HC Deb 29 March 1985 vol 76 cc811-72 9.38 am
Dr. Norman A. Godman (Greenock and Port Glasgow)

I beg to move, That this House views with the utmost concern the continuing decline of Scottish manufacturing industry, the increasing and disastrous levels of unemployment, particularly amongst young people and the shortage of investment for training and re-training; and condemns the complete failure of the Budget to offer any hope of economic recovery in Scotland. I propose to outline some of the economic, industrial and employment problems which so bedevil Scotland today and the Government's failure to tackle those problems. I shall then sketch several optional economic and industrial policy objectives. I believe that, no matter how condemnatory and critical of the Government's policies and failures we are, we should at the very least offer alternative prescriptions to cure the fearsome economic and social ills with which we are faced.

If the policy objectives that I shall outline later were to be adopted by Her Majesty's Government, we should see an improvement in productivity and employment which, in turn, would lead to greater prosperity. Nothing is easier than to offer from the Back Benches plausible solutions to the problems which seem to be beyond the capabilities of Ministers, Government and state to solve. Despite that qualification, however, I believe that the Government's political perspective and commitment to market forces have done little or nothing to stem the seemingly inexorable increase in unemployment and the consequent growth of misery.

In any debate on the Scottish economy it must be acknowledged that Scotland is a regional economy within the United Kingdom and thus largely lacks autonomous powers in the adoption of economic and industrial policy. It is also fair to say that there is no possibility of a devolved national administration for Scotland with autonomous tax-raising powers in the near future. That being so, employment and unemployment levels will be largely determined by the United Kingdom Government.

Not all is lost for Scotland, however. In a recent very important survey, which I understand the Minister has read, Stephen Young and Neil Hood have stated: there is the potential in Scotland, through bodies such as the Industrial Department and the Scottish Development Agency to design Scottish initiatives within the framework of existing guidelines and policies.

Mrs. Anna McCurley (Renfrew, West and Inverclyde)

Will the hon. Gentleman explain precisely what the Scottish Development Agency has done by combining with private capital to set up a £60 million project for the hon. Gentleman's area and my own?

Dr. Godman

I shall be dealing with the Inverclyde initiative later. The hon. Lady will have to contain her impatience. I am sure that she will succeed in catching your eye, Mr. Deputy Speaker, especially with the outfit that she is wearing today.

Mr. Robert Hughes (Aberdeen, North)

A scarlet woman.

Dr. Godman

I would not go so far as that. The hon. Lady's politics certainly seem to be deepest blue.

Hood and Young continue: Through innovative thinking and the scope for flexibility around national guidelines, it may be valid to think of a secondary tier of industrial policy which gives specific attention to the problems of industry in Scotland. Industrially, Scotland has experience of growth and decline. Once a leading nation in shipbuilding, marine engineering, steel making, engineering, coal mining and manufacturing industries, it is now woefully adrift in the league of industrialised nations, as evidenced by the dreadful decline in employment in coal mining, metal manufacture, shipbuilding, engineering, motor vehicle manufacture, textiles, clothing and footwear, and paper printing and publishing. Taking 1980 as the base year, the index for employment in manufacturing was 111.4 in 1977 but had fallen to 79.3 by June 1984. Thus Scotland—along with Morton, which may yet be rescued—faces relegation from the premier league. Scotland now accounts for only 0.7 per cent. of the total production of the 24 OECD countries.

In the interests of objectivity, I should add that Scotland's decline did not begin in May 1979. In truth, since 1945 the economies of both Scotland and the United Kingdom have slipped and slithered down the league of industrialised nations, as all the most significant economic indicators show. In the 1950s, 1960s, and 1970s the Scottish and United Kingdom economies fell below the average for industrialised nations. We have, I regret to say, a miserable record.

Scottish economist David Bell said recently: The rate of growth of real incomes in Scotland lags way behind that in the USA, France, West Germany and Japan. And this is true whether one considers the period prior to the first major rise in oil prices or the period of slower growth which followed the OPEC intervention. He continues: These countries have also, by and large, provided a continuous growth in employment to absorb any increase in labour supply … In Scotland, employment opportunities have tended to decline even though labour supply has increased, leaving little option but emigration or unemployment". With regard to emigration, the right hon. Member for Western Isles (Mr. Stewart), who is not present today, has claimed: If it were not for the fact that 18,000 skilled and qualified people leave Scotland each year, mass unemployment would be even worse".—[Official Report, 11 March 1985; Vol. 75, c. 50.] Many people seem to believe that the United Kingdom and Scotland are experiencing a form of de-industrialisation. They argue that the United Kingdom seems incapable of maintaining a positive trade balance in manufactured goods, and it is unfortunately true that in 1983, for the first time since the beginning of the industrial revolution, the United Kingdom exported fewer manufactured goods than it imported. That is a sorry state of affairs.

A number of studies have shown that British firms have a very poor rating for non-price competitiveness in terms of marketing, product quality, delivery dates and the servicing of products. I should point out, however, that the criticism does not apply to many Scottish firms which enjoy a deservedly high reputation in foreign markets. No one can deny, however, that in the past 20 years there has been a dismaying fall in the United Kingdom share of international trade and that this decline has had a serious effect on employment. I support the need for home-led demand, but one can scarcely expect high quality products to sell well in a country with high unemployment.

Concurrent with the decline in manufacturing industry in the past 20 years has been growth in the service sector. In the early 1960s, that sector accounted for about 45 per cent. of employment in Scotland. By 1982, the proportion had increased to 54 per cent. In the 1960s and 1970s the decline in manufacturing industry employment was to a large extent matched by the increase in the service sector, so that the overall employment level remained fairly static. But even in the service sector—the Government's magic employment garden — employment in some areas has declined. For example, employment in the distributive industry has fallen dramatically although the volume of retail sales has increased quite sharply. In 1965, employment in that industry was about 283,000. By 1981, it had fallen to 193,000, although in the same period sales increased by about 33 per cent. One reason for that, of course, has been the shift towards larger and more efficient stores. Other service industries such as education and the law are labour intensive and will presumably remain so for much longer.

The major shift in employment and employment opportunities between the manufacturing and service sectors was illustrated in a recent answer from the Secretary of State for Scotland to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), which stated that in 1978 609,000 people were employed in manufacturing industry but that by 1984 the figure had dropped to 437,000. In 1978, service industries employed 1,188,000 and in 1984 they employed 1,254,000.

I welcome the growth of employment in service industries, but I do not believe for a moment that a service-based economy can solve our economic and industrial problems. There must be a more positive mixture. To quote David Bell again: employment levels (in manufacturing industry) should not be taken to be the main symptom of economic decline. Rather, one should think of decline in terms of Scotland and the UK's increasing ability to maintain a favourable balance on trade in manufactured goods. Britain was the first nation whose wealth was derived from its ability successfully to exchange manufactured goods for raw materials.

Mr. Barry Henderson (Fife, North-East)

I apologise to the hon. Gentleman for missing the first couple of minutes of his speech.

In regard to trade, is it not a curiosity that, on the export side of the balance, we seem to have the highest proportion of national product exported in the world? The proportion is much higher than in Japan, the United States or Germany. Nevertheless, we seem to be losing a substantial share of our own market. Does the hon. Gentleman agree that the problem appears to be one of imports satisfying United Kingdom demand rather than of exports?

Dr. Godman

The hon. Gentleman was gracious enough to say that there is a problem with a lack of home-led demand.

Mr. Henderson

I did not say that.

Dr. Godman

I thought that that is what the hon. Gentleman said. Bell is saying that now, due to the eccentricities of the common agricultural policy and the chance discovery of North sea oil, the balance is swinging towards the export of raw materials and foods and the importation of manufactured goods.

Having mentioned North sea oil, I am prompted to describe the benefits of that natural resource to Scotland and the United Kingdom. Where on earth would we be without this enormously valuable resource? Much of the revenue obtained from the extraction of offshore oil and gas has gone to pay the huge bill of the millions of people on the dole—a sad waste of people and money. It must be said, however, that oil and gas resources have provided Scotland with a great deal of employment. The Minister of State, Department of Energy said in a Scottish Grand Committee debate: In 1983, gross capital investment in the United Kingdom oil and gas exploration and production industry accounted for 27 per cent. of total United Kingdom industrial investment. … In Scotland, more than 64,000 jobs are provided by companies in North Sea oil and gas activities, with a total of around 100,000 jobs when taking into account indirect oil-related employment. In view of that, clearly it is an industry of major importance and interest." — [Official Report, Scottish Grand Committee. 18 December 1984; c. 1.] Even there, opportunities have been lost by the failure of government and industry to capitalise effectively on this valuable resource.

Ian Wood, chairman and managing director of one of Scotland's most successful companies in this type of economic activity, has said: There is a strong belief in the United Kingdom fostered by both this and the previous Government that UK industry has done well in the development of North Sea oil. I personally believe that this is a dangerous myth. Far too many of the successful North Sea performers are the incoming international companies who simply operate a local UK base to cater for North Sea oil. They are not building up genuine UK technology and know-how to be supplied in further expansion overseas … Any present realistic assessment of the number of UK companies who have the know-how, technology and manufacturing skills to expand into the offshore industry world wide would provide a pitifully small number nowhere near the level of presence and influence that should have been achieved from our privileged frontier staring position. The two main areas of policy and prudence in offshore oil and gas industries are the expansion of Scottish involvement in the North sea and assistance for Scottish companies to compete more successfully in international markets.

North sea oil and the new high-technology industries, along with service industries, have saved Scotland from utter humiliation. But for many people and their communities, the experience is of poverty amid affluence. My constituency provides a striking example of the decline of secure employment and the growth of the dole queue. In the past 10 or 15 years, the communities of Greenock and Port Glasgow have suffered the withering away of traditional industries while there has been a growth of high-technology industry. It is estimated that more than 5,200 jobs in traditional industries have been lost in Greenock and Port Glasgow during the past five years. Almost 4,000 were lost in shipbuilding and marine engineering. We also lost a sugar cane refining plant, although I am pleased that Tate and Lyle still operates one successfully. It is an important element in the Scottish food and drink industry. Set against that decline in traditional industries is the growth in the electronics industry.

Mrs. McCurley

Will the hon. Gentleman give way?

Dr. Godman


For example, IBM has new factories at Dalrymple street, Larkfield and Spango Valley which employ about 2,700 people. Expansion is planned and I hope that it will lead to another 200 or 300 jobs. National Semiconductor (UK) Ltd. employs about 1,700 people. Total employment in electronics is now about 5,500, making it the largest industrial sector. According to The Sunday Times of 17 February 1985: 1984 was a fabulous year in every regard for IBM in the UK market and it did better against ICL than ever before … IBM's UK turnover was up 40 per cent. whereas ICL's was up 8 per cent; and IBM's UK profit was up 27 per cent. compared to ICUs 9 per cent. That extremely successful company was introduced to the area by one of my predecessors — not Dr. Dickson Mabon.

There is another welcome development, which the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) mentioned in her intervention. It is the Inverclyde initiative, which was inaugurated by the Under-Secretary of State on Tuesday at Gourock. I should have preferred the ceremony to take place in Greenock or Port Glasgow, but I cannot have things all my own way. The hotel at which the ceremony took place is delightful. The Minister, the hon. Member for Renfrew, West and Inverclyde and I did not get any lunch or a drink—just a cup of coffee. There again, we were there to work.

The Inverclyde initiative is a partnership, involving the private sector, district and regional councils and the Scottish Development Agency. It is proposed to pave the way for a £60 million investment in the area and a £6 million priority programme has already been identified. Naturally, I welcome the development, as I know the hon. Lady does.

The initiative is, first, a private-sector-led five-year project; secondly, an SDA commitment to expenditure of £4.75 million over a five-year period; thirdly, the establishment of a development group to oversee the project and the projecting, to promote the economic development of the area; and fourthly, the identification of a priority programme to be implemented over 12 to 18 months. The main elements of the programme are in the service sector, where there will be tourism and leisure initiatives, including a museum of emigration and the maritime industry. I hope one day to donate a little water colour of the Firth of Clyde, which I picked up in a sale. Obviously, I must first get the permission of my wife. Another element is the establishment of an enterprise development unit, and many manpower and training initiatives.

While I speak about the initiative, I must remind the House what the Secretary of State said about the project when he gave evidence to the Scottish Select Committee inquiry into Scott Lithgow: Once we have identified and costed whatever proposals are agreed between ourselves, the SDA and local interests on the ground, we can then work out how best they can be financed, and once I am clear about that I will have to consider how far it may be necessary for the Government to provide funds additional to those already provided to the SDA. I welcome that commitment.

At the ceremony on Tuesday, Mr. Robin Duthie, chairman of the SDA, said: Despite the growth of successful electronics firms, such as IBM and National Semiconductor, the decline in traditional industries such as shipbuilding and marine engineering has had a major impact on the social and economic heart of the district. Problems were highlighted with the threatened closure of the Scott Lithgow shipyard, at one time the biggest employer in the district. The subsequent takeover by Trafalgar House saved many jobs but there were still about 2,000 redundanies involving men with little chance of finding work elsewhere. I would be deeply delighted if, in addition to the development, Scott Lithgow won some of the orders for the new SKK 2400 conventional patrol submarine and, similarly, Ferguson Ailsa won more orders, including the replacement for the fishery protection fleet. Although that is not the responsibility of the Minister's Department, I should like him to comment on that. Some of the vessels in the fishery protection service are getting a little long in the tooth.

Despite that exciting new developmeent, Greenock and Port Glasgow continues to suffer from appallingly high unemployment. Male unemployment remains in excess of 22 per cent. In addition, many of my constituents live in damp and often overcrowded housing. Fully 25 per cent. of Inverclyde district council houses suffer from damp—that is, approximately 5,000 houses. That, combined with unemployment, is a disgraceful state of affairs.

Scotland's economy is in a mess, and certainly in a state of flux. In that respect it is no different from that of the rest of the United Kingdom. The one commodity that is not in short supply is labour.

There are measures that the Government take to deal with those problems. The Under-Secretary, in reply to my hon. Friend the Member for Glasgow, Pollock (Mr. White), said that there were many economic measures and special employment measures designed to help reduce the level of unemployment in my hon. Friend's constituency and elsewhere in Scotland. He mentioned economic measures, regional development grant at the maximum level available, selective financial assistance under the Industrial Development Act 1982 and SDA financial assistance—for example, for the Glasgow eastern area renewal project. He gave a long list of special employment measures.

I seek not to belittle the Minister's efforts, but to point out the facts of economic life in Scotland. The Budget offers little relief for the unemployed in Scotland and the rest of the United Kingdom, and little hope for many of the major industries which have sustained the Scottish economy for many years. The Budget was not a Budget for jobs. We need a Budget which will increase expenditure on our decaying or at least sharply deteriorating infrastructure. We need expenditure on houses, schools, hospitals, roads, bridges and sewers.

A great deal needs to be done, as the right hon. Member for Old Bexley and Sidcup (Mr. Heath) pointed out in Monday's debate: I believe more strongly than ever that a Government programme of investment in the infrastructure is desperately needed and should be carried through." — [Official Report, Monday 25 March; Vol. 76, c. 55.] Investment in the infrastructure would be one of my policy recommendations. Such investment is desperately needed in my constituency for the replacement or modernisation of a decaying housing stock. Secondly, economic trade and industrial policies should be centred on a precise objective—the development of a manufacturing industry which can compete in all the world markets.

All the evidence is that the key to the growth of the economy is the growth of manufacturing industry. A prosperous manufacturing industry spreads its prosperity through agriculture, fisheries, distribution and other service industries. In other words, manufacturing is the central element in the modernisation of our economy. That was acknowledged on Monday by the right hon. Member for Waveney (Mr. Prior), when he said: The manufacturing industry is still the main provider of employment in Britain. Without it, most service industries cannot prosper. The number employed in the service industries cannot be increased without a good and prosperous manufacturing industry."— [Official Report, 25 March 1985; Vol. 76, c. 60.] In this scheme of things, the role of the whole market is crucial. We can see that in Japan. Even now, it is largely a home-market-based economy with manufactured exports accounting for less than 14 per cent. of total domestic production.

The basis of a successful economy and industrial policy involves the control of demand and finance, and some direct influence on investment and, hence, on the development of the structure of industry. The control of demand can be achieved by state spending, including spending on subsidies, by taxing powers and by the control of imports. I am saying not that imports should be reduced, but that the growth of imports should be carefully regulated. We already have a restriction of imports by way of unemployment.

I have been able only to sketch in the merest detail my alternative policy objectives. I conclude by quoting from a paper written by Sir Alec Cairncross: In the end we cannot escape from the present depression without a large increase in demand and there is no likelihood of such an increase without an initiative on the part of governments. It is pure fantasy to suppose that output will recover of itself. The sad fact is that, without the possibility in the near future of a devolved Scottish Parliament with independent tax-raising powers, we shall continue to be at the mercy, tender or otherwise, of the London-based Government. We must engage in a continuing and critical examination of the Government's economic performance, and I hope that this debate is part of that essential democratic function.

10.10 am
Sir Hector Monro (Dumfries)

I congratulate the hon. Member for Greenock and Port Glasgow (Mr. Godman) on winning the ballot and introducing a debate on Scotland, because we always welcome the opportunity to discuss Scotland. However, for this extremely important debate we see no one from the Liberal party, the Scottish National party or the Social Democratic party. That is a severe criticism of their attitude to Scotland.

The hon. Gentleman spoke in his usual scholarly way, which was rather different from the wording of his motion. I believe it to be unacceptable. It talks down Scotland, and some statements in the motion are simply not true. This sort of grandiose motion does nothing to help Scotland. Of course unemployment is serious in Scotland; I have done nothing other than say that. Indeed, during my maiden speech in 1964, I said that this was an important issue; and, numerically, unemployment has grown worse during those 20 years.

However, criticism of the youth training scheme and of the Budget is misplaced and inaccurate. I am sad that the hon. Gentleman has not listened to Ministers, observed their actions or taken the trouble to read important documents. I know he will not have had much time to read the White Paper, "Employment: The Challenge for the Nation," nor does he seem to have read the Manpower Services Commission's plan for Scotland, which was published last year and which shows the amount of constructive thinking that has gone into resolving an extremely difficult problem.

The hon. Gentleman poured scorn on the Government's efforts to provide employment. Does he accept that 87 per cent. of the nation is at work? That is important, bearing in mind the fact that many others who are working are not on the register. Does he also accept that 350,000 more people are in work now than a year ago? That shows that growth is having an effect on employment and increasing the number of jobs. I accept, of course, that the larger population, because of the bulge in the 1960s, means that more people numerically are out of work, which is a sad fact.

Mr. Robert Hughes

What is the number of people in work in Scotland now, and what was the number when the Government took office?

Sir Hector Monro

I do not have those figures at my fingertips.

Does the hon. Member for Greenock and Port Glasgow accept that a significant number of new small businesses are starting up month by month; indeed, week by week? Does he realise the enormous number of schemes and plans to encourage small businesses? They were given added impetus by the Budget. Of course, the Budget must be viewed against the background of the coal strike, which did enormous damage to our economy. However, I emphasise, because it has been a topical issue all week, my concern that many small businesses will suffer because they will have to pay increased rates as a result of revaluation and other matters.

Did the hon. Gentleman hear my right hon. Friend the Chancellor of the Exchequer talking about the extension of the business expansion scheme, the reduction in class 2 national insurance contributions for the self-employed, and making class 4 contributions allowable against tax? Does he realise that the overall impact of the Budget has already reduced interest rates by 1 per cent. because of the strengthening of the pound, which is reflected in the importance that the Government place on beating inflation? Does he realise that, following the strengthening of the pound, petrol companies have already been able to reduce prices by 4p a gallon—[Laughter.] That is all good for the economy and the pound. I am sorry that Opposition Members are not pleased that the price of petrol has decreased by 4p a gallon, especially since many of them come from rural areas. The Government's strategy of keeping down inflation and strengthening the pound must have an impact on prices.

I do not believe for a moment that Opposition Members will support my view on wages councils, but I believe that some of them, especially those which cover shops and distributive trades, have prevented many youngsters, especially girls, from being employed in shops. The substantial initial wage that they can ask frightens off many shopkeepers. I hope that Labour Members will also welcome—they normally welcome nothing to do with the European Community — the introduction of Spain and Portugal into the Common Market. That will have an impact on tariffs between Britain and Spain and should help the motor car industry substantially. I hope that they realise that unemployment has not increased in every area of Scotland. Two employment areas in my constituency have fewer people out of work than 12 months ago, and that is probably true of some other areas. However, I should stress that I do not say that with any complacancy.

I must say something about the development of the youth training scheme. The two-year, instead of one-year, vocational training that is now proposed for school leavers must be helpful, especially if it will lead to additional skills and a qualification. The community programme will be increased by 100,000 places, which will cost about £300 million. I hope that Opposition Members will pay some tribute to training measures in Scotland, and that they realise that the special employment and training measures, including the job release scheme, the YTS, community industry, the community programme, training places supported in industry, the young workers scheme, the enterprise allowance scheme and the job splitting scheme, add up to 101,770 places in Scotland this month. If they do not believe that that is good news, they must be adopting their usual anti-Government attitude to everything. It is good news, and the Department of Employment must take much credit for providing so many schemes.

The Budget helps jobs, the lower paid and the elderly because it raises tax thresholds. I do not understand the statement in the hon. Gentleman's motion that the Budget is unsatisfactory.

Mr. Gordon Brown (Dunfermline, East)

Does the hon. Gentleman accept, first, that since 1979, 114,000 jobs have been lost in Scotland; secondly, that 172,000 jobs have been lost in manufacturing industry, which represents 100 every working day; and, thirdly, that there have been 1,200 closures, which is almost one for every working day of the Government's period of office? Does he also accept that, far from creating jobs during next year at the level he suggests, not one more penny will go to the youth training scheme as a result of the Budget, and that no money will go on infrastructure? The only money that is going to Scotland, in terms of direct job creation, will amount to about 75 jobs in each constituency by Christmas as a result of changes in the community programme. That will make no impact on the problem of unemployment.

Sir Hector Monro

The hon. Gentleman will have nothing to say in his own speech if he continues to make such interventions.

Let me remind Labour Members about their proposals, which were circulated just before my right hon. Friend's Budget statement. They were going to increase expenditure on various projects by £5 billion and on social security by £3 billion. That £8 billion of additional expenditure must be provided by higher taxation, which is unacceptable when we are trying to keep down inflation and interest rates and encouraging industry to expand.

I have advocated the rural programme for a long time now and I am pleased that the Select Committee which looked into the Highlands and Islands Development Board has recommended so emphatically that the Scottish Development Agency should set up a rural development fund with a substantial sum of money to implement its recommendation. That is important. The SDA has a duty to deal with rural areas. However, its estimate of a rural area as a community of some 15,000 people is much too large. I am thinking of smaller villages and even areas without villages to which we want to bring employment to keep people living in the countryside, to keep schools open, to help the village hall, shops, and so on.

To that end we must take a more positive attitude to planning in the countryside than the peculiarly negative circular 40/60 that should long since have been withdrawn and replaced with something constructive to meet the needs of the 1980s rather than the early 1960s. I hope that my right hon. Friend the Secretary of State will give another push to the efforts that I have been making with the Scottish Development Department to do something about planning in the countryside. I hope that we shall see a new circular this year. I want to highlight that aspect of the countryside that requires assistance and development more than anything else today, because it is essential that we base more development in the rural areas and not always in the urban areas.

I hope that my hon. Friend the Minister will look again at the great difficulty that we have in obtaining support from the EEC through regional grants for an area that is not in an assisted area. A large part of Scotland does not qualify as being in such an area and is therefore ineligible for EEC aid. I appreciate that rules are laid down, but they are not producing the results that we require, and everyone living in a deprived area is unable to obtain support from the EEC, of which everyone is a member. Therefore, I ask my hon. Friend to look at that most carefully.

Regional policy is important. Development in my area, which I share with my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang), has had substantial investment in the past year, although it is not an assisted area. ICI has put in over £60 million and Glaxo over £20 million, and Pinneys and Littlewoods are two other important developments in the area which show that the lack of assisted area status is not crucial to obtaining development.

Much of that is co-ordinated by the extra specially good work done by the regional council industrial development committee and the Enterprise Trust that has recently been set up to help industry in the area to expand and to iron out some of the difficulties that face it.

All in all, there is a great deal of good ahead for Scotland. If we can maintain the present growth, jobs will at last come in greater numbers and we shall see the high unemployment figures begin to come down.

10.24 am
Mr. Gregor MacKenzie (Glasgow, Rutherglen)

I congratulate and thank my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) for introducing this debate. It has been a bonus for all of us irrespective of party, apart from, as the hon. Member for Dumfries (Sir H. Monro) has just pointed out, the Social Democratic, Liberal, and Scottish National parties. It is no bonus for them. They do not seem to be much bothered about the matter. Perhaps they do not know that we work in Parliament on a Friday. Nevertheless, the rest of us are here.

A few days ago I read an answer which the Prime Minister gave to the hon. Member for Cheltenham (Mr. Irving). He asked the Prime Minister to list in the Official Report all her achievements and those of her Government since 1983. Those achievements took up about two and a half columns. But to all of us there were two noticeable and obvious omissions. First, she said nothing about what was being done about unemployment, and, secondly she said nothing about what was going on in Scotland. It may come as a great surprise to you, Mr. Deputy Speaker, but she did not mention Rugherglen in the whole two and a half columns. That was a big surprise to me.

It is little wonder that the right hon. Lady did not say much about unemployment. When my right hon. Friend the Member for Glasgow, Govan (Mr. Milian) and I left office in 1979—not voluntarily, I am bound to say—about 1 million people in Britain were unemployed. We now know that there are about 3.5 million claimants of unemployment benefit, which is not to say how many people are unemployed because the figures have now been adjusted—or, I would say, fiddled.

The worrying thing for all of us is the number of young people who are unemployed. Small pockets in my area have a rate of unemployment among young people somewhere in the region of 100 per cent. I am worried that those young people will become so bitter that they will turn against the parliamentary system if something is not done to help them. It worries me a great deal that they may turn to other avenues.

The hon. Member for Dumfries stressed what will be done with the YTS. I concede that the YTS is a palliative of some kind, but nothing is more soul-destroying than for a young man or woman to be given a two-year training course only to find that at the end of the day they do not have a real job. We should be concerned about the creation of real jobs at present.

The Chancellor introduced yet another of his Budgets for jobs. The best crack about that was made by my hon. Friend the Member for Newham North-East (Mr. Leighton) who said that since the Government have been elected we have had so many Budgets for jobs that the British people could not stand another because every time we get a Budget for jobs unemployment seems to go up.

I hope that some of the measures that were mentioned by the Chancellor and which have been published in the new White Paper will help. But I am bound to say that I cannot share the enthusiasm or optimism of the hon. Member for Dumfries. It does not get to the core of the problem of employment prospects in the United Kingdom or in Scotland.

I was disappointed the other day when the Secretary of State was in trouble about rates and revaluation and he said there was to be no new money there and that that money was coming from the SDA, and from roads and infrastructure. The Secretary of State and the Minister responsible for industry in Scotland should put a lot of thought into that. We are worried that the Government think that they can solve the rating problem at the expense of industrial growth and development, and infrastructure, and that is not good enough.

I do not pretend that there is an easy solution to the unemployment problem. There are no magic wands. The next Government—I hope that it will be led by my right hon. and hon. Friends—will have a difficult task. I wish that the present Government would recognise that we face an enormous problem and that all the measures tried over the last five years have failed. The Government should be big enough to admit that and to try something else. Instead, the Prime Minister blithely says that more people are now at work than ever before, as if that were some comfort to the people who do not have a job.

The hon. Member for Dumfries was asked by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) to say how many people were in work in Scotland today compared with 1979. I took the precaution of collecting those figures. In 1979, when my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) was responsible, 2,098,000 people in Scotland had a job. Today, 1,921,000 people in Scotland have a job. Will the Under-Secretary of State please tell the Prime Minister that we have lost 177,000 jobs in Scotland since she took office? That is a significant number, and worries all of us.

Most of the jobs have been lost in the traditional industries. A total of 10,100 jobs in coal mining have been lost since 1979. In shipbuilding, more than 4,600 jobs were lost between 1979 and 1982. In the same period, 8,900 jobs were lost in the iron and steel industry, 17,600 in the textiles industry and 4,600 in the whisky industry —no-one can blame me for that.

I am puzzled about why the Minister can provide the figures only up to 1982. His is one of the best Departments in the Scottish Office. The Scottish economic planning office is exceptional. Why the figures apply only up to 1982 is beyond me. I do not understand how the Minister can plan for the future on that basis.

There are only three growth industries in Scotland. In the civil service, the Department of Health and Social Services has employed 697 more people to pay out more dole money. The Department of Employment has employed nearly 1,000 more people to scratch around looking for more jobs. In the electronics industry there is a ray of hope. The development of that industry began under the Labour Government. My right hon. Friend the Member for Govan and I spent much time trying to attract investment for that industry because we knew that it was important and would continue to be important. However, not everyone can work in the electronics industry. The Government must not neglect our traditional industries.

I wish that right hon. and hon. Members would stop saying that our traditional industries are old and declining. We still need coal, ships, steel and textiles. The rundown of those industries results not only in fewer jobs but in the decline of whole communities. My constituency has lost many coal and steel jobs, so I have seen the social effects.

All this is happening when we are earning an unbelievable amount of money from the North sea. Last year, North sea oil and gas earned us between £8 billion and £9 billion. What do we do with that money? As I said the other day, we spend 17 per cent. of it on unemployment benefit. That is a scandal. That money should be spent on industrial development, training, education and research and development, and on a proper regional policy. I agree with the hon. Member for Dumfries about that. Above all, the money should be spent on infrastructure. If we want to attract inward investment and to make Scotland a more attractive place, we must spend much more money on roads, houses, railways and essential services. I wish that the Prime Minister would grasp that.

The need for such investment has been stressed, not only by Opposition Members, but by the CBI and the TUC. However, the Prime Minister does not even seem to know how much we are spending on such essentials in Scotland. In an inquisitive mood the other day, I asked the Prime Minister how much was spent on infrastructure in Scotland, in the United Kingdom and in the Falklands. She was able to tell me to a halfpenny how much we were spending on infrastructure in the Falklands, but she was unable to say how much we were spending on infrastructure in Scotland or the United Kingdom. I had to be content with being told that she would write to me later. That reveals the Prime Minister's priorities. They are upside down.

I am sorry about what happened in the Falklands, but we will not solve the problem by throwing money at it.

However, we can sort out many of Scotland's problems by spending more of the money we earn from the North sea in Scotland. We should spend that money on infrastructure, on investing more in the newer industries and on our traditional industries. Until we do that, unemployment will continue to grow and we shall fritter away the benefits of North sea oil as we have in the last few years.

10.40 am
Mr. Bill Walker (Tayside, North)

I congratulate the hon. Member for Greenock and Port Glasgow (Dr. Godman) on his good fortune in the ballot and on initiating this debate. He must be pleased with the number of Scottish Members in attendance today.

Like me, the hon. Gentleman must acknowledge that the only hon. Members who can truly speak for Scotland are Labour and Conservative Members who represent Scottish constituencies. The hon. Members of other parties who purport to represent Scotland's interests are always conveniently absent for late night sittings and debates on Fridays. Indeed, if it is inconvenient to them to attend, they do not care about the interests of Scotland. The citizens of Scotland should be told that they play a charade and do not care at all about Scotland.

I also congratulate the hon. Member for Greenock and Port Glasgow on the way in which he approached the subject. While I could not agree with everything he said—he would not expect me to do so— and while the motion as drafted is not particularly helpful, he made a constructive and thoughtful speech. As ever, he had done his homework. While I did not agree with some of his conclusions, I would not argue with the way in which he arrived at them.

It is always fascinating to listen to the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie), though one would imagine, from what he said, that he had never held office. During his spell as Minister of State, Scottish Office, in Blairgowrie in my constituency a canning factory and three spining mills closed down, with the loss of over 500 jobs. Those jobs were lost, on his criteria, because of the policies of the Labour Government of the day, but I have never subscribed to that view. Never once during the 1979 election campaign did I suggest that the loss of those jobs in the small town in which I live was the result of Socialist policies.

I have never believed in such a philosophy. Jobs are lost because of events. For example, an enormous change in consumer demand took place then, and it has continued. We must learn to live with events of that kind. New technology made the equipment in those spinning mills and in that canning factory out of date. The jobs were lost simply because the factories could no longer compete. In other words, they could not satisfy customer demand, a subject to which I shall return.

The right hon. Member for Rutherglen must stop and think about this issue, because many jobs were lost during his period as a Minister. As I say, it would not be right to blame him or the then Secretary of State for those losses, and I shall return to that subject, too.

Many of those in Blairgowrie who were made redundant in the winter of 1978–79 are today still out of work. They are part of the horrifying statistics made up of those whom we call the long-term unemployed. While it would be nonsense for me to suggest that the right hon. Member for Rutherglen could be held responsible for what happened to those people, I hope that he will be as charitable about the changes that are taking place now and the problems that we are facing.

No one can deny that the oil price increases had a damaging effect on the capacity of the industrialised nations to create and provide jobs. Indeed, the decline of the old smokestack labour-intensive industries has been going on all this century, and I wish that people would acknowledge that fact. The only two periods when that decline was halted, and even reversed, was during the two world wars. Otherwise, the old labour-intensive industries, in which I include the coal mines and other primary industries, have suffered a massive decline in jobs resulting from changing patterns of trade and demand.

Opposition Members frequently talk about a lack of demand. In fact, there is no lack of demand in the United Kingdom. There is a big demand for cars, videos, hi-fi equipment, white goods and furniture. It is sad to look at the Scottish scene and reflect on the factories that have closed in the last 20 years. I can think of many furniture factories in the west of Scotland that used to be household names. They made beautiful furniture—the demand was there—but they could not compete. The same happened to carpet factories. In other words, even when the demand exists, factories must be able to manufacture the goods that the customer wants at the time he wants them and at a price that he is prepared to pay.

We cannot blame other countries if they can manufacture the goods that the people of this country wish to purchase. I urge hon. Members to wander round the House of Commons car park and count the number of foreign cars. I suggest that the number is representative of the situation in the United Kingdom as a whole. We have the demand, but we do not have the companies manufacturing the goods to meet it.

The reason for that lies in the fact that, certainly in the latter half of this century, we have been suffering from out-of-date management practices and intransigent union attitudes. They have made the primary manufacturing industries of Scotland more vulnerable to the savage drop in demand that has occurred worldwide. After all, if we are to survive as a nation we must not only meet the home demand but be capable of exporting our goods. The drop in demand throughout the world made us vulnerable to the more effective management practices and more realistic union attitudes of our European and Japanese competitors.

I do not blame the trade unions alone. I have always held the view that managements get the kind of unions they deserve. If managers are not prepared to manage effectively, they should not be surprised if they end up with the type of union attitudes and practices that make life difficult and sometimes impossible.

I compliment those concerned — it is wrong constantly to knock—on the dramatic changes that have taken place. Today, at long last, there exist much improved and realistic attitudes on the part of management and unions. They have helped to improve our industrial performance. Unfortunately, those changes have not been sufficient to reduce the ghastly increase in the level of unemployment, and the situation, particularly in Scotland, was made more difficult by the coal strike.

I congratulate the management and workers of Ravenscraig and the shipyard workers and management on the substantial improvement in output and unit labour costs that they have achieved, despite the problems caused to them by the coal strike. We should place on record the improvements that have been made there and the fact that they are now as competitive as we wanted them to be in the last 20 or 30 years.

It is clear, as the hon. Member for Greenock and Port Glasgow pointed out, that there has been growth in the service sector. We cannot expect that to continue if we are to have ghastly rating problems. Conservative Members have always said that rates have a savage impact on job prospects, in manufacturing as elsewhere. One cannot say that in one sentence and, in the next, whichever party is in power, claim that the position has altered. Huge increases in rates, particularly brought about by revaluation, especially in the tourist industry, shops and hotels, will have a great impact.

Opposition Members will accept that, when they are warranted, I am always prepared to make critical comments. I do not willy-nilly support anyone, but nor do I abuse anyone. I am here to represent what I believe to be the best interests of Scotland and my constituents. I do that while supporting the Government's general policies. Nevertheless, there are some dreadful rating problems that must be recognised.

One must not simply criticise the Labour party when in office or Labour councils when the rates go up and stay quiet when they go up under a Tory Administration. The rates increases will have a damaging impact on job opportunities, particularly in a place like Blairgowrie, which has been suffering as a result of the closure of the canning factory and spinning mills. Unless we implement changes quickly to produce a realistic rating system, the prospects for the long-term unemployed in Blairgowrie will become even bleaker.

However, that alone will not help Scotland. We must not forget that we are linked to our markets in the United Kingdom and overseas. We must ensure that the road system is capable of coping with the outward flow of goods that we must export if we are to survive. Equally, we must have a rail network that is capable of handling the flow of goods. Money should be spent on improving railway services. That investment will improve efficiency and help to produce jobs. I understand that the Government's capacity directly to produce jobs is limited, but Government policies could and would help the railways. However, that investment must be linked to a realistic attitude on the part of those working on the railways. Realistic attitudes have produced improved performance in the shipyards on the Clyde and we must look to the railways also to adopt realistic attitudes.

It is known that I have a special and direct interest in the aviation industry. We must build up commuter air transport links with Europe, the English midlands and the London area. Therefore, it is essential that entry to Heathrow is not stopped or stultified. It is important that commuter links continue to have entry—indeed, I hope that they have increased entry—to Heathrow, the main hub and spoke airport of the United Kingdom. If that entry is not available, we shall face problems, as business travellers will have difficulty reaching the various parts of Scotland.

Dr. Godman

Would development at Stansted help or harm Scottish aviation interests?

Mr. Walker

If development at Stansted is based on the maintenance of artificial limits at Heathrow, that will damage Scotland's export interests. Heathrow has to be the main gateway for the United Kingdom. That must be so, as there is a demand for entry into Heathrow. We must ensure that there are facilities at Heathrow that will make it easy for those who want to travel to Scotland to do so. We must improve the direct links into Scotland. It is not enough merely to ensure that we have adequate access through Heathrow. For too long we have delayed the improvement in the rail services to Prestwick that should have been made some years ago. Without doubt, Prestwick is one of the finest airports in the United Kingdom. The sad feature is that we have not recognised that in Scotland to the extent of making it easy for travellers to get to and from Prestwick. We have a duty and responsibility to do that and I hope that the Government will take positive steps in that direction.

I have an interest also in training. The youth training scheme has been extended to two years and that is an improvement but, in my judgment, it is still not good enough. It should be a three-year scheme. That would be the most effective way of improving the prospects for the young. It would also be the most cost-effective way of assisting industry. If all vocational and apprentice training and skill training were paid for by the taxpayer out of the public purse, there would be a massive direct injection of resources into industry. It would enable us at long last to get rid of the out-of-date methods that we have used for the development and creation of job prospects for the young.

I am not worried by those who shout about the spending of public moneys on training. When youngsters leave school at 16 years of age in areas where jobs are difficult to find—I left school when I was 14—it is important to ensure that there is an escape route that creates opportunities. We have always recognised in Scotland that education and skill training provided escape routes for our young people. Scotland has a greater interest in developing those routes than almost any other part of the United Kingdom. We have a background of good technical training and education. We have led the world in this training and education and I do not understand why we underrate the institutions that have provided technical skills.

Our technical colleges were a credit to Scotland, but somehow we devalued them. It is rather sad that we thought that it was wrong to have a good technical education. It was thought at one stage that if someone did not go to university it was not quite right. What nonsense. We must ensure that the YTS provides a platform on which we can build. I hope that the Government will recognise that. The finest investment that the nation could make in its young people would be to extend the scheme to three years and to take over responsibility for the training of all apprentices and trainees. This would have an enormous impact on industry and other areas of the economy.

Mr. Jim Craigen (Glasgow, Maryhill)

Without going into the merits or demerits of the youth training scheme, is the hon. Gentleman suggesting that the funding of training for young people should be a matter initially for the state? The Chancellor of the Exchequer appears to be suggesting that training should be self-funding, with employers paying for it.

Mr. Walker

I have never subscribed to that view. If in a civilised society it is right and proper that we fund the education of those who are fortunate enough or bright enough to go to university, why should we not make similar facilities available to those who contribute to wealth creation? I have not deviated from my beliefs in this area. I have been involved in youth training for many years. I was one of those who were involved in the establishment of training boards. I sincerely believe that, if we are to help our young people, we must give them opportunities. We must maximise the skills and talents that the United Kingdom has in abundance. If we do not maximise them, we shall be doing a great disservice to our country.

The two elements of a business are money and people and it is the way in which people are used that makes the money move that creates the profits. We often become too involved in all the other technicalities. The most important factor is the motivation of people. They must be given the right sort of leadership, and that is why I have been critical of management. I am critical also of trade unions. Both management and unions have much to answer for. The problems that we suffer are the result of our being unable quickly to respond to changing demands.

I shall direct myself to the problems of rural Scotland. As I represent about 2,000 square miles of rural Scotland, I have to take a constituency interest in the issue. I have no background in agriculture; one of my hon. Friends once said that my lovely constituency is wasted on me as I do not fish. It is sad that unemployment in rural Scotland has become as great a curse as it is in urban areas, and perhaps a more difficult problem to cope with. The difficulty of creating jobs in remote areas becomes more and more of a problem as the years pass. I congratulate the Government, the Scottish Development Agency, the Tayside regional council and the Perth and Kinross district council on the new north Perthshire initiative. I hope that it wll create jobs. At least it is an attempt to do so.

My right hon. Friend the Secretary of State has said that £600,000 will be injected into the initiative over the next two years, but that does not change my view that no jobs will be created, no matter how much money is put up, unless there is the will and the desire on the part of individuals to take risks. That is the way to create jobs: someone sees an opportunity and realises that there are customers for a product or service. Customers create jobs. It is no good throwing £3,000, £300,000 or £3 million at a problem and believing that that will solve it.

The so-called travel-to-work areas are nonsense. Blairgowrie has been linked with the whole of north-west Perthshire in the Blairgowrie and Pitlochry travel-to-work area. It may have been all right in the past to call these districts travel-to-work areas, when it was sensible to think of people travelling to work within such areas, but the description is no longer appropriate, because it is unrealistic to expect people to travel to work in those areas.

Even after Blairgowrie has been linked with the north-west Perthshire and the figures have been fudged, unemployment in that travel-to-work area is still 16.5 per cent., which means that the rate in Blairgowrie is probably 19 or 20 per cent. That rate is higher than unemployment in Dundee. I do not complain about Dundee—my home town—getting assistance, because I should like it to get as much help as possible, but it is wrong that that should happen when we have big problems in the small town of Blairgowrie.

I draw the attention of the House to the splendid recommendation of the Select Committee on Scottish Affairs in its report on the Highlands and Islands Development Board: We therefore recommend that consideration should be given to alterations to the Board's boundaries to cover the contiguous areas of Grampian, Central and Tayside regions.

Dr. Godman

The hon Gentleman wrote that.

Mr. Walker

I do not claim that, but I hope that I had some influence on the Committee's decision. I did not propose that recommendation, because it seemed right for my constituency. I have never supported actions that I thought were wrong.

I cannot understand why, after 10 years in the European Community, we still do not recognise that the Highlands as understood in Europe are not the Highlands as we know them in Scotland. It is nonsense to go to Europe and say, "We do not really mean that those are the Highlands. They are only part of the Highlands. The other part of the Highlands, which is a substantial part, is not included in your definition, but we would like that other part to be included." That is nonsense. Assistance from Europe is particularly important to our hill farmers and to the tourist industry, and we must present our case properly. The recommendation of the Select Committee should be adopted by the Government so that we can have some sanity in the way in which we deal with the Highlands.

11.3 am

Mr. Norman Hogg (Cumbernauld and Kilsyth)

I hope that the hon. Member for Tayside, North (Mr. Walker) will forgive me if I do not follow the case that he put to the House.

I add my congratulations to my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) on putting his fortune in winning the ballot to such good use.

My hon. Friend should not be too suprised that alliance and SNP Members are not here. Those are part-time political parties. I am a connoisseur of Friday sittings and you and I, Mr. Deputy Speaker, know who attends and makes speeches on Fridays.

The motion rightly calls attention to the decline of Scottish manufacturing industry and the increasing and disturbing levels of unemployment, particularly among young people. That is certainly true in my constituency. The new town of Cumbernauld was built for young people, and the average age of the citizens there is 31, which means that the problems that I have to deal with are often those associated with young people.

The new town was built on a green field site and the idea was to combine jobs with high housing standards. The Government and their policies have undermined that concept. However, some fine work has been done to build up the town, and I pay tribute to Brigadier Colin Cowan, the chief executive of the development corporation, who is to retire later this year. He has made a fine contribution to the development of Cumbernauld and won a special place in the affections of the people there.

It would be appropriate also to congratulate Mr. David Anderson on being appointed to succeed Brigadier Cowan. Mr. Anderson will be warmly welcomed by the people of the new town and we wish him well in the onerous responsibility that he will undertake. He will have to specialise in the attraction of industry and jobs. Unemployment, particularly youth unemployment, is the most pressing problem in Cumbernauld.

This week, I tabled a number of questions to the Secretary of State for Scotland about the economy in Cumbernauld. Regrettably, a number of replies remain outstanding, but it would not do for me to suggest that they will remain outstanding until the debate is over and that I shall get the answers on Monday. I await with interest the detailed information from the Under-Sectretary, the hon. Member for Eastwood (Mr. Stewart).

The information that has come to hand contradicts the much-repeated claims of the Prime Minister, who insists, as she did on Tuesday and Thursday, that the economy is expanding, that investment is at an all-time record, that standards of living are at an all-time high and that the youth training scheme is being greatly expanded. That was the message that she gave the young people from the constituency of my hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) when they visited 10 Downing street on Tuesday. What a far cry reality is from the Prime Minister's Britain. Life in Finchley must be vastly different from life in the north of England and in Scotland. I can say with certainty that the Government's policies have ravaged my constituency.

As I said, the average age of the citizens of Cumbernauld is 31. That makes them of child-bearing age, but the birth rate in Cumbernauld is falling. I am sure that my hon. Friend the Member for Greenock and Port Glasgow will confirm that it is well known to economists that optimism and pessimism have much to do with rises and falls in the birth rate. The hon. Member for Tayside, North laughs. I did not refer to him, because it is well known that he is no economist.

There is much pessimism in Cumbernauld. The jobs lost in 1980–81 were 1,662. In 1981–82, the jobs lost were 1,816. In 1982–83, the loss was 559. In 1983–84, it was 600. Those are not my figures. They are the Government's, which means that they have been well massaged. We all know what they have been doing with the unemployment figures during their tenure of office.

The Government claim to have created jobs, especially last year. I am sure that the Minister will throw at me the statistic that he always does when he talks about unemployment in Cumbernauld, but I have never been able to track down the jobs to which the hon. Gentleman refers. There is nothing like the number of jobs being created that the Government claim, and I strongly suspect that they include in that figure all the jobs associated with youth training schemes, which are not real jobs. They are not even real jobs according to the definition laid down by the Prime Minister herself.

One real worry about the creation and loss of jobs in Cumbernauld is the future of British Rail Engineering at Springburn, which employs a large number of my constituents as well as many of those of my hon. Friend the Member for Glasgow, Springburn (Mr. Martin). I hope that the Government will put up a defence of those jobs at the British Rail Engineering works and that the Minister will tell us about it.

I am sure that throughout today's debate we shall hear about the decline in Scotland's traditional industries. My worry is that we have seen in my constituency the destruction of industries founded on the new technologies which the Government are so anxious to claim for the Scottish economy. For my constituents, Silicon Glen is as much a fantasy as Brigadoon. Today, in Kilsyth, 865 males and 296 females are unemployed. In Cumbernauld, 2,339 males and 1,228 females are without work. In the constituency as a whole, 4,539 persons are without jobs. In the travel-to-work area, there is about 17–5 per cent. unemployment. Over the constituency as a whole, 657 school leavers are wholly unemployed.

Those figures have to be seen in the context of the statement by the Prime Minister that living standards are at an all-time high. Since this Government came to office, the number of persons in receipt of supplementary benefit in my constituency has doubled. In 1979, 4,438 persons were on supplementary benefit. Today, that figure has risen to 9,649.

Against that background, the Government can hardly claim to have done anything for living standards. They believe that cutting young people's wages will lead to more jobs. They talk of young people pricing themselves into jobs. I am surprised that the hon. Member for Tayside, North, who is into economic jargon, did not tell us about young people pricing themselves into jobs, because that is a much favoured slogan among Tory Right-wingers.

As a proportion of adult pay, the pay of young workers is dropping steadily as youth unemployment rises. Between April 1982 and April 1983, young men's pay rose by less than 2 per cent., whereas adult wage increases for males averaged 8 per cent. That effectively answers the hon. Member for Dumfries (Sir H. Monro), who referred to wages councils and described how young people, especially young women, might get jobs in shops.

The Government's young workers' scheme aimed to undercut the pay of young workers with a £15 bribe to employers to keep their wages below £50. The scheme has failed because it offers no training, has been expensive and has not created jobs. It is little wonder that the Chancellor of the Exchequer has decided that it should go. For those on YTS, the Government have kept the training allowance down to a paltry £26.25 a week. It should have risen to £34 with inflation. For those lucky enough to get places in higher education, grants are derisory. Those on further education courses get no compulsory grant.

Those 16 and 17-year-olds who are without jobs receive merely £17.30 a week supplementary benefit. If they refuse to enrol on a YTS course or do not complete it, they can have their benefit cut to £9.90 a week. Worse is likely to come. The Cabinet Minister responsible for jobs, Lord Young, is proposing that young people should no longer receive supplementary benefit. All those facts are well known to the unemployed and their families in my constituency.

If Scotland is to climb out of the economic wreckage which has been brought upon it by this Government, there has to be a radical change in policy. We must invest in new technology and skills so that the country can pay its way when the oil runs out. We have to build new homes for the people and put the construction industry back to work instead of crippling it with cuts.

In the last year of the Labour Government, 453 new homes were built in my constituency. Last year, the figure was only 70. That means not only that there are no homes available for the new generation of people who were born and brought up in the new town, but that unemployment amongst construction workers remains unacceptably high.

The Government are currently receiving £12,000 million a year from North sea oil revenues. They spend it on unemployment, when that money should be invested in modern transport, communications and services so necessary for the basis of the Scottish economy in the latter years of this century.

Rebuilding the infrastructure throughout Scotland should be an urgent priority. My right hon. Friend the Member for Glasgow, Rutherglen (Mr. MacKenzie) devoted much of his speech to that requirement. It seems to be impossible to get decisions out of the Scottish Office to improve the infrastructure. Ministers have talked for years and years about a bypass at Stepps and the extension of the M80 motorway. I know that those improvements are not the direct responsibility of the hon. Member for Eastwood, but I hope that he will be in a position to make a statement about them, because the failure to make decisions is having an adverse effect on the economy of my constituency. At its simplest, it is depriving the new town of a hotel to serve the business community. It is a sad reflection that industrialists visiting Cumbernauld have to be accommodated in either Glasgow or Falkirk.

Jobs would be created through road improvements, the electrification of the rail system and the continued and extended refurbishment of the inner cities. My constituents wait and wait for the electrification of the CumbernauldGlasgow rail link. They have been waiting for it for just about as long as they have been waiting for the Stepps bypass.

For a time it went out of fashion to say that social problems were related to unemployment. Today, I believe that it can be demonstrated that our deteriorating social conditions in Scotland are directly related to the economic morass over which the Secretary of State presides. Young people especially see future prospects for Scotland as bleak, and it is interesting to note that the incidence of drug taking and crime has increased in tandem with the loss of jobs, deprivation and despair.

It is Labour's intention to bring back hope to the people, especially the young people, of Scotland. We intend to set out a basic recovery programme that will present clear-cut, sensible answers to the problems that the country faces. The overriding priority of our policies will be getting the people back to work.

In the next few days, we shall launch a campaign to explain our policies in detail, and I believe that will obtain a positive response from our people.

The people of Scotland have no confidence in the Secretary of State or in his Ministers over getting jobs to Scotland. Indeed, there is evidence that the Scottish people have no confidence in the Government's policies, if the opinion polls are to be believed. There is no reason why those opinion polls should not be believed. If the opinion polls are right, the Tory party cannot expect to return a sufficient number of Scottish Conservative Members of Parliament at the next election to form a shadow Scottish team. That is how bad it is. The hon. Member for Tayside, North laughs. He is the only Conservative Scottish Member of Parliament who can laugh because he is the only one who got more than 50 per cent. of the votes in his constituency at the general election. I do not want to say farewell to his colleagues right now. We expect them to be about for another couple of years, but at the end of that time we shall be saying goodbye to them.

That is the extent to which confidence has been lost in the Government. It is all over for the Tory Government in Scotland. There is not much that they can do about it at their forthcoming conference in Perth. I am looking forward to that conference as much as if I were a delegate myself. I cannot wait for it. It will be quite an occasion. The people of Scotland rightly remain loyal to the Labour party. Their judgment has always been sound. The Government have failed dismally in clearing up any of the problems that they have created. Clearing up the mess will fall to a new Labour Government. I look forward to that day.

11.21 am
Mr. Albert McQuarrie (Banff and Buchan)

Before commencing my remarks, Mr. Deputy Speaker, I must apologise to you and to the hon. Members for Greenock and Port Glasgow (Dr. Godman) and my hon. Friend the Minister for the fact that I may have to leave before the wind-up speeches are made. I have a constituency engagement which will prevent me from remaining here until the end of the debate.

Like other hon. Members who have mentioned it, I cannot let the occasion pass without commenting on the fact that there are three empty Benches opposite which are normally occupied by the alleged SDP alliance with the Liberal party and the two solitary Scottish National party Members. They say plenty in the media about what they would do for Scotland, but they do very little about coming into the Chamber to debate subjects which are of massive importance to the people of Scotland.

I congratulate the hon. Member for Greenock and Port Glasgow on having been fortunate enough to have his name drawn first in the ballot for private Members' motions and for the fact that he has chosen this interesting subject for debate today. It has given those hon. Members who represent Scottish constituencies the opportunity to highlight the real position in Scotland and to comment upon the biased manner in which the hon. Member chose to present his case—an example followed by the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg).

I do not agree with a great deal of the speech made by the hon. Member for Cumbernauld and Kilsyth, but I have too much respect for him to castigate him. I depend upon him now and again to get me out of the House late at night. I would not expect the hon. Member to give any credit to this Government for the measures they have taken to look after the best interests of the people of Scotland. It is the custom of the Opposition to try to drive a wedge between the people of Scotland and Her Majesty's Government. They choose to be blind to the achievements of the Government in Scotland.

Mr. Robert Hughes

Tell us some.

Mr. McQuarrie

I am coming to that. The hon. Member for Aberdeen, North (Mr. Hughes) has got the biggest mouth in the House when it comes to shouting across the Chamber and not allowing other hon. Members to continue with their speeches, yet he refuses to give way when asked to do so while making his own speech. Therefore I ask the hon. Member to hold back a little until I have finished my speech. I assure him if it is of any comfort to him, that I shall ask no questions during his speech.

The speech of the hon. Member for Greenock and Port Glasgow was no exception, for it too showed that the hon.

Member is blind to the achievements of the Government in Scotland. I shall endeavour to highlight where the hon. Member has got it all wrong. I would draw two points to his attention. He said that unemployment in his constituency now stands at 21 per cent. The Greenock Telegraph of 26 March reported that unemployment in Inverclyde was 19 per cent. Although that is high, the hon. Member should get his facts right before presenting them to the House.

Dr. Godman

The reason why I emphasised the unemployment figures in Greenock and Port Glasgow, not Inverclyde, was for a reason that the hon. Member knows well. There is a good deal of difference between, for instance, Kilmacolm and Port Glasgow. I do not need to 'be reminded of local facts and circumstances by the hon. Member.

Mr. McQuarrie

I shall come to that in a moment, too. The hon. Member did not mention that the Scottish Office has placed an order for an IBM computer costing £1 million that should secure jobs at the IBM factory in the hon. Member's constituency.

Mr. Bruce Milian (Glasgow, Govan)

One million pounds?

Mr. McQuarrie

Yes, £1 million. There is nothing wrong with £1 million. Many Conservative Members would enjoy life with a further £1 million. I remind the hon. Member for Greenock and Port Glasgow that I was born and brought up in Greenock. I am a native of that town, which is more than can be said of the hon. Member. If anybody knows anything about Greenock and Port Glasgow, I do. I have continued to maintain my interest in Greenock, not only since I have been a Member of Parliament but also when I served on the town council in an adjoining part of the hon. Member's constituency. I remained in Greenock until I left to serve in the second world war.

Mr. Robert Hughes

The hon. Member was in Gibraltar.

Mr. McQuarrie

Gibraltar was long after I left Greenock, and I still maintain my interest in Greenock. That is the reason why I have the Greenock Telegraph in my hand and the hon. Member probably does not. I accept that, since his election, he has taken a positive interest in his constituency and in the unemployment that faces the lower Clyde. I give him credit for that, particularly when Scott Lithgow was threatened with closure. On that occasion I was pleased to be associated with the hon. Member in persuading Her Majesty's Government to save that yard.

The motion widely condemns the Government. The hon. Member alleges that the Budget fails to offer any hope of economic recovery and complains about the disastrous level of unemployment, particularly among the young, the decline in Scottish manufacturing industry and the shortage of investment for training and retraining. I shall endeavour to set the record straight for the hon. Member. It is obvious that he has taken little account of the real picture in Scotland.

First let me deal with the Budget which my right hon. Friend the Chancellor of the Exchequer presented to Parliament on 19 March and begin with the economic background. During 1984 as a whole, inflation remained at about 5 per cent., output grew by a further 2.5 per cent., investment was up by 6.5 per cent. and non-oil exports were up by 9 per cent. They reached an all-time record level in each case. Is this what the hon. Member for Greenock and Port Glasgow thinks is a complete failure, or is he prepared to accept the facts?

Let me remind the hon. Member of a few other things that were contained in the 1985 Budget of my right hon. Friend the Chancellor of the Exchequer. He said that it was a Budget for jobs and he announced measures designed to encourage employment, expand assistance to the young and the long-term unemployed and reduce the tax burden on the lower paid. It was delivered against a background of sustained improvement in the performance of the economy. The Budget created a strategy for jobs. The main elements of my right hon. Friend's Budget were all directed towards improving the prospects for employment. The national insurance contributions of employers and employees alike have been sharply cut for those on low incomes. The employer's contribution rate will start at 5 per cent. instead of 9 per cent. This will be partly paid for by the abolition of the upper earnings limit on the employers' but not on the employees' contributions. The national insurance contributions of the self-employed are to be sharply reduced. That is how the Government are aiding small businesses and helping to decrease unemployment.

The personal taxation threshold has been raised by almost 10 per cent. nearly double the rate of inflation. Thresholds have risen since 1978–79 by more than 20 per cent. above the rate of inflation. That will be of benefit to the lower paid. The small business scheme is also to be extended to job-creating research and development.

My right hon. Friend the Secretary of State for Scotland, welcoming my right hon. Friend's Budget, said that it was tailormade for Scotland and would benefit Scotland with its announcement of an expanded YTS, and of measures to increase the output of engineers and technologists from the universities which would complement the switch of resources to those courses in the central institutions, which was announced last November.

Unchanged specific research allowances with new concessions on short life assets will be of especial help to high technology industries. The small increase in duty on whisky, which was much less than the rate of inflation, shows that my right hon. Friend recognised the industry's difficulties. It was a welcome way to protect jobs.

The Budget helps people who need help, and it encourages all those who create employment. It will be of considerable help to Scotland when we are looking forward to a fifth year of expansion.

I represent a rural constituency which also has high unemployment, and I am satisfied that my right hon. Friend's Budget was a Budget for jobs. I look forward to a further year of expansion and a reduction of unemployment in the rural areas.

Mr. Norman Buchan (Paisley, South)

Is that the finish?

Mr. McQuarrie

No, we are talking about the arts and crafts. The hon. Member should know that.

Let me deal with what the hon. Member for Greenock and and Port Glasgow has described as "disastrous levels of unemployment". In his Budget speech, my right hon. Friend told the House that the YTS, which was launched in 1983, was such a success for people between school and work that the Government had decided to promote a substantial expansion of the scheme to provide additional funds over and above the existing £800 million which had been spent on YTS in 1983–84. My right hon. Friend also said that the expanded scheme would offer places lasting two years to 16-year-olds and one year for 17-year-old school leavers, which would lead to recognised qualifications. Does the hon. Member for Greenock and Port Glasgow seriously believe that that is not a success story for the young rather than the dismal picture that he had chosen to present to the House?

I should like to draw the hon. Member's attention to an article in the Glasgow Herald. [Interruption.] The hon. Member for Greenock and Port Glasgow might be interested in listening to comments on his motion instead of addressing his colleagues from a sedentary position. If comments are of so little interest to him, it does not say much for his motion.

In an article in the Glasgow Herald dated 23 March, Mr. Ian Imrie reported that last month there were 13,841 vacancies at the jobcentres in Scotland for which there had been no applicants. Those were real jobs. If the hon. Member suggests that there are no opportunities for youth employment, it is time he visited the youth centres in and around the west of Scotland, where he will find a wide variety of jobs available for the young unemployed. The main problem to which he should apply his mind is the attitutde taken by so many unemployed, which Mr. Imrie described as a reluctance to make what in most cases would be a difficult move to another part of the country and the opposition to retraining for what many people consider is a cissy job. Unemployed people should start to do something for themselves. They could start a window cleaning business, for example, and see how many additional employees they could take on.

Gone are the days when jobs were available in the Clyde shipyards, and the hon. Member for Greenock and Port Glasgow well knows it. There has been change. If people are genuinely interested in employment, they could soon find a vacancy if they tried. It is the belief that the Government should provide them with a council house and that anything other than a job in heavy industry is demeaning that leads to jobcentres having 13,841 vacancies in Scotland with no one willing to take them on.

I should like to tell the hon. Member for Greenock and Port Glasgow a few more facts that he failed to mention. The birth boom and the increase in the service sector make it necessary for the country to provide between 160,000 and 200,000 new jobs a year to keep the jobless total at its present level. Many more women are becoming wage earners. That is shown by the fact that 340,000 new jobs were created in the United Kingdom, while the number of women in part-time work increased by 207,000. The total in full-time employment rose by 54,000. The hon. Member is well aware that in his constituency the number of women who have returned to work has risen dramatically in the past few years in the textile and electronic industries.

Mr. Buchan

They have lost thousands of jobs.

Mr. McQuarrie

There have been plenty of women entering textiles. There was a worthwhile sit-in at a Greenock textile factory. While all that is happening, men are stagnating at home because they are not prepared to apply for the kind of jobs which they could do. Mr. Imrie also said that it was no mean achievement for the Government to have created nearly 500,000 new jobs in eighteen months. That includes new jobs in Scotland and in the hon. Member's constituency.

The problem of an increasing work force, which during the past 30 years has grown by no fewer than 3 million, is temporary, because from 1990–95 the population of working age will decline. From then, it will rise much more slowly. That will create further good opportunities for job prospects for young people.

I should like to bring the hon. Member further back to reality about job prospects. As he is aware, the Government have played a significant part in regenerating employment. Unemployment has unhappily been prevalent in his constituency due to the closure of many heavy industrial firms.

Mr. Robert Hughes

What about your constituency?

Mr. McQuarrie

I ask the hon. Member to be quiet. I know that he is anxious to say something, but there is no doubt that he will catch your eye, Mr. Deputy Speaker.

The hon. Member for Greenock and Port Glasgow must acknowledge that the Government saved Scott Lithgow from complete shutdown, and that they have only this week given a further major boost to reducing unemployment by the announcement by the Under-Secretary of State for Scotland. I am pleased that the hon. Member gave the Government credit for their initiative in that multi-million pound project, which could lead to a further 2,000 jobs in his constituency over five years. As he said, the total programme is worth £60 million. The first £6 million has been identified for a priority programme. In setting that money aside, the Government intend to ensure the long-term regeneration of the Inverclyde economy, the diversification of the industrial base on which Greenock and Port Glasgow have been dependent for too long, the development of indigenous enterprise and the mobilisation of community skills.

The hon. Member quoted Mr. Robin Duthie, a native of Greenock, the town where the work will be carried out. He is the chairman of the Scottish Development Agency and the chairman of the new Inverclyde development group. He said: the launch of the initiative means that we now have a unique opportunity to improve the district's economic welfare". Like me, Mr. Robin Duthie was brought up in Greenock and he is delighted at the wonderful chance that the Government have given his home town to become once again a thriving, progressive and prosperous town—but with modern technology, now that the heavy industries have ceased to exist. It is no use the Opposition suggesting that we can still depend on heavy industry. Those industries have gone and we must look to the benefits of the technological age.

The motion moved by the hon. Member for Greenock and Port Glasgow takes no cognisance of the great efforts that the Government have made and are making for his area. His constituents will not thank him for condemning policies that will bring new life to their area. It would have been far better for him to congratulate the Government on all that is being done for his constituents. I hope that on reflection he will accept that his motion is utterly absurd and does not merit the support of the House.

11.40 am
Mr. Bruce Milian (Glasgow, Govan)

The hon. Member for Banff and Buchan (Mr. McQuarrie) has made a ridiculous speech, even by his own standards. He seemed to be suggesting at one point that unemployment was all the fault of the unemployed. The hon. Gentleman has clearly taken a great interest in Greenock and Port Glasgow. If he is so interested in that area, I suggest that he should resign his present seat and stand against my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) in the next general election. He will then be turfed out, as he richly deserves for making such an absurd speech, which insults the intelligence of the people of Scotland.

Mr. McQuarrie

Get back to Govan.

Mr. Milan

The hon. Gentleman is now interrupting from a sedentary position, having criticised others for doing that during his speech. The hon. Gentleman is a buffoon and I am sorry that we have had to listen to him.

I congratulate my hon. Friend the Member for Greenock and Port Glasgow on his good fortune in being able to initiate this debate so soon after the Budget and on the day following publication of the White Paper on employment. I also congratulate him on his constructive and interesting speech.

The White Paper is a shameful document. At some points, it seems to have pretensions to being the modern equivalent of the 1944 White Paper on employment. It is a long apologia for the Government's failure to deal with unemployment in the past five or six years. One newspaper reported this morning that the seven Ministers involved, including the Secretary of State for Scotland, had been working on it since last June. If it takes them nine months to produce such an absurd document, God help us—and God help the unemployed.

In the past few years the Government have made a succession of excuses for the level of unemployment. First, they said that it was all the fault of the Labour Government. Then it was the fault of all previous Governments, Labour or Tory. Then it was the fault of the trade unions. Then it was the world situation. Now we are told that it is because wages are too high, especially among the lower paid. That is what the threatened abolition of the wages councils is all about. The Government are now saying that the only way to solve our problems is on the basis of an even lower wage economy and that they intend to start at the bottom by attacking the people most in need of protection from the Government, as even some Conservative Members recognised in the Budget debate.

One of the many extraordinary features of the White Paper is the lack of any reference to the regional dimension. One paragraph on page 30 referred to the new system of regional assistance announced in November 1984, but there is no mention of the regional dimension of unemployment and the problems faced by Scotland, Wales and some parts of England. The changes announced in November 1984 must be at the forefront of our minds in a debate of this kind. At a time when unemployment in Scotland and in many parts of the United Kingdom is at peak levels, a Government who claim to be concerned about unemployment and the regeneration of industry have brought in a new system which will mean a significant reduction in regional assistance to Scotland, as the Secretary of State's recent public expenditure commentary shows.

There has been a reduction of assistance for the United Kingdom as a whole of about £300 million, of which Scotland's share is just under £100 million. Then, in January, the moratorium was announced on the payment of grants in 1985–86. In the longer term, as the public expenditure White Paper shows, when the policy is fully in operation in 1987–88 there will be a reduction in regional and general industrial support in Scotland of no less than 40 per cent. compared with 1986–87, although unemployment is at record levels and there is nothing in the Budget or in any of the Government's policies to reduce the scale of the tragedy that we now face.

It is to insult the intelligence of the people of Scotland for the Secretary of State to describe the Budget as tailor-made for Scotland and designed to improve Scotland's economic position. Here I express the view not just of the Opposition but of many members of the public. This year's Budget has had the most emphatic thumbs down from ordinary people that I can remember in the many years that I have followed Budget debates in the House.

The Government's overall economic policy has failed. The Under-Secretary of State may refer to specific measures and initiatives when he winds up, but while the Government continue their savagely deflationary policy, unemployment will continue to rise. Certainly there has been no reduction so far and the Government are understandably chary about making any forecasts in the White Paper because they know that unemployment will continue to rise. The Budget is severely deflationary, to the extent of about £5 billion per year on any reckoning. Yet there is a desperate need for public expenditure on infrastructure—housing, roads, hospitals and many other items—as we all know from bitter experience in our own constituencies.

The Government's failure is not just marginal. It is not a matter of specific policies. Their overall strategy, if such it may be called, in the past five years was intended to provide regeneration of the economy and especially of industry, but it has landed us in the worst industrial crisis since the 1930s, and the effects have been felt in manufacturing industry more than in any other sector of the economy.

We have been asked to examine the real figures of unemployment, so what are they? The most recently published figures show that 3.3 million are unemployed in the United Kingdom, 357,000 of whom are in Scotland. Since 1982, the Government have constantly adjusted how the figures are calculated. The Unemployment Unit—an independent body which is not financed by the Labour party — produces figures calculated on the old basis, which was used before the Government employed every possible device to make the figures look better. On that basis, unemployment in the United Kingdom is more than 3.7 million, rather more than 400,000 of whom are in Scotland. Those figures do not take account of schemes such as the youth training scheme, which reduce the figures.

Such schemes were once despised by the Prime Minister for not providing real jobs. At the moment, they are reducing United Kingdom unemployment figures by 465,000, according to the Government's figures, and by about 70,000 in Scotland. We therefore have approaching 500,000 unemployed in Scotland, not 357,000. That is the extent of the decline and the tragedy that has hit Scotland as a result of Government policy. It is no good the Chancellor and, no doubt, the Minister telling us about the expansion of the community programme as if it were a solution.

None of us despise such measures as, in such desperate circumstances, every little helps. The fact remains, however, that money spent on such programmes could be spent much more effectively by local authorities on local projects. It is absurd that the Government, who stop local authorities doing essential things, boast about expanding the community programme, in which much that local authorities are willing to do is done. Local authorities would have been able to do that if their spending had not been attacked in the past six years.

I have never disparaged the youth training scheme. It has many faults, and unfortunately most employers regard it as a source of cheap labour. The safeguards are not effective, but I am not knocking the scheme; it is important. Nevertheless, it is no substitute for the Government getting their general economic policy right. Until then, we shall spend more on schemes but not reduce unemployment or provide the sound basis for expansion which the Government mendaciously claim in the White Paper they have already provided.

If previous industry debates are anything to go by, the Minister will give us a long list of companies that have invested in Scotland. Some of the names are extremely familiar, because they have already been mentioned about 14 times. No doubt they will be mentioned 14 times more. The Secretary of State gives the impression that, because there is some investment here and there, the economy is thriving and there is nothing to worry about. It is equivalent to Ministers scouring Scotland to find a ratepayer who is paying less next year and saying that, because he is paying less, the other 99 per cent. of us who will have to pay more need not worry about having to pay more in 1985–86, as happened in the rating revaluation debate recently.

Despite micro-electronics, manufacturing investment is not even at its 1979 level, although manufacturing investment was given an artificial boost by the corporation tax arrangements in the 1984 Budget. In terms of manufacturing employment, we face disaster, despite the new projects that have come to Scotland and which we welcome.

If I hear one more Conservative Member talk about the new order which has come to Govan Shipbuilders, I shall scream. If the matter had been left with Conservative Members, there would be no Govan Shipbuilders. It is an efficient yard, which now has an important order, because it is well managed and has an excellent work force. The enterprise would not exist were it not for nationalisation and support provided by a Labour Government. I hope that the yard will get further orders, and that some of them will come soon.

As my right hon. Friend the Member for Glasgow, Rutherglen (Mr. MacKenzie) said, we are not suggesting that we can do everything by reviving our older industries. One of the most damaging fallacies of the Government and Conservative Members is that it does not matter what happens to our older traditional industries because new ones will come in and provide all the necessary jobs. That is complete nonsense. We must hold on, as far as we can, to existing industries. Thanks to a Labour Government's help with shipbuilding, I have an enterprise in my constituency which, although it has lost jobs recently, is efficient and is getting more work. I hope that it will prosper.

Much of what the Government claim that they are doing for Scotland is connected in some way with the Scottish Development Agency. I find it a little nauseating to listen to Conservative Members talking about projects and the valuable help they get from the SDA when I remember the hostility, or at least indifference, with which the concept of the SDA was greeted when the Labour Government introduced it in 1975. Ministers know better than anybody that, without the SDA, Scotland would be in an even more parlous state, despite the tremendous number of new jobs that have come from the oil industry.

When discussing unemployment, we are talking not about economic arguments or facts but about the social misery that unemployment causes. Most Conservative Members do not represent the worst hit areas of unemployment, and many of them have no idea of the amount of misery and despair to be found among many people in Scotland. The same is true for Wales and some of the regions of England. There is a sense of hopelessness. People believe that the Government have abandoned them and do not care about their problems. It is no use the Prime Minister inviting 25 people down from Merseyside and lecturing them in No. 10. If the Government care about unemployment, they should show it through action and policy.

Neither in the Budget nor in the White Paper is there a genuine recognition of the miseries of unemployment. Nowhere do the Government admit guilt. They always say, "Don't blame us. It is everyone's fault but ours." Until the Government accept their responsibility for unemployment, we shall get nowhere and bring no hope to the unemployed. After six years, the Government are in no position to bring hope to the unemployed in Scotland, and the sooner they go, the better.

12 noon

Lord James Douglas-Hamilton (Edinburgh, West)

It is a matter for comment that the Liberal party, the Social Democratic party and the Scottish Nationalist party have not been able to provide one hon. Member to listen to any of our proceedings this morning. That should not be allowed to pass unnoticed, considering the importance of the subject raised by the hon. Member for Greenock and Port Glasgow (Dr. Godman).

I shall not follow everything that the right hon. Member for Glasgow, Govan (Mr. Milian) said, but I am sure that he will be glad that 300 new jobs will be provided by the order which has been won from North Sea Ferries for Govan shipbuilders.

I am aware that, since February, 1,300 more jobs have been created through contracts. At present there is an appeal before the Secretary of State for Scotland which relates to land owned by Millers on the edge of my constituency by South Cultins road in the South Gyle. Millers want to lease the land for warehousing and high technology projects, which could produce employment for 500 people. It would be helpful if my hon. Friend would say when that decision is likely to be forthcoming.

I shall touch on four subjects: first, Ravenscraig's coke-making facility; secondly, Ferranti and the European fighter aircraft; thirdly, the need for Scottish universities to share fully in the programme to produce more graduates, for which £43 million was announced in the Budget; and fourthly, the case for flexibility in attracting further inward investment.

I gave notice to the hon. Member for Motherwell, South (Dr. Bray) that I would raise the subject of Ravenscraig. It seems that the delayed plan of the British Steel Corporation is likely to come forward in the form of a new strategy before very long. The decision, which affects the whole plant, will be determined by the decision about the coke ovens. If the BSC decides to close the coke-making facilities on the basis that the units will wear out within the next three years, Ravenscraig's self-sufficient coke-making facilities will be lost. I would deplore that. It would lead to importation of coke, would make the plant more marginal, and would be extremely unsatisfactory.

There are other options. The first is to repair the worn-out ovens — three out of six—at a cost of about £20 million. However, for that sum the repairs would not improve the facilities, and great extra productivity would not be achieved. The second option is to replace the three ovens, at a cost of nearly £60 million, with modern technology, making a valuable addition to the efficiency of the complete operation. Finally, there is the prospect of building new ovens of the most modern sort at a cost of £90 million, which would bring great benefits to the overall viability of the operation. I hope that my hon. Friend will tell BSC management that the wider interests of the Scottish economy require a substantial investment, as Scotland undoubtedly needs a steel industry. I hope that the complete renewal of the coke-making facilities will be seriously considered.

Before I became a Member of Parliament, I stood for election in Hamilton, so I am well aware of the difficulties of high unemployment. That was a valuable educational experience for me. I learned that a great many local suppliers depended on Ravenscraig, and that it was central to the local economy. During the miners' strike, the workers at Ravenscraig put the interests of the steel industry and their jobs to the fore. In so doing they acted in the national interest, so we owe it to them to give them strong support.

Ferranti is one of Scotland's outstanding success stories. Since I became a Member of Parliament 10 years ago, its work force has expanded by several thousand. Every year Ferranti receives more than £100 million-worth of orders from the Ministry of Defence. I am confident that, in placing the United Kingdom's contribution for the European fighter aircraft programme, the Government will recognise the present international pre-eminence of Ferranti in areas of advanced technology, such as radar and the formation of an international navigation system.

In recognising the benefits of co-operation for such an aircraft, I strongly urge the Government to use their best endeavours to ensure a fair share of any resulting work for the United Kingdom for Ferranti. It is with regret that I must tell the House of the potential for substantial disagreement between Britain and France over this matter. At present, France seeks to undertake 31–7 per cent. of the work on the project, leaving only 24–7 per cent. for Britain, 19.8 per cent. for Germany, 14.9 per cent. for Italy and 8.9 per cent. for Spain. British Aerospace would prefer Britain, France and Germany to be put on an equal footing, and each to receive 25 per cent. of the work, with 15 per cent. and 10 per cent. going to Italy and Spain respectively. I cannot stress too strongly that hundreds of jobs in Scotland depend on the Government getting this matter right, as the EFA will replace the Phantoms and Jaguars of the Royal Air Force in the 1990s.

In the talks that take place, I hope that the Government will respect the many principles which have been put forward by British Aerospace to ensure that the work is distributed fairly and that the French do not grasp the overwhelming preponderance of the work. I hope that my hon. Friend will pass that message on to the Secretary of State for Defence.

If no agreement is reached with France about the essential principles put forward by British Aerospace, such as that the weapon systems should meet the minimum requirements of the RAF, and that there should be equality of work-sharing between Germany, France and Britain, and if it is absolutely necessary, we should ultimately be prepared to go ahead with the national option. I hope that my hon. Friend will support Scottish interests in that connection.

I shall now deal with skill shortages and the lack of the necessary education provision for the necessary number of graduates for the job opportunities which are now available. I understand that it was suggested that about 500,000 jobs in Britain could be filled if the right skills were available.

I have with me an important book which will come out on Friday called "Silicon Glen: Reality or Illusion? A Global View of High Technology in Scotland". It is written by Andrew Hargrave. On page 119 it states: there may well be shortages, especially if demand by high technology industries continues to expand at the fast rate of the past few years. We should meet that challenge. On page 118 is a quotation from a report which said that low level of application in micro-electronics in any individual country may lead to its domestic economy becoming increasingly uncompetitive, and this may in turn lead to secondary effects on employment that could be far more serious than the direct employment effects. In other words, although inward investment may not produce an enormous number of jobs by itself, if we do not have it, the effect might be to lose necessary contracts.

Following the Budget, about £40 million to £43 million will be spent on producing more graduates in engineering and technology. I put in a special plea on behalf of Scottish universities. Edinburgh and Heriot-Watt are especially active in those areas. Edinburgh university's microelectronic and microbiology departments have received a substantial grant through the Alvey project, on which it is working with the Plessey company, for a speech-driven word processor. The research department of Heriot-Watt university has also received substantial assistance, and it is providing with the health-care industry a medical laser unit set up by the university and financed by the Scottish Development Agency. I suggest to my hon. Friend that there is scope for substantial expansion, and that universities are entitled to a fair share of the £43 million. I hope that that matter will be followed up vigorously.

The principal of Heriot-Watt university stated in a report: Many of our departments and those concerned with electronics and computer studies have had to fume, … finding themselves powerless to respond to the urgent appeals from industrialists for more graduates in those subjects. The £43 million will provide an opportunity to put that matter right.

Finally, an important priority for regional policy must be the capacity to attract inward investment projects. To do that, Britain must compete with other Community countries, and we must take into account the fact that Germany and Southern Ireland are competing directly with us. The Scottish lowlands are especially attractive to inward investment from American and Japanese companies partly because of the skilled manpower available, partly because of excellent communications but, above all, because in the past attractive financial packages were offered.

The main difficulty with modern regional policy is the operation of the cost-per-job limit in highly capital-intensive electronic projects. Under the present system, Nippon Electric receives less than half the grants that it was offered in September 1980. I suggest that there is a strong case for flexibility in the operation of the cost-perjob limit. I certainly do not advocate a return to the system that operated at the time of projects such as Sullom Voe. However, the attraction of high-technology companies to Scotland will bring immense advantages to the local economies, not only in terms of high-technology spinoffs, sub-contracts, and the balance of payments, but also for the service industries in those areas. It will have a direct effect on local economies and on local unemployment.

IBM in Greenock is an example of the way in which a multinational company can provide opportunities. It has sub-contracted about 5,000 jobs all over the United Kingdom, and there is an enormous trade of £1 million a day.

Inward investment requires speed of response in negotiation, and this depends on flexibility. If applied too rigidly, the cost-per-job limit could undermine efforts to attract high technology companies to Scotland. I hope that my hon. Friend the Minister will monitor closely not only the activities of those companies in Scotland, but the activities of our main competitors, to ensure that we do not lose in the future.

Contrary to what the right hon. Member for Govan suggested, I believe that the cumulative effects of the Budget measures will lead to the creation of hundreds of thousands of jobs.

12.11 pm
Mr. Norman Buchan (Paisley, South)

I am glad to follow the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), if only for one reason: to reinforce what he said about Ravenscraig, for which we thank him. We shall hold him to what he said. If Ravenscraig is ever in trouble, we shall remember the pledges of the Secretary of State for Scotland, and we are glad to know that, should that fight come, we shall have the hon. Gentleman's support. I cannot say the same about the other Conservative Members who have spoken today. They regretted the absence of the Scottish National party, the Liberal party and the Social Democratic party for today's debate, but I almost wish that I could have regretted the absence of the Conservative Members who spoke earlier.

The salient fact in any examination of the Scottish economy is that we have stated unemployment of more than 360,000 and a real figure approaching 500,000, as my right hon. Friend the Member for Glasgow, Govan (Mr. Milian) said. That means that nearly one in four of the work force is unemployed, which is an appalling and terrifying figure.

We must also remember that the Government have been conducting an experiment with the people of Britain and the regions of Britain in an economic heresy for which there was no basis in ideas or in material evidence. Galbraith once said that he thanked God that the experiment of Friedmanism that was being conducted in Britain was not being conducted in his country. We have seen the result during the past six appalling years; every application of those theories has led to greater misery for our people.

Unemployment of more than 4 million is a terrifying thought. It is infinitely worse than it was in the 1930s, and is creeping towards the long term. Yesterday, we had the publication of an astonishing White Paper, "Employment: The Challenge for the Nation". The Scotsman today says correctly: There is no forecast in the White Paper of where unemployment will be in the late 1980s, but the working assumption is that at most it will fall by 100,000 in 1985–86"— and that may be doubtful. It is a trivial reduction. The article continues: It will remain high throughout the rest of the century. That is the picture that the Government have painted for Britain during the past six years. The great depression of the 1930s will be the picture for Britain and, above all, for Scotland and the English regions.

What is the Government's response to that? It is this astonishing White Paper, which states at paragraph 2.4: To put this right"— the malaise largely created by themselves— and create jobs the people of Britain have to: show enterprise and a willingness to take risks. The people of Britain have to respond and adapt continually to new ideas and changing circumstances. The people of Britain have to carry out the necessary research and development. Shall I say to the unemployed textile workers in Paisley, "You must carry out research and development."? The people of Britain have to combine labour, materials and capital to produce efficiently and on time. The people of Britain have to "pay ourselves realistically." There is not a word of what the Government must do. The blame is laid entirely on the people of Britain. The Government's failure of the past six years has somehow magically become the failure of the people of Britain, who, especially with 4 million unemployed, have no access to power, to the levers of production or to control over the finances of this country.

A character in a Benoit Brecht play says, The people have lost confidence in the Government. The president in the play says, We will have to elect another people. That has been the sort of proposition we have had from the Government.

The Government's response has been cuts in regional development, cuts in local expenditure, cuts in infrastructure and cuts in rate support. Recently, we have talked about the problems of ratepayers in Scotland because of the recent rates crisis; they also must suffer a decline in services and in jobs. The one quick trigger for economic recovery is to give more resources to local authorities. Not only the rating revaluation is hitting our areas, but also the cuts in rate support grant over five years from 75 per cent. to 57 per cent. There have also been cuts in the skillcentres. We are told that they must show that they are ready to carry out developments and to show enterprise, but nevertheless they have been cut.

The Government have done one positive thing. They have used oil to finance unemployment. Their errors and the magnitude of those errors are awash in the funds from North sea oil — and tourism — without which Britain would have been bankrupt. As it is, the oil has hardly helped to sustain the cost and level of unemployment in Britain. It is a disgrace to a civilised country.

The Government's answer is shown on the first page of the document. The one specific thing they say is: The key contribution of Government in a free society is to do all it can to create a climate in which enterprise can flourish, above all by removing obstacles to the working of markets, especially the labour market. Cut from that the fine language and it means poor wages. It means cutting wages and cutting the security and protection that is given to poor wage earners through wages councils. We are back to the Speenhamland system. Wages and their cost to employers will be cut and replaced by Government support. That is what happened at the beginning of the 19th century and the Government are repeating it. The abolition of the wages councils and the removal of society's control over dictatorial employers will mean that workers on poor wages will have to turn to family income for support. That is the one thing that has come forward.

Let me examine the consequences of that for one industry in my area. That industry was almost the only industry that was left to us. In 1981 we had one industry that mattered. Once we had one major factory with about 9,000 workers in it. When it ended in 1981 there were 4,500. Overnight, 4,500 men at Linwood became unemployed. That was seen as a shock level.

My hon. Friend the Member for Paisley, North (Mr. Adams) is present and he will testify that the background to that was textiles. But what is happening in the textile industry is terrifying. Paisley was the great creator of the industrial revolution in cotton and textiles. In March 1985 there were 132 men and 370 women-502 altogether—in the textile industry. In 1948, 10,000 people worked in the textile industry.

The consequence of that for unemployment is interesting. Paisley has 16 per cent. plus unemployment, which is bad enough, but the real figure is concealed because the vast mass of those 10,000 workers, 7,700, were women and most of them have not gone on to the unemployment register. Yes, we recognise the shock of the closure of Linwood but the closure of the textile factories has been the slow bleeding of an area and is not shown in the figures because, on the whole, women have not registered.

That is why we have sought action from the Government. We met the Secretary of State when Linwood was closed in 1981 and he gave us some promises. In a letter of 29 May 1981 from the Secretary of State after a meeting that we had with him, he promised an SDA integrated urban project for Paisley. That has not happened. Secondly, he promised "Locate in Scotland" to collaborate with the region and district to market what the area has to offer to prospective investors. We have a lot to offer. Our area is one of the best placed in terms of communications. We have plant and factories which have been made empty. The Government demand that the people of Britain should show initiative. We have the plant, factory space, roofing and traffic because the area was built up, largely through regional development initiated by Labour Governments.

One of my first experiences as a Member of Parliament for my new constituency was to attend a medical charity occasion. A small boy was given the honour of performing a ceremony. That ceremony was to blow up the tallest chimney in the west of Scotland, before they proceeded to destroy the rest of the cotton mill. That was almost the first public appearance that I made there. Nothing has happened about "Locate in Scotland". That promise has not been fulfilled either.

Thirdly, there was to be a development of small Scottish development units in the Johnstone-Linwood area. That is the only thing that has happened and that has been due to a private entrepreneur.

Fourthly, factories at Hillington were to be refurbished. That has not happened. None of those promises has been fulfilled. We have exchanged letters, and the Minister with responsibility for industry in Scotland, above all, should know about that. We are demanding action. Linwood has failed. The textile industry has failed. Alongside Paisley is the carpet factory at Elderslie. That is the only factory in that village. Where we once had about 7,500 workers in the Scottish carpet industry, we now have only about 950 and far fewer than that remain in the one high-class quality carpet manufacturer, Stoddard Carpets at Elderslie.

We see the consequences of all this for our youth. What are the prospects for them in Paisley given that background? We are in favour of training schemes but we are not in favour of training schemes as a substitute for employment. We are not in favour of training schemes that end with the kids going back on to the dole. In Paisley, 600 are on youth training schemes and 596 are unemployed. The approximate number in work is 442. That makes a total of 1,638. Out of the 16 to 18-year-olds, only 28 per cent. are in work. Three out of four are either unemployed or in short term training.

In the area that my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) comes from in Renfrewshire we find exactly the same situation. Only 25 per cent. of the 16 to 18-year-olds are in employment. There is little hope for them there, with the shipbuilding industry in its present crisis, and there is little hope for them at our end if we depend only on the Government's initiatives.

Mr. Gerald Malone (Aberdeen, South)

I am listening carefully to the hon. Gentleman's exposition this morning of the reasons for unemployment being at the level that it is. Do they not sit rather uncomfortably with the view that he expressed in an article in the Glasgow Herald in 1978 when he said clearly that for demographic reasons unemployment would inevitably rise to over 3 million in the early 1980s? Was he not right then and is he not perhaps wrong now?

Mr. Buchan

That article is continually quoted.

Mr. McQuarrie

It was a good article.

Mr. Buchan

It was a very good article; I accept that. If the hon. Member for Aberdeen, South (Mr. Malone) will read the following paragraph he will see exactly what I said. It is for those reasons that we must take special measures to deal with the demographic effect. I went on to explain how to deal with it. Of course I accepted the demographic changes. The hon. Gentleman should go back and read the article. One of the things that I said was that there is no trigger for an economic recovery outside public expenditure. The Government hate public expenditure. They cannot even stand our great national institutions. They slavered and bayed at the thought of getting their hands on the pickings of advertising for the BBC two days ago — a disgusting and obscene sight. More and more Government Members resemble "Spitting Images". On the whole, I prefer their appearance in "Spitting Images" than their reality. They certainly look better.

The figures are terrifying and the cuts will make them worse. Since 1 January, another 800 redundancies have been created at Levi Strauss, Babcock and Stoddard carpets. We demand the restoration of proper investment in Britain and an end to the outflow of £12 billion a year to subsidise other countries' unprofitable undertakings on the mainland of Europe. We demand the restoration of proper funds for local authorities to provide the services which we so desperately need, and above all to act as a drive, a fillip and a trigger to economic recovery. There is no chance of that so long as the Prime Minister boasts that there is no alternative. There is an alternative. We can get rid of this Government and we can restore proper public investment to regenerate and rejig our industries.

12.30 pm
Mr. Barry Henderson (Fife, North-East)

It is always interesting to listen to the hon. Member for Paisley, South (Mr. Buchan), particularly when he is wound up a little. The hon. Gentleman said that the industrial revolution started with the textile industry, which is important in his constituency. That industrial revolution might never have got off the ground if a Labour party had existed then. I am sure that members of that party and Mr. Ludd would have worked hand in hand to prevent the changes necessary and desirable for the British economy.

The Linwood closure was a great tragedy for the west of Scotland, but the greatest tragedy about that was that an opportunity was not grasped. Management was at fault, but the trade union side was also at fault. I hope that the lesson has been learned. Instead of taking the opportunity to beat stiff world competition which had to be fought by every means imaginable, the trade union leadership saw the opportunity as a dripping roast of which they could take advantage and relax. They did not realise that in a highly competitive world they would have to prove themselves.

We are grateful to the hon. Member for Greenock and Port Glasgow (Dr. Godman) for initiating a debate on the Scottish economy. We are all deeply concerned about unemployment levels. The Government are seeking to create an enterprise economy with the best and most secure prospects of improving employment prospects.

We are entering the fifth year of continuous growth in output. Last year, manufacturing output was up by 3.5 per cent.—the biggest rise since 1973 in another period of Conservative Government. Manufactured exports rose by 10 per cent. Investment was up by 6.5 per cent. in 1984 and manufacturing investment rose by 13 per cent. I am talking of solid achievements which will create a firm foundation and will ultimately enable us to beat the dreadful scourge of unemployment. Britain today has the largest number of people in work of any major European country.

In creating the enterprise economy we are rectifying, in appropriate cases, the balance between public and private enterprise. That is important. Only the public sector can provide certain services effectively, but in other spheres private enterprise can do more to help the economy. A good example is Scott Lithgow, which failed under nationalisation, was rejuvenated by private enterprise and now has a continuing growth prospect.

I was told the other day by someone qualified to hold the view that Trafalgar House has launched a new offshore platform and announced further new orders and that management felt certain that the yards could continue to be filled so long as delivery was provided. In other words, if there were sound guarantees of delivery to specification and on time, there was a great future for the yards.

The same can be seen in smaller ways. My district council in north-east Fife until recently had its vehicle maintenance carried out by another public sector organisation. The council decided, after close investigation, that the work could be done more effectively and economically by private enterprise, and that change was then made. It was not a doctrinaire decision but a sensible change to get value for money.

Transportation is an area where the public sector has dominated heavily. It is curious that until recently one could not attend a meeting at which the question of public transport arose without someone complaining about the lack of a bus service or the inadequacy of a service or the way in which services generally were unrelated to the needs of the public.

Because the Government produced a White Paper, and have now introduced the Transport Bill to deregulate the environment of the buses so as to create an effective competitive climate which will put the customer first, suddenly all the lobbies are out saying that everything is wonderful with the buses and that nothing needs changing. Change is necessary and the customers will be the principal beneficiaries.

While I welcome the fact that the hon. Member for Greenock and Port Glasgow has initiated this debate on the Scottish economy, I wish that someone of his intellectual honesty had drafted the motion. The subject of, and the way in which he introduced, the debate is more positive and useful than the wording of the motion, which I pass over.

The most important aspect of the White Paper on jobs, which was published yesterday, is the intellectual honesty of the analysis of the nature of the problem. It points out that living standards have been rising throughout the Western world for 30 years, but less so in Britain than elsewhere, and it seeks to establish some of the basic reasons for that and for the problem of unemployment.

In the last 20 years, average productivity in manufacturing industry grew by over 500 per cent. in Japan, by over 120 per cent. in Germany but by less than 80 per cent. in the United Kingdom. That is one reason for our rate of unemployment today. If Labour Members cannot grasp that fundamental fact, they will not be able to help us as much as I hope in identifying policies which will help to change the unemployment position. If we are to change it, we must address ourselves to the problem of our competitiveness in productivity.

Related to that, we have always failed to put the customer first. After all, customers and their orders provide jobs, whether in the manufacturing or service industries. Powerful unions have often held economic reality at bay, and that has done nothing to create an environment for surer job prospects.

We have gone through an era in which the entrepreneur — the man who sees a business prospect and grasps it and, in grasping it and seeking to profit by it, creates work for others — has been one of the most under-valued members of society instead of the most crucial of all in relation to unemployment. I accept that we must be worried about unemployment and I recognise the totality of it. It is clear that there is a need to reduce it. But over 23 million are in work, a higher proportion of the working population than in the the main continental countries.

When I intervened in the speech of the hon. Member for Greenock and Port Glasgow I do not think that he understood the point that I was trying to make. Perhaps that was because I tried to make a short intervention. I sought to draw his attention the fact that we have a good export record. I think that about one third of all that we produce goes abroad but I accept that only certain sections of the economy contribute directly to the export effort. Some of the firms on the Clyde are making a major contribution. Scotland as a whole provides a significant proportion of all United Kingdom exports. Perhaps comparatively few companies are involved, but the fact remains that we are a good exporting nation. We depend on trade more than any other country in the world and I hope that we shall never be seduced by the siren voices of Labour Members who want to restrict the freedom of world trade. No nation benefits more from trade than the United Kingdom.

I put it to the hon. Member for Greenock and Port Glasgow in my intervention that there is a problem because we are importing many goods which we could produce more satisfactorily for ourselves. If we had held our market share of home-produced goods, we would have very little unemployment now. It is the loss of the home market rather than a reduced share of the world market which has perhaps had the most direct impact on the creation of unemployment.

Labour Members often say that we must stimulate demand, but I submit that there is not a lack of demand. The demand which exists is not being met by British companies; that is where the problem lies. In the past two years demand has grown by about 8 per cent., but that increase has not been met by our home companies.

It is often said that greater public investment would help to create more demand, as though there was no public sector investment. Last year we invested £22 billion of public money in the creation of public sector investment. To pour more resources into projects that will not yield a good economic return will waste the national wealth on which our jobs rest. If we increase public investment beyond £22 billion to £25 billion, one of the results will be less investment in the private sector, which is creating jobs and new opportunities. Manufacturing investment increased by 13 per cent. in 1984.

We are seeing a period of considerable changes in our economy. We must grapple with unemployment in a way which ensures that people are equipped to face the new opportunities which arise, as well as the old problems. One of the greatest problems in reducing unemployment is the poor qualifications of many school leavers. Developing training schemes, improving the education system and seeking to improve the vocational range of opportunities for youngsters will have a significant and increasing effect in tackling unmployment. The majority of those who have been unemployed for some time—this applies especially to younger people — have few educational qualifications and have had little or no opportunity for training. I welcome the further initiatives on training foreshadowed in the Budget. One of the great successes in Scotland has been inward investment. I congratulate my hon. Friend the Under-Secretary, who has made a direct contribution to that success, which has been particularly marked in information technology.

I hope that more effort will be put into developing opportunities in biotechnology as a native industry rather than as inward investment. Biotechnology could lead to as fundamental a revolution in industry over the next 20 years as we have seen with information technology in the past 20 years.

I also welcome schemes that are particularly helpful to areas such as mine. They include the PRIDE scheme, the programme for rural initiatives and development, which is administered by the Scottish Development Agency and supports private enterprise in rural areas. I understand that it has been open for business since the beginning of the month and I hope that it will make a useful contribution to developing industrial as well as service activities in rural areas, perhaps supported by the better business services scheme which now has a much wider coverage than Scotland.

The basic industries — agriculture, fishing, coal and oil — will have a crucial role in our economy for years to come and our interest in new industries should never detract from the importance of those fundamental industries.

I hope that today's announcement in the press about the efforts of the Scottish Fishermen's Federation to demonstrate the dangers of allowing a high by-catch in industrial fishing for Norway pout will be noted by the Scottish Office and that we shall try to get better arrangements within the European Community.

Only a sound economy can provide the vital base for industrial regeneration, whether in manufacturing or in the service sector. We have curbed inflation, but we have further to go. We must not put our achievements at risk. Curbing costs helps industry. The understandable outcry from people in Scotland facing substantial rates increases reminds us that only a few years ago under the Labour Government all prices were rising at such a rate. We have almost forgotten what it was like to live with inflation at over 20 per cent. The reduction of inflation to 5 per cent. provides an important base for the future.

12.48 pm
Mr. Robert Hughes (Aberdeen, North)

I join my hon. Friends in congratulating my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) on his good fortune in the ballot and on the subject that he has chosen to debate.

The motion draws attention to the great problems of unemployment, especially among young people. A youngster summed up in a letter to The Scotsman on 18 March what many young people think. He wrote: Sir,—What's in a name? An anagram for 'Nigel Lawson' is 'We all sign on.' Fraser Paton (15)". That sums up where young people will end up if the Government carry on as they are.

To listen to Conservative Members, one would think that the Government had come to power only a few weeks or months ago. The fact is that we are but a few weeks short of six years of Tory Government.

Yesterday saw the publication of the document "Employment: The Challenge for the Nation." That shows that in the last six years the Government have learnt not a single lesson. Their record on unemployment is open to all sorts of arguments about the precise figures, what figures are brought in and what figures are left out.

I always tend to underestimate the figures. I do not believe in making exaggerated claims or in taking the highest figures. I take fairly reasonable figures so that I cannot be accused of exaggeration.

When the Labour Government left office in 1979, there were 114,400 people unemployed in Scotland. According to figures published last month, there are now 357,200. We all know that a great deal of massaging of the figures has been going on. I think that it is reasonable to add to that figure about 40,000, because there are 40,000 youth training scheme places currently taken up. That gives us 397,200, and I believe that the figure is much higher.

That represents an increase in unemployment of 47,166 every miserable year that this Government have been in office. It represents an increase of 907 every week. It represents 129 every day of the six years that they have been in office—every working day, every Saturday and Sunday, every bank holiday and every Christmas and New Year's day.

The Government's response to that steady erosion of employment prospects is "Employment: The Challenge for the Nation." The document is totally devoid of ideas.

It is always said that Ernest Bevin once described a document as "nothing more than Clitch after Clitch after Clitch." But no one should be surprised at the poverty of ideas in the document. It represents the combined wisdom of the Secretaries of State for Employment, for Education and Science, for Scotland, for Wales, for the Social Services and for Trade and Industry and the Minister without Portfolio. The combined wisdom of them all is this pathetic document, and I shall return to it later in my speech.

I want to outline one or two difficulties facing my own city of Aberdeen, only part of which is in my constituency. The city is regarded in many circles as the jewel in the crown of the Scottish economy, if not the jewel in the crown of the United Kingdom economy. It is the so-called oil El Dorado of the United Kingdom.

We have an unemployment rate of 6.6 per cent. It is a measure of the stark nature of unemployment and the stark difficulties facing our country that a 6.6 per cent. rate of unemployment is regarded as reasonable. Some of my hon. Friends say to me "What are you complaining about with a 6.6 per cent. rate of unemployment? We only wish that was the unemployment rate in our constituencies." They have unemployment rates of 13 per cent., 16 per cent., 17 per cent., and 25 per cent.

The trouble with statistics is that they do not always mean a great deal. A 6.6 per cent. unemployment rate represents 10,460 people out of work in the city of Aberdeen. Even in a city with all the glorious prospects to be expected of a location which has changed dramatically with the coming of North sea oil, youngsters have no hope and really are in despair.

What is happening in the city of Aberdeen and its immediate surrounds in a sense is a microcosm of what is happening elsewhere in Scotland. Traditional industry is on the decline. The fishing industry is largely in decline—not that I blame that on the Government. There have been difficulties with over-fishing. It is probable that the fishing industry would have declined anyway. But I ask hon. Members to consider the example of fish processing, which is in very serious difficulty even at its much reduced level. We have the idiocy that Aberdeen firms are thinking of leaving to go to Motherwell Food Park because they can get a better financial deal there.

I do not take the traditionalist line that, because a commodity has been produced in an area, it always has to be produced there. However, it does not make sense to move companies away from the base of supply to a place hundreds of miles away where there is no local supply.

That shows the idiocy of the Government's policy. It makes no economic sense whatsoever. These, in the main, are the companies so beloved of the Prime Minister and the hon. Member for Eastwood (Mr. Stewart). They are small companies, the backbone of the nation, which should be expanding, but when they go the Government seeking help they get the brush-off. They are told that there is nothing that can be done about it. However, I believe that the Government must give aid to small fish-processing firms.

May I turn to another aspect which does not affect my constituency, although I regard it as being in my constituency? That is Hall Russell Shipbuilders. It is time that the Government made up their mind and told us what is to happen at Hall Russell. Leaving on one side for the moment my total objection to privatisation, the fact is that we have to live in the real world. The Government will privatise the shipyard. However, so confident are the Government about their privatisation policy that they will not tell us how many bidders there are for the yard, let alone who they are. They will not let the work force speak to the prospective buyers. This splendid work force has cooperated with management and done everything that was asked of it, yet it is being treated as though it can be bought an sold as a mere chattel.

Mr. Malone

I should not like the hon. Gentleman to be unaware of the fact that one of the potential buyers is at the yard this weekend. It is hoped that they will speak to the work force. The hon. Gentleman and I have been substantially at one on this issue. Therefore, I should not like him to be unaware of that fact, which came to my attention extremely recently.

Mr. Hughes

It may be that one of the prospective buyers is going to the yard this weekend. If the hon. Gentleman in whose constituency Hall Russell now is had said that they will be meeting the work force this weekend, I should have regarded that as progress. But today is Friday. The weekend presumably starts tomorrow. The hon. Gentleman is only able to tell me now that he hopes that the prospective buyers will be able to speak to the work force. That emphasises the point I am trying to make.

We need to remove uncertainty not only about who owns the yard but also about future orders. It is possible that fairly soon an order will be placed for two offshore patrol vessels, class II, but we do not know when those orders will be placed. The Government are still making up their mind. Even more important, a major part of the funding for further research into the new OPVIII vessels ought to be forthcoming from the Government. Money has been made available by British shipbuilders to carry out research into the early development of the OPVIIIs. It is necessary to remove uncertainty.

Engineering companies in Aberdeen and the surrounding area have been closed. Closures have taken place even in the constituency of the hon. Member for Banff and Buchan (Mr. McQuarrie). No mention was made of the fact by the hon. Gentleman in his speech. Engineering works have been closed in his constituency, as in mine. The paper manufacturing industry is in serious decline. Oil-related employment has masked the structural decline of industry and employment in the city of Aberdeen and throughout Scotland. The Government's response is to wring their collective hands and say, "We cannot do anything. It is not our fault. We have only been in Government six years. It takes time for things to change." The White Paper reflects that view. It says: Government cannot do what the nation will not. It cannot on its own create jobs. I think that they can on their own create jobs. I do not say that they can create all jobs on their own but the White Paper's philosophy is totally defeatist. The Government's record is one of destroying jobs. They have not even been neutral. Their policy has been antagonistic to job creation.

It is almost impossible adequately to describe the change which has taken place in the past six years. The change in regional policy has certainly destroyed jobs. I remember the surge of optimism in Scotland when the regional policy began to have an effect.

I remember, as does my hon. Friend the Member for Paisley, South (Mr. Buchan) the setting up of the car factory at Linwood, the pulp mill at Corpach and the aluminium smelter at Invergordon. The Labour party had to fight for many years to get those companies established. Where are they now? They have all gone. [Interruption.] The hon. Gentleman, who is so free in giving advice, should take his own advice. If he wishes to intervene, I will gladly give way to him.

Mr. McQuarrie

The hon. Member mentioned my constituency and engineering firms closing. I have good news for him. Every engineering factory in my constituency that closed has been reopened and men have been taken on. Consolidated Pneumatic Tool Co. Ltd. at Fraserburgh has taken on an extra 100 men this year. He also mentioned Invergordon. If the Labour party had put a power station beside the Invergordon smelter it might never have closed.

Mr. Hughes

Wherever the Government are directly responsible — they could have kept Corpach and Invergordon open — it is always someone else's fault further back. The Government are never willing to face up to their responsibilties. We see that everywhere we look. The White Paper boasts that the Government are financing the "support for innovation" programme for industry. We all support innovation and the exploitation of new technology because that is what the future is based on, but, what is the reality? What is behind the weasel words in the White Paper? The reality is seen in Hansard on Monday in the Budget debate. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) intervened during the speech of the Secretary of State for Trade and Industry. He was pointing out the Government's great support for innovation. My right hon. and learned Friend asked: With regard to support for innovation schemes, in the forthcoming year does the Secretary of State anticipate an increase in Government expenditure to support those schemes or a reduction? What was the Secretary of State's answer? It was clear and there can be no argument about it: There will be less expenditure in real terms."—[Official Report, 25 March 1985; Vol. 76, c. 39.] That is the truth. That is what the Government are doing. They are trying to pretend that they are doing one thing while they are doing the opposite.

That is also true of regional development finance. The Government boast in the White Paper that they are concentrating finance in areas where it is most needed. If we study the figures, we see that they are spending less on regional development. They are cutting all the time. That is one of the main reasons why investment is falling. It is traditional for the Tories to say that public expenditure does not create jobs. Public expenditure creates jobs in private manufacturing industry. It has been estimated that over 70 per cent. of public expenditure goes directly into the pockets of private industry. We are having record bankruptcies because the Government are cutting public expenditure. They are hitting those whom they are trying to help. The Government cannot see that. The White Paper is completely sterile and devoid of ideas.

There has been one theme only throughout the Government's six years of office. It has been common to every Budget and it is common to this White Paper, which has a blue cover. I do not know what they are trying to pretend by putting a blue cover on it. It is the insulting philosophy upon which the Government have based their whole programme — the rich will only work when they get paid more, but the poor will only work when they get paid less. That is the philosophy of the dinosaur. It is one of the reasons why the Tory party and the Tory Government, like the dinosaur, will soon be extinct in Scotland, and the sooner the better.

1.5 pm

Mr. Alan Williams (Swansea, West)

On a point of order, Mr. Deputy Speaker. I apologise for intervening, but this is a matter of importance to the whole House.

There was great concern in the House yesterday that the Government had produced a so-called White Paper on employment without any statement or opportunity for questions. I believe that it also proved impossible for my colleagues to put their side of the case on the BBC today.

There has now been a repetition in that we have another blue-covered document, although it does not have the same status as yesterday's blue-covered document, which was indeed a White Paper. Apparently, a press conference was held this morning by Lord Young and the Under-Secretary of State for Trade and Industry on the options for removing the burdens on small businesses. Many of the proposals will have an important impact. For example, one suggestion was that people taking proceedings for unfair dismissal should be required to put down a deposit which they would lose if they lost the case.

These are matters of great importance not just to our constituents but to the House. Yet not only were the Opposition not even notified through the usual channels that the press conference was to take place, but the House was not notified that the document would be available in the Vote Office at 11.30 am. Moreover, although Ministers were happy to parade before the Press, no Minister has come here to make a statement and to lay himself open to questioning by the House.

I therefore ask you, Mr. Deputy Speaker, what options are open to us at this time on Friday. Clearly there is little likelihood of getting a Minister here to make a statement at 2.30 pm. If that cannot be done, what help can you give us to ensure that, on a matter of such fundamental policy importance, a statement will be guaranteed to take place at the end of Question Time on Monday?

Mr. Deputy Speaker (Sir Paul Dean)

I understand the right hon. Gentleman's point, but he will appreciate that it is not a matter on which I can help. No doubt his comments have been noted and I am sure that he will use his ingenuity to pursue the matter on another occasion.

Mr. John Prescott (Kingston upon Hull, East)

Further to that point of order, Mr. Deputy Speaker. There is an issue of even more fundamental importance. During the protest yesterday at the publication of a White Paper without a statement being made to the House, my right hon. Friend the Leader of the Opposition and other Members challenged the Leader of the House and asked him to reconsider the position and to arrange for a statement to be made to the House on the first White Paper on employment in 40 years. After much pressure from the Opposition, the Leader of the House gave an assurance that the matter would be considered.

While the Leader of the House was considering the possibility of a statement next week, another Department — the Department of Trade and Industry — and a Member of another place were rapidly putting together a press announcement on the very matter to which our protest related and gaily going ahead with a repetition of the same mistake, despite the assurances given by the Leader of the House.

I appreciate that matters of business between Government and Opposition should be dealt with through the usual channels, and the usual channels have been working on the matter. Through a colleague, I sought assurances from the Department of Employment yesterday because we had heard on the grapevine that a further document was to be produced, but we were told that that was not to be. The second document is presumably not a White Paper. It, too, has a blue cover but it does not bear the usual command number, which makes things even more confusing. Presumably the Department of Employment felt able to assure us that no further document was being produced, because the document in question was to come from the Department of Trade and Industry.

It is utterly unacceptable that such offensive recommendations as obliging workers to put down a deposit before a court will hear an unfair dismissal case should be made in this unprecedented fashion, and it will cause great consternation. The Opposition are already being pressed by the media for statements. When I approached the Vote Office, having heard about the press conference, I discovered that the document was available from 10.30 am. It is totally unacceptable—

Mr. Deputy Speaker

Order. I am sorry to interrupt the hon. Gentleman, but I have got his point. He has answered his own question. This is a matter which no doubt he will pursue through the usual channels.

Mr. Milian

Further to the point of order, Mr. Deputy Speaker. This has come as a complete surprise to me as well. It is especially discourteous as we are discussing industry, albeit Scottish industry, to which the document is obviously relevant. It is bad enough having the thing published yesterday without there being a statement in the House or any notice, but this has happened in the middle of a debate. Moreover, Ministers have made statements to the press rather than come to the House. I understand that this is not principally a matter for you, Mr. Deputy Speaker, but one of your functions is to protect the interests of Back Benchers. I have no wish to hold up our proceedings, as I represent a Scottish constituency and, having spoken, do not wish to prevent my colleagues from doing so. Nevertheless, I hope that we shall have some statement from the Leader of the House before the end of the debate on this quite extraordinary procedure.

Mr. Deputy Speaker

I think that this matter has been ventilated now, and we are taking time out of a private Member's day.

Mr. Williams

Further to the point of order, Mr. Deputy Speaker. I do not want to impose upon your tolerance, but this is a matter of great importance for the standing of the House. If it were one off, we should not be pressing it so hard, but it is the second time in two days that the House has been treated with arrogant contempt. A major part of your role is to protect the standing and status of the House. As the Leader of the House has not been present, I wonder whether we could ask you, Mr. Deputy Speaker, to use your good offices to ensure that the right hon. Gentleman comes here before 2.30 pm to let the House know whether the Government intend there to be a statement on the blue document on Monday.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

Further to the point of order, Mr. Deputy Speaker. I shall of course report to my right hon. Friends the views that have been expressed.

1.11 pm
Mr. Gerald Malone (Aberdeen, South)

In view of the length of time that has been taken up with points of order and the number of other hon. Members who wish to speak, I shall curtail my speech as much as possible.

With regard to Hall Russell, I agree entirely with the hon. Member for Aberdeen, North (Mr. Hughes) that we have reached the stage in the sale of that shipyard at which, for the sake of management and work force, it is important that a conclusion be reached as rapidly as possible. I thoroughly endorse everything that the hon. Gentleman said on that matter. I hope that, in our representations to those responsible for taking decisions, we have made those views clear and that there will be progress soon.

I shall confine myself to discussing the role that the Scottish Development Agency plays in Aberdeen and the north-east of Scotland. There have been important developments in that role during the past 12 months. The right hon. Member for Glasgow, Govan (Mr. Milian) mentioned the SDA and what Conservative Members say about it. It now fulfils a role which is quite different from that which it fulfilled under a Labour Government. Rather than a fire engine that rushes from industrial crisis to industrial crisis, it now has the opportunity to be constructive, and it has been exceptionally constructive in Aberdeen and the north-east of Scotland in the last 12 months.

It is worth considering the SDA's achievements in the past 12 months. They are remarkable. It has got off its marks since it set up its office in Aberdeen. In company investments it has published business plans for some 70 companies.

The SDA has set up loan and equity investments in the north-east of Scotland totalling more than £1 million. The figure for the previous year was only £231,000. It has participated in the building of custom-built premises for industry and business in general, and in many local initiatives. One of the most important for the north-east is the new Aberdeen exhibition and conference centre, which will accommodate "Offshore Europe," which is the major European oil and gas exhibition outside Houston, Texas. The SDA property investment is about £750,000, and is exceptionally important.

My hon. Friend the Member for Banff and Buchan (Mr. McQuarrie) will be well aware that the SDA has provided great support for the Enterprise Trust in Fraserborough. Its contribution of £193,000 over three years is welcomed in his constituency and throughout the north-east. It is important that the north-east is seen, not as consisting of separate units, but as having an economy of its own. As an hon. Member for Aberdeen city, I welcome that initiative.

I welcome the establishment of the Aberdeen Enterprise Trust. Although the SDA contribution may look relatively small—£15,000 a year for three years—the principle of the trust is important for Aberdeen city, and I am sure that it will be successful. Indeed, the work that it is commencing has already shown signs of success. I trust that that will continue into the indefinite future.

Property developments in my constituency have also been assisted by the SDA. There is a new development at Altons industrial estate, which consists of 30,000 square feet of new units. Most of them will be leased to new businesses which are coming into Aberdeen and to expanding existing businesses in the city.

That is a first-class record for an office that was only recently set up. There were fears at the outset that there might be a conflict of interest between the SDA and other agencies operating in the north-east, especially those funded by Grampian regional council. I am sorry to report that there has been some evidence of a conflict between those agencies recently. Indeed, it was suggested that perhaps the SDA office in Aberdeen was being used to attract investment from Grampian region to other parts of Scotland. It is important to put it on record that investigation showed that that was not the case. I understand that both the agencies involved — the north-east of Scotland development agency and the SDA in Aberdeen — have resolved their differences and clarified matters.

The SDA was described somewhat irresponsibly by a Grampian regional councillor as a Trojan horse to poach industry from Aberdeen and the north-east of Scotland". That is not true. The SDA does the opposite. It has contributed substantially to industrial development and inward investment in Aberdeen. It is doing a worthwhile and thorough job in ensuring that high technology projects in particular are attracted to the city and the region. I congratulate the SDA on achieving that important task on what is approximately its first birthday.

The hon. Member for Aberdeen, North referred to the fish processing industry, which is another interest that we have in common. The formation of a new organisation in the north-east, which represents the fish processing industry, will bring some coherence to the policies that it needs to ensure that it is of the proper scale to process catches landed in the north-east, and to add as much value as possible to the catches before they are sold throughout the rest of the United Kingdom, and exported to many other quarters of the world.

Since I became the Member of Parliament for Aberdeen, South, I have noticed that, until now, those who represented the fish processing industry had no coherent approach. The representative organisation would say one thing — perhaps requesting Government aid, as it did some time ago—while the processors operated on a completely different basis. The coherence which the new organisation should bring to the policies that they believe are needed for restructuring the industry in the north-east will be more than welcome.

Mr. McQuarrie

I was seriously disturbed by a press report yesterday about that organisation, which was created to bring the fish processors together. Unfortunately, Aberdeen port is covered by the national dock labour scheme. A foreign vessel which arrived at Aberdeen was refused permission by the fish porters to offload there, so it had to come to my constituency instead. Are not such practices extremely detrimental to the principle behind what my hon. Friend is saying? Do they not damage trade in his constituency?

Mr. Malone

This is a unique occasion. My hon. Friend is regretting that something went from my constituency to his. He must be truly motivated by a generous spirit this morning. He certainly has a point. It is sad that much business is not attracted to the port of Aberdeen because vessels are sometimes not allowed to offload there. But that is not the main thrust of my speech.

The Government's policies are working in the north-east. The Scottish Development Agency is a prime example of what the Government can do to promote sensible investment which works and which provides a real return. Neither I nor my hon. Friend the Minister believes that, as Opposition Members allege, the Government have a completely hands-off approach. Of course they do not. It is an interventionist approach, but of a completely different nature to the sort of intervention that we experienced when the Labour Government were in office. The Government's intervention in the north-east is welcome and constructive, and what is more, it works.

I congratulate the hon. Member for Greenock and Port Glasgow (Dr. Godman) on being as successful in the parliamentary raffle as I was this week. No doubt it will be many a long day before either of us is as successful again.

Several Hon. Members


Mr. Deputy Speaker

Order. The wind-up speeches are expected to begin at 1.35 pm. I hope that the two hon. Members who wish to speak will divide the remaining time between them.

1.23 pm
Mr. Tom Clarke (Monklands, West)

I make no complaint about the absence of representatives of the alliance or the Scottish National party, because it has given me the opportunity to speak in the debate. I know that the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) believes that this is my maiden speech on Scottish affairs, but I have had the opportunity to hear many Scottish speeches in many debates.

This has been a most interesting debate, and I join hon. Members in congratulating my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) on initiating a debate on the most important subject for Scottish people today. The debate is essentially about resources and people and how best we can use and encourage both. In the short time available, I shall refer to three major aspects of Scottish industry and of the Scottish outlook: the construction industry, the steel industry and the problems of youth unemployment.

It is a great tragedy that we are seeing a decline of the construction industry and the numbers employed in it, despite the fact that the need for it is so great. I join my hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg) in support of the Stepps bypass. That will provide essential jobs and the delay has been undue. I hope that the Secretary of State will not use the various public inquiries as an excuse for doing nothing. It is essential and there should be a specific commitment on that bypass with a specific date in mind.

We should today be discussing the potential for Scottish industry and jobs based on the oil revenues that have been made available. Had we been using those revenues in a positive way we would be talking about investment in the public sector and private industry which would provide essential jobs. We are not doing that because we have squandered our oil resources by paying for substantially higher levels of unemployment than any of us find acceptable.

We are not even necessarily asking today for more public expenditure. Yes, public expenditure, even under this Government, has increased from 39.5 per cent. in 1979 to 42.5 per cent. now, but where has it gone? It has not gone to finance industry, to improve the future of the steel industry or to enhance Scotland's infrastructure. It has gone on levels of unemployment that are utterly unacceptable. Of those unemployed in Coatbridge in my constituency, 22.5 per cent. have been on the dole for two years or more and in Chryston and Kelvin Valley it is 19 per cent. One of the reasons for that is that the Government, in making those claims for public expenditure, as was the Prime Minister's case not so long ago, have failed to appreciate the association between revenue and capital and the consequences of capital commitments for current expenditure. That is a great blow to the construction industry.

Let me give an example from my constituency. Under the principal of Coatbridge college, that very able man Mr. Edward Dowdalls, Strathclyde region spent £1 million to provide a leisure centre with changing facilities, squash courts and so on. That has been standing unused for over a year because Strathclyde region has not found it possible — I make no criticism of it — to find the extra £25,000 that it needs for four or five people to keep the leisure centre going. Those are the revenue consequences of capital expenditure. If the Government will not accept that local authorities need money in addition to capital, that will be a grave blow to our communities in Scotland.

Two hon. Members have mentioned the future of Ravenscraig and I want to put my question as well. I put it in the context of my concern about the industry in Gartcosh in my constituency. Its future is tied closely to that of Ravenscraig. I had a meeting some weeks ago with the chairman of the British Steel Corporation, Sir Robert Haslam. He was unable to give me any assurance about investment. He said that there would be major Government decisions about the capital that would be made available. We believe that it is essential for the Government not just to encourage supporters to speak about Ravenscraig or Gartcosh but to show their commitment to the steel industry by making investment available.

I want to draw attention to an article on the front page of yesterday's Financial Times which was headed: EEC ministers to allow new steel subsidies". That shows that yet again France and Italy are being allowed to continue steel subsidies to a degree which even they find surprising. That is not acceptable to my constituents, especially to those whose futures are bound up with Gartcosh. I hope that the Minister can give a specific assurance that the Government are committed to a future for Gartcosh and Ravenscraig.

Youth unemployment is a problem. Strathclyde region recently published a document showing that 246 young people are chasing every job available in the region. No one should be surprised if we are suspicious about the various training schemes and the Government's attitude to them. Young people themselves are extremely suspicious of the training schemes because they do not lead to real jobs. The budget announcement simply means that even more young people trained to an extent greater than originally planned by the Government will be looking for jobs which are not available. That is not acceptable.

Even without the problems of the recession, even if we had not been unwise in the use of our resources, we would face great changes in technology which have an influence on industry. I can remember when factories posted notices saying "Hands wanted". Today we should be looking for minds as well as hands. Education, training and public investment should take account of that. I believe that Scottish industry offers a great deal more potential than the Government recognise.

1.32 pm
Mrs. Anna McCurley (Renfrew, West and Inverclyde)

The hon. Member for Greenock and Port Glasgow (Dr. Godman) was not as pessimistic today as I feared. Apparently he has not yet caught the Scottish sickness of publicly cutting our throats in despair and privately scooping up all the subsidies from the EEC and the Government that are going. Possibly the hon. Member is a reasonable man, as my hon. Friend the Member for Fife, North-East (Mr. Henderson) said. And so he should be. In spite of the Greek tragedy chorus from the Opposition about how awful Scotland is, Scotland survives — even with Socialist policies at local level. Indeed, Scotland continues to attract inward investment and new industries in the face of fierce competition from the EEC and the Irish Republic.

The hon. Gentleman's constituency is heavily involved in the regeneration of industry. Our two constituencies form the Inverclyde district, which is about to experience a long-awaited and welcome regeneration.

The survival of Scott Lithgow is acknowledged by the hon. Member for Greenock and Port Glasgow. This survival was entirely due to Government assistance and private enterprise. If we had gone down the road suggested by the hon. Member at the time we should have had the same old problems of overmanning, inefficiency and low productivity that have dogged the shipyard.

Perhaps some of the local teachers did not like my judgment of their latest fracas in my constituency the other day, but I doubt whether they could fault my judgment in my determination to ensure that Scott Lithgow survives through the intervention of the private sector. If Scott Lithgow had closed, it would have been catastrophic in social terms for the area. Now, with considerable and justifiable faith in the area, the Government have involved themselves in the Inverclyde initiative, which in the next five years will establish 2,000 jobs in the Inverclyde district. About £60 million is involved and the scheme is private capital-led. The SDA, the Manpower Services Commission and the Inverclyde district are involved. The project includes training initiatives in addition to the existing successful training schemes in the area. There will be developments in microtechnology, biotechnology, health care, electronics and, above all, reclaiming some of the derelict areas that persist in the region.

The hon. Member for Greenock and Port Glasgow failed to analyse industrial decline, although the subject was at least alluded to by the hon. Member for Monklands, West (Mr. Clarke). The industries which were labour intensive in our area are now more mechanised and streamlined. Nevertheless, one of the greatest complaints of employers in Scotland is that in certain industries they are not getting a fair week's work for a fair week's pay.

Although the hon. Member for Glasgow, Garscadden (Mr. Dewar) insisted in a recent debate on this issue that I was talking nonsense, if he spoke to some industrialists in my constituency he would be told that, when they are tendering for contracts, they estimate on getting under 20 hours' worth of work per man per week.

However, significant changes are taking place in the west of Scotland and the industrial initiatives, to some of which I have referred, will benefit us enormously. I pay tribute to the value of the microtechnological industry in Inverclyde. IBM has been with us for many years and has recently made local investment totalling £100 million. That is having a remarkable spin-off effect on small businesses which serve the company, and IBM's record in sub-contracting to those small businesses has been excellent. IBM has been awarded a contract by the Scottish Office for new equipment. The company supports 5,400 sobs in the west of Scotland and despite some of our vicissitudes, IBM is determined to stay.

The hon. Member for Greenock and Port Glasgow failed to mention certain matters. For example, when I spoke to the manager of the jobcentre in Greenock I was told that the number of job vacancies in Inverclyde had never been higher and that the enterprise allowance scheme was a great success. As a result of the Budget and the new training places that will come in the community programme, about 700 places will be available in Inverclyde. That, among other things, is what the Government are doing for my area.

The hon. Member for Greenock and Port Glasgow mentioned that Tate and Lyle had managed to survive in Greenock. I hope, should such a dreadful thing happen that a Labour Government were returned, the hon. Gentleman would strongly oppose the message that came from the Labour Front Bench recently to the effect that the Opposition would put a tax on sugar. If anything could destroy the chances of the survival of Tate and Lyle in Greenock, it would be that.

1.38 pm
Mr. Gordon Brown

On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. I will hear the hon. Member, but I ask him to be extremely brief because he is taking time out of the debate on his hon. Friend's motion.

Mr. Brown

I promise to be brief. Was it in order, Mr. Deputy Speaker, for the Prime Minister and the Minister for Sport to have intervened this morning to change arrangements for the Scotland-England football match without there having been a written or oral statement to the House about the matter? Were they not treating the House with contempt?

Will a statement now be made to the House exonerating Scottish football fans from any slur against their reputation caused by the transfer of this fixture? Will hundreds of Scottish fans, including many in my constituency, who stand to lose thousands of pounds because of the transfer of this fixture, be fully compensated by the Government?

Will the Minister with responsibility for sport in Scotland be in a position to say this afternoon when a statement will be made on the matter? Or will you, Mr. Deputy Speaker, ensure through the usual channels that the Prime Minister or Minister for Sport come to the House to make a statement on this serious issue which affects Scotland and Scottish football?

Mr. Craigen

Further to that point of order, Mr. Deputy Speaker. As Scotland's Minister with responsibility for Sport is with us today, may I ask him to say whether he was consulted over the change from Wembley to Hampden, or was he simply told by the Minister for Sport and the Prime Minister? We understand that the change has been made following concern over disorder in the London area. Are we to assume that the Prime Minister's approach to these matters is to pack up her problems in a tartan bag?

Mr. Deputy Speaker

Order. I think that the hon. Members for Dunfermline, East (Mr. Brown) and for Glasgow, Maryhill (Mr. Craigen) know that this is not a matter for me.

Mr. Allan Stewart

Further to that point of order, Mr. Deputy Speaker. It may be for the convenience of the House if I say that the Government asked the Football Association to move the match from the holiday weekend. That was done in 1983 on the advice of British Rail and the police. Congestion of fixtures prevented the fixing of an alternative Wembley date. The FA and the SFA agreed to transfer the game to Hampden. It will be played at Wembley next year but avoiding the bank holiday.

The Government have been discussing football violence, but we were not consulted about the change of venue. The change was not intended to reflect on Scottish supporters, whose recent behaviour has been exemplary.

Indeed, it is an acknowledgement of the good behaviour of Scottish football fans that the match has been transferred by the associations to Hampden.

Mr. Deputy Speaker

Let us now return to the debate.

1.42 pm
Mr. Jim Craigen (Glasgow, Maryhill)

I commend my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) for having taken the initiative to raise the subject of Scotland's economy and industry. I congratulate him on the way in which he introduced the debate. I cannot think of any hon. Member who endured such a trying baptism so soon after his election to this place. The crisis of the lower Clyde hit him immediately he became a Member. The concern, sagacity and approach which he adopted to the problems facing his constituency at that time understandably earned him considerable respect in the House.

My hon. Friend talked about decline in manufacturing and the prospects of growth in the newer industries. My hon. Friend does not need to wax eloquent about Silicon Glen. After all, he has Spango Valley in his constituency. With the home of the Scottish division of IBM in his area, he is able to see the interaction between the two trends in Scottish life.

The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) referred to the Inverclyde initiative. I am sorry that the hon. Lady is temporarily absent. She suggested that the initiative was entirely one of private enterprise. It was public enterprise which initiated the prospect of the Inverclyde study, but it will be an embracing of the two sectors which, we hope, will make a success of the venture. My hon. Friend the Member for Greenock and Port Glasgow specifically mentioned to me the part that Provost Harry Mulholland of Inverclyde played in the initial stages of the project.

It is essential to appreciate that balance between the sunrise industries, which we want to support in Scotland, and the staple manufacturing industries, which have done so much in the past to build up the Scottish economy. We still need these staple industries for the future. We cannot afford to let them sink with the sunset.

Electronics has understandably featured often in the debate, but I think that the Minister will agree that there are alarming signs that some of the considerable investment that was being directed to Scotland seems to be veering towards the south of England. Does the Minister agree that the Government's changes in regional policy may accentuate that trend? Will he tell us about the role of the SDA in further encouraging the electronics industry in Scotland? As the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) pointed out, there is considerable defence orientation in employment in that industry.

Scotland is one of Britain's centres for the development of artificial intelligence or knowledge-based systems — I sometimes wish that a little more artificial intelligence were available at the Scottish Office — but what are the Secretary of State's officials doing to stimulate that sort of work, which has considerable potential for future developments?

A number of hon. Members have mentioned the decline in manufacturing industries. All those industries have declined faster in Scotland than in the United Kingdom as a whole. Construction has declined particularly fast, and last week's Budget did nothing for the industry. The message that I get from builders is that they are only relieved that the Chancellor of the Exchequer did not do more damage than he did in last year's Budget. They are still suffering from the shell-shock of the imposition of VAT on home improvements.

Figures for the final quarter of 1984 show that production in the construction industry is down. That is not only because of the fall in the volume of improvement work; it largely reflects changes in the pattern of Government expenditure.

Housing represents only about a quarter of the work of the construction industry. Private house building has held steady, but new housing in the private sector has dropped by 19.5 per cent. and public sector construction work other than housing has dropped by 9.8 per cent. in the past year.

We bandy about figures of the number of people in employment now compared with yesteryear, but we have to remember that more people are now in part-time employment. That is a significant trend, particularly among women. The Under-Secretary confirmed to me that the number of women in part-time work increased by 20,000 to 389,000 in the 12 months to September last year.

The hon. Member for Fife, North-East (Mr. Henderson) referred to the Transport Bill. Having spent 90 hours in that Standing Committee, I have become fairly knowledgeable about what that Bill will inflict on the travelling public. It is mind-boggling. But section 20 payments have a particular concern for Strathclyde, which has the largest urban rail network outwith London. It is important to safeguard the rail network. As the hon. Member for Tayside, North (Mr. Walker) remarked earlier, in the context of the electrification of the Ayr-Glasgow line, there is considerable potential.

I hope that British Rail will set about opening a rail halt at Prestwick airport. When I think of the Gatwick-Victoria link and the possibilities that that has created, I am reminded that years ago Gatwick seemed at the back of beyond.I have in mind the potentialities of the tourist industry. A great volume of tourists from north America tend to come to London, and a visit to Scotland is an additional on-cost. I want to see Prestwick airport given a clear bill of security for the future so that we can develop its full potential. I want to see a visit to London as an on-cost for those who make the transatlantic journey. We must try to develop our lowland airport strategy. I hope that the Minister will say a word about that. He must not forget that the billion-pound tourist industry employs a great many more people than all the Silicon Glens in Scotland.

I am glad that my hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg) referred to the British Rail Engineering workshops at Springburn. Those of us at the bottom end of the line have constituents whose future is bound up with the decisions on those workshops. I hope that the Minister will tell us about the ability of the manager of Scot Rail to direct some of the work and investment in Scotland to those workshops in the north of Glasgow.

My hon. Friend the Member for Monklands, West (Mr. Clarke) discussed the steel industry. I should like the Minister to dispel the uncertainties about Ravenscraig by saying that he is giving his full support to the re-investment in the coking ovens. The British Steel Corporation is not saying what those figures are, although one hon. Member quoted some figures today. It would help greatly if the Minister promised to do his best to get British Rail headquarters to freeze any increases in freight charges in Scotland for the foreseeable future. It would also help if the Government changed their policy on high electricity charges.

On other energy matters, the Minister will know that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar)—who cannot be here today because he is attending the annual conference of the Convention of Scottish Local Authorities at Oban — along with a number of other colleagues, met Ian MacGregor on 20 March. I should like the Minister to put his not inconsiderable weight behind investment decisions affecting the Francis and Seafield collieries and assure us that there is a prospect towards which we can work.

My hon. Friend the Member for Paisley, South (Mr. Buchan) referred to textiles. I understand that the Minister attended yesterday's meeting between employers, trade unions and the Minister of State, Department of Trade and Industry and discussed extending the multi-fibre arrangement. I hope that the Government are not adopting a position of neutrality here. The Minister must appreciate, when we talk about rural aid funds, that many small communities in the Borders, Ayrshire, the Highlands, athough even big communities such as Glasgow depend on the textile industry. It is still a substantial employer in Scotland, despite having lost more than one third of its work force in the last 10 years.

I met the employers and the trade unions yesterday. They say that firms want to invest but that there is uncertainty. I hope the Minister will tell us what he is doing to dispel that uncertainty. There has been a downturn in offshore North sea oil work. Some of it seems to be going to Scandinavia. Will the Minister tell us what the Offshore Supplies Office is doing to try to reverse this trend and involve more of Scotland's manufacturing capacity in the potential of North sea oil development? Perhaps the Minister can also say a word or two about the Firth of Clyde. There may be a defence aspect to this, because of the problems connected with the magnetic field. However, it could open the way to a switch in the imbalance between the east and the west of Scotland.

On employment, having looked at my copy of the White Paper which was published yesterday, I reflected upon what was contained in the employment White Paper of 1944. The White Paper published yesterday does not equal in content and foresight the White Paper of 1944. All I can say is that the Prime Minister would find it more difficult to get the recently published White paper into her handbag. It contains a vacuous, empty and unpromising prospect for future jobs in Scotland. The Prime Minister's predecessor put Britain on a three-day week by the time he left office. This Prime Minister is putting Britain on part-time employment, quite apart from the millions who are out of work.

Reference has been made to the jobcentres. These were debated extensively last year. Uncertainty hangs over the jobcentre network. A great deal of local knowledge is being dissipated. Employers are becoming more reluctant to feed information into the jobcentres, their staff are becoming more and more demoralised and customers are becoming less satisfied with the service provided.

Distance learning and assistance at a distance is all very well, but it is no substitute for local knowledge and availability.

I do not intend to deal with the youth training scheme or the community programme because I do not believe that they provide solutions to the employment difficulties faced by this country. The Government need to adopt a much more fundamental approach to youth employment and training. It needs to be much more visibly matched to the availability of employment and to the areas in which the Government intend to invest in Scotland.

My hon. Friend the Member for Greenock and Port Glasgow referred to the book edited by Neil Hood and Stephen Young entitled "Industry, Policy and the Scottish Economy." When I read the various essays contained in that book I recognised that during the early 1960s the Scottish Office was a pioneering Department of State. It pioneered regional development. Look at it now. As the authors point out, the Scottish Office is largely reactive to leads from the greater Department of Trade and Industry. I want confidence to be generated in Scotland. Industry and commerce have to be involved in generating that confidence. However, political will is also called for, but that is absent. When I look at the Ministers in the Scottish Office who have custody of Scotland's future, I can see no flicker of imagination or any shred of will power that will lead to developing the prospects for our country.

There is a shortage of will power for developing the prospects of our country. I want no more of those tom-tom men who beat out on the drum the messages that emanate from No. 10 Downing street. The tom-tom chief himself, the Secretary of State for Scotland, sits in the Cabinet room agreeing with it all. As my right hon. Friend the Member for Glasgow, Govan said, those Ministers and their supporters—they are becoming fewer all the time—do not appreciate the demoralisation and despair that exist in many homes and parts of Scotland. In recent weeks, I have seen how rating and revaluation can concentrate their minds because, as one of their council members m— I think she came from Perth and Kinross—said, "We face extinction." I do not worry about the extinction of the Tories in Scotland, but I do not want them to extinguish the future hopes of Scotland and those of our young people who have every right to expect a job and to be able to live in their own country rather than do what so many had to do before—emigrate.

I hope that when the Minister replies he will take up the points that have been mentioned by my hon. Friends, because the Government are singularly wanting in the way in which they have handled the affairs of Scotland over the past six years.

2.1 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)

I join hon. Members on both sides of the House in congratulating the hon. Member for Greenock and Port Glasgow (Dr. Godman) on his good fortune in obtaining the debate and on his choice of subject. A point of order was raised earlier by the right hon. Member for Glasgow, Govan (Mr. Millan). I undertook to refer to my right hon. Friends the anxiety expressed about the publication today of the document entitled "Burdens on Business", copies of which are available in the Vote Office. I shall of course fulfil that undertaking. In the meantime, I should make it clear that my right hon. Friend the Secretary of State for Trade and Industry announced in the course of his contribution to the Budget debate on Monday that the document would be published today.

This has been something of a Scottish week. Hon. Members often complain that we have insufficient time to discuss Scottish affairs. They cannot make that allegation this week because we started on Monday with the five-hour debate in the Scottish Grand Committee, we had a four-and-a-half hour debate on Scottish matters during the debate on the Consolidated Fund, an order, and a full debate today. I congratulate the hon. Member for Greenock and Port Glasgow on his choice of subject but not on the terms of his motion.

Many hon. Members have attended the debate, and many have commented on the absence of Liberal, Social Democratic and SNP members. The House will understand that some hon. Members who have spoken during the debate have not been able to stay for the replies because of travel commitments, and they have asked me to apologise to the House for them.

Many points have been made in the debate. I shall endeavour to answer as many as possible. Hon. Members will accept that not all of the points mentioned are strictly speaking for the Scottish Office. I listened with great care, for example, to what my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) said about Ferranti. We recognise its importance to the Scottish economy, but he will recognise that his remarks were directed primarily towards the Ministry of Defence.

A number of hon. Members raised constituency points. The hon. Members for Paisley, South (Mr. Buchan), for Aberdeen, North (Mr. Hughes) and for Aberdeen, South (Mr. Malone) referred to Hall Russell. I especially welcomed the tribute to the Scottish Development Agency office in Aberdeen. I have visited that office and the impressive group of people there. I am sure that the House will join me in very much appreciating the tribute paid by the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) to Brigadier Cowan for his work at Cumbernauld and I am sure that we all wish Mr. David Anderson well. The hon. Gentleman questioned some of the figures, but I hope that on reflection he will agree that the figures that we give to the House are those supplied to the development corporation by companies in Cumbernauld.

As the hon. Member for Greenock and Port Glasgow introduced the debate, I want to be sure of answering his specific point about a replacement fishery protection boat. We are considering a replacement for FPV Norma, which was commissioned in 1959, and a contract has been placed for the preparatory design work, which is being undertaken by Ailsa. It is, however, too early to say when tenders might be invited and an order placed.

The hon. Member raised a number of general points in his opening speech, which provided a most interesting start to the debate. He rightly emphasised that many of the trends about which Members are concerned did not begin in 1979 or 1974 but went back deeper into Scotland's economic history. Hon. Members on both sides gave figures which showed clearly that Scotland as been and still is going through a process of fundamental change. Keeping up with technological developments, implementing research and meeting new consumer demands provide the competitive edge for an economy. Some people would like to preserve the Scottish economy like a medical specimen in a jar of formaldehyde, but we must look forward to the future.

Mr. Robert Hughes

It is no use attacking Scottish National party Members, because they are not here.

Mr. Stewart

I confirm that the charge was not directed at any hon. Member present in the Chamber.

The change has been fundamental. As the hon. Member for Greenock and Port Glasgow pointed out, the service industries now account for about 65 per cent. of employment in Scotland and 60 per cent. of the gross domestic product, whereas manufacturing industry accounts for about 25 per cent. of output and employment — a structure broadly comparable with that of the United Kingdom as a whole. The hon. Gentleman also pointed out that there had been structural changes within the manufacturing sector. The right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) referred to the traditional industries such as engineering, which have declined in importance not just in Scotland but elsewhere. There are also the growing industries such as electronics, to which my hon. Friend the Member for Fife, North-East (Mr. Henderson) and others referred.

As the hon. Member for Greenock and Port Glasgow has pointed out, the same thing has been taking place in the service sector. For example, transport and communications have been declining relatively in employment terms while there has been growth in professional and scientific services, insurance, banking and finance and in tourism.

What is important in the long term is our economy's competitive edge, as my hon. Friend the Member for Fife, North-East said. When examining the trends and what creates jobs, we should compare our performance with that of the United States, for example. During a 10-year period, 17 million new jobs were created in America while real wages fell. In the United Kingdom, we lost 1.1 million jobs and real wages increased by 15 per cent. We cannot ignore that fundamental relationship. A competitive economy creates and maintains jobs.

Mr. Norman Hogg

I am unable to understand the correlation that the Minister finds between wage levels here and in the United States and the creation of jobs in the United States and the loss of jobs here. Surely the correct correlation is between jobs and investment. Does the Minister agree that there simply was not the necessary investment in high-tech industries in Britain?

Mr. Stewart

The hon. Gentleman is right to suggest a relationship between employment and investment, but we must recognise that people can price themselves out of jobs. The easiest way in which to destroy jobs is for an economy to price itself out of its world markets.

Mr. Craigen

The hon. Member for Fife, North-East (Mr. Henderson) said that many of our manufacturing firms depend on overseas markets. Interest rates and exchange rates matter more to such firms than do wage rates or even inflation rates.

Mr. Stewart

My hon. Friend fairly observed that we depend on international trade more than other comparable economies. Exchange rates are important and the Government's strategy of controlling inflation is essential to reduce the costs that industries incur, including interest rates.

Several hon. Members referred to the relative performance of the Scottish economy. As my hon. Friend the Member for Fife, North-East said, we are in the fifth year of economic growth. In 1983, Scotland ranked third in gross domestic product per head of population, behind the south-east and East Anglia in the British regions. It is important to recognise that the output of our production and construction industries was 3 per cent. higher in the third quarter of 1984 than one year earlier and that manufacturing output was nearly 7 per cent. higher.

Recent surveys have been optimistic, most manufacturing firms reporting either no change in employment or recruitment. We must take a balanced view of the Scottish economy. It does nobody any good to suggest that the whole of Scotland is an industrial desert, as that is far from the truth. To be fair, several hon. Members have put forward a reasonably balanced view of the Scottish economy today.

The central point of the debate is employment and unemployment. We should all like a considerable increase in employment. Of course we know about the social misery created by unemployment, especially long-term unemployment. The number of jobs is rising, as my hon. Friend the Member for Dumfries (Sir H. Monro) said, but unemployment remains extremely high. The difference between the Government and the Opposition is about how to achieve the many more jobs which are necessary. The right hon. Member for Rutherglen rightly pointed out that there was no magic wand that could be waved to create the necessary jobs. I must remind the House that under the Labour Government, unemployment in Scotland doubled. That was not their objective, but it happened. The Labour party now constantly urges us that higher public spending is the simple answer to the problem of unemployment. That is totally absurd. Where that has been tried in other economies recently, it has had to be abandoned. That is not the answer.

As my hon. Friend the Member for Tayside, North (Mr. Walker) pointed out, there is no lack of demand; indeed, demand has been rising. He said that what was needed was competitive products that can maintain and improve their position in world markets. The right hon. Member for Govan (Mr. Millan) rightly said that our overall economic policy was the primary determinant of what happens in Scotland. The control of inflation which is at the core of the Government's economic policy is an essential prerequisite for a sound competitive economy. The measures announced by my right hon. Friend the Chancellor of the Exchequer will help because they will improve the operation of the labour market by sharpening incentives both to find work and to take on new employees.

Many right hon. and hon. Members referred to the problem of youth unemployment, and paid tribute to the youth training scheme. It has been successful in Scotland, with more than 83,000 youngsters entering the scheme since 1983. Evidence shows that about 65 per cent. go on to employment or further training. The hon. Member for Govan raised the question of the quality of the scheme. That is important and the Manpower Services Commission is constantly working to improve it.

Mr. Buchan

Will the Minister tell us how many pass out from the schemes into employment? It is no use telling us how many pass to employment or further training. How many become unemployed? How many go into employment? How many go on to further schemes? There may be 1 per cent. in two categories, and 98 per cent. in the third. He must answer the question.

Mr. Stewart

I shall be happy to provide the hon. Gentleman with detailed figures. Broadly speaking, about 65 per cent. go on to employment or further training. The proportion varies between the different schemes. The construction industry scheme, for example, is particularly successful.

My right hon. and hon. Friends have welcomed the fact that we are expanding the scheme from April 1986 to a two-year programme of work-related training for 16-year-old school leavers, and to one year for 17-year-olds. I echo the hope expressed by many hon. Members that the extension of the YTS will lead to recognised qualifications.

I emphasise the fact that the Government have said that the Manpower Services Commission will consult on the detailed proposals, and that if they are satisfactory, they will provide £125 million in 1986–87, and £300 million in 1987–88 over and above the existing £800 million for the YTS, to which my hon. Friend the Member for Banff and Buchan (Mr. McQuarrie) referred.

My hon. Friend the Member for Edinburgh, West referred to education. We are adapting formal education in Scotland so that our students are better prepared for employment in a changing society through curriculae changes, TVEI, the action plan and the increased provision for central institutions. We have provided £14 million extra to increase the output of engineers and technologists. Of course I recognise the importance of his remarks about Scottish universities receiving a full share of the £40 million that was announced recently.

Mr. Craigen

Has a figure been set? What discussions has the Minister had with the universities?

Mr. Stewart

The details have not yet been announced, but I assure the hon. Gentleman that we are well aware of the discussions that are continuing.

Several of my hon. Friends mentioned the problems of rural areas. I confirm that we shall be considering carefully the Select Committee report on the Highlands and Islands Development Board and will respond to it once we have completed our consideration. I was glad that my hon. Friend the Member for Fife, North-East referred to SDA initiatives, including the programme for rural initiatives and developments — known as PRIDE — and the rural workshop scheme. They will help to stimulate private sector investment in development, especially suited to the needs of rural areas.

Ravenscraig was mentioned by my hon. Friend the Member for Edinburgh, West and by the hon. Members for Monklands, West (Mr. Clarke) and for Glasgow, Maryhill (Mr. Craigen). I join hon. Members in paying tribute to the achievements of the work force and management at Ravenscraig in continuing production during a difficult period. They deserve the congratulations of everyone. The present position is that no corporate plan has been received from the British Steel Corporation.

Several Opposition Members mentioned infrastructure and the construction industry. I emphasise that more public expenditure simply means higher borrowing, higher prices and a less competitive economy. But, of course, capital expenditure is valuable where there are good returns for that expenditure. I remind hon. Members that between 1979–80 and 1984–85, gross capital spending on the programmes for which the Secretary of State for Scotland is responsible increased by 17 per cent. in real terms.

Mr. Millan

That includes Torness.

Mr. Stewart

As the right hon. Gentleman says, that includes the nationalised industries and capital spending on Torness. But if we exclude the nationalised industries, capital spending on the programmes under my right hon. Friend's control has been broadly unchanged in real terms, and the construction industry generally is recovering from its low point in 1981.

The hon. Member for Greenock and Port Glasgow referred especially to North sea oil-related industries. They were also mentioned by the hon. Member for Maryhill and by my hon. Friend the Member for Aberdeen, South. I emphasise that the Government's policies have given a substantial boost to the development of North sea oil, leading to orders for goods and services for Scottish-based companies. Following the 1983 Budget, there was a record total of 182 wells drilled in 1984. Development approvals also present an encouraging picture. I should tell the hon. Member for Maryhill that there were 10 in 1983, 15 in 1984, and there are an expected 20 in 1985.

The fabrication yards in Scotland are showing considerable success in winning orders and there are other encouraging new developments, such as the upsurge of rig repair activity in the Cromarty firth.

The oil industry is optimistic about the future prospects of North sea oil development. The recent United Kingdom Offshore Operators Association report forecast expenditure of £60 billion by the year 2000 on the development of about 80 new fields. The hon. Member for Maryhill asked how much of that will be taken by British and Scottish firms. I emphasise that our licensing policies are designed to contribute to the further development of the North sea in ways which bring the maximum benefit to British industry.

In the ninth round of licensing that is currently under way, we aim to ensure that the maximum benefit from new technology comes to British firms. That will be particularly helpful to Scotland and should help consolidate and enhance the already substantial contribution which North sea oil is making directly and indirectly to employment. That was referred to by the hon. Member for Greenock and Port Glasgow.

The right hon. Member for Rutherglen and others have referred to the importance of the electronics industry. The right hon. Gentleman was right to say that not everyone can be employed in electronics. Nevertheless, Scotland is an important centre for the expansion of electronics. My hon. Friend the Member for Fife, North-East referred in particular to inward investment. He will be interested to know that in the first 10 months of 1984–85 "Locate in Scotland" secured over £600 million-worth of inward investment in electronics and other industries, creating the promise of more than 7,000 new jobs and safeguarding 900.

It must be a matter of great potential strength to the Scottish economy that we are achieving not just quantity in terms of investment but quality as well. We are developing a chain of manufacturing capability. We now have 80 per cent. of the United Kingdom's integrated circuits and 50 per cent. of the United Kingdom's total of personal computers. Yes, the electronics industry is important. It is central to the Scottish economy. But other industries have a key and important role as well.

The hon. Member for Maryhill and several others asked about the textile industry. That is clearly important to the Scottish economy. It is a tribute to that industry that it has invested in the higher end of the market. I was at the meeting yesterday with my right hon. Friend the Minister for Trade and both sides of that industry when the importance of the industry was underlined by the delegation. My right hon. Friend emphasised that the Government were open-minded on the multi-fibre arrangement, that the consultation was genuine and that there would need to be a process of consultation with our partners in the EC.

The hon. Member for Maryhill asked me about a rail link for Prestwick. That suggestion has been made in the past, and I can only tell him that the report of the working party on lowlands airport policy is still being considered by Ministers.

Several hon. Members referred generally to the effect of regional policy. The regional policy changes which were announced were sensible. They will lead to a much more cost-effective regional policy.

Hon. Members should heed the extension of regional incentives to a range of service industries and the provisions for small firms. My hon. Friend the Member for Edinburgh, West asked about the cost-per-job limits affecting companies such as NEC. The ceiling on regional development grants will not be reached until companies—

It being half-past Two o'clock, the debate stood adjourned.

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