Scottish Economy and Industry

HC Deb 19 November 1981 vol 13 cc431-518

Mr. Speaker

I have selected the amendment in the name of the Prime Minister.

3.56 pm

Mr. Bruce Millan (Glasgow, Craigton)

I beg to move, That this House condemns the economic, industrial and public expenditure, policies of Her Majesty's Government which have led to record levels of unemployment in Scotland, a disastrous rundown of industry, poorer public services and increased burdens on the Scottish people. I wish to say something later in my speech about the Scottish implications of any announcement that may be made tomorrow from the British Leyland bus and truck division.

We are having the debate against the background of record levels of unemployment in Scotland, as I have said in previous debates on Scottish unemployment. Last month's figures showed 325,000 people unemployed, which is a rise of 79,000 during the year. Last year the figures also rose significantly. Even more worrying than the crude figures is the fact that the underlying trend is still strongly upwards in the United Kingdom generally and in Scotland. Therefore, the prospects for the coming winter are grim, especially for those leaving school at Christmas.

No doubt the Secretary of State for Scotland will say what he has said on many occasions—that it is not all doom and gloom in Scotland and that a number of good things are happening. I shall come to some of the more hopeful things that have happened in recent months. However, even if good orders are obtained occasionally—whether in nationalised or private industry—and even if there are stories of expansion and additional employment in parts of Scotland, we are swimming against the tide.

The overall position is bleak, Whatever happens in a particular circumstance in one part of Scotland—one welcomes expansion anywhere—the number of jobs being lost generally overwhelmingly outnumbers those created. That situation will not be corrected without changes in the Government's economic policy.

I intend to mention general economic issues only briefly as we had a debate on them only a week ago. I draw the attention of the House to the speeches of my right hon. Friends the Members for Stepney and Poplar (Mr. Shore) and for Battersea, North (Mr. Jay), and of my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray). The case against the Government's obsession with monetarism and the PSBR was put strongly, coherently and rigorously.

Virtually everyone, including a considerable number of Government Members, believe that a radical change in economic policy is long overdue, but there is no sign of it. The Government talk of flexibility, but there has been no action and nor has there been a real change of policy that would have any impact on the situation. Again this week we heard from the Prime Minister, as we often hear from the Secretary of State, hopeful and optimistic talk about the economy turning round soon. That is whistling in the dark. Similar false promises were made one year ago and two years ago, but over the past year the situation has got worse, and all the signs are that it will continue to get worse, at least over the next few months, and I believe for considerably longer.

The right hon. Member for Chesham and Amersham (Sir I. Gilmour) has an article in The Guardian today. The title is apposite—"Will unemployment fall?" When will we see a downturn in unemployment? The Secretary of State has failed to answer the question on numerous occasions. He fobs us off with optimistic talk of signs of recovery and a new industrial revival in Scotland, which will not happen without major changes in Government policy.

Different packages have been suggested by the right hon. Member for Chesham and Amersham, by hon. Members who represent Scottish constituencies, and in the document "Changing Gear". Policies have also been advocated from the Opposition Benches. The two common threads running through all the proposals are, first, that the Government must rid themselves of their obsession with the PSBR, which has been, in any event, completely self-defeating. They are paying so much in unemployment benefits that the PSBR cannot be under control. The second is that there needs to be a general stimulus to the economy. Whether the stimulus comes from national insurance surcharge reductions or from public investment in energy, transport and so on matters less than the fact that the Government should recognise the need for a stimulus and take swift action.

I believe that, with hundreds of thousands of construction workers out of work, it is an absolute scandal that the housing record is the worst not since the Second World War but since the end of the First World War. Additional expenditure would tremendously benefit people in Scotland and elsewhere and would stimulate the economy and the construction and other industries.

I promised that I would mention one or two of the matters about which we are pleased. One is the order the other day from the BNOC to Scott Lithgow, for a dynamically positioned oil-drilling rig. However, we should note that it was an order from one nationalised industry to another. Had the Government had their way, we should not have had the BNOC and certainly not British Shipbuilders. Without nationalisation and Government support, the shipbuilding industry would have been finished. That applies not only to Scott Lithgow but to many other yards, including Govan, which we are also delighted to see has had a substantial influx of orders.

However, despite the record of the BNOC and British Shipbuilders, the Government have made proposals to privatise BNOC. In addition, they have this week made an absurd and provocative announcement that they will privatise British Shipbuilders at some time. When the corporation was running at a loss and needed Government support, they put money in. Now that it looks as if it is turning the corner and becoming profitable, the Government intend to sell it. We shall oppose the sale, as we oppose all privatisation proposals.

I hope that the Secretary of State will deal with Robb Caledon in Dundee. It is a tragedy that the situation has not been resolved. If it cannot be resolved by local negotiation, the Government have a responsibility to intervene. The problem is dragging on and causes considerable concern not only in Dundee but also in other parts of Scotland.

Another bright spot is microelectronics. I welcome the fact that Scotland is maintaining its considerable position in the industry. The initiatives were taken mostly under the previous Government, but I give this Government credit for anything that they have done to attract microelectronics industries to Scotland and to expand those already there.

However, there is a tendency to suggest that, because a little bit of the Scottish economy is doing reasonably well, that is an overall solution. We also have oil jobs, but it would have been a miracle, even under this Government, if we had not. Microelectronics, like any other industry, is subject to world fluctuations, and there have recently been difficulties. The number of new jobs in no way matches the jobs that need to be replaced because of redundancies in many industries in Scotland over the past couple of years. It has reached the stage that, when Hoover announced 500 redundancies, it was regarded as a triumph, as the workers expected the whole organisation to close. In any other circumstances the loss of 500 jobs would be looked on as a tragedy. We have become so accustomed to rundowns, closures and the failure of expansion plans that it is now looked on as not too bad.

The redundancy figures are frightening. Notified redundancies to the Manpower Services Commission were 24,000 in 1978, 34,000 in 1979 and 61,000 in 1980. 1981 will be no better. Most of the redundancies are in manufacturing.

Another illustration of the extent of the spiral of decline is that the figure for industrial production in Scotland published the other day is only 90 per cent. compared with 101 per cent. in the second quarter of 1979. Over two years the reduction has been 10 per cent. The figures include North Sea oil. They show how desperate the situation is.

Events this week at Linwood have been symbolic of the industrial decline of Scotland. The factory was established with great hope and optimism. It is now closed, and the Secretary of State, with his usual sensitivity, has said that it was an industrial relic and ought to be swept away. The right hon. Gentleman obviously does not understand the tragedy, not just of Linwood but of many other places in Scotland where, with the closure of factories, there is a loss of manufacturing capacity which will be almost impossible to replace and which will not be replaced within a measurable period. Yet all the Secretary of State can say is that Linwood is an industrial relic.

At Linwood—the sale of which has given so much offence to Scottish public opinion—press descriptions have shown how new and up-to-date much of the equipment was. Much of it is going overseas, just as manufacturing jobs over the last couple of years have been and are being exported. The Government have helped the process along by removing exchange controls. There is now more British manufacturing investment overseas than there is here. Far from stopping it, the Government are encouraging it.

Labour Members, if they are called to speak, will want to deal with some of the problems of their constituencies. My hon. Friend the Member for Kilmarnock (Mr. McKelvey), whose constituency has been badly hit in recent months, has already raised the matter in an Adjournment debate. No doubt he will raise it again. [HON. MEMBERS: "Where is he?"] Where are the Tories. Very few of them are here today—although we know that there are not many Tory Members in Scotland.

I turn to the serious matter of the expected announcement tomorrow by the British Leyland bus and truck division. To be fair to the Secretary of State, I do not expect him to tell us the details of that announcement this afternoon. However, it would be rather nice if he could tell us that he has at least been consulted and is a party to the announcement. Only a month ago the important announcement of British Airways—which affected much of Scotland, including the right hon. Gentleman's constituency—was made, and he had to tell us that he knew nothing about it. Nobody had told him that the announcement was to be made. I hope he has been told about the announcement which will be made by British Leyland tomorrow, and what will be in it.

Labour Members are apprehensive about the Albion and Bathgate plants. Two of my hon. Friends, the hon. Members for West Lothian (Mr. Dalyell) and Glasgow, Garscadden (Mr. Dewar), made representations to the management there this week about the situation and about our apprehensions about the statement. They were told that there was no point in having a meeting before the announcement, which was cut and dried. That does not give me a great deal of optimism as to what might be said tomorrow.

There has already been a considerable rundown in both Bathgate and Albion since the present Government took office. At Bathgate, there were 5,600 jobs in 1978, the highest figure ever. It is now down to 3,600, and today's press reports suggest that a further 1,200 redundancies may be announced tomorrow. In Albion there were 3,000 jobs in 1978, but that figure is now down to 1,900. Again, that is before we know the results of tomorrow's announcement.

In Albion—as some of us who visited the plant were told—there has been a 30 per cent. increase in productivity since 1978. That has not stopped the flow of jobs out of the plant, in spite of the co-operation of the work forces of Albion and Bathgate. Things are getting worse, and if there are to be further redundancies in tomorrow's announcement they will become intolerable. This is not acceptable to Labour Members.

There may be a number of good reasons why there is a rundown in British Leyland's bus and truck division. We shall have to wait until tomorrow's statement to deal with the matter in any detail. It is crystal clear that one of British Leyland's problems, as with so much of Scottish and British industry, is a simple lack of demand because of the general crisis in the economy brought about by the Conservative Government. There has also been a lack of investment in the past, which led to certain difficulties, although there has been considerable investment in recent years.

One of the things causing difficulty for the British Leyland bus and truck division—it has already caused difficulty in the car side of the industry—is the increasing imports from Japan and other countries which are eating away at our manufacturing capacity. I particularly draw the right hon. Gentleman's attention to this because it is within the control of the Government.

In the truck riarket, BL's share has done down to about 17 per cent. Only a few years ago it stood at 30 per cent. At that time, imports made up 7½ per cent. of the truck market. Imports have now gone up to 21 per cent. of the market. Many of the trucks are imported from countries which, by one device or another, ensure that nothing is exported to their countries to compete with their manufacturing industries.

Japan, for example, exports 50 per cent. of its truck production, but not one truck is imported into Japan. There are various devices, such as national type approvals, which prevent fair competition for trucks from Britain or anywhere else. The same sort of difficulty is experienced in several European countries, although perhaps not to the same extent in terms of keeping out exports from other countries. But they are, nevertheless, using various methods to prevent other countries from competing fairly and effectively in their markets. It is about time we took similar action, because we are a soft option. Trucks come into Britain with virtually no restriction. There is no prior approval of design or anything of that nature. But we are not allowed to compete on the same basis in the markets of those other countries.

Similar action needs to be taken in regard to light commercial vars. Recently the Society of Motor Manufacturers and Traders expressed its considerable concern about Japanese penetration of the United Kingdom market. Unless action is taken, this sector of our vehicle industry will begin to go the way of the car side. We simply cannot afford that kind of loss of capacity and jobs.

Imports of Japanese light commercial vehicles have increased from 2½ per cent. of the market in 1975 to 18.8 per cent. in 1981. The increase, even over 1980, is over 50 per cent. Those imports are causing great damage to the Industry in Britain, and something must be done about them.

I want to put on record in this Scottish debate how much we deplore what is happening in regard to the gas-gathering pipeline. It was not some great idea of the previous Labour Government. It was not produced by bureaucrats or civil servants or by a nationalised industry. It was the result of a study which included representatives not only of the British Gas Corporation but of BP and Mobil, and it had the support of the Department of Energy. The Minister of State made that embarrassingly clear when he had to tell his unfortunate constituents that the jobs he had promised them would not be forthcoming. They were not forthcoming because of a decision, made against the Minister's better judgment, by the Cabinet of which the Secretary of State for Scotland is a member. It would be interesting to know whether the right hon. Gentleman supported the gas-gathering pipeline. If he did not, it was a dereliction of duty. If he did, it was only another example of how he has lost out in Cabinet on that issue as on many other issues affecting Scotland.

The pipeline was abandoned for quite the wrong reasons: not because of difficulties concerned with the gas price, though as part of the Government vendetta against the British Gas Corporation they want to put all the blame on them. The Government can and should be the arbiter on gas prices.

Again, it was not all the fault of the oil companies. It is true that some oil companies were not enthusiastic, but in the last analysis it is for the Government to determine the quantities of gas that are required to come into the pipeline, just as it was for the Government to say that the price for the gas was satisfactory. The Government dallied and dillied. They dithered so much that they lost the Norwegian gas, and ultimately they lost the whole pipeline.

I should like to believe that the project could be reestablished. However, that is very doubtful at present. Some oil companies are producing alternative and less satisfactory proposals which, incidentally, will not solve the gas pricing problem, and if they proceed it will be impossible to resuscitate the gas-gathering pipeline project.

It gives me no pleasure to say that this opportunity, once lost, is lost for ever, and it has been lost through the Government's neglect and negligence, and through their obsession with the PSBR. That was the ultimate reason why the project was abandoned, although in every other respect it was technically, financially and commercially a viable proposition. It was the best proposal for utilising to the fullest extent the important gas resources in the North Sea, much of which will be lost under any alternative proposals by the oil companies or anyone else.

I want to mention two other matters which are disparate, but both concern holding on to what we have in Scotland and giving confidence to Scottish commerce and industry. The first is the Royal Bank of Scotland. I want to put on record what I said in evidence to the Monopolies and Mergers Commission. The Labour Party does not wish either of the bids to go ahead. We want the Royal Bank to remain independent, and we oppose the bids from both the Standard Chartered Bank and the Hong Kong and Shanghai Banking Corporation. [Interruption.] I hope that the hon. Member for Renfrewshire, East (Mr. Stewart), who I think is responsible for health matters, does not take the frivolous attitude on those matters that he seems to be displaying now in connection with the Royal Bank of Scotland. If he does, he is out of sorts with the overwhelming body of Scottish opinion, including Scottish financial opinion, which wishes the Royal Bank to remain independent. I hope that the Secretary of State shares that view, because he and his ministerial colleagues will have some responsibility in considering the Monopolies and Mergers Commission report when that report reaches the Government.

Edinburgh is an important financial centre. In my view, the Royal Bank has shown a remarkable lack of self-confidence in its own ability, not just to survive. but to expand its business. I deeply deplore that lack of self-confidence. Nevertheless, I hope that neither bid will go ahead, because if it did, it could do serious damage to Edinburgh as a financial centre.

Mr. Michael Ancram (Edinburgh, South)

I thank the right hon. Gentleman for giving way. From what he has said about the independence of the Royal Bank, can we take it that he does not consider it likely that the bank will be nationalised under a future Labour Government? Is that his policy, the policy of the Shadow Cabinet, or the policy of his party, decided at conference?

Mr. Millan

It would have been nice if the chairman of the Conservative Party in Scotland—if he felt obliged to intervene—had said that he, too, was against the takeover of the Royal Bank of Scotland. Perhaps the Secretary of State will answer that question, if his hon. Friend cannot do so.

I want to stress three points in connection with the Royal Bank of Scotland. First, I want to re-emphasise that we expect the right hon. Gentleman to stand up for Scotland. I hope that he is doing so. If he does, he will have our support. He is not the Minister with direct responsibility and I understand his difficulties, but there is no doubt that the overwhelming body of opinion is against takeover, and if the right hon. Gentleman takes that view he will receive our support. Incidentally, it is interesting that the leader of the Liberal Party seems to think that it is in accordance with Scottish traditions that the bank should lose its independence. Unfortunately, it is in accordance with what has been happening to Scottish industry in recent years, but that is what we are worried about. We believe that the process should stop. If we cannot protect one of our major financial institutions, everything else will be vulnerable. So the process must stop now. If it requires additional legislation, I hope that the Government will not hesitate to introduce the necessary measures.

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

Perhaps I may take up that point, because it is important. I am surprised to hear the right hon. Gentleman complain about the statement by the leader of the Liberal Party. Surely he knows that that was the first policy statement ever from the new alliance.

Mr. Millan

I am reluctant to admit this, but for once I think that the Under-Secretary has a point.

Then there is the question of the Locate in Scotland organisation and the Scottish Development Agency offices abroad. I shall not go into the history of the matter, but I understand that the Locate in Scotland organisation is working satisfactorily and harmoniously. If that is so, I am very pleased. However, the battle is by no means won. The question of SDA and Locate in Scotland independent offices in San Francisco, New York and Brussels, and agencies elsewhere, has still to be settled and is due for review at the end of the year, or perhaps now. I warn the right hon. Gentleman that we would find it quite intolerable if any steps were taken to reduce or modify in any way an independent Scottish presence through those offices in San Francisco, New York and elsewhere. No doubt the right hon. Gentleman will have certain arguments with some of his ministerial colleagues——

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

I shall not.

Mr. Millan

I am delighted to hear the right hon. Gentleman say that he will not, so if he makes another disappointing announcement we shall know who to blame. I hope that he will realise that it will be offensive to Scottish opinion if these independent offices are closed down.

Having mentioned the SDA, I find it touching to see the Government's great attachment to it. We remember the hostility and suspicion with which the idea was originally greeted. We remember the difficulties which Conservative Members created during the passage of the legislation. Yet now, whenever there is a problem in Scotland, the right hon. Gentleman says "I stand ready to give every assistance for alternative jobs". That means nothing. Then he says "What is more, I shall ask the SDA to look into the matter". If he is now converted to a wholehearted support for the SDA, that is a conversion greatly to be welcomed, but I am still suspicious of it.

The pity is that in the industrial and economic circumstances in which we currently have to operate it is difficult for the SDA to do the creative job for which it was principally established. Nevertheless, I am pleased that in addition to its earlier work on microelectronics, it is now also undertaking work on health care. I remember trying to do something about that about 12 years ago when I was a Minister, but without a great deal of success as we then lost the next general election and the whole project fell. Nevertheless, the agency is carrying out work in that sphere and we are pleased to welcome that. If there are a few bright spots in Scotland now, the SDA is certainly one of them. That is no thanks to the Government, however, as the agency was established and supported by the Labour Government at a time when the Conservative Opposition were extremely critical and hostile to the idea.

Although there is the odd bright spot, I am sorry to say that the overwhelming picture in Scotland is still one of gloom and, for many young people especially, feelings are bordering on despair. The real reason for that is the failure of the Government's economic policy. Responsibility for that gloom and despair therefore lies fairly and squarely on the shoulders of the Government. That is why we condemn them.

4.31 pm

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

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof: this House, while deeply concerned about the high level of unemployment in Scotland, commends the Government's determination to encourage the development of a new industrial base for economic recovery and the generation of new and secure jobs. I am grateful to the right hon. Member for Glasgow, Craigton (Mr. Millan) and to the Opposition for having selected this subject for debate today. It is, after all, by far the most important subject to which we must address ourselves on the Scottish scene. I am also grateful to the right hon. Gentleman for his kind remarks about the various improvements currently taking place, which he clearly recognises. The right hon. Gentleman made an extremely interesting and useful speech. It was, however—and I shall return to this later—deficient in one main respect. It was extremely deficient in any coherent, well-thought-out alternative that could be put into effect to help the Scottish economy, or indeed any other part of the economy, without its having unacceptable effects elsewhere.

I wondered why the right hon. Gentleman was not his usual confident and assured self in some of his remarks today. This puzzled me a little, until I recalled that this is a remarkable day in that Glasgow district council has today sold its first council house, and with a true sense of irony it selected a house in the constituency of Craigton. No doubt the right hon. Gentleman will be as pleased as I am about that.

We are debating the Scottish economy against an extremely serious background. This is and has been a most. difficult time for all involved in the Scottish economy and elsewhere. It has affected businesses, both large and small, public authorities' which face great difficulties in recasting their expenditure to take account of the changed economic situation, as well as individuals in all walks of life in Scotland who now have to accept lower standards of living due to the changed circumstances of our country and the impact of the recession. Whether one admits it or not, that is the background to the debate. We are going through the worst recession in the lifetime of most hon. Members. No one can ignore that background when discussing the economy without making nonsense of his argument.

In debating this subject the House is entitled to expect from the Government an account of what the effects are in Scotland and what constructive policies they can introduce to help to alleviate the problems and rectify the causes. I believe that the Government have a responsibility to take action in three main ways. First, we must do all that we can, to the limit of our resources, to help those who are out of work for any reason. Secondly, we must do all that we can to help firms and businesses that are in difficulties but have a prospect of becoming viable and profitable once again if they are given the chance to recover and survive. Thirdly, a major priority for the Government must be to attract new industries in order to regenerate the industrial base and to bring in new jobs to replace the old jobs being lost.

It is my contention that in the extremely difficult situation that I have described the Government are doing everything possible to achieve those aims and are pursuing a sensible and competent policy, not only to ride out the recession, but to create conditions from which lasting prosperity will grow.

Mr. Jim Craigen (Glasgow, Maryhill)

Will the right hon. Gentleman give way?

Mr. Younger

No, I think that I ought to make some progress with my speech.

The right hon. Gentleman rightly drew attention to the high level of unemployment. I share the Opposition's concern, and indeed the concern of hon. Members in all parts of the House. That is why, at a time when we have the gravest difficulty in finding money for any of the public projects that we wish to put in hand, we have funded a major expansion of the programme of special measures aimed at alleviating the worst effects of unemployment and safeguarding the skills of the work force.

That is the Government's first responsibility, and we therefore have a very large programme to help with that. We expect 75,000 young people to enter the youth opportunities programme this year. We have provided additional support to encourage the recruitment of apprentices. The young workers scheme will aid the recruitment of young people to other permanent jobs, and the new community enterprise programme is double the previous programme for older workers. My right hon. Friend the Secretary of State for Employment hopes to make an announcement around the turn of the year about the introduction of a comprehensive training scheme for the young unemployed. These measures and initiatives illustrate in a positive way our concern to help the unemployed by developing programmes that will not only help individuals through a difficult period but will increasingly provide lasting benefits to them and to the economy.

Those measures, however, important though they are, do not attack the real causes of high unemployment. As everybody knows, our economy has been fundamentally weak for many years. Throughout the various periods of world recession in recent times, Scotland has always fared worse than elsewhere, due to falling competitiveness and low growth in productivity. Without an increase in national competitiveness we shall see no long-term improvement in the prospects of Scotland or of the United Kingdom. The priority that we attach to tackling inflation is therefore utterly necessary in the interests of Scotland.

To deal with inflation we have to do everything possible to reduce levels of public spending and borrowing. That is essential if we are to avoid even higher interest rates and yet more borrowing on which we can scarcely afford to pay the interest, let alone pay back. That was the main gap in the right hon. Gentleman's few remarks about an alternative strategy. I do not know whether the various strands making Labour Party policy have anything better to offer, but there is no answer to the fact that greatly increased public expenditure cannot fail to mean higher interest rates, higher taxes on already hard-pressed businesses and higher borrowing that is increasingly difficult to repay.

As the right hon. Gentleman well knows, the Government's policies are not responsible for all, or anything like all, of the unemployment. They are designed, instead, to combat the conditions that cause unemployment and to create the climate in which to secure new and lasting jobs.

There are encouraging signs that our policies are beginning to succeed. Despite some recent pressure arising mainly from the fall in sterling—although that has been of considerable benefit to our exporters—the annual rate of increase in retail prices is running at 11.7 per cent. compared with about 22 per cent. last June.

Mr. George Foulkes (South Ayrshire)

What about the year before?

Mr. Younger

Productivity is improving dramatically. Output per person employed in manufacturing industry in the United Kingdom rose by an impressive 5 per cent. during the first six months of this year. There are indications that there have been even greater improvements throughout manufacturing industries in Scotland, where output rose about 5 per cent. during the first three months of this year—about twice the rate for the United Kingdom as a whole. There are indications, moreover, that in contrast with previous recessions, Scotland is showing greater resilience than elsewhere in the United Kingdom in the present recession.

Dr. Jeremy Bray (Motherwell and Wishaw)

On the production figures, will the right hon. Gentleman take out of the increase of production in Scotland the big increase that there has been in the output of steel at Ravenscraig, which has been accompanied by a major reduction in the work force there through increased productivity?

Mr. Younger

I am not sure whether the hon. Gentleman wishes me to take it out for interest or to take it out in order to leave a remaining figure which means something else. That certainly forms part of it, and very welcome it is, too. If we can get more productivity at lower costs, that is exactly the reform that Scottish industry needs. I should have thought that I would have the hon. Gentleman's agreement on that.

Dr. Bray

The increase in output in Scotland is due to the investment which has taken place over many years under previous Governments and which is now bearing fruit. Because of the failure of the Government to follow that up with new investment to provide more employment for people in Scotland, we are getting this increase in output accompanied by a fall in employment which has nothing to do with recent action and the failure of the Government to create new jobs. We need new enterprises, new initiatives and new investment. That is not coming forward.

Mr. Younger

I think that the hon. Gentleman has raised a number of points—albeit some good ones—that are different from the original point. The hon. Gentleman knows a great deal about Ravenscraig. I should have thought that the main thing to be pleased about is that it has greatly improved its productivity recently. If it is producing steel with some of the most modern plant in Europe at a lower unit cost, it is doing exactly what we want everyone in Scotland to do. Ravenscraig should be warmly congratulated on doing that.

As the right hon. Member for Craigton and I have made clear, we accept that the level of unemployment is tragically and unacceptably high. But we have experienced during this recession a lower increase in the rate of unemployment than in the United Kingdom as a whole since mid-1980. Over the past two and a half years unemployment in Scotland has risen by 30 per cent. less than in the United Kingdom as a whole. Thus, the unemployment relative has been dropping—from 137 in the first quarter of 1979 to no more than 118 in October of this year.

Crucially, too, our industrial output has been holding up better. Over the year to the first quarter of 1981, the latest date for which we have figures, our total industrial production fell by 2 per cent. less than the United Kingdom's comparable figure, and manufacturing output fell by almost 4 per cent. less than it did elsewhere in Britain. Our manufacturing output in that quarter was 1.5 per cent. higher than in the previous quarter. What this shows is not that we do not have any problems, but that for once they are at least not worse than those in the rest of the United Kingdom.

Mr. Dennis Canavan (West Stirlingshire)

That is not saying much.

Mr. Younger

It is the first time that that has happened in the lifetime of the hon. Gentleman, and he should be pleased about it.

The results of these things are not to be seen simply as cold statistics. In both the public and private sectors of the economy there is plenty of concrete evidence in the form of new orders and new investment. When we took office we were faced—perhaps this chimes in with one of the points mentioned by the hon. Member for Motherwell and Wishaw (Dr. Bray)—with the need to take many hard decisions, particularly with regard to the nationalised industries.

A great deal of damage had been done by the failure of our predecessors to take those decisions. They ducked the hard decisions that were necessary to enable the nationalised industries to operate efficiently and to compete effectively, with results that we all saw only too clearly. We have faced those decisions, and to illustrate the positive results that have been achieved I should like to give just two examples out of no doubt many more that could be selected.

The right hon. Member for Craigton mentioned shipbuilding. I was very grateful for what he said, and I was pleased with what he said about recognising some of the improvements there. But it must be remembered that when, two and a half years ago, we were faced with finding huge sums to keep British Shipbuilders going during the recession and its time of difficulty we had no support from the Opposition. It was said to be a quite inadequate and an impossible way of proceeding, and we had no encouragement from Opposition Members.

Yet what do we now find? In recent months British Shipbuilders has won orders for five bulk carriers at Govan—with, we understand, more in prospect. It won them because it was able to quote prices that were competitive with those of the overseas competition. That is success. All concerned at Govan, from the managing director down to the newest recruit, deserve great credit for that.

The right hon. Member for Craigton mentioned the heavy duty drilling rig for Scott Lithgow. There is a new type 22 frigate for Yarrows, and there are a number of orders for the smaller yards as well. It is significant that British Shipbuilders has plans to start recruiting up to another 250 workers on the Clyde. That is the fruit of taking the difficult decisions. The results are coming through in increased competitiveness and ability to quote for orders.

Mr. Gordon Wilson (Dundee, East)

We all appreciate the increase in orders for British Shipbuilders at various yards, but the right hon. Gentleman will know that the Dundee yard of Robb Caledon has been closed. What action will he take, either with British Shipbuilders or the Dundee port authority, to which he nominates representatives to the board, to ensure that the workers who are currently on a sit-in at that yard are given the opportunity of employment, one way or another? It would be a tragedy if that yard were to be closed, stripped down and left as a deserted waste area without any hope of employment connected with it.

Mr. Younger

I was going to deal with that matter later in my speech, but perhaps I should deal with it now. I share the hon. Gentleman's concern about it. I have been keeping a close eye on the negotiations that have been taking place between the Dundee port authority, Kestrel Marine and British Shipbuilders. Although the harbour authority has appointed members, it is my right hon. Friend the Secretary of State for Transport who is directly responsible for them. In any case, he does not have power to instruct the port authority to do what it might not otherwise think it right to do.

What I have said is that if there is any way in which I can assist I shall be glad to do so. We stand ready to give advice and financial assistance in the usual forms for any new project that can be got together. If it is a question of any encouragement or assistance that I can give, I shall gladly give it. I hope very much that an agreement will be reached between the port authority and the parties to the scheme, and that it will go ahead. But it is up to them to get on with the negotiations.

I come to the second of the examples that I said I would give. Opposition Members have often criticised the Government, which is easy to do, for failing to invest in the public sector, for cutting capital projects, and for cutting practically everything in sight. Yet not very far away from Edinburgh, where many hon. Gentlemen live and work and have their constituencies, at Torness, contracts worth over £500 million have already been placed or offered. The total value of the project is over £1 billion. It employs 2,200 people on the site, and many hundreds more in associated industries. That represents employment and jobs directly created by a public concern—the Torness power station.

In the private sector, too, there have been many difficult problems.

Mr. John Home Robertson (Berwick and East Lothian)

I suppose that we should be grateful for small mercies in the sense that some public spending is taking place. Will the right hon. Gentleman account for the fact that the use of cement in Scotland—this is also produced in my constituency, near Dunbar—has started to fall, I think for the first time since the war, during the past 18 months? The cement works that produce raw materials for building in Scotland are working at 25 per cent. below capacity. Does the right hon. Gentleman not think that he should take action to stimulate that industry?

Mr. Younger

I am surprised that the hon. Gentleman thinks that 2,200 jobs in his constituency are a small mercy. If that is his view, I wish that the jobs could be transferred to Ayr, where they would be considered a very big mercy. I am not sure how much cement is used at Torness power station, but no doubt some is involved.

In the private sector, too, there have been many difficult decisions to take. Many companies have found matters extremely difficult. Some have gone out of business and many have had to reduce the number of jobs. This has not resulted, to the disappointment, no doubt, of some, in the industrial desert that is the catch-phrase of all those wanting to make headlines.

During September and October alone, Scottish-based companies announced export orders—those that we are aware of, apart from any others—worth no less than £200 million. The notable example is, of course, John Brown Engineering at Clydebank, with orders from Abu Dhabi, New Guinea and Russia. There are others. Weir Pumps, which would not be trading today but for a major and most successful rescue operation mounted, with Government help, through the Scottish Development Agency, has orders from Qatar and Zimbabwe. Caledonian Airmotive beat off stiff overseas competition to securre a valuable contract with Egyptair for engine overhaul and repair work. Daniel Industries has an order for oilfield equipment for the Norwegian sector of the North Sea.

I could-continue with the list. It is more substantial than is often recognised by hon. Members in many of their speeches. British Aerospace at Prestwick is pressing ahead with building its new Jetstream 31. This involves an investment of several million pounds in the aircraft itself, of which a considerable portion was grant provided from Scottish Office funds. The encouraging number of orders and inquiries already received means substantial new employment at Prestwick. Employees are being taken on now.

There has been success also for home industries. A Scottish construction company has won the main contract for foundation and underground services work at Mossmorran. Another Scottish firm has won a large contract of over £2 million for catering there. Over 200 local firms are engaged in the work at Mossmorran.

The right hon. Member for Rutherglen (Mr. MacKenzie) came to see me to express his concern about the Hoover factory at Cambuslang. I understand the feeling of the workers at the Hoover factory at Perivale over the decision by Hoover to rationalise its United Kingdom operations in Scotland. At the same time, I welcome the company's commitment to invest in new products at Cambuslang, thus ensuring the future viability of Hoover's entire United Kingdom operation. I welcome also the improvements that have taken place in industrial relations at Cambuslang in recent years. I urge all employees there to maintain their commitment to the success of the company.

At Shieldhall, in Glasgow, a new company has announced a big food processing development costing £15 million, which is likely to produce about 250 jobs. An Ardrossan firm is to create at least 50 new jobs for a £500,000 contract in engineering. There are many others. All demonstrate a determination by private companies that have the guts and the drive to see their way through even the depths of a difficult depression. We are beginning to see in Scotland not the industrial desert that had been feared but old-fashioned industrial skill and determination that still exists and still enables companies to surmount the difficulties that they face.

Mr. Robert Hughes (Aberdeen, North)

I understand the necessity for the right hon. Gentleman's concentration basically on the Forth-Clyde valley. This is, however, a debate on the Scottish economy. The right hon. Gentleman will be aware that unemployment in the Aberdeen-Stonehaven employment exchange area has increased by 50 per cent. in the last 12 months. Will he be making any reference to the Government's response to the McDowall-Begg report, which forecast that in the next five years companies employing over half of the labour force in the Grampian area expect to shed labour?

Mr. Younger

I appreciate the hon. Gentleman's point. If, however, hon. Members will forgive me. I do not think that I shall give way again. My speech will otherwise become too long. I have no announcement to make about the McDowall-Begg report, which was commissioned to discover the effect on indigenous industries in areas affected by oil. I consider it a most useful report and intend that it shall be taken fully into account in the review next year of regional development areas.

I do not underestimate the difficulties with which we are faced. A number of areas have been badly affected by the decline of traditional industries. There have been substantial redundancies. The Government have concentrated the full thrust of regional policy on these areas. In addition, we have taken a number of special, new, local initiatives. These include the new enterprise zone at Clydebank, which followed an earlier decision to ask the SDA to establish a task force in an area particularly hard-pressed in recent years, especially by the rundown and closure of Singers. Already over 70 companies with a potential for 860 new jobs have either moved into the enterprise zone or expanded their operations there. Twenty-three companies with 153 employees are operating on the Singer site. Over 1,000 inquiries have been received. This cannot be described as anything other than an outstanding success in the early months.

We have continued our support for the Garnock Valley task force, which has already secured the creation of 300 new jobs, with a further 500 in prospect from developments likely to take place in the next two or three years. Similar initiatives involving a concerted effort to tackle the deep-seated problems of an area are taking place through the SDA's integrated projects at Dundee and Leith, where the agency is committing a total of £17 million over the next three years.

Elsewhere, the Enterprise Trust, established in the Ardrossan, Saltcoats and Stevenston area, has dealt with about 90 inquiries since it was launched in May by my hon. Friend the Minister with responsibility for industry and education. These initiatives are each tailored, and in particular ways suited, to the circumstances of the area. They are making a positive contribution to the regeneration of some of our hard-hit localities.

I have been asked about what appeared in the newspapers this morning concerning the possibility of developments at the British Leyland factory in Bathgate. What appeared in the newspapers is necessarily speculation. I understand that British Leyland is to make an announcement tomorrow about action that it proposes to take to bring capacity in its truck business into line with prospective demand. While this will involve, I understand, some reduction in the work force, I am assured that there is no proposal to close either Bathgate or Albion.

Like everyone else, I deeply regret any reduction in jobs. As is known, the truck business has been going through extremely difficult times. The right hon. Member for Craigton recognised that it is counter-productive to speculate today about details in advance of the statement tomorrow. The decision that is taken is entirely a matter for those who run the business. They will make the statement.

Mr. Tam Dalyell (West Lothian)

Did the right hon. Gentleman or his Minister of State meet or have contact with either Sir Michael Edwardes or Mr. Andrews at the formulation stage of the decision-making?

Mr. Younger

I, my hon. Friends and my civil servants have regular contact with the company all the time. I have not spoken personally to Sir Michael Edwardes or whoever the other person was—Mr. Andrews, was it?—about the situation. I have, however, been in close touch with the company throughout the whole of this business. I believe that the Opposition will find that the company is grateful for the contact that exists with the Scottish Office. It has kept us fully informed at all stages. That is how things ought to be.

The right hon. Member for Craigton also asked me to say something about Linwood. My Department has been in contact with Talbot's agents in connection with Mr. Turnbull's comments, reported in the press, about prospects of finding a buyer for part of the Linwood plant. They have assured me that urgent and genuine negotiations are taking place on the sale of the premises. It is therefore, imperative that nothing is done that would be counter-productive to the disposal of the premises or the redundant plant and equipment.

In the meantime, my Department and the SDA are doing all that they can to assist in efforts to secure alternative job opportunities for Linwood and the Renfrew district as a whole, including the provision of small factories and workshops, commissioning a job creation agency to generate new employment opportunities in the short term, and mounting an integrated project to provide more jobs in the longer term. Locate in Scotland has also drawn the factory's availability and the area's potential to the attention of investors and will continue to do so. It is of the greatest importance not to say or do anything that. will make it more difficult to find a new buyer for that factory or part of it. That is important for the future of the people who work in the area.

Mr. Millan

The right hon. Gentleman is explaining all that he plans to do now that Linwood has been closed. Our complaint is that he did nothing before the decision to close Linwood was announced. That seems to be the pattern that will develop in relation to Albion and Bathgate. Is the Secretary of State honestly telling the House that Ministers, including himself, have not considered in full the statement that is to be made? The Secretary of State gives the impression today that he knows very little about it and that he has not been consulted at all.

Mr. Younger

The right hon. Gentleman fails to be consistent. He made it clear earlier that he did not expect me to make a detailed statement today. He now says that he wants me to say exactly what BL will say tomorrow.

Mr. Dalyell

Absolute rubbish.

Mr. Younger

The hon. Member for West Lothian (Mr. Dalyell) is becoming excited. If I am not being asked to say that, I am not required to say it. That is my point. The right hon. Member for Craigton is trying to make out that I do not know what BL is about at Bathgate, although I have made it clear that I do and that I am in close touch all the time. I have seen people from BL on many occasions. The right hon. Gentleman must make up his mind. He must accept what I say, unless he wants me to make an announcement that BL will make later. He cannot have it both ways.

Mr. Millan

I am not asking the Secretary of State to give details, but perhaps he can answer a simple question. When did he last discuss these or any other matters with Sir Michael Edwardes, Mr. Andrews—the executive vice-chairman who is responsible for these matters, although the right hon. Gentleman does not appear to know that—or Mr. Hancock? When did he last meet any of those gentlemen?

Mr. Younger

To the best of my knowledge, I have not met any of the gentlemen, although I met Sir Michael Edwardes four or five years ago on one occasion. I am not sure what the significance of that is. If the right hon. Gentleman wants to pick out the names of various people and ask whether I have met them, he is entitled to do so. What is important is that I and my Department should be in close touch with BL about this matter. I am in close touch with BL. If the right hon. Gentleman cares to inquire he will discover that the influence of the Scottish Office on decisions taken by BL has been considerable. Nothing that the right hon. Gentleman can put up will get him out of the hole.

Mr. Donald Dewar (Glasgow, Garscadden)

I am sure that the Secretary of State will wish to hurry from this matter. Sir Michael Edwardes, who is in overall control, Mr. Andrews who is executive vice-chairman and Mr. Hancock are the key figures in decision-making in the British Leyland bus and truck group. Some hon. Members, including myself, have had direct contact with those gentlemen. The Secretary of State for Scotland should have made direct representations to them about the fate of plants that are essential to the economy of central Scotland. We expect and demand that of him. Does he accept that if a Labour Secretary of State had not had any direct contact at that level he, the right hon. Gentleman, would have been shocked at such a dereliction of duty?

Mr. Younger

I do not accept any of that. It would be best for the hon. Gentleman and his hon. Friends to await the announcement by BL. They will be able to see what it is all about. That is the most fruitful way to proceed.

The right hon. Member for Craigton's suggestion for Linwood seemed to be that the Government and everybody else should ensure that the plant sitting in the empty factory is left there in mothballs to wait for someone to ask if he can build some more Avengers and Hunters. I cannot think of anything more out of date. I hope that the right hon. Gentleman will think better of that suggestion. There is no future in clinging to the old and out of date in Scotland. We must look to new industries to replace the old.

As the right hon. Gentleman acknowledged, Scotland is a major centre for microelectronics. Scotland has over 100 firms with over 40,000 employees in the industry. Other new technological industries are being developed. For instance, the SDA has established a health care industry unit to develop Scotland's share of one of the fastest growing industrial sectors in the world. The agency is also studying the commercial potential of biotechnology.

A new industrial base does not establish itself. It has to be worked at and it depends greatly on inward investment. Scotland offers a labour force and industrial structure that are attractive to incoming firms. The additional investment by overseas firms that are already established provides the best possible evidence that Scotland is a desirable location for investment.

I am grateful to the right hon. Member for Craigton for the complimentary remarks that he made about Locate in Scotland, which I set up a few months ago to provide a focus for inward investment work.

Mr. Barry Henderson (Fife, East)

Is my right hon. Friend aware that at the major computer exhibition at Olympia this week many native Scottish firms and many firms that have invested in Scotland are doing extremely rapid business? One can think of several new firms that have spun off from larger operations. They have come to the area through inward investment and are growing and expanding rapidly because of the importance of information technology.

Mr. Younger

I am encouraged to hear of what my hon. Friend saw at Olympia.

Locate in Scotland could not have started work at a more difficult time with world-wide recession and fierce competition for what little mobile industry there is. Nevertheless, Scotland has won some significant new investments as a result of robust efforts by LIS. In the last few months, for example, Motorola's proposed development at East Kilbride, which promises 800 jobs, has reached the pre-construction stage. Sunbeam Electric, with 300 jobs, has also been attracted to the new town, as has Rockwell International, with 240 jobs. Other localities have also benefited—Encase Ltd. at Larkhall with 160 jobs, Beckman Instruments at Glenrothes with 45 jobs and TK Valves at Dunfermline with 250 jobs. All the projects have been won in the face of strong international competition. Coors Porcelain at Glenrothes is an example of a supply industry being attracted by the large and growing electronics industry. These and other such projects augur well for the continued restructuring of our industrial base.

There is spin-off activity from North Sea oil. At present, 80,000 to 95,000 jobs in Scotland owe their existence to the finding of North Sea oil. All six platform yards in Scotland are currently in work. While the level of orders received by British industry from the United Kingdom continental shelf fluctuates according to the amount of development taking place, the average secured in recent years has been about 70 to 80 per cent.

As the oil industry moves into new situations offshore—for example into the deeper waters to the west—possibilities open up for industry in newer, relatively untried, technologies. It is exciting to see industry responding to those openings. We already have, for example, the Scott Lithgow dynamically positioned drilling rig order announced last week and the tension leg platform being built jointly by McDermotts and HiFab. But in addition to making the most of these opportunities off our shores we must also build on the experience gained in the North Sea by venturing further afield. Some companies are already doing so—such as UIE at Clydebank, with rigs for Mexico, and Seaforth Maritime, which is supplying tug boats for exploration off Canada.

Nobody looking at the Scottish economy today can pretend that it is possible simply to abolish or ignore the existence of the worst international recession since the war. It would be nothing but a cruel deception to the unemployed to raise such false expectations. There is a great deal that we can do and we are doing to help the unemployed, to help industry to restructure and survive through the recession to viability, and to replace lost jobs with new and better ones in the technological industries of today. We are making steady progress with much help and understanding from management, workers, local authorities and the public at large.

Anyone who looks at the Scottish economy must also look at the alternatives that might be offered. The right hon. Member for Craigton was, understandably, extremely quiet about that. I am not sure which strand of the Labour Party he represents. I have had a look at what the Labour Party proposes to do should it ever get the opportunity to take over in Government. I noticed that the main plank of the Scottish Labour Party conference at Perth was its decision to leave the EEC. However, I am not sure whether it agreed with the right hon. Member for Bristol South-East (Mr. Benn) to leave the Common Market within a month. Whether or not the period of time is a month, I tremble at the thought of the effect on Scottish jobs and Scottish industry if that were to happen.

In the United Kingdom about 30 per cent. of exports were destined for Community markets when we joined the Common Market in 1973. That figure is now 42 per cent. Scotland exports over 25 per cent. of its manufactured goods and withdrawal from the EEC would put at risk as many as 50,000 jobs, and possibly many more. That disregards the considerable benefit that we derive from Community funds in other ways. Such a policy would have an effect which I can only describe as devastating on any success in attracting inward investment. Companies are corning to Scotland to take advantage of a tariff-free market of 270 million people.

If we were to cut ourselves off from Europe, as the Labour Party voted to do in Perth, we would cut ourselves off from that flow of inward investment and new jobs, as surely as night follows day. In addition, companies already in Scotland would be forced to reduce their operations and some would decide to up sticks and move to areas in which they could do better business in a larger market. Therefore, the results of that part of the Labour Party's policy would be catastrophic. I hope that the Labour Party in Scotland will think better of it at its next annual conference. No doubt that particular wing of the Labour Party will try to do something about it.

Let us examine the Labour Party's defence policy. I understand that the next resolution voted on at the conference was to leave NATO. That is a great cause. I am not sure whether the right hon. Gentleman supports that idea. Apart from the implications for defence, which is not a matter for this debate, such a policy would have devastating consequences for employment in Scotland. What would happen to companies such as Ferranti, Marconi, Yarrows and Hall Russell, as well as to the Ministry of Defence establishments at Rosyth and elsewhere? That policy would affect about 40,000 people in Scotland. That is a frightening figure and represents as many as those employed in the electronics industry. Those people depend for their livelihoods, and Scottish businesses depend for their turnover, on such orders. If the Labour Party in Scotland abandons that policy, Scotland will be left to escalating and more horrifying levels of unemployment.

The terms of the motion say it all. It is a wholly unconstructive motion which shows no knowledge or realisation of the realities of modern economic life that we in Britain face, whether or not Labour Members like it. The motion could have been written on the back of an envelope in two minutes flat by any Opposition. It betrays no sign of an understanding of Britain's position. It has been tabled by a party that sees itself as a party of permanent opposition. That is why the House will assuredly reject it tonight.

5.14 pm

Mr. Donald Stewart (Western Isles)

I do not want to take up time by arguing about whether the United Kingdom, or Scotland, should be in the Common Market. However, as we are largely discussing jobs, I cannot help but point out to the Secretary of State that when we had the referendum on whether to remain in the Common Market, Scottish workers' pay packets were full of statements and handouts that said that we should stay in the Common Market if they were to keep their jobs. We stayed in but the jobs have gone all the same—[HON. MEMBERS: "Nonsense".] Hon. Members may say nonsense, but they are not prepared to look facts in the face and to consider the present level of unemployment.

We were assured that membership of the Common Market would preserve jobs. However, it has done nothing of the kind, and that is a fact that no one can argue about.

Mr. Canavan

Roy Jenkins got a job.

Mr. Stewart

The Secretary of State mentioned the various parts of the Scottish economy that exist on arms contracts. I am sure that those involved are glad of work. However, to be thankful for such work is almost like wishing for more criminals, so that more people can find jobs in the police force. We want to get rid of such things and to employ people in more useful and socially desirable jobs.

The Secretary of State takes offence when Scotland is described as an industrial desert. Not surprisingly, he went through a list of some of the new contracts that are going to Scotland. Goodness me, if we did not have some of those contracts, we would be in dead trouble. The Government's proposals for the universities will leave us with a lack of educated and trained personnel to take advantage of the high technology industries that the Secretary of State says will come to Scotland. Strathclyde university has done much work, but it will be in great difficulties as a result of the Government's proposals.

My hon. Friend and I will support the motion because the Government have failed and failed miserably. We have only to look briefly at the performance of other countries to see that. Let us take the industrial production figures at June 1981, using 1975 as a base reference of 100. Austria's index is 131, Sweden's is 102 and West Germany's is 123. The figure for the United Kingdom is less than the output figure for 1975 at 98. Needless to say, the figure for Scotland is worse. On July 1981 figures, unemployment in Austria was 1.3 per cent., in Norway 1.3 per cent.—although I understand that it has increased slightly since then—in Sweden 2 per cent. and in Finland 5 per cent. Unemployment in the United Kingdom was 10.6 per cent., and in Scotland it was well over 14 per cent.

Inflation in the cost of living in Scotland is much worse than it is in the rest of the United Kingdom. Energy costs are higher, because the climate is colder. Rural delivery costs bump up prices, and so on. Therefore, compared with other European countries the United Kingdom has a bad record. Not many countries are in a worse overall situation than Britain. Norway and Scotland are the best countries to use for the purposes of comparison, because both countries have oil wealth. Indeed, Scotland has much more wealth in that respect than Norway. Last year our oil was worth £4,000 million per year in tax revenue.

Mr. Tristan Garel-Jones (Watford)

rose——

Mr. Stewart

I am not giving way to the hon. Gentleman, because he told me during a previous debate that he would not support anything that came from a nationalist Member of Parliament. Therefore, his intervention is a piece of impertinence.

Mr. Garel-Jones

rose——

Mr. Stewart

Norway's oil was worth £1,600 million. In the past decade Norway's average annual growth has been 4.3 per cent., while Scotland's average growth rate has been only 1.7 per cent.

In 1980, Norway's GDP per head of population was £6,200 as against £3,200 in Scotland. I could present a whole range of social and economic statistics that highlight the difference between those two nations over the past 10 years——

Mr. Garel-Jones

Will the right hon. Gentleman give way on this point?

Mr. Stewart

No.

Both countries are rich and have a good ratio of land and resources to people. The difference is that Norway has its sovereign Parliament whereas Scotland does not.

Mr. Garel-Jones

rose——

Mr. Stewart

Scotland has undergone a traumatic experience over the past few years in terms of the destruction of its economic base and the debasement of its people. We have been hit particularly hard since the Tory Government came into office. They came to power—although the Scots did not support them—on a platform of false promises.

Mr. Garel-Jones

Will the right hon. Gentleman give way?

Mr. Stewart

I shall not give way to the hon. Gentleman.

In their so-called Scottish manifesto, the Government said: The next Tory Government will want to ensure that Scotland continues to benefit from North Sea oil". The Scots have enjoyed very little benefit. We are poorer now than when oil was discovered. People in the Middle East would find that unbelievable, but that is a fact.

The Tories also promised: New, more modern, better paid jobs". That is a blatant mistruth and perhaps the worst example of deceit ever perpetrated on an electorate by a political party in recent times. The Tories knew all along that unemployment was a prime tool in their economic policy, but it was a disgustingly gross deception.

By 1984, 84,000 young Scots will have entered the job market for the first time, but there will be nothing for them. The Government seem quite prepared to sacrifice another generation of Scots to forced mass migration. The migration figures are rising already. When Scottish history of the early 1980s is written, the term "clearances" may well be used once more, because that is about to happen. If the Tories continue their threatened policies, they will succeed in destroying Scotland as a nation. They will succeed in de-educating de-skilling, de-industrialising and depopulating the country, as well as in demoralising the people.

The last Government were indifferent to Scotland's endemic problems, but this Government are openly hostile.

Mr. Garel-Jones

Will the right hon. Gentleman give way?

Mr. Deputy Speaker (Mr. Bernard Weatherill)

Order. I thought I heard the right hon. Gentleman say that he would not give way.

Mr. Stewart

I hope, Mr. Deputy Speaker, that that message is beginning to get through to the hon. Gentleman.

In the long term, when we have achieved independence, we aim to transform the Scottish nation. My party's economic policies stress the desirability of reducing the extremes of wealth and poverty through a redistribution of income. That is altogether different from what the Government have in mind. We stress a commitment to overcoming unemployment. We spell out the need to encourage native industry, especially in the manufacturing sector. We also attach the greatest importance to the improvement of industrial relations and the encouragement of industrial democracy and workers' co-operative enterprises.

All these things will not happen while Scotland remains a nation without a head. On the contrary, our remaining firms will be taken over. In this regard I welcome the statement of the right hon. Member for Glasgow, Craigton (Mr. Millan) that the Labour Party is opposed to the swallowing-up of the Royal Bank of Scotland. My party has adopted that stance from the beginning.

There was an offer by the Standard Chartered Bank which the Royal Bank directors were predisposed to accept. But that has been overtaken by a greatly increased offer from the Hongkong and Shanghai Banking Corporation. That indicates that the business acumen of the present directors of the Royal Bank is more or less on the same level as their patriotism.

A comparison of the years 1965–66 and 1966–67 with 1973–74 shows that Scotland received greater attention in this House when the Scottish electorate backed the SNP. We had more than a little to do with that increased attention. At present, only 30 minutes per sitting day is devoted to Scottish business on the Floor of the House.

Scotland's ills will not be overcome by part-time government. We need a parliament that will commit the majority of its time to the priority of dealing with our economic and social ills. That will be achieved only by supporting the independence option. The choice is clear, and was embodied in the slogan of the 1820 radicals: "Scotland free or a desert". I know that the Secretary of State does not like that slogan, and repudiates it. But it is not over-dramatic. It merely enunciates a plain, simple fact of Scotland Scottish life.

Mr. Canavan

Will the right hon. Gentleman remind the House, especially those hon. Members who were not here at the time, that during the last Parliament he and his 10 colleagues from the SNP voted to return the present Prime Minister? They must therefore accept a tremendous responsibility for the havoc which the Prime Minister and the Secretary of State for Scotland have wreaked throughout Scotland.

Mr. Stewart

The Government were not elected by my party. Whether the hon. Gentleman likes it or not, they were elected by the people. However, we can agree that they were not elected by the Scottish people. The Labour Government were brought down because of the failure of some of the hon. Gentleman's hon. Friends to vote for the Scotland Bill, even though that was Labour policy. The then Prime Minister could not depend on support from his side. That was compounded by the action of the trade unions during the winter of discontent.

I shall conclude, as many other hon. Members wish to speak. The motion is entirely justified and it will have our support in the Lobby.

5.27 pm

Mr. William Hamilton (Fife, Central)

I do not intend to indulge in a post mortem on the Scotland Bill. played some part in defeating it, and I make no apology for that.

When we debate these matters, there is a tendency to produce unemployment statistics by whichever party is in Opposition. Predictably, the Government of the day say that everything is well or, alternatively, that there will be jam tomorrow or the next day. We are getting sick and tired of the Secretary of State and his mistress, the Prime Minister, repeatedly telling us "Just hold on, the medicine will taste even worse in the next six months but thereafter there will be complete recovery and everyone will live happily ever after."

I approach this problem from a different angle. The unemployment figures hide oceans of misery, hardship, fear and insecurity. However, other problems tend to be overlooked. I therefore want to put some other figures on the record.

Our indictment of the Government is not solely that they have deliberately and callously raised the total numbers on the dole. Of that there can be no doubt. They have also sought to shift the blame on to other shoulders. For example, they blame the trade unions for seeking wage increases that are too high. The Government have also clobbered the worst-off—in other words, the old, the sick, the unemployed and the low-paid.

Let me give some of the facts, which are irrefutable. First, the former Secretary of State for Social Services, now the Secretary of State for Industry, was the first Minister in that Department for 50 years to cut social security benefits by reducing the value of pensions, child benefit, unemployment benefit, sick pay and maternity allowances. The real value of child benefit, even after this month's increase, will have fallen by a tenth since the Prime Minister took office, yet during the election she made a great pledge that she and her Government would care about the family.

Unemployment pay has received a harsh blow. The earnings-related supplement has been phased out and the supplements for dependent children have been reduced. The result is that, compared with 1979 when the Government took office, the dole money of a man with two children has fallen by one third and for a single man by 40 per cent.

Even after this month's uprating, an unemployed single person will receive only £3.32 a day to provide everything apart from housing. An unemployed school leaver—there are plenty of those in Scotland—will have only £2 a day to keep body and soul together. Those who are fortunate enough to have a job with average earnings have £20 a day. The gap between those unfortunate enough to be on the dole and those lucky enough to be in work is widening because of the Government's policies.

The Government are using unemployment as a discipline for workers. The Prime Minister repeatedly comes to the Dispatch Box and boasts about more realistic pay claims. They are more realistic because workers are terrified of throwing themselves out of a job. That fear is incited by the Government's policies. The lower paid are pursued by the fear of losing their jobs and by the taxation imposed by the Government.

The facts are summarised by startling figures produced by the House of Commons Library research department. They are reliable figures which were not disputed when they were given to the House last week by my hon. Friend the Member for Blackburn (Mr. Straw). They will startle people outside the House. For the average family, since 1979 direct and indirect taxation, including national insurance, has risen by £25.83 per week. Yet the Government were elected on their promise to reduce taxation.

During the past three years central Government taxes for the average family were £50.13 per week in 1979–80; £63.71 in 1980–81 and £75.96 in 1981–82. Those are disgraceful figures. They show that, whatever justification the Government give for their policies, they have not alleviated the lot of those whom they should be doing their best to protect—those on low incomes, both employed and unemployed, the aged, the sick and those that the Government promised to protect.

Mr. Russell Johnston (Inverness)

I was startled by the hon. Gentleman's figures. By the average family, does the hon. Gentleman mean a married man with two children? What is the average income of the family?

Mr. Hamilton

We are talking about the impact of taxation on the average family since 1979. I presume that the figures are based on average earnings. They were produced by the Library and I have no reason to doubt them.

On 29 October an editorial in The Times, referring to the groups that I have described, said: It is not sensible or humane to argue that there should be equal sharing of burden between these unequal groups. The absolute level of benefits for many on social security, and especially for Britain's huge dole-force, are at rock bottom and should not be depressed further. The grim prospect is that they will be depressed further when the Cabinet comes forward with its further proposals for decreases in public expenditure. Those groups will be hit again.

An editorial in The Guardian on 20 October said precisely the same. It stated: At Blackpool last week ecstatic applause greeted the observations that the unemployed were not starving. Well, no, they're not actually starving. A family with two children under eleven on supplementary benefit will manage, from next month, on £53.55 per week. They may not starve; but they will have to choose between the gas bill and new shoes for the children, or new shoes and a hot meal, or a hot meal and the electricity bill. Those are the facts. Poverty today is probably more obscene than in the worst days of the 1930s. I know, because I lived through that time and my family suffered from poverty—[Interruption.] No Conservative Member can tell me anything about that time.

The Secretary of State asked for positive proposals. I want to put the figures for Fife on the record. It is not one of the hardest hit areas in Scotland, but the position is serious enough. The latest figure for unemployment in the region is 13.1 per cent. I know that that is not a high figure compared with many regions in the West of Scotland, but it represents more than one in eight. In the Leven area, the figure is 21.3 per cent., which is more than one in five. In Cowdenbeath, it is 23.1 per cent., which is almost one in four. Most of my hon. Friends can quote even worse figures.

The youth opportunities programme is completely useless in dealing with such great unemployment. It is being dubbed the youth exploitation programme. There is evidence in my constituency of youngsters being employed as cheap labour; long before their six months' work is completed the companies get rid of them and take on someone else. That practice must stop. I hope that the Secretary of State will answer some questions about the programme, which is due to begin in the new year, for a comprehensive youth unemployment scheme. When will that begin? How long will it take before it is in operation? Will there be any additional money available? It is no good the Government saying that they will do this, that and the other if there is no additional cash available. That would be worse than useless and would be only a cosmetic exercise.

The right hon. Gentleman has in front of him positive proposals for Fife and the remainder of Scotland. First, there is the saga of the East Fife regional road. By heavens, I have been in the House for 30 years and the saga has gone on for all that time. Government after Government have produced paper, plans and reasons why they should not get on with the road, but we are no further forward today than when it was first mooted.

I have long been an advocate of the abolition of tolls on the bridges. It makes no sense in these days of great industrial difficulty to have that further imposition on the industrial and commercial development of the East of Scotland—and also the West.

What a mess the Government have made of the gas-gathering pipeline. The Prime Minister was originally in favour of it. She then suddenly turned turtle. We have a disaster on our hands because of the mishandling of the affair by the Government. They looked at it myopically. If private industry was not interested and if it could not make a profit, the Government thought that the plan could not be worth while. I suppose that on that basis no new hospitals would be built anywhere in Britain, unless the Government could make sure that a profit could be made out of sick people.

The paper industry is important in Fife and Scotland. It is on its knees. It is in the worst crisis of the 350 years of its existence. The managers voted Tory. I remind the management of Tullis Russell in Fife that it almost deserves what it is getting. However, the workers do not deserve what they are getting. They complain about the unfair energy prices paid by the industry as compared to those paid by their competitors. The Government could do something about that.

The Government should contemplate the possibility of increased Government financial support for public transport—whether it be road transport, buses or British Rail. That is important in the infrastructure and future economy of Scotland.

Those are positive proposals that have come not only from the Opposition, but from increasing numbers of Conservative Members. Therefore, I hope that the Secretary of State will consider those national and local propositions and come forward with a constructive reply.

Mr. Younger

The hon. Gentleman mentioned railway investment. He will have noticed that we have recently put forward proposals and given a great deal of money to help with electrification, repairs and renewals in the Glasgow and Ayrshire area.

5.42 pm

Mr. Michael Ancram (Edinburgh, South)

The weakness of my voice is not caused by emotion on following the speech made by the hon. Member for Fife, Central (Mr. Hamilton), but by a cold.

Mr. Canavan

Stop wasting time. Get on with it.

Mr. Ancram

It is interesting that we are once again discussing the vital question of the Scottish economy on a motion from the Opposition. Whenever that happens, Conservative Members gather with some anticipation to see whether, on this occasion at least—after all, the odds must favour it as time progresses—some constructive proposals will be made by the Opposition.

Mr. Allen Adams (Paisley)

The House has not heard me yet.

Mr. Ancram.

The hon. Gentleman may suggest something constructive from the Back Benches, but we are interested in hearing Front Bench policy.

When the right hon. Member for Glasgow, Craigton (Mr. Millan) began, I thought for a moment that we would be lucky today. He seemed to be on the verge of coming forward with something positive. The hon. Member for Fife, Central said that he would give us something positive. However, as the right hon. Gentleman and the hon. Gentleman came up to the terrifying hurdle of putting forward constructive proposals for Scotland, they backed off and once again retreated to the same old carping arguments and complaints that we have heard so often and that do nothing for the economic problems facing Scotland.

Many Conservative Members and people in Scotland are sick and tired of that empty and unhelpful performance time after time. We hear brave press conferences in Scotland promising all sorts of answers in Westminster. There are all sorts of well-oiled demonstrations in the streets of Glasgow, but in Westminster the Labour Party is invisible and silent on concrete proposals. The speeches that we have heard today resemble nothing so much as so many tired old steam engines creating much smoke and a few whistles, but making little forward movement.

I do not hold the charitable view taken by some of my colleagues, that it is too much to expect Opposition Members to think of constructive things to say while they are tearing each other apart in a desperate competition to find the Holy Grail of Socialism. I do not take that view, because Opposition Members claim to speak for Scotland, It is an insult to the aspirations and hopes of people in Scotland to hear the speeches made by the Opposition today.

This is not our motion, but one tabled by the Opposition. It is almost beyond belief that they should come to the debate yet again with nothing constructive to offer. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) is winding up the debate for his party. Conservative Members know how strong he is on abuse. I hope that tonight he will at least be able to show us that he is strong on constructive proposals.

As it is an Opposition motion, I should like to ask some questons. I hope that I shall receive some answers. Do the Opposition want to see more jobs in Scotland? If so, they are going the wrong way about it. If they want to see more jobs in Scotland, it is about time that they started selling Scotland rather than continually talking it down.

Mr. James Hamilton (Bothwell)

rose——

Mr. Ancram

The hon. Gentleman might tell his party leader, the right hon. Member for Ebbw Vale (Mr. Foot), that starting off cycle demonstrations and watching football matches in Glasgow at the weekend is no substitute for going out and trying to bring jobs to Scotland.

Mr. James Hamilton

As the hon. Gentleman is expressing that point of view, no doubt he will be aware that the Minister responsible for industry in Scotland went to America. Will the hon. Gentleman tell me about any jobs that he has brought back to Scotland?

Mr. Ancram

My hon. Friend was not helped when Opposition Members described Scotland as an industrial waste where there would be trouble in the streets. That does not bring industry to Scotland, and never will.

Mr. Robert Maclennan (Caithness and Sutherland)

The hon. Gentleman is being a little hard on the right hon. Member for Ebbw Vale (Mr. Foot), who, when he went to Scotland, received a loud raspberry from the Scottish Labour Party's executive.

Mr. Ancram

I always make a rule to try not to become involved in the internal affairs—or brothers' affairs—of other parties.

The right hon. Member for Craigton complained as usual about closures. None of us is happy about them, but, Opposition Members spent last winter supporting rate rises in the region that includes my constituency, which have driven out shops, business and jobs. What is the consistency in that?

The right hon. Member for Craigton once again mentioned Linwood. Had the Labour Party been in Government, would it have continued to pour money into that firm to make cars that not enough people wanted to buy at the price at which they were being made? If so, where would that money have come from? Would the Labour Party have borrowed it on the international markets and had to find the interest that would have to be paid? Would it have borrowed it on the home market through Government bonds and watched interest rates rise as a result, with the effect that that would have had on jobs in Scotland? Would it have printed the money? After all, the Labour Party said about the 1970–74 Conservative Government that printing money created inflation. Would it have obtained the money from taxation? If so, perhaps the hon. Member for Stirling, Falkirk and Grangemouth will tell us across what bands it would have to tax to raise enough money.

The right hon. Member for Craigton and the hon. Member for Fife, Central complained about the gas-gathering pipeline. They cannot get away from the fact that one of the contributory factors to that decision was the price that the British Gas Corporation was prepared to offer for the gas. The price was too low to make that endeavour commercial. However, when the Government introduced their proposal to remove the monopsony from the British Gas Corporation, Labour Members voted against them. When the monopsony is removed and the oil companies begin to gather the gas and create jobs by so doing, it seems that the Scottish Labour Party will oppose that too.

My right hon. Friend the Secretary of State talked about the effect that withdrawal from Europe would have on Scottish jobs. We have heard carping remarks about the enterprise zone on Clydeside. Would Labour Members abolish that zone if they were ever elected to Government again? That is the sort of question that they must answer before the people of Scotland.

The hon. Member for Fife, Central again criticised the YOP schemes. Would a Labour Government abolish those schemes, or would they prefer to see young people on the dole? It would be a start if the hon. Member for Stirling, Falkirk and Grangemouth gave some practical answers to questions of that sort. It is the easiest and least creditable thing in the world to be brave in the safety of our homes but to be afraid to stand up on the battlefield.

At least the SNP and the SDP are honest enough to admit that they have no policies. They make a virtue of it. They are asking the electorate for blank cheques. In a sense, they are the Paul Daniels of the bunco booths of Scottish politics. The Scottish Labour Party must realise that its pretence of having answers that never materialise is a calculated insult to the intelligence of the people of Scotland.

My right hon. Friend said that the only true solution to the provision and maintenance of jobs in Scotland depends ultimately, as in the rest of the United Kingdom, on those jobs earning more than they are now and, indeed, earning their own way. Whatever public money is used to bolster existing jobs, that can by its nature be short term only. In the end jobs such as those in British Steel must produce a return and underwrite themselves financially.

My right hon. Friend rightly emphasised the need to increase output per man and to continue the hunt for increased productivity. The figures that he gave for increased productivity in Scotland are encouraging, but the equation is not that simple. Productivity increases themselves can be part of a vicious job circle. In a sense, there is a long-term danger in making more examples of a product than the public are prepared to buy at the price at which they are being sold. The National Coal Board faces that problem. It has to sell its excess coal stocks abroad at an under-cut rate because it is producing more coal than can be sold on the home market at the price which is being charged for it. Linwood in its latter days was another example of that.

Productivity creates jobs and job security only when the benefits of improved performance per head are transferred to the price by way of a reduction and hence to an increase in demand. If, as too often happens, the benefits are swallowed up in wage packets by way of increases or by increased straight bonuses that can increase overheads and thereby increase the price and further reduce demand. Increased productivity is a circle that can turn two ways. I am worried that too often it is turning the wrong way.

I hope that my right hon. Friend and his colleagues will continue to stress that rewards will come only when the cycle is that of increased productivity followed by reduced or more competitive prices followed by increased demand. Only then will increased productivity be followed by increased wages. It may take a little longer for the reward to be achieved, but only in that way can we create real growth in demand and consumption of manufactured goods, which alone holds the key to economic regeneration.

Scotland has had it hard but we are cutting off our noses to spite our faces if we do not acknowledge that we have done relatively better than the rest of the United Kingdom. We have achieved an advantage for when the upturn comes. We must have the confidence and the realism to take advantage of that, especially in the sector of micro-technology where we are on the verge of cornering the United Kingdom's market.

Conservative Members are grateful to my right hon. Friend for stating what is happening in Scotland and for answering some of the accusations that are so often flung at the Government, of being inflexible and uninvolved. The Government have been flexible in the past to industrial needs and I am sure that they will continue to be so. The Government are involved, as any Government have to be, in creating the economic climate which industry in Scotland needs if it is to begin to thrive again.

Many of those who are engaged in businesses and industries in Scotland have admitted to me that the pain of the past few years has been worth while because it has made them restructure themselves to meet more efficiently the challenge of future markets. They are ready to go forward. They are keen to do so. However, they say, quite rightly, that they need the work now to be able to go forward. Much of that work they can and must create for themselves, but the Government have a role to play. That should not be to dole out vast sums of public money which they do not have and which they cannot obtain without creating other problems. It lies in continuing to follow the roles that we have set for ourselves—investing public money in ways, in areas and according to the conditions that will show returns to the taxpayer in the long term. This was done in British Steel and in British Leyland. I encourage my right hon. Friend to repeat that example in suitable areas of Scotland.

At the same time I encourage my right hon. Friend to consider projects in the public sector where agreed wage restraint can go a long way to financing the outlay in terms of public expenditure. As long as public expenditure is self-financing, the dangers of reflation and inflation will be that much less.

I hope, too, that my right hon. Friend and his colleagues will consider projects such as insulation programmes where there will be a commensurate saving to the public purse and where jobs and demand in the construction industry, which is so central to many other industries, can be given a small boost without creating an inflationary spiral. That is not reflation in the pejorative sense. It is careful investment that is based on a responsible analysis of potential return. I hope that my right hon. Friend will consider it carefully.

The Scottish economy is poised to take off. The Government are prepared to play their part. I hope that Scottish business men in industry are prepared too. There are others abroad who will be prepared to make the investments if they are not. I hope most of all that Labour Members will start to help the regeneration of the Scottish economy and begin to help to provide the jobs about which they make so much noise. I hope beyond hope—perhaps it is too much to hope for—that the speech of the hon. Member for Stirling, Falkirk and Grangemouth will for once be constructive.

5.58 pm

Mr. Russell Johnston (Inverness)

Nothing in the speech of the hon. Member for Edinburgh, South (Mr. Ancram), which was somewhat pitted with platitudes, made me feel that we do not face an extremely grim economic situation.

In October, total unemployment in Scotland amounted to 13.4 per cent., which puts it, within the European Economic Community, almost at the top of the league. Only the rate in Belgium is worse, which stands at 14 per cent. It is 10.8 per cent. in Ireland, 9.8 per cent. in France, 8.6 per cent. in Italy and 5.9 per cent. in Germany. We are not doing well in comparison with our competitors. Unfortunately, the trend is inexorably upwards.

The Fraser of Allander Quarterly Economic Commentary published this month predicts that unemployment will increase to 400,000 by the end of 1982. With notified vacancies at their lowest ever level, the Scottish Council (Development and Industry) estimates that there are more than eight unemployed workers in Scotland for every job available. That is a very bad position.

If we use the latest Manpower Services Commission figures, each unemployed person costs Britain about £4,380. The figure produced by the Treasury was about £3,400, which is a difference of almost £1,000. I must ask the Minister why there are such large variations in calculations from public bodies. The Treasury tells us that a jobless person costs £3,400 and the MSC that the cost is £4,380. That is a very big difference. In any event, it means that unemployment in Scotland now costs Britain about £1.5 billion a year. That is a large sum.

The Government justify their policies on the grounds that they are tackling inflation. However, the retail price index shows October's annual rate of increase as 11.7 per cent., while the tax and price index now stands at 15.2 per cent.

The Government do not have a definable and clear industrial strategy. Perhaps privatisation is the nearest thing to it, but that is no substitute. The North Sea gas-gathering complex has already been mentioned by the right hon. Member for Glasgow, Craigton (Mr. Millan) and the hon. Member for Fife, Central (Mr. Hamilton). One can but echo what they say. It was a great mistake to abandon a project of that sort—perhaps the largest engineering project ever contemplated in Britain—for what appear to be doctrinaire reasons. Britain has been deprived of secure gas supplies, further revenues and thousands of new jobs.

The hon. Member for Edinburgh, South, in the middle of a mainly constructive speech, made his ritual attack on the Liberal Party and said that it had no policies. I find it somewhat boring to hear a limp repetition of something that is evidently untrue.

Mr. Ancram

rose——

Mr. Johnston

If the hon. Gentleman will be patient, I shall give way in a moment. I shall send the hon. Gentleman copies of some documents on Liberal policy about Scotland's economy, because I am sure that they will do him a great deal of good. He needs a great deal of good done to him.

Mr. Ancram

I am grateful to the hon. Gentleman for offering to send me documents about the Liberal Party's policies. I did not mention the Liberal Party at all. I mentioned the Scottish National Party and the Social Democratic Party, which only goes to show how far under the SDP's thrall the Liberals in Scotland have now fallen.

Mr. Johnston

I have too little time to follow those flippant paths. The view of the Liberal Party in Scotland for some time has been that the Government should be much more selective both in actual industrial investment and in the stimuli towards industrial investment. Industrial competitors such as Japan and France—which are the most noteworthy examples—adopt a selective approach.

If Scotland's industrial base is to stop contracting and real job opportunities are to be created, we must have a strategy and framework for determining the segments or sub-segments of various new industries—micro-electronics, offshore exploration, energy conservation, which the hon. Member for Edinburgh, South mentioned, biotechnology, advanced chemicals, new materials and computer applications—in which Scottish industry should invest.

We do not lack skill. On Tuesday I was in Inverness for the tenth anniversary of Tarka Controls, a relatively small English-based company that was attracted to the North by the Highlands and Islands Development Board. The firm produces bimetallic switches and exports them very successfully to Japan and France, because it has a particular expertise. That is the important factor.

It is, however, not simply a question of picking winners for new inward investment, but—as the Secretary of State remarked—of selecting growth sectors for existing industries to develop into.

The Secretary of State mentioned shipbuilding and the £80 million order for the semi-submersible exploration rig that has gone to Scott Lithgow. That is a good example of the dividends that have been paid because that company began to specialise in that sector four or five years ago.

The Scottish Development Agency is certainly giving a lead in that area, especially in the emphasis that it has placed on electronics during the past few years. The Secretary of State mentioned the initiative to turn Scotland into a major world sector for the health care industry. All those things are very welcome. I believe that Robin Duthie and his team at the SDA should be congratulated. Nevertheless, it is fair to say that Scotland still lacks a recognised forum for carrying out the selecting process. There is also an argument for making Government incentives more selective.

Sir David Orr, chairman of Unilever, recently suggested that an independent body should select the industrial sectors that need special development and that thereafter the independent body would negotiate development contracts with individual companies. He also argued that there should be special State aid.

The nearest thing that we have to that in the United Kingdom as a whole is the National Economic Development Council, for which there is no equivalent in Scotland, as the Secretary of State is aware. I put one concrete suggestion to him. There is a body which represents business, trade unions and local authorities and which could fulfill the role. It is the Scottish Council (Development and Industry). Will the Secretary of State consider the possibility of talking to the council about fulfilling a role of that kind? It is something that it could do well.

In the election campaign that resulted in my coming to the House 17 years ago, the centrepiece of the Highland economic case being made by the Liberal Party was the establishment of a Highlands and Islands Development Board, a proposal which—as the Secretary of State may recall—was strongly contested by the Conservative Front Bench spokesmen of the day. However, the value of the board at such a difficult time has been clearly demonstrated.

I am worried that the board now has insufficient funds to do its job properly. The Secretary of State looks surprised at that. I know that the amount of money it has been given has kept up with inflation. I readily give the Government credit for that, but I repeat what I have said. I am not privy to the internal discussions of the board, but all the information available to me demonstrates that it does not have sufficient resources to back viable enterprises and that, in consequence, sound business prospects are being put off or turned away.

Mr. Younger

rose——

Mr. Johnston

If the Secretary of State will permit me to finish this point, I shall gladly give way to him.

Part of the problem is the pressure of rescue operations—many of which have had to be undertaken at the present time—which are draining money that could be used to back new enterprises with an element of risk.

I know that the Government are planning their Budget for 1982–83. I implore them to look at the matter carefully and to consider the fact that it may be a sensible means of spending money to give the board somewhat more. I am not talking about dramatic amounts of money. To put a figure on it, I would say about £4 million or £5 million. However, it is a problem.

Mr. Younger

I know that the hon. Gentleman is trying to be helpful in everything he says. The position as far as I am aware is that, not only in the Highlands but throughout Scotland, no vital project has been unable to go ahead because of shortage of funds to support it. I hope that that is still the position. If the hon. Gentleman knows of any examples of vital business proposals that could not go ahead because of lack of funds I hope that he will tell me what they are.

Mr. Johnston

I am grateful to the right hon. Gentleman for his intervention. My understanding is that there are such businesses, and I shall be in touch with him.

I conclude by referring to training and apprenticeships. Perhaps the major tragedy is that Scotland's training provision is declining at the very time when new markets and new technologies are developing and will require a more highly skilled, better educated and more mobile work force. That is an area of considerable Government failure.

The Secretary of State said that we are likely to have an announcement, perhaps before Chistmas, about a new scheme. However, there is a great rumour that it will be funded by a 1 per cent. levy on industry. The right hon. Gentleman looks surprised. I do not believe that any Secretary of State is effective unless he listens to and has access to all rumours. I am sure that the right hon. Gentleman has heard that rumour. It would be interesting if he or his Minister could comment on it.

Liberals welcomed the publication in May of the MSC's consultative document on a new training initiative. It is also right to pay tribute to the work done by the Select Committee on Scottish Affairs in its hearings on youth employment. The problems have been identified. The need now is for urgent discussions among employers, trade unions and the Government to produce new training programmes that can be introduced by the autumn of next year. I hope that that is the sort of action that the Government have in mind.

The statistics again reflect badly on us. Full-time training and apprenticeships for 16 to 19-year-olds are 68 per cent. in Germany, 54 per cent. in France and only 24 per cent. in the United Kingdom.

I shall quickly make four concrete proposals. First, the payroll tax on youth training should be ended by abolishing the employers' national insurance surcharge on all employees under 21. Secondly, the MSC must continue to estimate manpower and skill requirements, but the responsibility for training must remain with the industrial training boards. The Government should reconsider their recent decision. It is difficult for Governments to reverse anything that they have announced, but that was a great mistake.

Thirdly, some of the Government funds to subsidise those who are not working should be redirected into payments for skill training by way of full reimbursement of costs to employers who train surplus to their requirements. Fourthly, the Government must assist where lack of funds would lead to training establishments closing and training teams breaking up. There is spare capacity in engineering group training schemes and associations and technical colleges and, to a lesser extent, in skillcentres.

I began by saying that the situation was grim. No one would say otherwise. However, there are solutions and the Government can take a series of actions that would greatly improve the present position and lay a sound basis for the future. I beg them to learn from their mistakes and not to be too proud or stubborn to listen to the ideas of others.

6.13 pm

Sir Hector Monro (Dumfries)

One almost says "Oh, dear!". We hear the same story of depression and lugubriousness from the Socialists, the SNP and the Liberals; no doubt we shall hear it also from the Social Democrats. At least one of them might say "Well done" to Scotland for being the first to qualify for the World Cup final, giving a lead to England and Northern Ireland. We desperately hope that Wales will make it eventually.

My right hon. Friend the Secretary of State set an excellent tone of compassion for and concern at the great troubles facing the country, but also of quiet confidence that things are beginning to turn and to go right. What he said supports the sentiments of my right hon. Friend the Prime Minister in replying to the Gracious Speech. She, too, adopted an approach of confidence, as she did when she addressed the Lord Mayor's banquet earlier this week. All in all, we should not think of the picture as entirely depressing; we should turn our thoughts to better times ahead and consider how best we can achieve them.

One of the most important aspects of the Secretary of State's speech was his story of the number of the industries that are doing well, the new industries whose success he announced and he way that exports are picking up. The Labour Party should reflect on the fact that 42 per cent. of Scottish exports go to the EEC. How can it help Scotland to take us out of the Common Market at this stage in its development?

We should also record the fact that 23 million people are in work, although we all feel desperately sorry for the 3 million out of work. I was lucky enough to be called to speak during the debate on the Gracious Speech. I reminded the House that in my constituency unemployment varied from 12.5 to 21 per cent. among the employment areas. We all appreciate the serious personal problem that affects every individual who is unemployed. If my right hon. Friend can promote special measures in the South of Scotland, as he has done so spectacularly with his enterprise zones, I shall welcome them.

The hon. Member for Inverness (Mr. Johnston) compared unemployment in the United Kingdom with that in Europe. If we consider unemployment within the United Kingdom, we see how successful my right hon. Friend has been in sheltering Scotland from the worst of the recession. Sadly, Northern Ireland is top of the league, with 17.6 per cent. The figure in the North is 14.7 per cent., in Wales 14.4 per cent. and in the West Midlands and the North-West 13.8 per cent. Scotland is fairly far down the league, at 13.4 per cent. We must give my right hon. Friend credit for achieving so much in such difficult circumstances. Scotland is normally near the top of the unemployment league.

In my earlier speech I also mentioned the changes due to be made next autumn in the assisted areas. The matter causes concern in industry because of the impact not only on capital investment but on plant and machinery. I hope that my right hon. Friend will have detailed discussions in each region and will listen to the strong case for regional grants, which are an important part of the industrial incentive system.

Unlike the hon. Member for Fife, Central (Mr. Hamilton), who adopted a critical approach, I believe that the special programmes division of the MSC has been exceptionally successful. I am pleased that the Government's undertaking that summer 1981 school leavers will be offered a YOP place by Christmas is likely to be fulfilled. The new training schemes, which my right hon. Friend will announce in due course, will also be particularly helpful.

Small businesses are facing many problems. Certain authorities—thankfully not mine—have walloped up rates. That has had a spectacular impact on shops and small businesses. Those who live in regions where it has happened ought to make some effort to assist the Secretary of State to keep public expenditure and rates down.

My right hon. Friend would perhaps agree that what most small businesses want more than anything else is the relaxation of interest rates. It is a world problem, but there seems to be a glimmer of hope in America of a fall in interest rates, and I trust that it will be translated into the British economy as soon as possible.

It is very rare for a Member's plea for action to be dealt with as expeditiously as mine was. I asked that the hill farming subsidy should be increased, and my hon. Friend the Member for Banff (Mr. Myles) and I were more than delighted to hear today of the increase in allowances for next year. It is a sign that the Government appreciate the difficulties that, have faced livestock rearing farmers in Scotland over the last two or three years. The increase by £2 in the subsidy will be welcome.

The allowance has doubled since the Labour Party was in Government in 1979. It is a dramatic improvement, and it will help farmers in Scotland. There are, of course, many difficulties still facing farmers, of which high interest rates is perhaps the most serious, but I thank my right hon. Friend for what he has managed to do for farming.

We have not heard much from the Opposition parties—I wait with interest to hear what the Social Democrats will say—about their policies to help Scotland. I give the Liberal Party a little more of the benefit of the doubt, but basically all of them advocate spending our way out of trouble. We have to accept that the public sector borrowing requirement is £10.5 billion. If we are to spend our way out of trouble, there are only two ways to do it. We either increase the PSBR—which inevitably means rising interest rates and a falling pound—or we increase taxation. The Opposition parties must tell us which it is to be—higher PSBR and interest rates or higher taxation. If it is to be neither, they must accept the sensible policies that the Government are pursuing.

I look forward keenly to hearing about the policies of the Social Democrats, because many of us have thought——

Mr. Donald Stewart

The hon. Gentleman is optimistic.

Sir Hector Monro

I am glad that I am. It will be interesting to hear the policies of the Social Democrats, because the party has become the refuge of those who want to jump off the sinking ship of the Labour Party. The Liberals were keen enough to throw them a lifebelt, so now we have the alliance.

The country has to realise that the alliance is changing one brand of Socialism into another. It is strange how the Liberals, who fought so hard against Socialism during the last election campaign, now seem quite happy, two and a half years later, to jump into bed with the Social Democrats.

I have some constructive thoughts for my right hon. Friend on how to give help to the building industry and assist development in Scotland. He could at a stroke of a pen start doing this tomorrow. I hope that my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) will do so tonight. All this could be achieved without any expenditure from central funds.

The bible about planning in the countryside which planning officers clutch to their breasts is 21 years old. Circular 40 of 1960, on which planning is based, is still being used today. It is so old that it was published by the Department of Health for Scotland, long before the Scottish Development Department came into being.

If my right hon. Friend the Secretary of State were to encourage a little more flexibility in planning matters there could be some important developments, and house construction could go ahead more rapidly. I emphasise that I am totally against indiscriminate building and development in the countryside. I am the last person to want that. But I think that we have become too restrictive in Scotland generally. A really attractive house can enhance the countryside if it is in the right setting and of the right design and construction.

It is unfortunate that many planning officials, sometimes supported by their committees, seem always to insist upon acting according to the book—in other words, the 1960 circular. My hon. Friends in the Scottish Office may agree with my view that planning has evolved somewhat in the last 21 years and that the circular ought to be looked at again. It is not legislation but it seems to be regarded as such by many in the planning world.

If my right hon. Friend wished to do so, he could set a new trend by his attitude to planning appeals. If he were to be more sympathetic to the planning appeals of private individuals in particular, it might well result in more action in the building industry. From time to time I have seen what I have regarded as reasonable applications for planning permission turned down simply on the basis of the 1960 circular. I therefore ask my right hon. Friend to consider whether it should now be brought up to date in order to promote building and development in these difficult times.

Sometimes one hears from laymen—and often they are right in planning matters—that an application has been turned down at the direction of the Secretary of State simply on the ground of road safety. It would appear that chief road engineers—or whoever gives advice to the Secretary of State on safety matters—perhaps bend over too far on the side of caution. Of course we do not want unnecessary accidents to happen. In practical terms, matters of access rarely make any difference to road safety, but they provide an excuse for saying "No" to planning applications. Here again I hope that we shall see greater flexibility.

When my hon. Friend the Under-Secretary of State replies to the debate, I hope that he will undertake to provide more flexibility in planning matters in the countryside in the manner that I have suggested.

By and large, my right hon. Friend the Secretary of State has given a most encouraging picture. It shows that he is going in the right direction to help employment by providing new jobs and new industries. If we hold to our course of cutting public expenditure and using the resources that we have to promote industry, the future will not be as gloomy as the Labour Party makes out.

Mr. Speaker

Reluctant as I am to put any restraint on Celtic eloquence, may I say, before I call anyone else, that it is possible for all those hon. Members who wish to speak to do so. I do not criticise the hon. Member for Dumfries (Sir H. Monro). Indeed, his speech was not the longest by any means.

Mr. George Foulkes (South Ayrshire)

It was the most boring.

Mr. Speaker

Order. I measure speeches by length, not by quality. If hon. Members co-operate, there will be time for all of them to speak.

6.30 pm

Mr. James Hamilton (Bothwell)

I hope that I shall be excused if I do not follow the line of the hon. Member for Dumfries (Sir H. Monro), and I hope that when the Minister replies he will disregard some of the issues that the hon. Gentleman raised because, much as we are concerned about good planning, we are debating the Scottish economy. That is where I intend to direct my words.

My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) referred to the high unemployment in Scotland. When we are told the figures next Tuesday, it is reasonable to assume that they will show a serious increase. The Secretary of State mentioned all the areas to which new jobs were coming. However, he did not mention Lanarkshire. The Caterpillar Tractor company factory there has announced 800 redundancies, and I am glad to say that the workers have now decided to fight that. On far too many occasions men are prepared to sell their jobs for the juiciest carrot. On this occasion, however, the men are standing firm. That is not the end of the story. Everyone in that factory will be on a three-day week. That, of course, will not be recorded in the unemployment figures. At Honeywell, which was visited by the Minister, there were 210 redundancies. Another company in my constituency has natural wastage and there are to be no replacements there. That, too, means job losses.

None of us on these Benches can be accused of not encouraging industrialists to come to Scotland. The Government have used many phrases to denigrate what has been said by Labour Members. The hon. Member for Edinburgh, South (Mr. Ancram), who is chairman of the Tory Party in Scotland, said that we were doing nothing to encourage development in Scotland. Nothing could be further from the truth.

Let me put my own record on the nail. I visit every factory in my constituency. Indeed, the last recess was the most dismal of my 17 years in Parliament. Many industrialists who supported the advent of this Government now realise that they were conned in the 1979 election. I dare not repeat what was said by one Tory Party supporter to me about the Government. His language was not only unparliamentary; it was not even the sort of language that one would use in a factory.

I have worked in a factory, and I know how the workers feel. It is said that wages are the offending instrument in connection with jobs, but nothing could be further from the truth. The Scottish trade unions are taking a responsible approach, as are those in the United Kingdom as a whole. The Government believe in free collective bargaining, and that means, in essence, that trade unions have the same rights as the employers and are entitled to get the best possible deal for their members.

The Government have asked for our proposals. Let us go back to 1931. Many Ministers are dishonest in what they are saying to the people in Scotland. Indeed, many of the so-called wets now concede that the Labour Party's points of view are correct. We should adopt the same attitude as was adopted in 1931 by the President of the United States, Franklin D. Roosevelt, at a time when there was astronomic unemployment—and we should remember that America is 320 times the size of Scotland. He got all those people bask to work as a result of the New Deal. They worked for their money, and were not paid subsidies in the name of unemployment and social security.

The unemployment figures are still further clouded. The Government are sending letters, through the Department of Health and Social Security, to people of 60 and over asking them to accept early retirement, provided that they do not sign on at the employment exchange or go to the jobcentres. That will further cloud the issue, because those men will not be included in the unemployment figures.

The youth opportunities programme has been mentioned on many occasions. I hope that the Minister will accept that in many instances the young people have been exploited. I know of one case in which the lad concerned was taken on a YOP scheme—that involves Government money, of course—and he was told to wash cars. The final straw came when he was asked to walk the managing director's dog. He said "Enough is enough", and contracted out. We may have been the people who started YOP, but if that is the true meaning of the scheme, we want no part of it. I fully understand why many trade unions are now kicking over the traces because of what is happening.

People in the YOP scheme are paid £23.50 at present. The Manpower Services Commission has recommended that they be paid £28. So far the Government have not acceded to that request. I hope that the Minister, when he replies, will give a categorical assurance that he and his right hon. Friend, who is a member of the Cabinet, will fight for that.

We have been told that in the near future a further 500 redundancies will occur in the steel industry in Scotland. Bearing in mind the number of redundancies that have taken place over a period in that industry, and bearing in mind that the workers have measured up to their responsibilities, is it not time that the Government took a leaf from other countries' books and to some extent subsidised our steel industry? It is not only the steel industry that is suffering, but the derivatives of steel.

I worked in the construction industry, and that industry is now at its lowest ebb since the 1930s. Since last year there has been a 17 per cent reduction in brick production, as well as an 11 per cent. reduction in cement production—all this at a time when we need more local authority houses, more modernisation of houses, and more hospitals.

There is a hospital in my constituency, Kirklands mental hospital, which is one of the old poor law hospitals—in fact, it is the oldest in Scotland. The first phase of modernisation will begin next year, but the second phase is also urgently required. Public money could be spent on providing the necessary facilities for patients in such hospitals. Schools, too, are urgently required. The road from Baillieston to Edinburgh and from Baillieston to Glasgow should be brought up to motorway standard. People now living on unemployment, social security and supplementary benefit could be brought back into work if the resources provided by North Sea oil were used for such projects.

We know what the Government's line will be with regard to the steel industry. The engineering industry, which is the backbone of Scottish industry, is declining rapidly despite what the Secretary of State has said about all the jobs that are coming. He mentioned Ferranti, which is in my constituency. I visited Ferranti during the recess. It is true that if Ferranti stopped building weapons of war the people in that factory would become redundant, But is it beyond us to produce for peace rather than war? Workers in those industries do not want to work for war. That argument should therefore not be used, because the workers themselves do not accept it.

In the construction industry, a factory in Lanarkshire is also closing. My hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) has made representations to the Government about that. My interest in that factory is that I dealt with it as a trade union official. I know that my hon. Friend will put forward a strong case for its retention. Another factory, under the aegis of the British Steel Corporation, has been closed lock, stock and barrel. The whole place is now derelict and, to use a phrase that has been bandied about the House, it is now barren territory and will not be used again to the best advantage. There are many pre-war factories which require to be brought up to modern standards. That is another opportunity to use public expenditure to bring men back to work.

If the Prime Minister and her Government are not prepared to grasp the nettle and to accept the views of the wets on the Conservative Benches, the only wise and decent thing to do is to go to the country and lay before it the record that is at stake. I have no doubt that Scotland would, once again, return a very large number of Labour hon. Members, and that that would be repeated throughout the United Kingdom.

6.43 pm

Mr. John Corrie (Bute and North Ayrshire)

For two and a half years I have listened with great care to all that has been said by the Opposition, hoping that one day I should hear the easy answer to all the serious problems that we face. Sadly, I am still waiting. The only answer that they offer still seems to be that we should spend our way out with money that we do not have, thus creating greater problems for the future.

Despite what has been said by hon. Members from all the Opposition parties, much better news is now coming out of industry. The Secretary of State gave us a great deal of that good news today. Speaking privately to many companies in my area which have had a difficult time and serious problems, I have found that over the past three months they have at long last been experiencing an upturn in industry. My hon. Friend the Member for Edinburgh, South (Mr. Ancram) is right. It does the Scottish economy no good to keep talking down to Scotland and trotting out the suggestion that it is an industrial wasteland.

Mr. Foulkes

The hon. Gentleman mentioned discussions with firms in his constituency. Can he give the House examples of companies which are experiencing such great prosperity, because that is not what I have found?

Mr. Corrie

I shall come to that point, so I shall not deal with it now, but I promise to cover it later.

For all that, Conservative Members are deeply concerned at the present level of unemployment, and particularly youth unemployment. To listen to the Opposition, one would think that it was a new phenomenon. That is not so. As they well know, there has been a set pattern of rising unemployment for the past 20 years. The real worry this time is that as the economy picks up many of the old types of job have disappeared for ever—and would have disappeared even under a Labour Government. That is why we must concentrate our efforts in the future on high technology, in which we can compete in world markets.

It is no use producing goods that we cannot sell, as that will never break the pattern of rising unemployment. Scotland is going through another industrial revolution. There is no way in which we can escape the effects of world recession, but we have weathered the storm better than most. That may not be saying much, but it is true. A major shift is taking place in industry. It is perhaps sad to say, but in industry big is no longer beautiful. Large factory units do not just die: they are strangled as they attempt to compete in world markets in which they are no longer competitive because their goods are too expensive due to high wages, high rates and high energy costs which have pushed up inflation faster than has been the case for their competitors. We must therefore tackle the root cause. This is simple logic, but nobody seems to want to face it. No magic wand can be waved to make things better. If there were one, the Opposition would not be where they are now. They would be sitting on these Benches as the Government.

Mr. Foulkes

We would be the Government in Scotland if we had a Scottish assembly.

Mr. Corrie

The key is still productivity. The only thing that will improve matters is a better understanding of what is wrong with industry and a determined effort to put it right. At last, that is beginning to happen. Inflation is under control. Wage increases are becoming more realistic. Companies are becoming more efficient. Goods are therefore becoming more competitive. But we cannot just stop there.

Mr. James Dempsey (Coatbridge and Airdrie)

I draw the hon. Gentleman's attention to a very serious point. There have recently been 200 redundancies in my constituency. There have been redundancies in Fifeshire and the Borders. We met the Minister responsible for the gas and electricity industries to try to persuade him to stop the exorbitant increases in charges. Those charges represented far more than a fair profit. They made costs so high that industry became uncompetitive, leading in my own constituency alone to 200 redundancies which could have been avoided if the Government had refused to allow exorbitant and unfair gas and electricity charges.

Mr. Corrie

If the Labour Government had allowed prices to rise as they should have risen during their period of office, we should not have had to push the charges up so rapidly when we came to power, so it is a self-inflicted wound.

We must accept that the pressure on our industrial base can only become worse. A great change is taking place in the world situation. Our great competitors—Germany, Japan and America—are still there, but a new problem is developing. Emerging countries such as Taiwan, China and Korea are producing and putting on to the world market consumer goods at prices with which we cannot compete. We are in a Catch 22 situation, because we have a duty to aid the Third world and to give it all the help and expertise that we can. We have a moral duty to continue to increase that aid as our economy improves. But as more and more of the goods that we produce are also manufactured abroad, so our market shrinks and competition becomes fiercer.

It is no longer any use trying to compete on the world market in certain areas of production. Most of those countries pay tiny wages and produce goods at production costs far lower than ours. What do we do when they wish to export those goods to us? If we keep them out, we deny our consumers cheaper goods in the shops and put at risk the economies of these emerging States. If we let them in, we destroy our own industries and throw thousands more out of work, as has happened in the car and textile industries in Scotland.

There are no easy answers. Survival must be worked for. Neither can we buy our way out of this problem, because if we buy jobs, we simply run into problems later. Any Government can boost the economy by squirting money into it, but the short-term gain is far outweighed by the long-term damage that is done.

Governments, as we all know, do not have money; only taxpayers have it. Higher taxes and higher borrowing, or higher amounts of paper money, only boost inflation in the long run and bring the inevitable consequences.

We are reaching a dangerous stage at which fewer and fewer people are working in productive jobs, having to pay out more and more taxes to carry a growing number of people in nonproductive work. That trend must be reversed, or it will pass the point of no return.

In a world of deep recession, we in Scotland have many more benefits than most. In a world of scarce energy resources, we have oil, gas and coal in plentiful supply.

Mr. Foulkes

They are being squandered.

Mr. Corrie

We are the only major industrial country which is more than self-sufficient in energy. The oil-related industry is booming in parts of Scotland, but we see very little of that boom on the West Coast. One oil rig is being built at Hunterston. What are the possibilities of a future order for that yard? What are the chances of oil or gas being discovered off the West Coast of Scotland, so that we in North Ayrshire can have some of the boom?

Mr. Foulkes

The hon. Member, having broken his silence, has raised an important point about the exploration for oil and gas off the West Coast of Scotland. Is he of the same opinion as I am—that some of the oil companies are keeping very quiet about the huge potential and extent of resources off the West Coast because they do not want the Government to be fully aware of the amount of money which would be available in petroleum revenue tax and other taxes, just as they did about the North Sea? Does the hon. Member agree with me that the Government ought to be looking into this matter?

Mr. Corrie

I am not privy to that sort of information. I thought that the problem off the West Coast of Scotland was that the companies would have to work in depths that are much greater than those off the East Coast, and that therefore technology would have to move forward much more.

However, there is no doubt that the oil-related industry, the microchip industry and the high technology industries are the industries on which Scotland should concentrate now. All that industry asks of Government is that it be allowed to compete on equal terms with its competitors abroad. In many cases that is just not possible, as has been said in the debate, because many companies abroad enjoy subsidised energy prices. It is tragic, as the hon. Member for Fife, Central (Mr. Hamilton) said—it is not often that I agree with him—that, for instance, Scotland has the water, the trees and the energy, yet we cannot produce our own newsprint because our competitors enjoy subsidised fuel costs.

A real example of high productivity is our agriculture. If the rest of British industry were half as efficient or half as productive per man hour, we should not have a recession problem of the depth that we have. The EEC is much criticised, but there is no way in which the British Treasury could have supported British agriculture as the common agricultural policy has done over the last few years. For Britain to come out of the Community now would be disastrous, not only for Scottish farming but for Scottish industry.

Mr. Home Robertson

In view of the glowing picture that the hon. Gentleman has just painted of Scottish agriculture, would he care to account for the fact that employment in Scottish agriculture, according to recent figures, has dropped by 7 per cent.?

Mr. Corrie

I had not thought that I had painted a glowing picture of Scottish agriculture. If the hon. Gentleman gives me a few moments, I shall tell him exactly how I see the situation in Scottish agriculture. I agree with him that Scottish farming has been far harder hit by the recession than its English counterpart over the last two or three years. Bank borrowing is dangerously high, and a high proportion of farmers are now precious near the edge of the precipice. I was extremely pleased today to hear the news about hill livestock compensatory allowances, which will at least give some boost to the income of hill fanners. I sincerely hope that the Under-Secretary will pass on to our right hon. Friend the Secretary of State the message that he must fight in all ways possible the mad scheme from Brussels which suggests that we should have a super-levy on dairy farmers in Britain, who are highly efficient, to subsidise the smaller inefficient farmers in Europe.

The greatest burden that agriculture faces is high interest rates. I accept that they may help to control the money supply, but they crucify small businesses, which must borrow to exist, and they merely fill the banks' coffers with profits that they do not require.

Many new companies are setting up in Scotland. The Secretary of State listed some today; there are many more. Most firms now believe that there is a lift in the economy. A little more optimism from the Opposition would go a long way to help matters. The single door approach on the establishment of the Locate in Scotland unit has been a tremendous boost for those wishing to invest in Scotland. That investment from abroad must be pursued to the full. What we do not want to see—we must all agree about this—is a "Relocate Within Scotland" movement, with firms simply moving from one area to another to gain some advantage. The maximum help must be given to any firm that wants it if its project is viable. That must be the criterion.

My right hon. Friend the Secretary of State has told the House of the interest already generated by the Clyde enterprise trust. That is most welcome news. If this is the way to success, more enterprise trust areas must be set up. If the future means 100 small factories employing 10 people each rather than one employing 1,000 people, that is the way that we must go.

The Ardrossan, Saltcoats and Stevenston Enterprise Trust in my constituency has been a great success. I can update the Minister on what the right hon. Member for Glasgow, Craigton (Mr. Millan) said. As of this morning, 97 projects with a potential of 1,000 jobs have been processed for that enterprise trust—and this is all since last May. Inquiries are coming in at the rate of 15 per fortnight. That is a success story.

Thanks to British Steel and the Government, new life is coming to the Garnock valley. the electrification of the Ayr line will create jobs, and downstream jobs. However, I hope that this is the first phase of electrification in that area and that the next phase will be the extension to Hunterston and Largs, because there is a serious environmental problem on that line, with the noise level of heavy diesel trains travelling from Hunterston to Ravenscraig carrying ore.

Last week I spoke to representatives of a number of firms. The thought uppermost in their minds is good training via a good apprenticeship scheme. There is a joint responsibility between Government and industry to see that we have enough craft training to produce All the qualified craftsmen that our industry needs. Provided that the course is sufficiently well designed to meet industry's long-term practical needs, I should like to see an extension of a year for some of those in the youth opportunities programme. Failure to give our young people adequate training for careers in industry will threaten our long-term survival as an industrial trading nation. That must not be allowed to happen.

It would be foolish to pretend that all was well with the Scottish economy, but it is equally wrong to say that nothing good is happening. Confidence breeds confidence. All that is now required is a will to recover and discipline to see it through. The Opposition could be of great help in that, if they could put short-term political gain aside and show a little more optimism.

6.59 pm

Mr. Dennis Canavan (West Stirlingshire)

The manifestation of the failure of the Government's economic strategy can be seen in the rising toll of unemployment in Scotland. The Secretary of State did not remind us of the statistics. When the right hon. Gentleman took over in May 1979, unemployment in Scotland stood at 165,000. It is now over 325,000, an increase of over 160,000. For every week that the right hon. Gentleman has been in his job, over 1,200 people in Scotland have lost their jobs. Over 240 jobs have been lost every working day. Even during the three-quarters-of-an-hour of the Secretary of State's speech, at least seven people in Scotland probably lost their jobs.

Mr. Corrie

rose——

Mr. Canavan

I shall not give way. The October figures show 13,400 vacancies notified to employment offices in Scotland and only 200 vacancies notified to careers offices in Scotland which deal specifically with young school leavers. There are 22,900 young school leavers unemployed in Scotland. This means that more than 100 youngsters are chasing every job in Scotland. Yet we have a Secretary of State for Employment, or, rather, for unemployment, who has the cheek to insinuate to these young people that they should get on their bikes to look for a job. The truth is that the jobs do not exist. The vacancies are not available.

The responsibility, for that situation lies fairly and squarely with the Government. They look around for convenient scapegoats—trade unions, Labour-controlled local authorities or an international recession. They talk about recession as if it were the weather or an act of God. Recessions are not acts of God. They are acts of man. It is for Governments to try to find man-made solutions to economic recessions instead of trying to pass the buck.

It seems to me that the Government have virtually abandoned any serious attack on unemployment. It is little wonder that an increasing number of people are beginning to suspect that the Government are deliberately using unemployment as an economic weapon. It is certainly true to say that a high level of unemployment is the inevitable result of the extreme monetarist policies that the Government are pursuing. Monetarism may look all right in the textbooks of some theorists. In fact, it does not stand up to the light of experience. The aim of this monetarist approach is to reduce inflation by cutting public expenditure, but inflation is still higher than the rate that the Government inherited from the Labour Government. The public sector borrowing requirement is still considerably higher than the Government's own targets.

Monetarism contains within itself the seeds of its own destruction. One does not need to be a brilliant economist, mathematician or econometrician to understand the reason. The Institute for Fiscal Studies revealed at the weekend its most up-to-date estimate of the average cost to the Government of each unemployed person. Its figure was £4,500. Multiplying that figure by the 3 million unemployed, we get the sum of £13.5 billion, which is more than the total public sector borrowing requirement. I agree with the hon. Member for Inverness (Mr. Johnston) that the cost of unemployment in Scotland is about £1.5 billion.

Why cannot the Government shift that expenditure? Is it beyond their nous to realise that it would be a transfer of expenditure if they began a public investment programme to create real and meaningful jobs, instead of that expenditure simply going to prop up an ever-increasing dole queue? Many Labour Members, including myself, would like to see that public investment combined with public ownership and public enterprise. I realise, however, that the Government are beyond conversion to any such radical measures. I should, nevertheless, like to refer to some areas where public investment is essential and where even this Government might be able to make a useful response.

I refer first to the construction industry. A leaflet published by the Scottish Construction Industry Group, a joint venture of trade union representatives and industrialists, lists some facts about Scotland that I have never seen seriously challenged. It says: Half our factories were built before 1939. Victorian sewers built 125 years ago need replacing— regular collapses indicate the need for massive investment. If the quality of our housing stock is to be maintained 30,000 new homes are needed each year in Scotland—in 1980 under 20,000 were built. Several hundred thousand houses await major repairs. Half our hospitals were built before 1914. Our motorway network will need major renewal in the next 20 years". I should also mention much needed public investment in our railways and the fact that over 40 per cent. of primary schools in Scotland are still using buildings erected before the First World War. The irony is that at least 30,000 construction and allied workers are on the dole in Scotland when their skills could be used to build hospitals, schools, factories, roads and railways that are essential for our industrial recovery.

Conservative Members will ask where the money is to be' found to trigger all this new public investment. The oil revenues are now running at £4 billion a year. Why do not the Government set up an oil development fund to regenerate depressed areas in Scotland and elsewhere.in the United Kingdom? Instead, even within the energy industry itself, the Government are so hell-bent on a doctrinaire monetarist policy that they will not consider good, wise and useful public investment in the gas-gathering pipeline, which would create jobs not only in the north of Scotland but in Central Scotland, including jobs possibly for my constituents.

The Government are engaged in an exercise of public asset—stripping of the British Gas Corporation and the British National Oil Corporation, which could destroy jobs and increase energy prices and have a devastating effect on many industries and therefore a detrimental effect on employment. In talking about the energy sector I am not referring only to oil and gas. We need more public investment in the coal industry. There are hundreds of thousands of tonnes of workable reserves of coal in the Stirlingshire and Clackmannan coalfield. If public investment in the coal industry were combined with the construction of another coal-fired power station or a coal liquefaction plant in the area, that would not only be a valuable contribution to our economy, but would help to create jobs in that area.

I should like to mention training. I do not know whether it is a coincidence, but this debate follows a debate yesterday on higher education. The cuts in higher education affect science and mathematics-based courses at the University of Stirling and many other technologically based courses at colleges and universities throughout Scotland. The young people who would have graduated from these courses are the very people that we need for our economic and industrial recovery. The effects of the cuts discussed by hon. Members yesterday will be far-reaching and detrimental, not simply on education, but on industry.

There has been mention of our industrial competitors. The proportion of our population in further and higher education is very poor. We are much nearer to the bottom of the international league than we are to the top. I draw the attention of the House to one of the many letters that I have received on the subject of the university cuts. It comes from a professor at the University of Stirling, who, referring to the MacRobert Centre, which is part of the university, said: In early September we have arranged to celebrate the tenth anniversary of our founding. If this takes place it could be the event of the year most heavily tinged with irony. For the centre was opened by the man who became the first chairman of our advisory committee and chairman of our appeal fund, namely, Viscount Younger of Leckie. He is the father of the Secretary of State for Scotland. It is sad that the good deeds of the father should be so soon erased by the doctrinaire obscurantism of the son. But we must remember that this Government was elected to be pragmatic and flexible. Reference was made earlier to the need for flexibility in industrial strategy. The Secretary of State for Scotland and the rest of them in the Cabinet have the flexibility of a gauleiter. Until fundamental change is brought about in the Government's policy, we shall be in trouble in Scotland and everywhere else. I know that the Minister responsible for industry and education in Scotland does not have much weight in Cabinet Committees, but he must try to persuade his colleagues, particularly his Treasury colleagues, that public investment must not be seen only as an exodus of money from the Treasury. It should be seen as a useful investment for the construction of a better future, when people have the right to education, the right to work and all the other basic human rights that should exist in a civilised society.

7.11 pm

Mr. Alex Pollock (Moray and Nairn)

I shall concentrate my remarks on areas which are further north than those to which the hon. Member for West Stirlingshire (Mr. Canavan) referred. I hope that my speech has a general relevance in a debate on the Scottish economy.

I advise that a degree of caution should be exercised when handling the statistics which have been mentioned today. Hon. Members on both sides of the House perhaps have not appreciated fully that some figures require significant qualification if their true import is to be properly understood. I shall give two examples to illustrate what I mean.

In the Forres employment exchange area in my constituency the unemployment figures in the last few months have crept up to and touched the 20 per cent. barrier. At first sight that will strike everyone as being an appalling figure which ranks equal to some of the worst hit areas in Scotland and elsewhere. However, a major qualification must be made. In that employment area lies a major RAF station where several thousand Service men and their wives live. Service men are not included in the total employment figures. However, many Service wives who come with their husbands to the area having worked elsewhere find that similar work is not available in Forres. They register as unemployed and create a double distortion in the figures. I do not intend to belittle the unemployment problems in my area. However, I counsel caution when using such figures to further an argument.

Another matter of more general application has not been noticed by politicians when dealing with the vexed unemployment issue. I refer to the number of married women who have come on to the labour market in recent years. I received a brief answer from the Department of Employment which stated: the net increase in married women in the labour force in Great Britain between 1971 and 1979 is estimated to have been about 900,000."—[Official Report, 24 February 1981; Vol. 999, c. 326.] That means that not far short of 1 million extra married women have joined the labour market in the last 10 years. In relation to the overall figure for unemployment that is a factor which cannot be ignored. I do not make the point in a sexist sense, but I urge that we have a responsible appreciation of the factor which certainly was not present in the depression of the 1930s.

Mr. Michael Martin (Glasgow, Springburn)

When making his calculations the hon. Gentleman must recognise that many female workers who are made redundant do not record their names on the unemployment register because they are part-time workers and do not qualify for unemployment benefit. There are many unemployed people in that category and they are not included in the figures.

Mr. Pollock

I am grateful for that observation. It underlines my argument that statistics can mean little and must be subject to qualification if they are to be properly understood.

The North-East of Scotland faces the recession as everywhere else. Given the work ethic which is prevalent there, the problems have been tackled with a remarkable degree of resilience and success. One major employer engaged in food canning when faced with the recession realised that there was a choice. The employer decided that he could shed labour, reduce the working week and cut out a shift, or expand the sales force and aggressively attack markets that he had never tried to capture before. The latter course was chosen. Such is the success that the firm is planning expansion and further investment. I know of a firm in the whisky trade that reacted in the same way.

There is a role in the economy for management which only it can take. Managers are showing a willingness to accept that role more vigorously than they have for many years. Management can achieve a certain amount, but a degree of assistance is required from the Government within the national economic framework.

There is no doubt that the high level of interest rates is holding back investment and expansion in the small business sector. I make a plea for the Government to examine again the possibility of introducing a dual interest rate scheme. Such countrywide schemes already exist in four EEC countries— Germany, France, Italy and Belgium.

In Germany, credit is available at subsidised interest rates to be channelled into small and medium-sized companies through an institution that was founded in the post-war period to help German reconstruction. In France preferential interest rates are given to specific sectors such as agriculture. In Belgium a subsidy on investment contributes directly to the creation, extension and modernisation of industry.

Mr. David Myles (Banff)

My hon. Friend speaks of lower interest rates for agriculture in other European countries. We have opted for the capital grant method of supporting agriculture, rather than low interest rates. At a time of high interest rates the money in one's hand can be more beneficial than a low interest rate. In hard cash terms the capital grant method is better.

Mr. Pollock

There may be strength in my hon. Friend's remarks. However, I am sure that he will agree that he has received many representations from the farming community about the unacceptably high level of interest rates, which are making the running of farms very difficult. My plea is that the Government should consider the merits of such an alternative scheme. It would help to underline, for the small business sector, the Government's determination to encourage proper restructuring and expansion—the very things that the Secretary of State counseled. Such a scheme would also have the beneficial effect of drawing a clear distinction between the committed borrower, who is motivated by a desire to help the local and national economy, and the speculator and manipulator of the money markets, whose motives are quite different.

Another major burden on industry is the high cost of fuel. Industry is entitled to look to the Government for more positive assistance than it has received. Of course, the proposed breaking of the British Gas Corporation's purchase monopoly should assist. Indeed, that has already been warmly welcomed, for example, by the chemical industry.

More can and should be done about those monopolies that will remain within the public sector. I reiterate a plea that has been made. All nationalised industries should have to apply to a permanent public sector prices board to validate their price increases. Deep disquiet and suspicion remain among many sectors of industry that the nationalised sector is not properly accountable for the price increases that it so often imposes on industry.

Mr. Canavan

How did the hon. Gentleman vote on the abolition of the Price Commission?

Mr. Pollock

As time is short, I would rather tell the House that I voted vigorously in favour of the Government's recently announced changes in the BNOC and the BGC. They seem to offer a far better hope of competitive and worthwhile prices—[Interruption.] I shall avoid being drawn into any football similes, although they are so topical.

My hon. Friend the Member for Dumfries (Sir H. Monro) touched on the subject of regional aid. My local business community and my local authorities are most concerned about the threatened loss of assisted area status, which is due to take place next year. There is a genuine fear that such removal of regional aid will make it difficult— especially for the non-oil sector in Grampian—to ride out the recession and to sow the seeds of expansion, as requested by my right hon. Friend the Secretary of State. I hope that the Scottish Office will carefully consider the implications of any downgrading before it makes a final decision.

The message that I leave with the Government is that I welcome the realism with which they have tackled many deep-rooted problems that face the Scottish economy. Industry, especially in the small business sector, appreciates the wisdom of the Government's objectives and is actively trying to help to reach a more sensible management of the economy. At the same time, industry is looking to the Government, in the second half of their Administration, to concentrate not only on monetary realism but on combining that realism with hope, through further necessary support from central Government. Such hope could come from the factors that I have touched on. I commend them to the Government Front Bench in the difficult tasks that lie ahead.

7.24 pm

Mr. Robert Maclennan (Caithness and Sutherland)

I hope that the hon. Member for Moray and Nairn (Mr. Pollock) will not think me ungracious if I reflect on his initial remarks, although he made an interesting suggestion about dual interest rates. He said that we should be cautious when looking at statistics. There is not much argument about the level of unemployment in Scotland. The Government's economic bulletin, the Fraser of Allander Institute, and the Manpower Services Commission all paint the same picture.

However, if we must be cautious about statistics, we must be even more cautious about the type of anecdotal evidence that the hon. Gentleman gave. He mentioned a firm in his constituency in the food processing sector. As an illustration of the dangers of the hon. Gentleman's line of argument, it is worth drawing attention to what the Fraser of Allander Institute said about that sector in its most recent bulletin. It said that in 1980 as a whole production in Scotland was 1.9 per cent. lower than the 1979 level. It also said that 67 per cent. of respondents in the July CBI industrial trend survey were producing a less than satisfactory level and that 95 per cent. stated that orders were the main factor likely to limit output over the next four months. It added that it seemed likely that that low level of production would continue.

That is probably a more accurate picture than the anecdotal picture that the hon. Gentleman painted. It is not only a matter of cold statistics. In that sector of industry substantial redundancies have been declared, such as at Keilers in Dundee. Indeed, Scottish and Newcastle Breweries has made 600 workers redundant.

Mr. Bill Walker (Perth and East Perthshire)

Is the hon. Gentleman suggesting that those redundancies are the result of Government policies or that they are the result—as has happened in my constituency—of a changing pattern? The Smedleys factory closed and 400 people were made redundant, yet that occurred before the Conservative Party came to office.

Mr. Maclennan

I was not suggesting anything of the kind. I suggest that there are several coincident, interacting reasons for such things. The Government's policy is seriously exacerbating the situation. The point is that it does not help the argument to suggest that those who express deep concern on the basis of statistics—many of us could cite examples—are exaggerating the seriousness of the situation.

I had sympathy with the Secretary of State when he criticised the speech made by the right hon. Member for Glasgow, Craigton (Mr. Millan). In the space of 35 minutes the right hon. Member for Craigton made only one positive suggestion about what the Government might do. However, the Secretary of State showed no sense of industrial strategy. He tried to set the tone of the debate by reading out a great list of firms that had taken on, or were about to take on, new employees. Any of us could have read out a longer list of firms that are laying off workers. However, that would have driven most hon. Members to distraction and would not have added one constructive idea to the debate. The Secretary of State's rather tendentious approach did not add anything either.

As the Secretary of State said in the Select Committee on Scottish Affairs, the reality is that the level of unemployment is bad and is becoming worse. In addition, the Government's measures are not designed to solve the problem. I regret that a Treasury Minister will not conclude the debate, as the Treasury is the prime culprit, but I remind the Under-Secretary of State of what the Secretary of State said in reply to the hon. Member for Central Ayrshire (Mr. Lambie) on 15 June in the Select Committee on Scottish Affairs. Unemployment was under discussion and the right hon. Gentleman, when asked the Government's predictions, said: It is difficult to tell in one sense because we are at the moment at a stage when the trends over the next year or two are not absolutely clear, but it is expected that the recovery in activity, when it comes, will have a helpful effect on the unemployment level, although I do not expect it to halt the rise. I expect that it may reduce the rise in unemployment, but I do not expect in the immediate future that unemployment will start to fall. Therefore, the Secretary of State paints a deteriorating picture, not an improving one. Surely that must give the Government cause for reconsideration—or are they prepared to live with these levels of unemployment indefinitely? If they are not, they must change course. That is what the hon. Member for Moray and Nairn and other Conservative Members have been advocating.

A number of Conservative Members sought to trail my speech by suggesting that I would advocate massive public expenditure increases as a cure-all for the present level of unemployment. I must disappoint them. That is not the policy of the SDP, any more than it is the policy of Conservative Members who are critics of the Government. We have proposed a number of public expenditure increases that we believe are designed to create employment, particularly in needy infrastructural areas.

The hon. Member for West Stirlingshire (Mr. Canavan) mentioned sewers. I suggest that we could also invest in roads and bridges, particularly the Drench Firth crossing in my own constituency, which would be enormously beneficial.

Some Conservative Members who twit us for our belief that an increase in public expenditure at present is not only justified but necessary talk out of both sides of their mouths. The hon. Member for Dumfries (Sir H. Monro), who attacked me for advocating a cure-all proposal, thought it appropriate to praise the Government for having announced a £2 increase in the hill livestock compensatory allowance. Surely Mat is an increase in public expenditure. The same point was made by the hon. Member for Bute and North Ayrshire (Mr. Corrie). Conservative Members cannot get away with the cant that they have uttered about the evils of public spending when they are advocating it selectively in other sectors of the economy.

The great weakness of the official Opposition is that, for reasons best known to themselves, they have not revealed what they would do. The Secretary of State was wholly justified in taking them to task on this point. During a 35-minute speech by the right hon. Member for Craigton, there was a great deal of justified criticism about the Government's inactions in respect of pending closures. However, the only positive suggestion made by the right hon. Gentleman was that we ought to do something about Japanese imports.

I do not know what experience the right hon. Gentleman had of this subject when he was in Government, but if he had no direct experience no doubt his right hon. Friend the Member for Lanarkshire, North (Mr. Smith), who was Secretary of State for Trade, could have told him something about dealing with the Japanese, because he knows some of the difficulties involved. The right hon. Gentleman might have drawn attention to the fact that the Foreign Secretary has made considerably tougher remarks about Japanese trade than ever came from the lips of the right hon. Member for Lanarkshire. North. It should not be thought that the consequence for the Labour Party of what will be announced tomorrow will be "We can have little disagreements in Government but we can have big disagreements in Opposition".

The right hon. Member for Lanarkshire, North is at least as guilty as the present Government for not coming to terms with the problem of Japanese imports a long time ago. The great gap in the debate has been that the right hon. Member for Craigton did not take on the Government in respect of their central economic strategy. He said that that had been left to his right hon. Friend the Member for Stepney and Poplar (Mr. Shore) last week. However, a debate in which macro-economic conditions are not discussed is a debate that lacks heart.

The right hon. Member for Stepney and Poplar, by putting forward uncosted proposals for massive public expenditure increases, simply makes a wholly incredible proposition.

Although this is an Opposition debate, it is primarily a debate about the Government's performance. With the important exceptions of the micro-electronic industry, the offshore oil industry and the financial services industry, the Scottish industrial scene is almost uniformly bleak. There are three reasons. The first is the international recession. The Government are not wholly without blame, but I do not propose to expand on that subject.

The second reason has been touched on particularly by several Conservative Members— that in some sectors at least Scottish industry has been slow to adapt to new techniques of production and new market situations. The Government do not bear all the blame for that, but they are doing precious little to bring about those adaptions or to exploit, or assist in exploiting, the new market opportunities.

A striking example is the fiasco of the Government's gas-gathering pipeline scheme, which the Minister of State, Department of Energy—my amiable neighbour to the south—promoted vigorously. But I understand that he was finally defeated in Cabinet in the absence of the Secretary of State for Scotland who apparently was at that time in the United States.

If I recall correctly, that was the famous occasion when the Secretary of State announced from the United States that he had not known about the plans of British Airways for Prestwick. That was an unfortunate visit which cost Scotland dearly. If foreign visits by Ministers are to be so unproductive and of so little benefit to Scotland, they would do better to stay at home in future.

The third reason for the predicament of the Scottish economy is the framework imposed on the Government by the Prime Minister and the Chancellor of the Exchequer. The Conservative Party, sometimes known in Scotland as the Unionist Party, is accustomed to speaking of the unity of the British economy. Notwithstanding the temporary advantage of North Sea oil, there is no doubt that Scotland is suffering equal misery with the rest of the United Kingdom.

Mr. Dewar

I am anxious to instruct myself in the policies of the SDP, but at present I have some difficulty following the positive policies that the hon. Gentleman is advocating. We understand that he feels that the Labour Party is proposing unchecked and uncosted public expenditure, and he draws back from that horrific prospect. He accuses the Conservatives of not doing enough. What exactly should the Government be doing to get the Scottish economy out of the self-evident mess which it has been allowed to flounder?

Mr. Maclennan

The hon. Gentleman must allow me to develop my speech in my own way. Unlike some hon. Members, I regard debate essentially as an opportunity to comment on arguments put by others before putting forward one's own positive and constructive proposals. I have every intention of doing so, but I hope that the House will not complain if I take some time.

I was referring to the main aim of Government policy in economic matters—the reduction in inflation. One must question the appropriateness of their total preoccupation with that objective. One must also question the means that they have chosen to bring about that end.

The Government have been in office for two and a half years and inflation, measured by the retail price index, is still substantially higher than it was when they took office. By any test, their economic policy must be regarded as a failure, even without its impact on the manufacturing and service industries. The Prime Minister said that we cannot look for a further reduction in inflation in the short term, and that the Government must persist with their policies.

It is probably true that the Government have had modest success in holding down costs in industry. However, that success has been brought about by measures deeply damaging to the Scottish economy as well as to that of the remainder of Britain. They have reduced real wages below the level of inflation for the past year. There is no reason to believe that that trend will not continue in the event of an upturn in the economy and in the absence of any effective incomes policy.

The hon. Member for Glasgow, Garscadden, (Mr. Dewar) asked me about the positive policies of my party. I want a positive commitment from him that he will seek to make an incomes policy work. The previous Labour Government tried to do that, but the present Opposition have virtually resiled from it. Some Opposition Members may privately believe that it is desirable, but it is not discussed in polite Labour circles. I put forward the positive proposal of an incomes policy.

I shall work positively towards the development of our trading relations with the European Community. Will the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) give the House a categorical assurance that that is Opposition policy? Or will their positive policy be to do what the Scottish Labour Party suggested at its first conference and take Britain out of the EEC? About 42 per cent. of British trade, and a higher percentage of Scottish trade, is with the European Community, and more than 60 per cent. is with the Community and associated States. There is no dubiety about where the Social Democratic Party stands on that matter, but there is much dubiety about where the Opposition stand.

Public spending is the nub of the matter for a number of hon. Members. On 15 June the Secretary of State told the Select Committee on Scottish Affairs: I do not think we want an upswing in the economy fuelled by an increase in public expenditure, either capital or current. We really want to see a recovery led by private sector investment, and therefore our public expenditure strategy is governed by the need to get inflation down, thus creating conditions where expansion can take place and be sustained. That was a damaging statement of dogma.

The Secretary of State has admitted that the Government's policies will result in continuing increases in unemployment. I do not quarrel with those hon. Members who say that they have detected some slight improvement in Scottish industry, but none of them is also saying that that will create a single additional job. They are saying that employment is down to a level that can be managed, that it is under control, that there is increased productivity and an increased market. They say nothing about an increase in employment. Yet that is the damaging consequence of the change of course that the Government have wrought.

Our medium and long-term future lies with the new science-based industries described by the hon. Member for Inverness (Mr. Johnston), but it also lies with the Government, who must ensure the prosperity of some of the indigenous industries about which the Secretary of State said not a word. The right hon. Gentleman said nothing about agriculture, which is suffering considerably from the deprivations of the Government.

I shall give one example of what is happening to agricultural products. It is drawn from the Fraser of Allander Institute report on the consumption of beef and veal, which is crucial for Scotland. The hill livestock industry is the backbone of Scottish agriculture. The report states: Consumption of beef and veal in the first quarter of this year is down by 17 per cent. on last year. That must have an impact on the prosperity of the industry.

Mr. Myles

It is the money that the producer receives that matters. Will the hon. Gentleman comment on the difference in price for beef and sheepmeat compared with last year or with 1979?

Mr. MacLennan

There has been a marginal improvement this year over last year and the year before. The hon. Gentleman must recognise, especially as he is a proponent of the market economy, that ultimately the consumer determines the price. Otherwise, there would be massive increases in public expenditure which he would not welcome.

Agriculture was not the only section of the economy about which the Secretary of State was silent. What about the fishing industry? That is parlous in the extreme. The volume of landings is down on last year. Even more worrying is the serious drop in the value of fish. Landings of cod were 10 per cent. lower in the first quarter of this year than in the same period last year. The value per tonne has fallen from £571 to £517. Landings of haddock are down by 16 per cent. and the value per tonne has fallen by £100.

I have been asked for positive policies. I advocate an immediate increase in the reference and withdrawal prices negotiated by the Secretary of State—or whoever handles these matters—of 15 per cent. The industry cannot survive without a massive jacking-up of prices. The Government do not: appear to be taking seriously the critical condition of the industry.

It is strange that the Secretary of State did not say a word about the tourist industry. It affects the rural areas and he should have said something about it. The industry employs 116,000 people in Scotland, which is a massive proportion of its total employment. Certain parts of Scotland—those not close to the oil industry—have faced lean times. The tourist industry has been harder hit than almost any other sector by the massive increases in the price of petrol.

It is about time that the Government reconsidered the taxation of petrol. They must realise that the VAT and Customs increases that they have happily passed on to the consumer have hit the rural communities especially hard. I undersand that the Government cannot control the OPEC price for oil, but they can control the taxation. If the rural areas are not to be utterly decimated—that is happening—we must tackle that problem.

That brings me to another point about fuel subsidies generally. I am not suggesting a subsidy, but it would be worth looking at what is being done in other European countries. It is clear that other countries are putting our Scottish industry at a disadvantage through fuel subsidies. Fishing is only one of the many examples. The Government do not need to be so purist about those matters in their commitment to the market economy. They should take steps at least to enable our industry to compete with industries that are subsidised in that way.

During their two and a half years in office the Government have laid themselves open more to the charge of passivity in the face of economic disaster than to that of deliberately engineering the destruction of the Scottish economy. What has been so dismaying has been how they have stood by while industry after industry of great strategic: importance to the Scottish economy has gone to the wall. The Government have said that these industries are not viable. That has happened in Fort William with Wiggins Teape, with British Leyland and with Talbot at Linwood. It has happened too often.

What is particularly distressing about the debate is the way in which the Secretary of State picks and chooses. He seems to think that industries are not viable when he cannot find the money to support them and that they are viable when he finds the money. He has shown no yardsticks that he applies as a test of survivability. What the Government must do in respect of the non-science-based sectors of the economy, although some should be more science-based—pulp is an example—is to enable those industries to adapt and become competitive. There cannot be no pulp industry. We are not incapable of finding the resources to enable that industry to modernise.

The Secretary of State should not have stood back and allowed that to happen. That is true of his whole approach to the development of those older sections of our economy. It is a sad commentary on his addiction to dogma. I hope that he will intervene more effectively in the time that remains to him to save those industries, which would provide the bridge that we need to enable us to live on the newer industries to which the hon. Member for Inverness referred.

7.53 pm

Mr. Jim Craigen (Glasgow, Maryhill)

I am not being bitchy to my former colleague the hon. Member for Caithness and Sutherland (Mr. Maclennan), but, although he took twice as long as the leaders of the Scottish National Party and the Scottish Liberal Party, I am still in great doubt about the economic strategy that he seeks to expound.

I shall direct my remarks to the Government, because it is a bit of a cheek that they have put their amendment before the House. What foundation are the Government intending to lay for a new industrial base of economic recovery? This afternoon the bland were leading the blind. The Secretary of State outlined nothing that would give any prospect of hope in the Scottish economy. The only gleam was from the hon. Member for Dumfries (Sir H. Monro) who talked of Scotland's success in sport. The Secretary of State had no responsibility for that.

Sometimes I wonder what the point is of having a Secretary of State for Scotland in the Cabinet if he does not or will not influence United Kingdom economic and fiscal policy. It is important that the Secretary of State for Scotland should be in the Cabinet speaking for Scotland. We are not sure whether the present Secretary of State is a wet or a dry.

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

He is a drip.

Mr. Craigen

Some of us think that it is more a question of Scotland on the rocks, because since the Secretary of State came to office there has been a net loss of employment in Scotland of over 100,000 jobs. In my area, which covers the Springburn and Maryhill jobcentre areas, unemployment has risen by 75 per cent. since the right hon. Gentleman came to office.

Some of the political, economic and industrial buoyancy of Scotland has been punctured since the right hon. Gentleman occupied St. Andrew's House. I sometimes feel that he is one of the best delegators of responsibility in the business. If there is something to be opened, the right hon. Gentleman will be there. If there is something to be cut or closed, the Under-Secretaries will do it. The hon. Member for Edinburgh, North (Mr. Fletcher) does the closing and the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) does the cutting. Fortunately, the hon. Member for Renfrewshire, East (Mr. Stewart) has not been in the job long enough. He has only injured his arm. I am glad to see that he is over that.

In the recent Cabinet reshuffle and the subsequent changes, it struck me that the Secretary of State had to silence the blue chips. He brought in one as the Government Whip and another as his Parliamentary Private Secretary. Some of us had thought that the hon. Member for Argyll (Mr. MacKay) was in line for promotion. His difficulty is that he believes in Government policy. He will need to write a black paper so that he can get somewhere.

On a constructive and positive note, what is so lacking in Scotland now is not a blue chip, but a blueprint. There is a lack of vision at the Scottish Office of where the country is going. The Government threw away the prospect of a gas-gathering pipeline, which my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) mentioned. However, it is not just one major project that Scotland needs—although, heaven knows, it needs one such project—but a whole series of, I hope, inter-related projects.

What did we have in the Queen's Speech? We will tinker with the Stodart proposals on local government, when every local authority tells us that the basic problem is the lack of resources to do its job. There will be a civic government Bill, which will make sensational press headlines over the coming months.

The Secretary of State referred to enterprise zones. I spoke recently to my hon. Friend the Member for Dunbartonshire, Central (Mr. McCartney) about my fears that any success in the movement of firms to which the Secretary of State referred was a case of firms moving house rather than new businesses being created in the enterprise zone. My hon. Friend said that it was the efforts of the task force that had made the difference, rather than the enterprise zone. There is much truth in that.

I have raised this matter before with the Under-Secretary. If the Secretary of State at one stroke wanted to do something that would be of considerable benefit to heavy industries in the Clydeside area, he could derate them all. There is no possibility of any of the engineering companies, for example, relocating down the road in an enterprise zone.

There would be a considerable lifting of the burden if the Secretary of State were to derate industrial rating. When the right hon. Gentleman went to address the Scottish Council (Development and Industry) forum at Aviemore he spoke about the incentives now available in Scotland to attract overseas investment. I welcome overseas investment, but more must be done for indigenous firms. More has to be done to sustain the businesses that we already have. I thought that the hon. Member for Moray and Nairn (Mr. Pollock) advanced a valid argument when he referred to the contribution that Scottish management can make. However, it is rather restricted in the sense that the headquarters of many companies are outwith Scotland. The marketing function is invariably centralised elsewhere.

I hope that the Secretary of State will engage in serious discussions with the banks in Scotland, with the building societies and with the savings institutions about the prospects of them and their investors investing in Scottish industry and commerce.

Yesterday we had a useful debate on the future of Scottish universities. I am a Glasgow Member and I am especially interested in the future of Strathclyde and Glasgow universities. As the Under-Secretary of State knows, I welcome the development of the new West of Scotland science park, especially as it is to be located in my constituency. There is a need for a far more extensive interface between higher education in Scotland and our future industrial prospects. However, as the hon. Gentleman knows, I had to twist the arm of the Scottish Office not so long ago so that it would be represented at the conference on micro-biotechnology at Paisley, which Strathclyde university organised.

The Scottish Office should get up off its behind and try to facilitate new developments such as biotechnology, micro-technology and telecommunications, to which the hon. Member for Inverness (Mr. Johnston) referred.

I shall now direct my remarks to communications. I hope that I shall not be intruding on the preserves of my hon. Friends from Ayrshire.

Mr. Foulkes

Not at all.

Mr. Craigen

There is a strong case for developing Prestwick airport, especially the links between Prestwick and Glasgow and Edinburgh airports. This afternoon I was speaking to a Yorkshire man who was waxing strong about the development of an international airport in South Yorkshire. When I said "What about Prestwick?" when he told me about his journey from Boston, he replied "I should love to get off at Prestwick. The trouble is the six-hour journey afterwards. I wish that you could improve the links between Prestwick and Glasgow or Edinburgh."

It is unfortunate that the Secretary of State apparently wants to do nothing. Perhaps he resents the initiative shown by my hon. Friends the Members for Kilmarnock (Mr. McKelvey), for South Ayrshire (Mr. Foulkes) and for Central Ayrshire (Mr. Lambie) in wanting to develop Prestwick airport. The right hon. Gentleman should also be doing something about the shuttle fares between London, Glasgow and Edinburgh.

Mr. Foulkes

On behalf of my hon. Friends, may I say that we do not resent my hon. Friend's remarks about Prestwick airport? We welcome the support of Glasgow Members for the development of the airport. I wish that the Secretary of State had taken up the suggestion that we advanced with the enthusiasm that has been shown by my hon. Friend.

Mr. Craigen

My hon. Friends will welcome my next suggestion even more, because it is for the electrification of the Ayr-Glasgow line. As my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) knows—I hope that he will be able to contribute to the debate—it would provide immense job opportunities in the British Rail engineering workshop, in which many of our constituents are employed. The workshop has had to pay off more employees recently. Consideration should be given to the port facilities in the Glasgow area, because they are important for many of the engineering companies that operate in my area. If they are unable to use those facilities, they have to send their products to the South, with all the consequences that that has for their tendering prices.

I was rather surprised that the hon. Member for Dumfries did not take the opportunity to suggest that the A74 should be upgraded to motorway status. The Scottish economy would be benefited by strengthening that link.

My hon. Friend the Member for Fife, Central (Mr. Hamilton) spoke about bus fares and public transport. If the Secretary of State were keen to help the unemployed and the employed in the Glasgow area, he would increase the Government subvention to assist the work that has to be done by the Greater Glasgow passenger transport executive.

I have an inner-city element within my constituency, and I am in no doubt about the new building projects and the rehabilitation work that should be taking place. However, in the Maryhill corridor area, for which my hon. Friend the Member for Glasgow, Kelvingrove (Mr. Carmichael) and I share responsibility, new-build is coming to a halt. The modernisation of inter-war houses is being reined back and rehabilitation is not taking place as quickly as it could. Housing and construction are labour-intensive industries. If they were encouraged to expand they could take people off the unemployment queues.

The environmental work of the Scottish Development Agency within Glasgow is being seriously restricted. The Secretary of State and his Under-Secretary's of State may not attach much importance to that but people have to live in the areas that could be improved by the SDA's work. They want to see improvements in the quality of their surroundings. The rehabilitation of such areas also makes a great difference when it comes to attracting new industry.

The feature that worries me most of all about the lack of a Government policy for the economic development of Scotland is that there is little immediate prospect of abolishing the present high level of unemployment. More and more firms will absorb any upturn—there is precious little at present--and increased productivity within their existing labour forces. I hope that the Secretary of State will study the unemployment figures in detail. It is alarming that one-tenth of those who are out of work in Scotland have been unemployed for two years. It will not do for the Government to table such rubbishy amendments to our proposals.

8.8 pm

Mr. John MacKay (Argyll)

It is a pleasure to follow the hon. Member for Glasgow, Maryhill (Mr. Craigen), who at the beginning of his speech showed remarkable judgment when he referred to me. It may be that he does not realise that we are having this debate to celebrate the election of his right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) to the Shadow Cabinet. I hope that the right hon. Gentleman enjoys a happy and—dare I venture to hope—a peaceful time in it.

The position in Scotland is depressing, and especially so this week. We have witnessed the spectacle of the Linwood chapter coming to a close. The past 18 years at Linwood have been depressing. Linwood has given industrial Scotland more bad publicity than anything. It was a Conservative Government who attempted to site a car industry at Linwood, and it is sad that the attempt has failed. However, Labour Members are living in a fool's paradise when they try, both in the House and on picket lines—if one can call them that—at the factory, to pretend that a car-making plant can be retained at Linwood. It is pious to hope that something new will happen to disprove the unhappy events of the past 18 years.

Mr. John Maxton (Glasgow, Cathcart)

rose——

Mr. MacKay

I know that the hon. Gentleman wishes to contribute to the debate and the best thing for me to do, that being so, is to continue with my remarks.

We should now try to find a new company for Linwood and get away from the idea that we can have a car industry, despite the unhappy experiences of the past 18 years.

All hon. Members must have listened with great interest to the hon. Member for Caithness and Sutherland (Mr. Maclennan) to discover the policies of the SDP. As I suspected, its central policy is that it believes in the Common Market. That belief is shared by most of us in the Conservative Party, but beyond that I do not believe that any of our questions were answered. The hon. Gentleman said that the picture in Scotland outside the electronics industry was almost uniformly bleak. I do not believe that he is right. One example is the shipbuilding industry, for which a few years ago no one would have given much. The shipbuilding industry now presents a better picture than it has for a long time. We have heard all afternoon about the orders that have gone to Scott Lithgow on the Clyde, Robb Caledon in Leith, Hall Russell of Aberdeen and Yarrows, again on the Clyde. Those orders will take the shipyards a long way into the future, consolidating existing jobs and providing new ones. That is very encouraging, although it has been done at a price—many people have lost their jobs in order to make the shipyards more efficient and effective so that they can gain orders and be more competitive.

The hon. Member for Caithness and Sutherland mentioned the timber industry. I wish to point out to my hon. Friend the Minister the problems in the pulp mill industry in Scotland. The forests are being kept going with considerable exports of pulping wood—some of it from my constituency—to Sweden. However, that is not a long-term prospect that we view with any pleasure. We must consider how we can once again have a pulp industry in Britain. The experience of Fort William has told us that the wrong process will, at the end of the day, go out of business, which is what happened there. A project is presently being considered for Fort William which has a chemical byproduct called lignosulphanates, which have considerable value. I ask my hon. Friend whether he is involved in that project and, if so, what progress is being made.

I go further than that. Is the Consolidated Bathurst project once more worth considering, with the value of the pound now less than it was when the project was shelved? On a recent visit to Canada, it was explained to me that one of Consolidated Bathurst's problems when it came to Britain was that the British loved trees too much. We would not let the company fell the trees in the way that they do in Canada, which makes the felling costs and therefore the process more economic.

I now turn to the Highlands and Islands Development Board. Despite the recession, there is still considerable interest in small businesses in the Highlands. I was interested to hear what the hon. Member for Inverness (Mr. Johnston) said, because I have not heard from the board or anyone else that there was a problem about money. During 1980 the board helped some 740 small businesses to set up in the Highlands, and spent in total about 12 million.

I remind my hon. Friend—I do not know whether the hon. Member for Inverness was trying to do so in a subliminal way—that we are still awaiting a new chairman of the Highlands and Islands Development Board. David Dunbar-Naismith has been temporary chairman since Kenneth Alexander went to Stirling university. We must look both for a chairman and a chief executive, which is not easy. I hope that my hon. Friend will soon make an announcement so that the board can look forward to the next five years, knowing who its chairman is.

I turn now to the hydro-electric board. Is it worth considering some of the hydro projects that were put on the shelf when the cost of producing hydro-electricity was expensive compared with oil and coal projects? Perhaps those projects, in the different world in which we now live, deserve to be taken down from the shelf and considered again. One problem is that all the best sites have already been used to advantage. Therefore, perhaps no new projects can be started in the conventional way.

However, a long time has elapsed since many of those plants were installed. There have been changes in technology and perhaps it is time to use some of those changes and invest money in re-equipping some of the older stations so that they can produce more electricity from the water available. A modest scheme such as that would give considerable impetus to Scottish industry. If the scheme were only to re-equip, that might not help the construction industry but it would certainly help the engineering industry.

I hope that the Loch Lomond scheme has not been completely shelved because of the attack made on it by conservationists. Loch Awe in my constituency and Loch Ness in the constituency of the hon. Member for Inverness have projects similar to the one that was planned for Loch Lomond. I do not believe that they have done anything to damage the beauty that still remains around Loch Ness and Loch Awe. The Loch Awe project has provided employment in the electricity industry for many people in a rural area. I hope that my hon. Friend will consider my suggestion about Loch Lomond.

One of the greatest successes of the Highlands and Islands Development Board has been the tourist industry. In 1979, the tourist industry in Scotland was worth £650 million. It is an important employer, as the hon. Member for Caithness and Sutherland said. I am pleased that the Scottish Tourist Board has grasped the nettle of the need to carry out powerful advertising. It remains to be seen whether Jack Nicklaus, J. R. of Dallas fame and the dreadful Emu are powerful advertising, but at least the Scottish Tourist Board is trying. I believe that Alan Deveraux must be congratulated on having persuaded the tourist trade to get together and finance and mount the advertising campaign. The tourist trade is very competitive. There is much advertising of a high quality for Spain and Miami, which one must admit have a certain guarantee of sunshine. We must sell our beauty, charm and peace, which we have in abundance in Argyll. I do not wish to pretend that we have the same abundance of sunshine as Spain.

Mr. Henderson

My hon. Friend will be glad to know that in 1981 there were 64 days of continuous sunshine in St. Andrews.

Mr. MacKay

I am grateful to my hon. Friend for intervening with that free piece of advertising.

Three main problems face the tourist industry in Scotland. I am told by many constituents who run tourist-related businesses that they are almost priced out of employing young people because of the way in which the wages council in their industry has increased the cost of employing especially 17 to 19-year-olds. The wages council has a responsibility to remember that if it puts up young people's wages it will add to the unemployment in the country, because the employers in the industry will simply cease to employ youngsters if they have to pay too dearly for them.

Another problem in such a labour-intensive industry is the effect that the national insurance surcharge is still having on the tourist industry and on other industries. The, Scottish Office should encourage my right hon. and learned Friend the Chancellor in his next Budget to start to reduce and 'eventually to abolish the surcharge placed by the Labour Government on industry and employment.

Like my hon. Friend the Member for Dumfries (Sir H. Monro), I, too, make a plea about interest rates, which have had an extremely damaging effect on the tourist trade. We must find a way to shelter ourselves from the high interest rates that operate elsewhere in the world. It is not an easy problem, but we must turn our minds to finding a solution. Goodness knows, we have produced enough economists over the past 20 years for some of them to come up with ideas.

In a wider field, we in Scotland have one of the most concentrated centres in Europe of microelectronics and electronic production. Silicon Glen, as it is sometimes called, is rivalling Silicon Valley in California. The Secretary of State mentioned some of the companies. Although they are well worth mentioning again, for the sake of brevity I shall mention only two or three—the NEC plant at Livingston, with an investment of £40 million, Motorola at East Kilbride, with £60 million expansion and 800 jobs, and an exciting development at Sinclair in Dundee. They are all exciting frontier developments in high technology.

My hon. Friend is also in charge of education in Scotland. He is interested in the project to put microprocessors in schools. I ask him to give every possible support to the microelectronic educational development centre at Paisley college of technology. I hope, too, that he will encourage the Scottish microelectronics development programme, despite the recent unwarranted attacks in The Times Education Supplement. I hope that he will do everything possible to advance education in microprocessors in schools. I hope that he will take the opportunity to visit the exhibition in the Committee Corridor to see what is being done in schools in the London area. The same terrific developments have occurred in some schools in my constituency, which must have every possible encouragement.

Not only are we looking at the sunrise industry of microtechnology, but we are also beginning to look at the new sunrise industry of biotechnology. We have had experience of that for hundreds of years in Argyll in distilling. The name of my right hon. Friend the Secretary of State is associated with the biotechnology industry of brewing. We in Scotland and the SDA must give the maximum help to the new industry. Through biotechnology we may find ways to perform industrial processes that at present are extremely expensive in the energy that they use. It may well even be that the future development of pulp mills will be through biotechnology.

The hon. Member for Maryhill mentioned the West of Scotland science park. My hon. Friend should give it the maximum possible encouragement. It is a co-operative venture of the two universities of Glasgow, the district council and the SDA. The universities will put in their research and development skills, and the park will be the place to translate new ideas into productive enterprises. The United States already does that with great success. Indeed, it does much more than we do. The great thing about that country is the close relationship and the movement of personnel between industry and universities. Our industry and universities must consider moving in that direction. It is to the science parks like the one in Glasgow that we look for the new sunrise industries.

The one thing that could damage electronics and biotechnology in this country is the determination of at least part of the Labour Party and certainly the SNP to take us out of the Common Market. The new industries depend on having large markets. Had we not been in the Common Market, they would not have set up here. The ones that we still hope will come and develop will not do so if we do not have a large market. Those people who wish to come out of the Common Market must face the reality that they will write off the microelectronics and biotechnology industries if their wish is realised.

Mr. Ernie Ross (Dundee, West)

Will the hon. Gentleman give way?

Mr. MacKay

No. I am trying to finish.

When the right hon. Member for Western Isles (Mr. Stewart) was regaling us with his view about the Common Market, I wondered whether he would turn down the money that it is putting into the Western Isles for special development. If he does not want it, we shall take if for the other islands

Mr. Donald Stewart

We certainly have no intention of turning the money down. My constituency, like every other part of the country, is footing the Common Market bill. We must also consider the damage that the Common Market has done to the fishing industry, which it is going to see off.

Mr. MacKay

That is interesting—"I do not like it but I will take its money." One of the principal reasons why my SNP predecessor has joined the SDP is that he has seen the wisdom of the Common Market, against which he campaigned at the beginning.

Mr. Ernie Ross

The hon. Member mentioned Sinclair in Dundee. It is fairly obvious that he has been too busy to read where Sinclair is selling its products. It is selling them not in the Common Market but in Japan.

Mr. MacKay

That is splendid and goes counter to some of the arguments already put. The base of the whole electronics industry—and the one which it needs—is the whole of the Common Market. If it can sell out from the Common Market to Japan, that is excellent. We have some successes in selling to Japan.

We are right to be concerned about the level of unemployment. However, a long catalogue of woe on the difficulties in Scotland that is not counterbalanced with some of the successes we are having gives a one-sided picture. That will not encourage anybody to invest in Scotland and to set up new plant. It is only if we can give an image of a place in which it is good to invest, and which will produce the goods—whether in shipbuilding, engineering or electronics—that we can hope to encourage more investment development in Scotland and thereby reduce unemployment. That is what everyone wants.

8.27 pm

Mr. Michael Martin (Glasgow, Springburn)

I should like to take up the point on training and apprentices made by the hon. Member for Inverness (Mr. Johnston). The Government argue that things will get better and that they are doing all they can to improve employment prospects. Time and again in a recession, Scotland has lost employers, and because we have lost employers we have lost opportunities for young people to be trained. They cannot get apprenticeships in engineering unless they have an employer.

The hon. Member for Argyll (Mr. MacKay) is wrong in saying that high wages adversely affect training prospects. It is unemployment which causes the vicious circle. The Government should step in and say that they are prepared to make places available in the engineering colleges where young people can be trained and assessed to see what capabilities they have for the future. It would be galling for young people first to have to walk the streets, unable to learn skills, and then some years later to be told that they cannot be employed because they have no skills. I cannot see things getting any better under the Conservative Government. It will take a Labour Government to improve employment prospects.

In my constituency is Springburn College of education. People from all over the world have remarked on the excellent training that it gives young engineering apprentices. I asked the Secretary of State for Scotland to consider the fact that there were 50 vacancies in that college. I suggested that we put young people in there and made the youth opportunities programme pay them the rate that it is paying those on its scheme. It has been agreed that people under the scheme will be put into the college but for only 18 weeks training, before being sent back to the scrapheap again.

Why not give these young people two, three or four years' training and turn them out as tradesmen? That would be a far better prospect for them than to have a taste of training for 18 weeks, especially when there are highly skilled teachers and trainers already in the college and willing to do the work.

We would all like to see employers coming to Scotland and employing large numbers. However, it looks as though more and more we shall have to depend on small employers, perhaps employing fewer than 10 people. Employers who employ only two or three people have told me that their biggest difficulty is lack of premises. When they go to the industrial estates they are offered accommodation which is far too big for their needs. The Government can help in this difficulty. They can get in touch with the local authorities and perhaps ask them to convert for industrial purposes some of the empty houses that people will not take in hard-to-let areas.

I agree that the Government should try to help small businesses by giving them better credit facilities. I should like more small businesses to come into my constituency as we have no other types of employers.

Mention was also made of the electrification of the Glasgow to Ayr line. The Secretary of State said that the Government should get credit for making funds available for the electrification of that line, but he did not tell the full story. I understand that, although the Government are to allow Strathclyde region to make money available for the electrification scheme, they will ensure that Strathclyde is not allowed to exceed its present budget. The chances of the scheme being carried out could be endangered for that reason.

None the less, I hope that the electrification scheme will proceed, because the only large employer of labour in my constituency is the railway engineering workshop. If more work can be secured for the workshop, which has already experienced redundancies, it will help the tradesmen and the skilled men there. There may also be a possibility of taking on unskilled labour, and some future may be secured for the apprentices.

It would be much better, however, if the Government were to undertake the electrification of the entire railway system in the United Kingdom. That would bring jobs not only to my constituency but throughout the country. Indeed, that is a subject that should be debated in the House.

Unfortunately, the only expansion that I can envisage in the west of Scotland is in unemployment. I am very worried that the Scottish Development Agency does not seem to be doing a great deal in my constituency. Although it is involved in renewing some of the derelict lands, I cannot see any evidence of employers being attracted to the area through the SDA. I hope that someone will be able to contradict me and show that I am wrong. I should like to see the SDA at work in my constituency and in many of the other inner city areas.

Although we have to consider the problems of Linwood, Clydebank, and the other areas which have recently been hit so tragically, my constituency has been experiencing a decline in its industrial base for about 20 years. I do not see why the Government cannot look at Springburn and the north end of Glasgow as a matter pf urgency.

I hope that the debate will enable the Government to get the message that we are not content with what is happening in our constituencies, and that the Government will undertake to provide a better future for our people and our unemployed.

8.34 pm

Mr. Bill Walker (Perth and East Perthshire)

The hon. Member for Glasgow, Springburn (Mr. Martin) made an interesting speech. I certainly agree that it is always a good thing if any Government, of whatever political colour, help small businesses. If small businesses grow, they create jobs. They are the giants of the future. That is where the future lies. I shall return to that aspect later in my speech.

The hon. Member for Caithness and Sutherland (Mr. Maclennan) provided a most interesting introduction to the thoughts and thinking of the SDP. He spoke for 28 minutes and managed to bore almost the entire House, including his friend from the alliance, the hon. Member for Inverness (Mr. Johnston). I have never seen the hon. Gentleman look so bored—

Mr. Russell Johnston

I was not bored.

Mr. Walker

—whatever he may say now.

We understand that the SDP believes in a pay policy and trading in Europe—we are not told how we are to trade effectively in Europe—and the building of bridges in Caithness and Sutherland. I am sure that that will do a lot to bring jobs to Scotland.

The hon. Member for Bothwell (Mr. Hamilton) made his usual robust speech. We all acknowledge the hon. Gentleman's wide experience in industry. I think, however, that he has got things a little wrong in calling for President Roosevelt's policies to be copied here. When the New Deal was introduced, the populace of the United States were prepared to buy Henry Ford's cars. I cite that merely as an example. Until the British people are prepared to buy British products, any reflation of the kind introduced by President Roosevelt is liable to result in a massive flood of imports. That is one of the dangers, although I acknowledge that there are some lessons to be learnt from the experience of the United States at that time. In this context, I must say that the hon. Member for Caithness and Sutherland—I am sorry that he has left the Chamber—seemed to confuse controlling Government expenditure with having no Government expenditure at all. No Government suggests that there should be no Government expenditure. The Conservative Government are spending a great deal of public money and a great deal of borrowed money. Indeed, some of us believe that they are perhaps borrowing too much and spending it in the wrong way.

I dispute the reason given by Labour Members for the present level of unemployment in Scotland. I also dispute the claim that the Government's policies are responsible for what they describe as a disastrous rundown of industry. I am reminded in this context of the speech of the hon. Member for West Stirlingshire (Mr. Canavan) which was delivered, as always, in his cavalier, caveman style which is strong on abuse but very short on constructive ideas. There is much to be learnt from that. I believe that there has been too much abuse and that this has produced a confrontation which is not to the benefit of Scotland.

The Opposition would do well to remember the situation which existed in Britain when the Conservative Government took office in 1979. The whole country was suffering from the effects of the borrowing and the spending of previous Governments. Some of it was well intentioned, particularly the spending. The borrowing was perhaps in a different category. We had also just completed the winter of discontent. The cumulative result was inept management and intransigent unions throughout industry and a massive national debt. The interest on that debt is paid by everyone, including Members of Parliament, as a tax. Indeed, it requires a tax on the average family of more than £20 per week merely to service the debt. That is what the Government inherited.

Labour Members frequently claim that traditional industry is being destroyed and that jobs are vanishing. That is nonsense. The reason for many of the factory closures and job losses is simply change, and a failure to meet the demands of change. The situation can best be illustrated as follows. The candlemakers' jobs vanished when oil lamps came into production. The oil lamp makers' jobs vanished when gas lamps came into production. The gas lamp makers' jobs vanished when electric lights came into production. It was the same when steam trains were replaced by diesel, and when diesel was replaced by electric; when sail gave way to steam, and steam gave way to turbines; when the car replaced the horse, and when jet aircraft replaced propeller-driven aircraft.

Unless we are prepared to face the fact that customers create jobs, it is no good our blaming anyone but ourselves. We must face the fact that customers create jobs and guarantee the continuation of jobs. It is no good producing products that the customer will not buy.

I remind Opposition Members that in the United Kingdom there are 2 million more people available for work than there were 20 years ago. That has contributed substantially to the problem, coupled with the failure to meet change.

The recession is affecting every country, and we are all seeing it in different ways. It is wrong to suggest that the United Kingdom is the only country suffering from the savage recession. The sad story of Linwood is a typical example of the use of public money to sustain a company whose products would not sell on the open market. The customer rejected them: that was the real problem. There was no shortage of cars being sold in the United Kingdom.

There are probably very few British cars in the car park underneath the House of Commons. That sums it up. You are a customer, Mr. Deputy Speaker. We are all customers. If we reject British cars, we must face our responsibilities and the consequences. I run two British cars.

Anyone going to a CBI meeting or conference will see for himself the two different sorts of management that exist in Scotland today. One group will be demanding that the Government get off industry's back and concentrate on ensuring that costs under direct Government control, such as tax and charges levied by nationalised concerns, are no greater than those faced by their overseas competitors. I shall return later to that aspect.

The other group of managers will be calling for more Government intervention and more Government aid. These are the ma lagers who are unfortunate enough to be running firms which have not faced up to the challenge of change or who have not yet realised that for the first time since the war they, the managers, are being allowed to manage. Nanny, State is no longer fixing the wages and telling them how to run their firms. They have got what the trade unions wanted and what management was asking for—collective bargaining. Now they can get on with managing. The Government are not intervening on a massive scale.

I do not believe that all is doom and despair. Scottish firms are obtaining, against intensive overseas competition, orders which two years ago they would not have obtained. The management of these firms and the workers are to be congratulated. They are facing the challenge of change. Management is managing and workers have accepted the introduction of new equipment and changed work practices, with consequent higher productivity.

The whisky industry is a major employer in my constituency. It has suffered due to overproduction and the impact of the recession. Yet in my constituency Arthur Bell, under the inspired leadership of Raymond Miguel, has increased sales and profits. Few hon. Members, certainly in the House tonight, do not know Bell's. I am a teetotaller but I know of it. The Bell group's profit before taxation for the year to 30 June 1981 amounted to £20 million-plus, compared with just on £16 million the year before. Arthur Bell's results are due to the simple fact that everyone in the firm works. The directors and the management set the example by being at work first and being the last to leave, thus ensuring that jobs in Bell's are not lost. The total work force follows the example of management, thus ensuring that the firm's sales continue to rise even in the present difficult market conditions.

General Accident, another corporation based in my constituency, has also produced increased pre-tax profits despite a decline in profits by other major insurance corporations. Mr. Buchan Marshall and his management team are to be congratulated on this result. The job prospects of the work force have been assured by the decision of the corporation to build a new multi-million pound world-wide headquarters in Perth. The decision was due in no small measure to the realistic level of rates levied by the Tayside region and the Perth and Kinross district council. That is why the General Accident headquarters remains in Perth. It is also a major reason why many companies are looking to Perth to set up factories, shops and offices even though Government-assisted area incentives are no longer available.

Mr. Home Robertson

At least the poet McGonagall would have said all this in verse.

Mr. Walker

I was about to say, before the sedentary intervention by the aristocratic capitalist on the Opposition Benches, that firms such as Lawtex, Morganite, Brands of Perth and Caithness Glass are but a few of those that told me during the recess that things were getting better and that orders are being obtained, for example, in South America, where previously firms had not managed to sell because it was reckoned to be the province of the United States.

The five patrol craft order that went to the Hall Russell yard in Aberdeen is no mean achievement by the management and work force of that yard when one realises that 75 per cent. of the cost of the ships is paid for by the Hong Kong Government and that the Hong Kong shipyard wanted the order.

The situation is difficult but the change in attitude that is taking place bodes well for the future. I am sorry that the hon. Member for Fife, Central (Mr. Hamilton) is leaving the Chamber. As ever, he expressed his extreme views. The hon. Gentleman has clearly shown once more that he is another of those Socialists who, in Scotland, pretend to be mode rates but down here behave as extremists.

There are areas where Government can and should help. The new training initiative will make a contribution to the problem of the young unemployed. I suggest that we in Scotland should take our own initiative. An exciting opportunity exists to snake use of the present difficulties. We should couple with the new training initiative a co-ordinated training and education policy that is purely Scottish. There are also special and narrow areas in which the Government can act. Expenditure would be helpful to improve facilities at Riverside airport.

I should like to see the Property Services Agency of the Government reviewing the methods whereby jobs and work are allocated. It is interesting that a firm on Tayside was recently not considered acceptable for a tender. Yet the company has no overdraft and makes no use of bank facilities while another company on the list is well overdrawn and, I should have thought, close to being in extreme difficulties. The Property Services Agency should review that.

I make a special plea to the Government to examine carefully the effect of the price of avgas, the fuel used in light commercial aircraft. It is far more expensive than the fuel used in automobiles. The cost of avgas is crippling the light aviation industry which provides vital communications and plays an important part in flying training. I make that special plea on behalf of the air service training school at Scone.

I welcome the decision to inject competition into the supply of energy, but it will take time. In the meantime the Government must ensure that our energy costs are competitive with those overseas. The right hon. Member for Glasgow, Craigton (Mr. Millan) referred to the Royal Bank of Scotland takeover. It is nonsense for Labour Members to talk about Scotland retaining control of Scotland's banks when they propose to nationalise them. The record of the Hong Kong and Shanghai Banking Corporation in North America gives us little to be concerned about because of the way that that bank has handled its North American subidiary. We should also remember that Hong Kong is a Crown colony and that the bank's founder was a Scot. The bank today is run by expatriates.

The right hon. Member for Western Isles (Mr. Stewart) is back in his seat. He recommended the use of North Sea oil revenues in Scotland. Does he also recommend that beer revenues should be spent where the breweries are and that whisky revenues should be spent where the whisky producers are? It is nonsense to walk down that road.

It is impossible to spend the Exchequer's clawback from industry or anywhere else more than once. Money cannot be spent twice. Changing it from one pocket to another does not provide more to spend. Putting on a label such as "oil revenue money" does not change its value.

Mr. Donald Stewart

Will the hon. Gentleman give way?

Mr. Walker

I am sorry but I cannot give way. It is important that I finish my speech soon.

The Government—our caring Government—have spent a lot of borrowed maney on mitigating the effects of the world recession and on firms which face changes. They have not received the credit that they deserve for the way in which they have dealt pragmatically with the problems involved in the changes required in Scottish industry. I hope that some of the words spoken this evening will find their way to the Scottish media so that the people of Scotland recognise that the Government have cared, and are still caring.

8.53 pm

Mr. John Maxton (Glasgow, Cathcart)

The hon. Member for Perth and East Perthshire (Mr. Walker) made the speech of an economic ignoramus to which we have become accustomed. The hon. Gentleman openly parades his personal virtues at every turn and becomes sickening as a result. The hon. Gentleman recited a long list of companies in his constituency. He has ensured that he receives all his Christmas presents for nothing this year.

The debate has been marred by only one lengthy speech. The hon. Member for Edinburgh, South (Mr. Ancram) and his hon. Friends have decided to blame us for what is happening in Scotland because we say that it is an industrial wasteland. They do not blame their economic policies any more. They blame us because we keep saying what dreadful things are happening in Scotland. They used to make lengthy speeches, which I read, attacking industrial relations in Scotland, making out that the situation in Scotland was much worse than it was before. As a result, they say, firms are not going to Scotland because of the bad industrial relations, yet the Tory Party has made those industrial relations much worse. I do not believe in romantic painting or painting pretty pictures. I am a believer in the school of realism, in which a true picture is painted. The true picture in Scotland is one of an increasing industrial wasteland despite the fact——

Mr. Adams

I apologise to my hon. Friend for intervening. I have been out of the Chamber for two hours speaking to the managing director of J. and P. Coats, in Paisley. I wish to make an announcement that will, to some extent, discredit much of what the Government have been saying all day about how they are building up the industrial base of Scotland. I should like the Secretary of State to know that at 5.30 pm J. and P. Coats issued a statement to all the Scottish newspapers saying that there would be 1,000 redundancies at the Paisley mill over the next two years. What exactly will the Secretary of State do about that tomorrow morning?

Mr. Maxton

I am grateful to my hon. Friend for having intervened to make that announcement. I know that he wished to speak in the debate and he would have done so had he not been involved in the sort of discussion that many of us have had over the last few years with the managing directors and the trade unions that have been involved in the many companies that have declared redundancies. The odd little facts that the Secretary of State and others, such as the hon. Member for Perth and East Perthshire, can pull out of the air about companies doing well do not stand up to close examination, given the wasteland created by their policies.

The hon. Member for Argyll (Mr. MacKay) —it is amazing how so many hon. Members disappear after their speeches—referred to Linwood. The Labour Party objects to the closure of Linwood because it could have been kept going. One reason why we objected to the sale at Linwood was that the company was selling the machinery to put the proceeds into its pockets, although it had been kept going by taxpayers' money. The taxpayers should have received the return from the sale at Linwood. Many of us objected to that sale.

The Secretary of State referred to the great orders acquired by shipyards. If the Conservative Party had had its way, the last Labour Government would not have nationalised the shipyards and there would have been no shipyards in Scotland to obtain orders. It has been pointed out that the Scottish National Party also voted against the nationalisation of shipyards.

Great play was made with the fact that the Labour Party believes in withdrawal from the EEC. It has been suggested that on the very day that we withdraw all trade between Britain and every country in the EEC will stop. That is nonsense. Those countries sell more goods to us than we sell to them. It is more to their benefit to keep trade going than it is to ours. If Britain withdraws from the EEC, they will ensure that trading agreements are worked out. Those agreements would probably be more beneficial to Britain than those that we have.

I shall make my major point briefly, because my hon. Friend the Member for Kilmarnock (Mr. McKelvey) wishes to speak. The Government constantly refuse to recognise the link between the private and public sectors of industry. Many of the small companies that the Government say they wish to support, and will support, depend for their continued existence upon public orders from local authorities, and nationalised concerns.

I gather that the Secretary of State referred to a big order that Weir Pumps has obtained. I congratulate it on obtaining that order. It is a public sector order, but it does not come from this country. Weir Pumps depends almost entirely on public sector money, whether from other countries or from Britain. In Britain, Weir Pumps may have got that order, but if it had not the company's viability would have been put seriously at risk.

I am informed by Weir Pumps that only one in 10 of the inquiries that it receives comes from Britain. It is gravely concerned about lack of a home base. It does not believe—as many Conservative Members would not believe—that a company can sustain itself for any time unless it has a strong home market on which to build its export industry. It cannot rely entirely on export orders

Most of Weir Pumps' home market is found in the public sector. It is a private, major engineering company yet it relies on defence contracts for nuclear submarines, on pump contracts for the power and energy industry and on contracts for water and sewage works. Almost every part of the industry depends on the public sector spending money. If it does not do so, industries such as Weir's are in grave difficulties. The Government do not seem to have woken up to that. Many private industries—which have slimmed down, yet which the Government say they want to see built up again with investment—will not survive unless the Government are prepared to put a massive injection of public expenditure into capital programmes in many areas of the. economy. The Government must learn that lesson.

There are many other lessons that I should like to teach them, but as several of my hon. Friends wish to speak I shall conclude. I hope that the Government will take serious heed of that lesson. Indeed, several of my hon. Friends have raised similar points. It is a simple economic lesson, but even after two and a half years the Government seem incapable of learning it.

9.1 pm

Mr. David Myles (Banff)

I greatly appreciate having a chance to speak briefly in the debate. I have been waiting to hear something about the rural economy. A fair area in Scotland depends on the rural economy, and therefore I shall confine my remarks to that.

I waited for the hon. Member for Caithness and Sutherland (Mr. Vlaclennan) to say something about the rural economy and what the SDP would do about it, but very little was forthcoming. The hon. Member for Inverness (Mr. Johnston) made a considered, reasonable and constructive speech. I wonder whether he still hankers after the chairmanship of the Highlands and Islands Development Board. I shall leave that aside.

The liquidity of agriculture in the rural economy is not in a healthy state. I shall briefly analyse why that is so. I have produced a chart to demonstrate how, since 1973 inflation has affected agricultural produce such as lambs and calves. Over this period there has been a gradual decline and a larger gap has emerged between the returns for livestock farming and the costs that have had to be put in. The only saving grace has been the escalation in land and capital values. As a result, the banks have allowed farmers to acquire larger overdrafts. It is that—and not high interest rates—that is the trouble. In 1973 the cost of interest rates on a £10,000 overdraft—in terms of calves—was 1–. In 1981 the cost is only— Therefore it is not the interest rates that are damaging, but the sizes of overdrafts. I also deplore the dreadful way in which the Opposition used the green pound policy to degrade Scotland's rural economy.

I welcome the announcement today that the Government again intend to increase the hill livestock compensatory allowance. The allowance has increased by 96 per cent. since 1979. We welcome the many other things that the Government have done. I have in mind the sheepmeat agreement, the elimination of the green pound, the raising of the hill livestock compensatory allowance every year and the way in which they have assisted the pig industry.

There is light at the end of the tunnel. The rural economy is showing signs of picking up because of the worthy policies pursued by the Government, in spite of all the opposition to them. There is the opposition of the hon. Member for Sheffield, Brightside (Miss Maynard), who feels that agriculture should be run down. However, I understand that the right hon. Member for Barnsley (Mr. Mason) has dissociated himself from that policy.

I realise that my time is up, but my plea is that we look after the rural economy as well as the economy of the central belt of Scotland.

9.6 pm

Mr. William McKelvey (Kilmarnock)

I have sat throughout the debate and listened to the speeches of Conservative Members. I am not in the least convinced that the recession in Scotland is over or that it has started to turn.

I shall condense my remarks into the few minutes available. I have plenty of statistics to bring to the attention of the House, but I do not have time to do so. However, the saddest statistic of all is that in Kilmarnock at present 1,132 kids under the age of 19 are without a job. The number of advertised vacancies for that age group at the local jobcentre currently stands at nil. In other words, those kids have no future.

Throughout the whole of the previous year, only 11 apprenticeship vacancies were registered at the Kilmarnock job centres. In other words, if the number of those apprenticeship vacancies was doubled, there would still be 100 young people fighting for each apprenticeship. The sad fact is that if one apprenticeship was offered tomorrow, 1,132 kids would be chasing that job. That is a scandalous and grotesque figure, and it gives me no pleasure to place it before the House.

It is strange that not one hon. Member has mentioned the short and long-term psychological effect that unemployment can have, not only on those young people but on all those without a job. A survey carried out in Scotland found that the effects of short and long-term unemployment were far-reaching. If I quickly outline the symptoms that were observed, it may be that those hon. Members who have experienced unemployment will recognise them.

Initially, there is self-doubt, a worsened self-image and great anxiety about the future when one is threatened by redundancy. That can last for a few weeks after a person has been made redundant. That passes and is replaced by a more positive mood of a greater sense of freedom, because the unemployed person can do as he or she wishes. That feeling is extremely short-lived. It is quickly followed by depression and feelings of inadequacy. The unemployed person may blame himself or herself for not getting a job. The reaction is "Maybe it is me", and family feuds can result from the fact that husbands and wives are continually in each other's company. Sadly, because of their reduced income, they have nothing to do but quarrel with each other. That may be something that Members of Parliament seldom see.

I think that all hon. Members agree, especially those who come from far away constituencies and return to their wives at weekends, that often at the end of the weekend friction develops between husband and wife because of the time that they spend together. [Interruption.] It is caused by the pressures of our job. It is all very well for Conservative Members to laugh. Some hon. Members, who may not be re-elected at the next election, have safe and comfortable jobs waiting for them. I must tell them that the effects of unemployment are not restricted to the lower classes. They are felt in every class of society.

I have a few positive solutions to offer, but time does not permit me to cite them. I was prepared to offer some consolation to the Government on their measures to tackle the problem of youth unemployment, even though they do not go far enough. I do not share the attitude of some of my hon. Friends who criticise the schemes. The Opposition criticise not the youth employment schemes as such, but the way in which they are operated. In many cases they are being used for cheap labour. That is no way to introduce a young person to a job.

I believe that import controls could be introduced. I am not saying that there should be blanket import control. The Opposition have never said that that would be a workable proposition. However, import controls could be introduced in some areas, especially for Japanese goods. I shall introduce some slight levity into the discussion of a serious subject. The Prime Minister received 2,500 telegrams of congratulations from car workers—the only problem is that they came from Japan. We should use import controls to our advantage.

If I have anything to say to the Secretary of State about how he might improve the position, it is that he should argue in the Cabinet against the monetarist policies that are creating havoc in the Scottish economy. He should tell the Prime Minister that he will not tolerate the imposition of those policies on a Scottish electorate who voted Labour. He should either resign in protest, thereby showing the people of Scotland that he cares about them, or declare some form of self-determination for Scotland based on the Scottish Labour Party's latest formula.

9.13 pm

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

I am pleased that my hon. Friend the Member for Kilmarnock (Mr. McKelvey) was able to speak. He sat through the whole of the debate, which is more than can be said for some Conservative Members who made their speeches, departed and have only recently returned to the Chamber. My hon. Friend made two salient points, one being the important matter of the psychological effect of unemployment both on adults and youngsters, some of whom have never had a job.

I direct the Secretary of State's attention to a statement by his right hon. Friend the Member for Sidcup (Mr. Heath) during the recent Conservative Party conference. He said that the Government were writing off a whole generation of youngsters. I am sure that behind that statement was the knowledge that when a youngster cannot find a job he does not blame the employers—for the simple reason that he has never had an employer to blame—but looks inward and blames himself. It is that inward-looking, self-condemnation that will cause no end of trouble in the years to come. Among the many other problems that the Government are creating, not only for Scotland but for the remainder of the United Kingdom, is that of the psychological effect of unemployment. Future Government's will have to deal with that.

The feeling has been reiterated by my right hon. and hon. Friends that the Secretary of State is not fighting for Scotland in the Cabinet. That is felt not only by my right hon. and hon. Friends, but on a widespread basis throughout the whole of Scotland. It is difficult to understand why, when major decisions such as that on the gas-gathering system were taken in the Cabinet, the Secretary of State was not even at the meeting. We still do not know whether the Secretary of State was in favour of that decision on the gas-gathering system. His hon. Friend the Member for Ross and Cromarty (Mr. Gray) was in favour of building the system. When the Minister winds up tonight it would be helpful if he told us whether the Secretary of State was on the side of his hon. Friend or of his right hon. Friend the Prime Minister. I shall give way to the Secretary of State now if he wants to tell us whose side he was on in that argument. He has no one to blame but himself if the feeling prevails that he is not fighting for Scotland in the Cabinet.

At the beginning of the debate the Secretary of State said that this was the most important subject to which we have to direct our attention. No one would have realised that when listening to his speech. My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) said once that no self-respecting civil servant with a career prospect would have written such a speech. It does no harm to repeat that statement. There are not many self-respecting civil servants with career ambitions if those are the speeches that are being turned out.

The Secretary of State went on to say that this is the worst recession that we have had. Halfway through his speech he changed the word from "recession" to "depression". I have always understood that the difference between recession and depression is that it is a recession when someone else loses his job, but it becomes a depression when one loses one's own job. I hope that for the Secretary of State it becomes a depression fairly soon because during his period in office there has been a net loss of 100,000 jobs, which will never return. That has never been explained by the Secretary of State. He made no attempt to define the reason for the loss during his speech.

The hon. Member for Dumfries (Sir H. Monro) who has now been knighted, the hon. Member for Edinburgh, South (Mr. Ancram) and other Conservative Members took up the theme that the effect of the recession on Scotland was less than on the rest of Great Britain. I shall leave Northern Ireland out of the argument. The approach of the Secretary of State and Conservative Members seems to be that Scotland is dying less slowly than the rest of Great Britain. If that is a consolation, all I can say is that it is a small one.

We then came to the important part of the speech in which the Secretary of State was in possibly the most serious trouble since he came to the House. Obviously, he has had no consultation with any senior officials in British Leyland in advance of the announcement to be made tomorrow. My hon. Friends the Members for Glasgow, Garscadden (Mr. Dewar) and West Lothian (Mr. Dalyell) and I and my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) have no complaints about the British Leyland management. Mr. Hancock was only too pleased to meet us recently for a discussion. He has been available to us at any time to have discussions.

It is a bit much, when there will be such a profound announcement tomorrow, that the Secretary of State comes to the Dispatch Box and gives the clear impression that he has had no direct consultation with British Leyland against the background of the important announcement tomorrow. It is not good enough to say that he met Sir Michael Edwardes five years ago when the right hon. Gentlemen was shadow spokesman on defence. The right hon. Gentleman is sadly mistaken if he thinks that tomorrow we shall accept a defence from him that the redundancies are sad and are to be regretted, but that they are not as had as they might have been and are not nearly as bad as they are in other BL truck and vehicle divisions. I advise him rot to insult the workers at Bathgate and Scotstoun by issuing that sort of statement through his press officers when the BL announcement is made tomorrow. To do so would be only to add insult to injury.

In a brief intervention my hon. Friend the Member for Paisley (Mr. Adams) told us that at 5.30 pm J. and P. Coats of Paisley announced that there would be 1,000 redundancies over the next two years. I hope that the Minister will tell us how much he knew about that. If he knew about it, why did he not announce the redundancies in his opening speech? Is he saying that he knew about it? Did he know about the 1,000 redundancies? I shall give way to the right hon. Gentleman if he wishes to tell us that he knew about the redundancies. In the absence of the right hon. Gentleman accepting my invitation to intervene, I can only assume—it is not funny for 1,000 people in Paisley to lose their jobs—that the Secretary of State did not know anything about the redundancies.

We have seen during the debate a display of incompetence and what amounts to almost a lack of concern that have possibly been unparalleled during the history of Parliament. The only time that the right hon. Gentleman hit a bright note was when he began to discuss the enterprise zone at Clydebank. When Scottish questions last appeared on the Order Paper I welcomed the enterprise zone at Clydebank, but there is a worry that the Secretary of State and his junior Ministers should take seriously. The right hon. Gentleman admitted—this appeared in Hansard—during the previous Scottish Question Time that a fair number of the jobs going into the zone result from direct transfers from other areas on Strathclyde.

If that process continues, it will present difficulties that I am the first to admit were not anticipated when the zone was established. If that transfer of jobs is taking place—the Secretary of State said that it was—I hope that at this early stage he will discuss the issue with the task force to ascertain whether anything can be done to ensure that jobs in other areas of Strathclyde are not transferred to the enterprise zone. That sort of movement will not do very much good.

My hon. Friend the Member for West Stirlingshire (Mr. Canavan) referred to the unemployment figures since the Secretary of State came to power. I agree that unemployment doubled during the six or seven years when the previous Labour Government were in office. In the two and a half years that the right hon. Gentleman has been Secretary of State unemployment has more than doubled. There is no sign of its reducing. It is fairly obvious that it will continue to climb. Unfortunately, there is every reason to believe that unemployment will reach about 400,000 in Scotland by this time next year.

Coupled with the increase in unemployment has been a dramatic fall in investment. Conservative Members have not claimed that investment in industry in Scotland is increasing or improving. I shall refer to the figures that are set out in a document produced by the Scottish Council (Development and Industry) "Industrial Forum in Scotland, Agenda for Progress", which was produced for the Aviemore forum. On page 19 investment in manufacturing industry in Scotland is set out at 1975 prices. In 1974, when the Labour Government came to power, investment stood at £372 million. It rose in 1975 to £426 million. In 1976 it fell to £409 million. There was a further fall in 1977 to £400 million. In 1978 it increased to £408 million. It fell again in 1979 to £374 million and now, in 1981, it has plummeted to £240 million. Indeed, investment in Scottish industry is lower now than it was in 1972. There is no evidence that the Scottish economy is beginning to recover.

It is a gross deceit to mislead the people of Scotland into believing that there is an economic rainbow just around the corner, when we are going through the worst economic blizzard that the Scottish economy has had to withstand for a considerable time, one that has been manufactured by the Secretary of State and his colleagues. My hon. Friend the Member for Fife, Central (Mr. Hamilton) said that we have the first Government for 50 years to reduce social benefits. A great many people are suffering from the Government's decision to do that.

My hon. Friend also mentioned the youth opportunities programme. I wish to place my views on record. A number of good employers are doing a good job under the scheme, but a number of bad ones are doing a bad job. We should not do the scheme any good by saying things that might put good employers off participating in it, but it is up to the MSC to weed out the abuses and see that the scheme operates as it was intended to operate.

It is a great tragedy that only 30 per cent. of youngsters coming out of the scheme find full-time employment. Previously it was about 60 per cent. That is yet one more statistic that shows that there is no basis for saying that the recession is beginning to come to an end.

The hon. Member for Edinburgh, South said that it was about time that the Opposition started to sell Scotland. I will say one thing for the Government—they have started to sell Scotland, beginning with Linwood and going on to the BNOC. They are involved in asset-stripping in a most disgraceful way. We want no part of selling Scotland in that way. The people at Linwood have been treated disgracefully. They have not even been given an undertaking that profits from the proceeds of the sale will be retained in the area to generate new employment. There is nothing in the sale for them. They are told by the junior Minister that their area is dead, and that the quicker that it is buried the better for all concerned. That is a disgraceful statement.

The hon. Member for Edinburgh, South also mentioned rates in the Lothian region. When defending the decision of Burroughs at Cumbernauld to run down its establishment, his hon. Friend the Minister called in aid the fact that the company was building a new factory in Livingston. That is no evidence that the rates in the Lothian region are chasing industry away. The hon. Gentleman's argument does not bear examination.

The hon. Member for Inverness (Mr. Johnston) made an important point about the abolition of industrial training boards. In two or three years' time we shall have a depressed industry that has done no training for a number of years. It will be the devil's own job to get out of that situation.

The hon. Member for Bute and North Ayrshire (Mr. Corrie) complained about the energy cost disadvantage that Scotland's industry is suffering. The disadvantage was not as great as when the Government forced the British Gas Corporation to increase its prices against its will—a clear case of market interference—by 27 per cent. It is a real problem that must be considered and dealt with. The Government, if they had the will, could do something about it, but they have neither the desire nor the will.

I shall not deal with the speech of the hon. Member for Caithness and Sutherland (Mr. Maclennan), because for someone who sits here under false pretences it was a total abuse of the House to take 28 minutes to tell us nothing except what we all knew—that he is in favour of staying in the Common Market. That was the blinding revelation of a disgraceful 28-minute speech from an hon. Member who sits here under false pretences. Such conduct is not acceptable.

My hon. Friend the Member for Maryhill, in a good speech, mentioned the central theme of the international forum at Aviemore. The Secretary of State made a speech at Aviemore, but he completely misread the purpose of the international forum. I do not blame him for that, because he was badly advised. He referred to schemes that the Government had set up to attract inward investment. If someone in the Scottish Office had taken the trouble to read the material, he would have seen that the central theme of the international forum concerned regenerating and developing existing Scottish industry. We find all the way through the document the complaint that the Scottish Office now spends all its time attracting inward investment and no time helping the present industry. [HON. MEMBERS: "Which document?"] I am quoting from the international forum document, which says that the Government are not doing enough to help Scottish industry now.

Mr. Younger

rose——

Mr. Ewing

I thought that I would never tempt the Secretary of State to rise, even after all the important questions that I have asked him.

There must be a balance in all matters. The Government are right to spend time on inward investment, but they must also spend time on the development of Scottish industry. If the Secretary of State wishes to tell me about British Leyland or J. and P. Coats I shall give way to him.

The hon. Member for Dumfries congratulated the Scottish football team on qualifying for the World Cup. We must be grateful that Jock Stein was in charge of that venture and not the Secretary of State or we should have been at the bottom of that league as well. We must also be grateful that the World Cup finals are not being played at Hampden Park. If the Under-Secretary of State for Scotland had not withdrawn the bulldozers on the same day that they went in, there would not be a pitch for the Scottish team to play on.

The hon. Member for Argyll (Mr. MacKay) referred to Sinclair electronics. That firm is a National Enterprise Board company which was helped by the Labour Government, against the wishes of Conservative Members. It has been able to go to Dundee only because the Labour Government saved it through the National Enterprise Board.

Some Conservative Members have complained that my right hon. and hon. Friends have not produced sufficient alternative proposals. Once the record of the debate is read, that complaint will not stand up to examination. My right hon. and hon. Friends have suggested many alternatives.

I wish to end my speech by suggesting some alternatives. First, the Secretary of State must take his courage in his hands and tell the Prime Minister that the gas-gathering system must be started in Scotland because it is crucial to the development of the petro-chemical and especially the chemical industry in Central Scotland.

We are still waiting for a capital building programme—now that there is a new Secretary of State for Social Services perhaps we shall see some action—for hospitals in Scotland. After two and half years the Government have not told us what their forward planning hospital programme is. The Secretary of State goes around the country opening hospitals that the Labour Government arranged to build and for which we laid the plans. He is still working on the building programme that was left by the Labour Government. There is an opportunity to get ahead with a hospital building programme.

Mr. Henderson

rose——

Mr. Ewing

There have been a number of suggestions concerning roads. The hon. Member for Dumfries mentioned the A75. My hon. Friend the Member for Fife, Central mentioned the East Fife regional road. There are, indeed, a number of roads that could be improved if the Government had the will to do it. I thank the Minister for saying that he would deal with one of the roads in my constituency—the interchange at Inchyra. I am glad to have that on the record.

With regard to housing, there can be no doubt that, with the lowest house building programme that we have ever had in Scotland, there must be tremendous capacity for a new house building programme, coupled with the home insulation programme for which we have all asked.

The Government can, if they wish, remove the national insurance surcharge tomorrow and help industry. They can reduce interest rates and help industry. They can do something about exchange controls, and stop at long last the massive export of capital. That would help industry and help reinvestment in industry in Scotland.

If the Government will not adopt any of these suggestions in order to bring about a change in policy and reduce unemployment, I hope that the Minister will tell us what the Government intend to do. When the Minister goes through the whole range of his knowledge of Scottish industry and economics from A to B, we do not want to hear the same old story that there is no alternative, and that the Government will have to stick to their policy, which has proved so disastrous. If the Minister is unable to tell us about any proposed changes in policy, I hope he will tell us that the Secretary of State and himself will go before they do any further damage.

9.37 pm

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

The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), to be fair to him, made fewer than his usual number of insulting remarks, although he referred particularly to my right hon. Friend the Secretary of State for Scotland. Only one point is worthy of any response. He made the accusation that my right hon. Friend knew of the possibility of some redundancies at J. and P. Coats at Paisley when he spoke this afternoon, and that he should have made an announcement to the House to that effect.

I feel bound to say to the hon. Gentleman and to his right hon. Friend the Member for Glasgow, Craigton (Mr. Millan)—if the hon. Gentleman does not agree with me, I am sure that his right hon. Friend will—that it is not the job of the Secretary of State for Scotland to make announcements on behalf of independent companies—or, for that matter, of nationalised industries—about redundancies or anything else.

My right hon. Friend was, of course, fully advised about the possibility of an announcement being made. We had details to the effect that the company was likely to make an announcement later today. But it would be quite beyond the bounds of any reasonable sense of responsibility, on the part of the Government or the Minister concerned, to make an announcement in advance of the announcement being made by the company, in advance of the company advising the trade unions, and in advance of anything being done that is entirely the responsibility of the management of the company.

Mr. Dewar

rose——

Mr. Fletcher

The hon. Gentleman no doubt wishes to know what we were told about J. and P. Coats. We were advised that the company had decided to begin negotiations with the trade unions because it considered it necessary to concentrate industrial sewing and thread production at the Anchor site in Paisley. The information made available to the Scottish Office was that the decision would involve a major investment in new plant and machinery but would, most regrettably, also involve a substantial reduction in the numbers employed by the company overall.

The company has announced that it is modernising and updating its facilities and concentrating its production but that, unhappily, it finds—as many companies do, not just in Britain, but throughout the world—that the actual numbers employed will be reduced as a result. We were advised of that, as I have already told the Opposition. But it is entirely the responsibility of the company, not only to make the announcement, but to do so after consultation with the trade unions. I am sure that the hon. Gentleman would not object to that.

Mr. Harry Ewing

Does the Minister accept that in a debate on the Scottish economy it is unsatisfactory for the Secretary of State to have this major piece of information about a major redundancy case and to seek—deliberately, in our view—to conceal that from the House? That standard of conduct is totally unacceptable.

Mr. Fletcher

The hon. Gentleman is judging my right hon. Friend by his own standards. They may satisfy him and his hon. Friends, but they certainly would not satisfy Conservative Members.

Mr" Dewar

No Opposition Member would expect the Minister to go into detail. That would be unreasonable. With regard to British Leyland, however, though no announcement had been made by the company, the Secretary of State explicitly conceded that redundancies would be announced tomorrow. He could at least have indicated that there would be a problem at Coats, without doing anything unreasonable. The item was on the 6.30 news. What was unforgivable was to make a speech that was so insufferably complacent, given the information that was at his disposal.

Mr. Fletcher

The British Leyland story broke in the newspapers this morning. My right hon. Friend responded to the right hon. Member for Craigton, who had said that news was circulating that British Leyland was making some redundancies. He asked my right hon. Friend to respond, and my right hon. Friend did so. The situations are quite different in relation to the two announcements.

In the limited time that remains to me I shall deal with the substance of the debate. It is impossible to exaggerate the real concern felt in Scotland about the steep rise in unemployment in recent years. In October, 325,400 were registered as unemployed. That is 14.4 per cent. of the working population. It includes 22,500 school leavers. I doubt whether any Member ever imagined that we should have to deal with unemployment of that magnitude at any time in our careers.

It is little consolation to learn, although it is a fact, that Scotland is no longer at the top of the unemployment league in Britain, as my hon. Friend the Member for Dumfries (Sir H. Monro) pointed out. We do not count that as a success. Nevertheless, it is a fact. The Opposition constantly complain that nothing is done to alleviate the position in Scotland. It is therefore entirely justifiable to set the Scottish problem in the context of the United Kingdom as a whole.

The debate is therefore not about who is the most emotionally concerned about the unemployment figures, but about what the Government are doing about them.

Mr. Foulkes

Nothing.

Mr. Fletcher

Equally important, it is about what the Opposition, as the authors of the motion, propose to do if perchance they ever become the Government. My right hon. Friend gave a full and encouraging account of what is being done and the considerable successes being achieved in export orders in the oil and gas industry, in electronics and in other industries. He also spoke about the Government's special programmes to assist the unemployed and the action that we are taking on the ground—in Clydebank, Dundee and North Ayrshire, and in other particularly hard-pressed areas. A great deal is being done to alleviate unemployment and to prepare for the expected upturn in the world economy.

However, as I have already mentioned, what we have not heard, as my hon. Friend the Member for Edinburgh, South (Mr. Ancram) said, is any constructive proposal from the Labour Party, from any of the opposition parties, or from any of the factions within those opposition parties, to reduce the unemployment to which the previous Labour Government contributed so decisively when they were in office.

If the Labour Party were returned to office, its policies would have a catastrophic effect on the Scottish economy. As my right hon. Friend said, withdrawal from the Common Market would not only mean the loss of thousands of existing jobs in Scotland; it would virtually banish the prospects of any further inward investment.

The hon. Member for Bothwell (Mr. Hamilton) is rather fond of asking what I did in the United States and how many jobs was I able to bring back to Scotland as a result of my visit. I must tell him and his hon. Friends that what we have to spend a great deal of time doing in the United States, and elsewhere, is trying to explain why any company should come to Scotland if a future Labour Government would withdraw the United Kingdom from the European Community. We find ourselves in the most embarassing position of trying to explain Labour Party policy to people in the United States, Japan, Europe and elsewhere.

Mr. Younger

Which Labour Party?

Mr. Fletcher

As my right hon. Friend asks "Which Labour Party?" That just compounds the difficulty. It is a serious difficulty that is faced not only by Ministers but by executives of the Locate in Scotland bureau and the Scottish Development Agency and other officials. They face the same difficulty and embarrassment when they go abroad and try to attract industry to the United Kingdom.

One must add to those job losses the 40,000 civilian defence jobs, to which my right hon. Friend referred, which the Labour Party would also put at risk.

Mr. Canavan

We want jobs, not bombs.

Mr. Fletcher

If the hon. Gentleman or some of his hon. Friends got their way, Scotland would really become the Albania of the North. That might satisfy one or two people in West Stirlingshire, but I do not think that it would satisfy anyone else.

I am very sorry to hear that the leader of the Scottish National Party would also support the policy of making Scotland the Albania of the North by withdrawing from the European Community and by supporting the defence policies advocated by Labour Members. I am particularly surprised that the right hon. Gentleman totally disregards the benefit that his constituency would derive from the European Community as a result of the integrated development programme for the Western Isles, which has been approved by the Council of Ministers and which would make a contribution of about £20 million over a period of five years to develop agriculture, fisheries and forestry. I am surprised that the right hon. Gentleman did not have some grace—

Mr. Donald Stewart

Will the Minister give way?

Mr. Fletcher

No, I am sorry; I have no time for interventions. I am surprised that the right hon. Gentleman did not at least acknowledge that that is one very significant benefit to the Western Isles. I am sure that the hon. Member for Inverness (Mr. Johnston) must feel envious when he hears the attitude of the right hon. Member for Western Isles (Mr. Stewart).

Turning again to Government policy, the road to economic recovery demands that we in Scotland should not become obsessed with recession. Firstly, it would be defeatist and there is too much evidence of success for that. Secondly, an obsession with recession would destroy the constructive and innovative thinking that is essential for our industrial recovery in the highly competitive international trading conditions in which we live. To put this another way, we can wait hopefully but unavailingly for the return of yesterday,.as some Labour Members and some SNP Members did at Linwood on Monday this week, or we can prepare for tomorrow by making sure that Scottish industry is ready for the upturn in world trade. Nothing heard from any Opposition Member suggests that they are even aware of that important fact.

A number of hon. Members have asked what steps the Government are taking to make sure that we create, as our amendment says, "a new industrial base" in Scotland. The business opportunities programme has been the subject of a number of seminars in Scotland at which I have been present with colleagues. These have been well attended. They have underlined the 72 specific benefits that the Government have introduced for the small business sector since May 1979. There is, indeed, a growth in new company formations in Scotland and in businesses that are taking advantage of the new proposals and policies that we have implemented.

The microtrain that went around Scotland gave people in all sorts of industries the opportunity to see what microelectronics can do for their industry. The launching of INMAP, a combination of the expertise of Edinburgh university and Heriot Watt university in a limited company to introduce micro-electronics into the generality of Scottish business, was supported by a substantial contribution from Government funds. We were pleased to be able to do that.

Biotechnology has been mentioned. We have brought together a number of industrialists and academics in Scotland with a view to making sure that we do not miss out on the considerable opportunities available. The right hon. Member for Craigton referred to the health care industry study carried out by the Scottish Development Agency. This points to areas of new technology which are invaluable to the creation of new and secure jobs in Scotland. This is related to the science parks which are being created in Glasgow and elsewhere in Scotland. These will provide a physical as well as a financial bridge between developments at our universities, which are encouraging, and the commercial exploitation of those developments, which, it must be recognised, we have been slow in capitalising on in the past.

There is general Government aid to industry—financial support for industry and investment offers under section 7 of the Industry Act 1972. In the first seven months of this year, 73 offers of grant have been made, totalling £34 million, in relation to investment projects totalling £326 million. The jobs involved are 7,400 new and 2,900 safeguarded. I mention these figures as an indication of the continuing positive financial support for industry that the Government and my right hon. Friend are undertaking. To answer a specific question from the hon. Member for Glasgow, Maryhill (Mr. Craigen), these are some of the things that the Government are doing to help new and old industries to prepare for the highly competitive situation that exists in the world today.

My hon. Friend the Member for Edinburgh, South said rightly that the Government have a role in encouraging investment in Scotland. I hope that he will gain satisfaction from the figures that I have given. I know that he will gain satisfaction from the public funding that the Government are providing at Torness in East Lothian where a large commitment involving £500 million worth of contracts has been made, providing more than 2,200 jobs.

My hon. Friend the Member for Dumfries recognised that our position must be seen against the background of the world economy. Demand is depressed in most countries. Inflation and unemployment are international problems, as are interest rates. They are dominated by the United States' position. As this week's Economist states: The dollar dominates three-quarters of world trade and international lending and accounts for about two-thirds of all foreign exchange reserves. It should not be surprising even to Opposition Members that interest rates in the United States have a severe impact on interest rates elsewhere in the Western world, not least on a trading nation such as the United Kingdom.

My hon. Friend the Member for Moray and Nairn (Mr. Pollock) asked for a dual system of interest rates for small businesses. That is a matter for my right hon. and learned Friend the Chancellor of the Exchequer. My hon. Friend will also acknowledge that we have introduced 72 specific aids for small businesses since we came to office. Grants are available which can help interest charges.

We can do more for ourselves in Scotland. My hon. Friend the Secretary of State listed some excellent successes which are encouraging. The Scott Lithgow order involves not only BNOC. It is 50 per cent. supported by Ben-Odeco. Orders have gone to Govan and Yarrow. There is improved productivity at Ravenscraig. All that is encouraging but we have still more to do to compete with our overseas competitors. In steel and shipbuilding we have more to do to compete with the best in England and Wales. That is art important message which I hope will not be lost on shipyard and steel workers or on the management of those industries in Scotland.

The Rolls-Royce strike was damaging at a time when competition in the aero-engine industry has never been more severe. We need that business and the jobs in Scotland. I hope that that unofficial strike will end soon.

My hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) is welcome back to the business of making speeches in the House. His voice has been silent for too long. He recognises that there are no easy answers. He asks for more oil-related employment for the West of Scotland. In the last 12 years about 50,000 jobs have been created as a direct result of North Sea oil and gas. Almost an equivalent number have been created indirectly. Some of them have been created in the West of Scotland but I agree that not enough have been created. We are doing everything that we can to ensure that more jobs are made available.

My timekeeper, the hon. Member for West Stirlingshire (Mr. Canavan), wants the Government to transfer unemployment benefit—his figure was £13 billion—to public spending projects such as housing and roads. He sees that as the way to full employment. He ignores the effect that it would have on our industrial competitiveness. The only countries that provide full employment in that way are Russia and its satellites. It works to an extent. The people of Poland are protesting not about unemployment but about a failed economy that cannot provide enough food. That is their complaint. After 60 years of Socialist-planned economy in Russia, the Russians still cannot feed themselves either. Yet that is what the hon. Gentleman wishes to inflict on the people of Scotland.

The Opposition condemn the Government's economic policy yet they have absolutely nothing new to offer the Scottish people. My complaint is not simply that they are unfamiliar with the real world outside Scotland but that they are completely unaware of the facts of economic life within Scotland. For that reason alone I ask my right hon. and hon. Friends to oppose the Opposition's motion.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 207, Noes 277

Division No. 8]	[10 pm
AYES
Abse, Leo	Flannery, Martin
Adams, Allen	Fletcher, L. R, (Ilkeston)
Anderson, Donald	Fletcher, Ted (Darlington)
Archer, Rt Hon Peter	Foot, Rt Hon Michael
Ashley, Rt Hon Jack	Ford, Ben
Ashton, Joe	Forrester, John
Atkinson, N. (H'gey,)	Foulkes, George
Bagier, Gordon A.T.	Fraser, J. (Lamb'th, N'w'd)
Barnett, Guy(Greenwich)	Freeson, Rt Hon Reginald
Barnett, Rt Hon Joel (H'wd)	Garrett, John (Norwich S)
Benn, Rt Hon Tony	Garrett, W. E. (Wallsend)
Bidwell, Sydney	George, Bruce
Booth, Rt Hon Albert	Gilbert, Rt Hon Dr John
Boothroyd, MissBetty	Grant, George(Morpeth)
Bottomley, Rt Hon A.(M'b'ro)	Grimond, Rt Hon J.
Bray, Dr Jeremy	Hamilton, James(Bothwell)
Brown, Hugh D. (Provan)	Hamilton, W. W. (CtralFife)
Brown, R. C. (N'castle W)	Hardy, Peter
Brown, Ron(E'burgh, Leith)	Harrison, Rt Hon Walter
Buchan, Norman	Hart, Rt Hon Dame Judith
Callaghan, Jim(Midd't'n & P)	Hattersley, Rt Hon Roy
Campbell, Ian	Healey, Rt Hon Denis
Campbell-Savours, Dale	Heffer, EricS.
Canavan, Dennis	Hogg, H. (EDunb't'nshire)
Cant, R. B.	Holland, S. (L'b'th, Vauxh'll)
Carmichael, Neil	HomeRobertson, John
Clark, Dr David (S Shields)	Homewood, William
Cocks, Rt Hon M. (B'stol S)	Hooley, Frank
Cohen, Stanley	Hoyle, Douglas
Coleman, Donald	Huckfield, Les
Concannon, Rt Hon J. D.	Hughes, Robert (Aberdeen N)
Conlan, Bernard	Hughes, Hoy (Newport)
Cook, Robin F.	Janner, Hon Greville
Cowans, Harry	Jay, Rt Hon Douglas
Craigen, J. M. (G'gow, M'hill)	John, Brynmor
Crowther, Stan	Johnson, James (Hull West)
Cryer, Bob	Johnston, Russell (Inverness)
Cunliffe, Lawrence	Jones, Barry (East Flint)
Cunningham, G. (IslingtonS)	Kaufman, Rt Hon Gerald
Cunningham, Dr J. (W'h'n)	Kerr, Russell
Dalyell, Tam	Kilroy-Silk, Robert
Davidson, Arthur	Kinnock, Neil
Davies, Rt Hon Denzil (L'lli)	Lamborn, Harry
Davies, Ifor (Gower)	Lamond, James
Davis, T. (B'ham, Stechf'd)	Leighton, Ronald
Deakins, Eric	Lewis, Ron (Carlisle)
Dean, Joseph (Leeds West)	Litherland, Robert
Dempsey, James	Lofthouse, Geoffrey
Dewar, Donald	Lyons, Edward (Bradf'd W)
Dixon, Donald	McCartney, Hugh
Dobson, Frank	McDonald, Dr Oonagh
Dormand, Jack	McElhone, Frank
Douglas, Dick	McKay, Alien(Penistone)
Douglas-Mann, Bruce	McKelvey, William
Dubs, Alfred	MacKenzie, Rt Hon Gregor
Duffy, A. E. P.	Maclennan, Robert
Dunnett, Jack	McMahon, Andrew
Dunwoody, Hon Mrs G.	McNamara, Kevin
Eadie, Alex	McTaggart, Robert
Eastham, Ken	Magee, Bryan
Ellis, R. (NE D'bysh're)	Marks, Kenneth
English, Michael	Marshall, D(G'gowS'ton)
Ennals, Rt Hon David	Marshall, Dr Edmund (Goole)
Evans, Ioan (Aberdare)	Marshall, Jim (LeicesterS)
Evans, John (Newton)	Martin, M(G'gowS'burn)
Ewing, Harry	Maxton, John
Faulds, Andrew	Maynard, Miss Joan
Field, Frank	Meacher, Michael
Fitch, Alan	Mikardo, Ian
Fitt, Gerard	Millan, Rt Hon Bruce

Morris, Rt Hon A. (W'shawe)	Snape, Peter
Morris, Rt Hon C. (O'shaw)	Soley, Clive
Morris, Rt Hon J. (Aberavon)	Spearing, Nigel
Moyle, Rt Hon Roland	Spriggs, Leslie
Mulley, Rt Hon Frederick	Stewart, Rt Hon D. (W Isles)
Newens, Stanley	Strang, Gavin
Oakes, Rt Hon Gordon	Straw, Jack
O'Neill, Martin	Summerskill, Hon Dr Shirley
Orme, Rt Hon Stanley	Thomas, Dafydd(Merioneth)
Park, George	Thomas, Jeffrey (Abertillery)
Parker, John	Thomas, Dr R. (Carmarthen)
Parry, Robert	Thorne, Stan (Preston South)
Pavitt, Laurie	Tilley, John
Pendry, Tom	Tim, James
Penhaligon, David	Torney, Tom
Powell, Raymond (Ogmore)	Varley, Rt Hon Eric G.
Prescott, John	Watkins, David
Price, C. (Lewisham W)	Weetch, Ken
Race, Reg	Welsh, Michael
Radice, Giles	White, J. (G'gow Pollok)
Rees, Rt Hon M (Leeds S)	Whitehead, Phillip
Richardson, Jo	Whitlock, William
Roberts, Albert (Normanton)	Willey, Rt Hon Frederick
Roberts, Gwilym (Cannock)	Williams, Rt Hon A.(S'sea W)
Robinson, G. (Coventry NW)	Wilson, Gordon (Dundee E)
Rooker, J. W.	Wilson, Rt Hon Sir H.(H'ton)
Roper, John	Wilson, William (C'try SE)
Ross, Ernest (Dundee West)	Winnick, David
Rowlands, Ted	Woodall, Alec
Ryman, John	Woolmer, Kenneth
Sever, John	Young, David (Bolton E)
Sheldon, Rt Hon R.
Silkin, Rt Hon J.(Deptford)	Tellers for the Ayes:
Skinner, Dennis	Mr. George Morton and Mr. Frank Haynes.
Smith, Rt Hon J. (N Lanark)
NOES
Aitken, Jonathan	Chalker, Mrs. Lynda
Alexander, Richard	Channon, Rt. Hon. Paul
Alison, Rt Hon Michael	Chapman, Sydney
Amery, Rt Hon Julian	Churchill, W.S.
Ancram, Michael	Clark, Hon A. (Plym'th, S'n)
Arnold, Tom	Clark, Sir W. (Croydon S)
Aspinwall, Jack	Clarke, Kenneth(Rushcliffe)
Atkins, Rt Hon H.(S'thorne)	Clegg, Sir Walter
Atkins, Robert (Preston N)	Cockeram, Eric
Atkinson, David(B'm'th, E)	Colvin, Michael
Baker. Kenneth(St.M'bone)	Cope, John
Baker, Nicholas (N Dorset)	Cormack, Patrick
Bell, Sir Ronald	Corrie, John
Bendall, Vivian	Costain, Sir Albert
Benyon, W.(Buckingham)	Cranborne, Viscount
Best, Keith	Critchley, Julian
Bevan, David Gilroy	Crouch, David
Biffen, Rt Hon John	Dean, Paul (North Somerset)
Blackburn. John	Dickens, Geoffrey
Blaker, Peter	Dorrell, Stephen
Body, Richard	Dover, Denshore
Bonsor, Sir Nicholas	du Cann, Rt Hon Edward
Boscawen, Hon Robert	Dunn, Robert (Dartford)
Bottomley, Peter (W'wich W)	Durant, Tony
Bowden, Andrew	Dykes, Hugh
Braine, Sir Bernard	Eden, Rt Hon Sir John
Bright, Graham	Edwards, Rt Hon N. (P'broke)
Brinton, Tim	Eggar, Tim
Brittan, Rt. Hon. Leon	Emery, Peter
Brooke, Hon Peter	Eyre, Reginald
Brotherton, Michael	Fairbairn, Nicholas
Brown, Michael(Brigg & Sc'n)	Faith, Mrs Sheila
Bruce-Gardyne, John	Fell, Anthony
Bryan, Sir Paul	Fenner, Mrs Peggy
Buchanan-Smith, Rt. Hon. A.	Finsberg, Geoffrey
Buck, Antony	Fisher, Sir Nigel
Budgen, Nick	Fletcher, A. (Ed'nb'gh N)
Bulmer, Esmond	Fletcher-Cooke, Sir Charles
Burden, Sir Frederick	Fookes, Miss Janet
Butcher, John	Fowler, Rt Hon Norman
Butler, Hon Adam	Fox, Marcus
Cadbury, Jocelyn	Fraser, Rt Hon Sir Hugh
Carlisle, Kenneth (Lincoln)	Fraser, Peter (South Angus)

Fry, Peter	Mayhew, Patrick
Gardiner, George(Reigate)	Mellor, David
Gardner, Edward (S Fylde)	Meyer, Sir Anthony
Garel-Jones, Tristan	Miller, Hal(B'grove)
Gilmour, Rt Hon Sir Ian	Mills, Iain (Meriden)
Glyn, Dr Alan	Mills, Peter (West Devon)
Goodhart, Sir Philip	Miscampbell, Norman
Goodhew, Victor	Mitchell, David (Basingstoke)
Goodlad, Alastair	Moate, Roger
Gorst, John	Monro, Sir Hector
Gow, Ian	Montgomery, Fergus
Gower, Sir Raymond	Moore, John
Grant, Anthony (Harrow C)	Morris, M. (N'hampton S)
Gray, Hamish	Morrison, Hon C. (Devizes)
Grieve, Percy	Mudd, David
Griffiths, E. (B'yst.Edm'ds)	Myles, David
Griffiths, Peter Portsm'th N)	Neale, Gerrard
Grist, Ian	Nelson, Anthony
Grylls, Michael	Neubert, Michael
Gummer, John Selwyn	Newton, Tony
Hamilton, Hon A.	Normanton, Tom
Hamilton, Michael(Salisbury)	Nott, Rt Hon John
Hampson, Dr Keith	Onslow, Cranley
Hannam, John	Oppenheim, Rt Hon Mrs S.
Hastings, Stephen	Osborn, John
Havers, Rt Hon Sir Michael	Page, Richard (SW Herts)
Hawkins, Paul	Parris, Matthew
Hawksley, Warren	Patten, John(Oxford)
Hayhoe, Barney	Pattie, Geoffrey
Heddle, John	Pawsey, James
Henderson, Barry	Percival, Sir Ian
Heseltine, Rt Hon Michael	Pink, R. Bonner
Hicks, Robert	Pollock, Alexander
Higgins, Rt Hon Terence L.	Prentice, Rt Hon Reg
Hogg, Hon Douglas(Gr'th'm)	Price, Sir David (Eastleigh)
Holland, Philip(Carlton)	Proctor, K. Harvey
Hooson, Tom	Pym, Rt Hon Francis
Hordern, Peter	Raison, Timothy
Howe, Rt Hon Sir Geoffrey	Rathbone, Tim
Hunt, David (Wirral)	Rees, Peter (Dover and Deal)
Hunt, John (Ravensbourne)	Rees-Davies, W. R.
Hurd, Hon Douglas	Renton, Tim
Jenkin, Rt Hon Patrick	Rhodes James, Robert
Johnson Smith, Geoffrey	Rhys Williams, Sir Brandon
Jopling, Rt Hon Michael	Ridley, Hon Nicholas
Joseph, Rt Hon Sir Keith	Rifkind, Malcolm
Kaberry, Sir Donald	Roberts, M. (Cardiff NW)
Kershaw, Sir Anthony	Roberts, Wyn (Conway)
King, Rt Hon Tom	Rossi, Hugh
Kitson, Sir Timothy	Royle, Sir Anthony
Knight, Mrs Jill	Sainsbury, Hon Timothy
Knox, David	Shaw, Giles (Pudsey)
Lang, Ian	Shaw, Michael (Scarborough)
Latham, Michael	Shelton, William(Streatham)
Lawrence, Ivan	Shepherd, Colin(Hereford)
Lawson, Rt Hon Nigel	Shepherd, Richard
Lee, John	Silvester, Fred
Lennox-Boyd, Hon Mark	Sims, Roger
Lester, Jim (Beeston)	Skeet, T. H. H.
Lewis, Kenneth (Rutland)	Smith, Dudley
Lloyd, Peter (Fareham)	Speed, Keith
Loveridge, John	Spence, John
Lyell, Nicholas	Spicer, Jim (West Dorset)
Macfarlane, Neil	Spicer, Michael (S Worcs)
MacGregor, John	Sproat, Iain
MacKay, John (Argyll)	Squire, Robin
Macmillan, Rt Hon M.	Stainton, Keith
McNair-Wilson, M.(N' bury)	Stanbrook, Ivor
McNair-Wilson, P. (New F' st)	Stanley, John
Madel, David	Steen, Anthony
Major, John	Stevens, Martin
Marland, Paul	Stewart, Ian(Hitchin)
Marlow, Antony	Stewart, A.(E Renfrewshire)
Marshall, Michael(Arundel)	Stokes, John
Marten, Rt Hon Neil	Stradling Thomas J.
Mates, Michael	Tapsell, Peter
Maude, Rt Hon Sir Angus	Taylor, Teddy (S' end E)
Mawby, Ray	Tebbit, Rt Hon Norman
Mawhinney, Dr Brian	Temple-Morris, Peter
Maxwell-Hyslop, Robin	Thomas, Rt Hon Peter

Thompson, Donald	Wells, John (Maidstone)
Thorne, Neil (Ilfordsouth)	Wells, Bowen
Townend, John (Bridlington)	Wheeler, John
Townsend, Cyril D, (B' heath)	Whitelaw, Rt Hon William
Trippier, David	Whitney, Raymond
Trotter, Neville	Wickenden, Keith
van Straubenzee, Sir W.	Wiggin, Jerry
Vaughan, Dr Gerard	Wilkinson, John
Viggers, Peter	Williams, D (Montgomery)
Waddington, David	Winterton, Nicholas
Waldegrave, Hon William	Wolfson, Mark
Walker, Rt Hon P.(W' cester)	Young, Sir George (Acton)
Walker, B. (Perth)	Younger, Rt Hon George
Walker-Smith, Rt Hon Sir D.
Wall, Sir Patrick	Tellers for the Noes:
Ward, John	Mr. Anthony Berry and Mr. Carol Mather.
Warren, Kenneth
Watson, John

Question accordingly negatived.

Question, That the proposed words be there added, Put forthwith pursuant to Standing Order No.32 (Questions on Amendments):—

The House divided: Ayes 268, Noes 203

Division No. 9]	[10.13 pm
AYES
Aitken, Jonathan	Colvin, Michael
Alexander, Richard	Cope, John
Alison, Rt Hon Michael	Cormack, Patrick
Amery, Rt Hon Julian	Corrie, John
Ancram, Michael	Costain, Sir Albert
Arnold, Tom	Cranborne, Viscount
Aspinwall, Jack	Critchley, Julian
Atkins, Rt Hon H.(S' thorne)	Crouch, David
Atkins, Robert (Preston N)	Dean, Paul (North Somerset)
Atkinson, David (B'm'th, E)	Dickens, Geoffrey
Baker, Kenneth (St. M' bone)	Dorrell, Stephen
Baker, Nicholas (N Dorset)	Dover, Denshore
Bell, Sir Ronald	du Cann, Rt Hon Edward
Bendall, Vivian	Dunn, Robert (Dartford)
Benyon, Thomas(A' don)	Durant, Tony
Benyon, W. (Buckingham)	Eden, Rt Hon Sir John
Best, Keith	Edwards, Rt Hon N. (P' broke)
Bevan, David Gilroy	Eggar, Tim
Biffen, Rt Hon John	Elliott, Sir William
Blackburn, John	Emery, Peter
Blaker, Peter	Eyre, Reginald
Body, Richard	Fairbairn, Nicholas
Bonsor, Sir Nicholas	Faith, Mrs Sheila
Boscawen, Hon Robert	Fell, Anthony
Bottomley, Peter (W' wich W)	Fenner, Mrs Peggy
Bowden, Andrew	Finsberg, Geoffrey
Braine, Sir Bernard	Fisher, Sir Nigel
Bright, Graham	Fletcher, A. (Ed' nb' gh N)
Brinton, Tim	Fletcher-Cooke, Sir Charles
Brittan, Rt. Hon. Leon	Fookes, Miss Janet
Brooke, Hon Peter	Fowler, Rt Hon Norman
Brotherton, Michael	Fraser, Rt Hon Sir Hugh
Brown, Michael (Brigg & Sc'n)	Fraser, Peter (South Angus)
Bruce-Gardyne, John	Fry, Peter
Bryan, Sir Paul	Gardiner, George (Reigate)
Buchanan-Smith, Rt. Hon. A.	Gardner, Edward (S Fylde)
Buck, Antony	Garel-Jones, Tristan
Budgen, Nick	Gilmour, Rt Hon Sir Ian
Bulmer, Esmond	Glyn, Dr Alan
Burden, Sir Frederick	Goodhew, Victor
Butcher, John	Goodlad, Alastair
Butler, Hon Adam	Gorst, John
Cadbury, Jocelyn	Gow, Ian
Carlisle, Kenneth (Lincoln)	Gower, Sir Raymond
Chalker, Mrs. Lynda	Grant, Anthony (Harrow C)
Channon, Rt. Hon. Paul	Gray, Hamish
Chapman, Sydney	Grieve, Percy
Clark, Hon A. (Plym'th, S'n)	Griffiths, E.(B'y St. Edm'ds)
Clark, Sir W. (Croydon S)	Griffiths, Peter Portsm'th N)
Clarke, Kenneth(Rushcliffe)	Grist, Ian
Clegg, Sir Walter	Grylls, Michael
Cockeram, Eric	Gummer, John Selwyn

Hamilton, Michael (Salisbury)	Page, Richard (SW Herts)
Hampson, Dr Keith	Parris, Matthew
Hannam, John	Patten, John(Oxford)
Hastings, Stephen	Pattie, Geoffrey
Havers, Rt Hon Sir Michael	Pawsey, James
Hawkins, Paul	Percival, Sir Ian
Hawksley, Warren	Pink, R. Bonner
Heddle, John	Pollock, Alexander
Henderson, Barry	Prentice, Rt Hon Reg
Heseltine, Rt Hon Michael	Price, Sir David (Eastleigh)
Hicks, Robert	Proctor, K. Harvey
Higgins, Rt Hon Terence L.	Pym, Rt Hon Francis
Hogg, Hon Douglas (Gr'th'm)	Raison, Timothy
Holland, Philip (Carlton)	Rathbone, Tim
Hooson, Tom	Rees, Peter (Dover and Deal)
Hordern, Peter	Renton, Tim
Howe, Rt Hon Sir Geoffrey	Rhodes James, Robert
Hunt, David (Wirral)	Rhys Williams, Sir Brandon
Hunt, John (Ravensbourne)	Ridley, Hon Nicholas
Hurd, Hon Douglas	Rifkind, Malcolm
Jenkin, Rt Hon Patrick	Roberts, M. (Cardiff NW)
Johnson Smith, Geoffrey	Roberts, Wyn (Conway)
Jopling, Rt Hon Michael	Rossi, Hugh
Joseph, Rt Hon Sir Keith	Royle, Sir Anthony
Kaberry, Sir Donald	Sainsbury, Hon Timothy
Kershaw, Sir Anthony	Shaw, Giles (Pudsey)
King, Rt Hon Tom	Shaw, Michael (Scarborough)
Kitson, Sir Timothy	Shelton, William (Streatham)
Knight, Mrs Jill	Shepherd, Colin (Hereford)
Knox, David	Shepherd, Richard
Lang, Ian	Silvester, Fred
Latham, Michael	Sims, Roger
Lawrence, Ivan	Skeet, T. H. H.
Lee, John	Smith, Dudley
Lennox-Boyd, Hon Mark	Speed, Keith
Lester, Jim (Beeston)	Spence, John
Lewis, Kenneth (Rutland)	Spicer, Jim (West Dorset)
Lloyd, Peter (Fareham)	Spicer, Michael (S Worcs)
Loveridge, John	Sproat, Iain
Lyell, Nicholas	Squire, Robin
Macfarlane, Neil	Stainton, Keith
MacGregor, John	Stanbrook, Ivor
MacKay, John (Argyll)	Stanley, John
Macmillan, Rt Hon M.	Steen, Anthony
McNair-Wilson. M.(N'bury)	Stevens, Martin
McNair-Wilson, P. (NewF'st)	Stewart, Ian (Hitchin)
Madel, David	Stewart, A. (E Renfrewshire)
Major, John	Stokes, John
Marlow, Antony	Stradling Thomas. J.
Marshall, Michael(Arundel)	Tapsell, Peter
Marten, Rt Hon Neil	Taylor, Teddy (S' end E)
Mates, Michael	Tebbit, Rt Hon Norman
Maude, Rt Hon Sir Angus	Temple-Morris, Peter
Mawby, Ray	Thomas, Rt Hon Peter
Mawhinney, Dr Brian	Thompson, Donald
Maxwell-Hyslop, Robin	Thorne, Neil (IlfordSouth)
Mayhew, Patrick	Townend, John (Bridlington)
Mellor, David	Townsend, Cyril D, (B'heath)
Meyer, Sir Anthony	Trippier, David
Miller, Hal (B'grove)	Trotter, Neville
Mills, Iain (Meriden)	van Straubenzee, Sir W.
Mills, Peter (West Devon)	Vaughan, Dr Gerard
Miscampbell, Norman	Viggers, Peter
Mitchell, David (Basingstoke)	Waddington, David
Moate, Roger	Waldegrave, Hon William
Monro, Sir Hector	Walker, Rt Hon P.(W'cester)
Montgomery, Fergus	Walker, B. (Perth)
Moore, John	Walker-Smith, Rt Hon Sir D.
Morris, M. (N'hamptonS)	Wall, Sir Patrick
Morrison, Hon C. (Devizes)	Ward, John
Mudd, David	Warren, Kenneth
Myles, David	Watson, John
Neale, Gerrard	Wells, John (Maidstone)
Nelson, Anthony	Wells, Bowen
Neubert, Michael	Wheeler, John
Newton, Tony	Whitelaw, Rt Hon William
Normanton, Tom	Whitney, Raymond
Onslow, Cranley	Wickenden, Keith
Oppenheim, Rt Hon Mrs S.	Wilkinson, John
Osborn, John	Williams, D.(Montgomery)

Winterton, Nicholas
Wolfson, Mark	Tellers for the Ayes:
Young, Sir George (Acton)	Mr. Anthony Berry and Mr. Carol Mather.
Younger, Rt Hon George
NOES
Abse, Leo	Duffy, A. E. P.
Adams, Allen	Dunnett, Jack
Anderson, Donald	Dunwoody, Hon Mrs G.
Archer, Rt Hon Peter	Eadie, Alex
Ashley, Rt Hon Jack	Eastham, Ken
Ashton, Joe	Ellis, R.(NE D'bysh're)
Atkinson, N.(H'gey,)	English, Michael
Bagier, Gordon A.T.	Ennals, Rt Hon David
Barnett, Guy (Greenwich)	Evans, Ioan (Aberdare)
Barnett, Rt Hon Joel (H'wd)	Evans, John (Newton)
Benn, Rt Hon Tony	Ewing, Harry
Bidwell, Sydney	Faulds, Andrew
Booth, Rt Hon Albert	Field, Frank
Boothroyd, Miss Betty	Fitch, Alan
Bottomley, Rt Hon A.(M'b'ro)	Fitt, Gerard
Bray, Dr Jeremy	Flannery, Martin
Brown, Hugh D. (Provan)	Fletcher, L. R. (Ilkeston)
Brown, R. C. (N'castle W)	Fletcher, Ted (Darlington)
Brown, Ron (E'burgh, Leith)	Foot, Rt Hon Michael
Buchan, Norman	Forrester, John
Callaghan, Jim (Midd't'n & P)	Foulkes, George
Campbell, Ian	Fraser, J. (Lamb'th, N'w'd)
Campbell-Savours, Dale	Freeson, Rt Hon Reginald
Canavan, Dennis	Garrett, John (Norwich S)
Cant, R. B.	Garrett, W. E. (Wallsend)
Carmichael, Neil	George, Bruce
Clark, Dr David (S Shields)	Gilbert, Rt Hon Dr John
Cocks, Rt Hon M. (B'stol S)	Grant, George (Morpeth)
Cohen, Stanley	Grimond, Rt Hon J.
Coleman, Donald	Hamilton, James (Bothwell)
Concannon, Rt Hon J. D.	Hardy, Peter
Conlan, Bernard	Harrison, Rt Hon Walter
Cook, Robin F.	Hart, Rt Hon Dame Judith
Cowans, Harry	Hattersley, Rt Hon Roy
Craigen, J. M. (G'gow, M'hill)	Haynes, Frank
Crowther, Stan	Healey, Rt Hon Denis
Cryer, Bob	Heffer, Eric S.
Cunliffe, Lawrence	Hogg, N. (E Dunb't'nshire)
Cunningham, G. (IslingtonS)	Home Robertson, John
Cunningham, Dr J.(W'h'n)	Homewood, William
Dalyell, Tam	Hooley, Frank
Davidson, Arthur	Hoyle, Douglas
Davies, Rt Hon Denzil (L'lli)	Huckfield, Les
Davies, Ifor (Gower)	Hughes, Robert (AberdeenN)
Davis, T. (B'ham, Stechf'd)	Hughes, Roy (Newport)
Deakins, Eric	Janner, Hon Greville
Dean, Joseph (Leeds West)	Jay, Rt Hon Douglas
Dempsey, James	John, Brynmor
Dewar, Donald	Johnson, James (Hull West)
Dixon, Donald	Johnston, Russell (Inverness)
Dobson, Frank	Jones, Barry (East Flint)
Dormand, Jack	Jones, Dan (Burnley)
Douglas, Dick	Kaufman, Rt Hon Gerald
Douglas-Mann, Bruce	Kerr, Russell
Dubs, Alfred	Kilroy-Silk, Robert

Kinnock, Neil	Roberts, Albert (Normanton)
Lamborn, Harry	Roberts, Gwilym(Cannock)
Lamond, James	Robinson, G. (Coventry NW)
Leighton, Ronald	Rooker, J.W.
Lewis, Ron (Carlisle)	Roper, John
Litherland, Robert	Ross, Ernest (Dundee West)
Lofthouse, Geoffrey	Rowlands, Ted
Lyon, Alexander(York)	Ryman, John
McDonald, Dr Oonagh	Sever, John
McElhone, Frank	Sheldon, Rt Hon R.
McKelvey, William	Silkin, Rt Hon J. (Deptford)
MacKenzie, Rt Hon Gregor	Skinner, Dennis
Maclennan, Robert	Smith, Rt Hon J. (N Lanark)
McMahon, Andrew	Snape, Peter
McNamara, Kevin	Soley, Clive
McTaggart, Robert	Spearing, Nigel
Magee, Bryan	Spriggs, Leslie
Marks, Kenneth	Stewart, Rt Hon D. (W Isles)
Marshall, D.(G'gowS'ton)	Strang, Gavin
Marshall, Dr Edmund (Goole)	Straw, Jack
Marshall, Jim (Leicester S)	Summerskill, Hon Dr Shirley
Martin, M.(G'gowS'burn)	Thomas, Dafydd (Merioneth)
Maxton, John	Thomas, Jeffrey (Abertillery)
Maynard, Miss Joan	Thomas, Dr R.(Carmarthen)
Meacher, Michael	Thorne, Stan (Preston South)
Millan, Rt Hon Bruce	Tilley, John
Morris, Rt Hon A. (W'shawe)	Tinn, James
Morris, Rt Hon C. (O'shaw)	Torney, Tom
Morris, Rt Hon J. (Aberavon)	Varley, Rt Hon Eric G.
Morton, George	Watkins, David
Moyle, Rt Hon Roland	Weetch, Ken
Mulley, Rt Hon Frederick	Welsh, Michael
Newens, Stanley	White, J. (G'gowPollok)
Oakes, Rt Hon Gordon	Whitehead, Phillip
O'Neill, Martin	Whitlock, William
Orme, Rt Hon Stanley	Willey, Rt Hon Frederick
Park, George	Williams, Rt Hon A.(S'sea W)
Parker, John	Wilson, Gordon (Dundee E)
Parry, Robert	Wilson, Rt Hon Sir H.(H'ton)
Pavitt, Laurie	Wilson, William (C'try SE)
Pendry, Tom	Winnick, David
Penhaligon, David	Woodall, Alec
Powell, Raymond (Ogmore)	Woolmer, Kenneth
Prescott, John	Young, David (Bolton E)
Price, C. (Lewisham W)
Race, Reg	Tellers for the Noes:
Radice, Giles	Mr. Allen McKay and Mr. Hugh McCartney.
Rees, Rt Hon M (Leeds S)
Richardson, Jo

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House, while deeply concerned about the high level of unemployment in Scotland, commends the Government's determination to encourage the development of a new industrial base for economic recovery and the generation of new and secure jobs.