned to the Chamber only for the winding-up speeches. In accordance with the appeal made by Mr. Speaker, I ask the Minister not to reply to his hon. Friend. If he does, he will encourage other hon. Members to act in a similar way.

Mr. Fletcher

I say to my hon. Friend the Member for Edinburgh, South (Mr. Ancram)—

Mr. Harry Ewing

On a point of order, Mr. Speaker. Only last week you explained to us the normal courtesies of the House, and asked hon. Members to acknowledge them. You said that, having caught your eye and made their speeches hon. Members should have the courtesy to listen to others. The hon. Member for Edinburgh, South did not do so.

I appeal to you, Mr. Speaker, to advise the Minister not to encourage the bad practice of hon. Members making speeches and then leaving the Chamber, yet still receiving a reply from the Minister.

Mr. Speaker

Order. It is not for me to advise the Minister of his reply. I shall say no more on the matter now.

Mr. Fletcher

The hon. Member for Stirling, Falkirk and Grangemouth is not contributing to the debate. He is indulging in a time-wasting exercise.

My hon. Friend the Member for Edinburgh, South knows that the Secretary of State has outlined to Lothian region the steps that he may take to reduce its overall expenditure in view of the Labour group's refusal to restrict its spending within the ratepayers' means.

My hon. Friend the Member for Fife, East (Mr. Henderson) asked about the prospect of the microelectronics centre coming to Fife. The consultants engaged by the Scottish Development Agency—the Stamford Research Institute—are examining the facilities in all Scotland's main institutions in order to advise the Government on the best location. None of our universities is ruled out.

My hon. Friend also asked about an advance factory in Newburgh and Cupar. I shall ask the SDA to advise us on completion dates. I can tell my hon. Friend that work on the Thornton bypass begins next month.

Mr. Buchan

Will the hon. Gentleman give way?

Mr. Fletcher

My hon. Friends the Members for Galloway and Argyll raised the point—

Mr. Buchan

Will the hon. Gentleman give way?

Mr. Speaker

Order: We cannot have two hon. Members on their feet at the same time. The Minister is not giving way.

Mr. Fletcher

The Opposition ate tending to make a noise rather than a real contribution.

My hon. Friends raised the question of the British Tourist Board advertising on behalf of domestic tourist boards. The advantages clearly outweigh the disadvantages. I shall raise the matter with my noble Friend the Minister of State, and I am sure that he will give his view to my hon. Friends.

Mr. Buchan

Will the hon. Gentleman give way?

Mr. Fletcher

The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) produced a list of spending demands in typical Labour style, without a single suggestion where the money might come from. That is a simple but effective illustration of the bankruptcy of Labour policies.

Because of the behaviour of Labour Members, I am unable to reach many of the other points raised.

Mr. James Hamilton

The Minister has not covered my point.

Mr. Fletcher

The hon. Gentleman should rather complain to his hon. Friends.

Despite the heated exchanges, I believe that there is a considerable measure of agreement between the parties on regional policy. Agreement across the

Division No. 1921 AYES [10 pm
Adams, Allen Gilbert, Rt Hon Dr John Maxton, John
Alton, David Ginsburg, David Millan, Rt Hon Bruce
Archer, Rt Hon Peler Goldlng, John Mitchell, Austin (Grimsby)
Ashton, Joe Gourlay, Harry Mitchell, R. C. (Soton, Itchen)
Atkinson, Norman (H'gey, Tott'ham) Grant, George (Morpeth) Morris, Rt Hon Charles (Openshaw)
Bagier, Gordon A. T. Grant, John (Islington C) Morton, George
Beith, A. J. Grimond, Rt Hon J. Newens, Stanley
Benn, Rt Hon Anthony Wedgwood Hamilton, James (Bothwell) O'Neill, Martin
Bidwell, Sydney Hamilton, W. W. (Central Fife) Owen, Rt Hon Dr David
Booth, Rt Hon Albert Hardy, Peter Park, George
Bray, Dr Jeremy Harrison, Rt Hon Walter Parker, John
Brown, Hugh D. (Provan) Hattersley, Rt Hon Roy Pavltt, Laurie
Brown, Robert C. (Newcastle W) Haynes, Frank Penhaligon, David
Brown, Ronald W. (Hackney S) Heffer, Eric S. Race, Reg
Brown, Ron (Edinburgh, Leith) Hogg, Norman (E Dunbartonshire) Radice, Giles
Buchan, Norman Holland, Stuart (L'beth, Vauxhall) Roberts, Albert (Normanton)
Callaghan, Rt Hon J. (Cardiff SE) Home Robertson, John Roberts, Ernest (Hackney North)
Callaghan, Jim (Middleton & P) Homewood, William Robertson, George
Campbell, Ian Howells, Geraint Rodgers, Rt Hon William
Campbell-Savours, Dale Huckfleld, Les Rooker, J. W.
Canavan, Dennis Hughes, Mark (Durham) Roper, John
Cartwright, John Hughes, Robert (Aberdeen North) Ross, Ernest (Dundee West)
Clark, Dr David (South Shields) Janner, Hon Greville Ross, Stephen (Isle of Wight)
Cocks, Rt Hon Michael (Bristol S) Jay, Rt Hon Douglas Sandelson, Neville
Cook, Robin F. John, Brynmor Sever, John
Craigen, J. M. (Glasgow, Maryhill) Jones, Rt Hon Alec (Rhondda) Silkin, Rt Hon S. C. (Dulwich)
Cryer, Bob Jones, Barry (East Flint) Smith, Rt Hon J. (North Lanarkshire)
Cunningham, Dr John (Whitehaven) Kilfedder, James A. Snape, Peter
Dalyell, Tam Lambie, David Soley, Clive
Davis, Terry (B'rm'ham, Stechford) Leadbitter, Ted Spearing, Nigel
Deakins, Eric Leighton, Ronald Spriggs, Leslie
Dempsey, James Lewis, Arthur (Newham North West) Steel, Rt Hon David
Dewar, Donald Lewis, Ron (Carlisle) Stewart, Rt Hon Donald (W Isles)
Dormand, Jack Litherland, Robert Stoddart, David
Douglas, Dick Lyons, Edward (Bradford West) Stott, Roger
Douglas-Mann, Bruce Mabon, Rt Hon Dr J. Dickson Strang, Gavin
Dubs, Alfred McCartney, Hugh Straw, Jack
Dunnett, Jack McDonald, Dr Oonagh Taylor, Mrs Ann (Bolton West)
Dunwoody, Mrs Gwyneth McElhone, Frank Thomas, Dafydd (Merioneth)
Eadie, Alex McGuire, Michael (Ince) Thomas, Dr Roger (Carmarthen)
Eastham, Ken McKay, Allen (Penistone) Tinn, James
Edwards, Robert (Wolv SE) McKelvey, William Urwin, Rt Hon Tom
Ellis, Raymond (NE Derbyshire) MacKenzie, Rt Hon Gregor Wainwright, Edwin (Dearne Valley)
Ellis, Tom (Wrexham) Maclennan, Robert Wainwright, Richard (Colne Valley)
English, Michael McMahon, Andrew Walker, Rt Hon Harold (Doncaster)
Evans, loan (Aberdare) McMillan, Tom (Glasgow, Central) Watkins, David
Evans, John (Newton) McNally, Thomas Weetch, Ken
Ewing, Harry McNamara, Kevin Welsh, Michael
Fitch, Alan Marks, Kenneth White, Frank R. (Bury & Radcliffe)
Fletcher, Ted (Darlington) Marshall, David (Gl'sgow.Shettles'n) While, James (Glasgow, pollok)
Foot, Rt Hon Michael Marshall, Dr Edmund (Goole) Willey, Rt Hon Frederick
Foulkes, George Marshall, Jim (Leicester South) Wilson, Gordon (Dundee East)
Garrett, W. E. (Wallsend) Martin, Michael (Gl'gow, Springb'rn) Wilson, Rt Hon Sir Harold (Huyton)
George, Bruce Mason, Rt Hon Roy Winnick, David

Floor of the House would also be helpful in another area. Public acceptance by the Labour Party that Scotland would and could do more to help itself would be welcomed. If the Labour Party helped the Government to persuade the Scottish people to show the world that productivity and industrial relations can be better in Scotland than elsewhere and persuade miners and steel workers in Scotland to return to work, instead of manning the barricades in Sheffield and Sheerness, it would make a significant contribution to the Scottish economy.

Question put, That this House do now adjourn:—

The House divided: Ayes 165, Noes 210.

Woolmer, Kenneth Mr. Joseph Dean and
Young, Davld (Bolton East) Mr. Ted Graham,
Aitken, Jonathan Goodhew, Victor Normanton, Tom
Alison, Michael Gorst, John Onslow, Cranley
Ancram, Michael Gow, Ian Osborn, John
Arnold, Tom Grant, Anthony (Harrow C) Page, John (Harrow, West)
Aspinwall, Jack Gray, Hamish Page, Rt Hon Sir R. Graham
Atkins, Rl Hon H. (Spelthorne) Grieve, Percy Page, Richard (SW Hertfordshire)
Atkins, Robert (Preston North) Griffiths, Peter (Portsmouth N) Parris, Matthew
Baker, Nicholas (North Dorset) Grist, Ian Patten, John (Oxford)
Banks, Robert Gummer, John Selwyn Pattie, Geoffrey
Beaumont-Dark, Anthony Hamilton, Hon Archie (Eps'm&Ew'll) Pawsey, James
Bell, Sir Ronald Hamilton, Michael (Salisbury) Pink, R. Bonner
Bendall, Vivian Hampson, Dr Keith Pollock, Alexander
Benyon, W. (Buckingham) Hannam, John Prentice, Rt Hon Reg
Berry, Hon Anthony Haselhurst, Alan Price, David (Eastleigh)
Bevan, David Gilroy Hawkins, Paul Pym, Rt Hon Francis
Biffen, Rt Hon John Hawksley, Warren Raison, Timothy
Blackburn, John Heath, Rt Hon Edward Rathbone, Tim
Blaker, Peter Heddle, John Renton, Tim
Body, Richard Henderson, Barry Rhodes James, Robert
Bonsor, Sir Nicholas Hicks, Robert Ridley, Hon Nicholas
Boscawen, Hon Robert Hill, James Rifkind, Malcolm
Bottomley, Peter (Woolwich West) Hogg, Hon Douglas (Grantham) Roberts, Wyn (Conway)
Boyson, Dr Rhodes Holland, Philip (Carlton) Rossi, Hugh
Braine, Sir Bernard Hooson, Tom Rost, Peter
Bright, Graham Hurd, Hon Douglas Royle, Sir Anthony
Brinton, Tim Jessel, Toby Sainsbury, Hon Timothy
Brocklebank-Fowler, Christopher Jopling, Rt Hon Michael St. John-Stevas, Rt Hon Norman
Brown, Michael (Brigg & Sc'thorpe) Kaberry, Sir Donald Shelton, William (Streatham)
Bruce-Gardyne, John Kellett-Bowman, Mrs Elaine Shepherd, Colin (Hereford)
Buchanan-Smith, Hon Alick Kershaw, Anthony Sims, Roger
Bulmer, Esmond Kimball, Marcus Speed, Keith
Butler, Hon Adam King, Rt Hon Tom Speller, Tony
Cadbury, Jocelyn Knight, Mrs Jill Spence, John
Carlisle, John (Luton West) Knox, David Spicer, Jim (West Dorset)
Carlisle, Kenneth (Lincoln) Lang, Ian Spicer, Michael (S Worcestershire)
Carlisle, Rt Hon Mark (Runcorn) Lawrence, Ivan Sproat, Iain
Channon, Paul Lawson, Nigel Stainton, Keith
Chapman, Sydney Le Marchant, Spencer Stanley, John
Churchill, W. S. Lennox-Boyd, Hon Mark Stewart, Ian (Hitchin)
Clark, Hon Alan (Plymouth, Sutton) Lester, Jim (Beeston) Stewart, John (East Renfrewshire)
Clark, Sir William (Croydon South) Lloyd, Ian (Havant & Waterloo) Stradling Thomas, J.
Clarke, Kenneth (Rushcliffe) Lloyd, Peter (Fareham) Tebbit, Norman
Clegg, Sir Walter Luce, Richard Thatcher, Rt Hon Mrs Margaret
Cockeram, Eric Lyell, Nicholas Thorne, Neil (Ilford South)
Colvin, Michael Mactarlane, Neil Thornton, Malcolm
Cope, John MacGregor. John Townend, John (Bridlington)
Cormack, Patrick MacKay, John (Argyll) Townsend, Cyril D. (Bexleyheath)
Corrie, John McNair-Wilson, Michael (Newbury) Trippier, David
Cranborne, Viscount McQuarrie, Albert Viggers, Peter
Critchley, Julian Major, John Waddington, David
Dean, Paul (North Somerset) Marlow, Tony Waldegrave, Hon William
Dorrell, Stephen Mather, Carol Walker, Rt Hon Peter (Worcester)
Douglas-Hamilton, Lord James Maude, Rt Hon Angus Walker, Bill (Perth & E Perthshire)
Dover, Denshore Mawby, Ray Walker-Smith, Rt Hon Sir Derek
Dunn, Robert (Dartlord) Maxwell-Hyslop, Robin Waller, Gary
Eden, Rt Hon Sir John Mellor, David Ward, John
Eggar, Timothy Miller, Hal (Bromsgrove & Redditch) Warren, Kenneth
Elliott, Sir William Mills, Iain (Meriden) Watson, John
Fairbairn, Nicholas Mills, Peter (West Devon) Wells, Bowen (Hert'rd & Stev'nage)
Fairgrieve, Russell Mitchell, David (Basingstoke) Wickenden, Keith
Faith, Mrs Sheila Moate, Roger Wiggin, Jerry
Fenner, Mrs Peggy Montgomery, Fergus Wilkinson, John
Fisher, Sir Nigel Morrison, Hon Charles (Devizes) Williams, Delwyn (Montgomery)
Fletcher, Alexander (Edinburgh N) Morrison, Hon Peter (City of Chester) Winterton, Nicholas
Fletcher-Cooke, Charles Mudd, David Wolfson, Mark
Fookes, Miss Janet Murphy, Christopher Young, Sir George (Acton)
Fraser, Peter (South Angus) Myles, David Younger, Rt Hon George
Fry, Peter Neale, Gerrard
Galbraith, Hon T. G. D. Needham, Richard TELLERS FOR THE NOES:
Gardiner, George (Reigale) Nelson, Anthony Mr. John Wakeham and
Garel-Jones, Tristan Neubert, Michael Mr. Peter Brooke
Goodhart, Philip

Question accordingly negatived.