UNEMPLOYMENT IN SCOTLAND

HL Deb 18 June 1958 vol 209 cc1035-91

2.48 p.m.

THE EARL OF DUNDEE rose to call attention to the serious unemployment revealed by the Report on the Jute Industry in Dundee and Angus submitted to the Secretary of State by the Scottish Council, and in general to the problem created by the recent increases of unemployment in other parts of Scotland; and to move for Papers. The noble Earl said: My Lords, I beg to move the Motion standing in my name on the Order Paper. These Reports from the Scottish Council to the Secretary of State are usually private, and I should therefore like to thank the Government for acceding to the request which I made a month or two ago that this particular Report, which was written on March 31 of this year, should be made available to your Lordships and also to Members of the House of Commons, so that we might all be able to study it and discuss it.

I had put down this Motion on the Order Paper nearly a year ago in rather different terms, when the President of the Board of Trade announced the reduction in the jute markup on July 17, but I had always intended to wait until we could see how the situation was likely to develop before asking your Lordships to discuss it. I thought that this most valuable Report from the Scottish Council—whose Chairman, Lord Polwarth, I am glad to see is here—presented a suitable opportunity of doing so. At the same time, I have extended the terms of the Motion to include the unemployment in other parts of Scotland which has lately been giving so much anxiety to so many of us, and I hope that noble Lords who are going to follow me will widen the debate as much as they please.

I am aware that the Minister of State for Scotland, who is going to reply, may not be in a position to give us all the assurances which we should like him to give about the Government's policy on jute without consulting his colleagues, but I am going to suggest to my noble friend that he, together with his colleagues, should consider certain possible lines of action. I should like to begin not by complaining about the uncertainty which has most unfortunately been created by the Government's statements about jute during the last eleven months, but by reminding your Lordships of the magnificent contribution which the postwar jute industry has made to our national economy.

Very soon after the war, the Labour Government appointed a Working Party on jute. This Working Party reported in 1947. It recommended that the British home manufacturing industry, which is almost entirely concentrated in the city of Dundee and in the Angus burghs of Forfar, Kirriemuir, Brechin, Arbroath and Carnoustie, should be permanently safeguarded against the competition of Indian imported manufactures. The Working Party made this recommendation both on strategic grounds and also on economic grounds. I am going to quote your Lordships only one sentence from the Working Party's report of 1947, in paragraph 4 of the introduction, where it says: A wide range of industries is dependent on jute products either as a packaging material or as a component in the manufacture of other articles and it would be unwise in the national interest to allow these industries to become more and more dependent upon a single outside source of supply. The reason why I have quoted this sentence is that it proved to be so remarkably prophetic. The people who wrote it in 1947 could not have foreseen how soon those words were going to be proved to be true.

The world shortage of jute after the war was greatly aggravated by the outbreak of the war in Korea. By far the greatest producer and exporter of jute in the world in the 20th century is, of course, India, which produces ten times as much as the United Kingdom or anybody else. India, like all other countries, wanted particularly to earn dollars. At that time the Indian Government allowed full and unrestricted export of their jute manufactures to all dollar countries, but very severely restricted exports to sterling countries. Great Britain was put on what might be described as a starvation ration of jute goods. The Board of Trade here therefore had not only to prohibit the export of British jute manufactures but also had to prohibit the use of jute cloth for certain purposes (like packing of linoleum, and so on) which were considered to be less essential, so that there might he enough for the most essential uses of this material. At the same time, the Indian Government took advantage of the situation to put on an export duty at the colossal rate of £112 a ton.

Now, my Lords, I am not blaming or criticising the Indian Government for making as much profit as they could out of the situation at that time, but I wonder whether these events, which happened only six or seven years ago, have already been forgotten by the Board of Trade. They certainly seem to have been forgotten, I will not say by all but by one or two of the English manufacturing industries which use jute as a component part and which are continually pressing the Government and the Board of Trade to abolish or heavily reduce the safeguarding of home-manufactured jute in order that they may enjoy at least the temporary advantage of cheaper Indian products. But, my Lords, this Working Parry recommended that jute should be safeguarded only on the condition that the industry reorganised itself, reduced the number of firms and modernised its equipment, and your Lordships are probably aware already how well the jute industry has fulfilled that condition. Since the issue of the Working Party's report in 1947, production of jute cloth has increased from 48,000 to 80,000 tons a year, and the production of jute yarn from 73,000 to 137,000 tons.

This increase in production, not far short of double, has been achieved with approximately the same labour force. Since the war, it has always been roughly between 17,000 arid 18,000 in Dundee and between 2,000 and 3,000 in the Angus burghsa total of something in the neighbourhood of 20,000 workers who have, in the last ten years, increased their production per man by about 45 per cent. Some £10½ million of new capital has been put into the re-equipment and modernisation of the jute industry, and half of that sum—a little over £5 million—has been spent since 1954. I hope in a moment to show your Lordships the particular significance of that date. Parties of American industrial experts who have come over here from the United States on mutual visits from one country to another have told us that they have never seen anything as modern or efficient in America as the modern jute factories in Dundee. A former official of the Board of Trade, Mr. Oakley, who used to be Board of Trade Controller for Scotland, has expressed the view that Dundee is the outstanding example in Britain of postwar industrial progress.

On the side of labour I believe it would be universally agreed that the jute workers' trade unions have followed an enlightened and progressive policy. The Dundee jute industry was the first industry in Great Britain and is one of the still very few industries here in which the workers' unions and the employers have agreed upon a wage structure based on what is called "job 'evaluation." There are no restrictive practices. The wages in the jute industry have, of course, rightly risen, since the production per worker has nearly doubled; but they have not risen in excess of the increase in production, so that the modern post-war jute industry has made this valuable contribution to our national wealth without making any contribution to the process of monetary inflation. That is something which cannot be said of all industries in this country to-day.

I am anxious to support, so far as I can, what I am saying to your Lordships by outside, independent evidence. There is a wellknown national business magazine called Scope, which may be known to some of your Lordships. In the current issue of that magazine it is stated that the jute industry in Eastern Scotland at the present time is a model for all textile industries in the United Kingdom. Why is it that this highly efficient and reorganised industry requires protection from foreign manufactures? One reason, of course, is the same old trouble that affects a great many other industries—the disparity between Asiatic and European labour: the wages of the Indian jute workers are about one-quarter of those paid in this country.

Then there is the fact that our jute manufactures here are not highly finished products. They are nearly all components for other industries, so that the difference between the price of the manufactured article and the price of the raw material is not very great; and the weighting of industrial skill and efficiency is not quite so great as it would be in the case of a highly finished product. Thirdly, there are a considerable number of industrial and financial expedients practised by the Indian jute manufacturing industry for artificially lowering the price of certain classes of their jute exports. Your Lordships will find these expedients described in the Report of the Scottish Council, copies of which are available in the Library and are in the possession of Her Majesty's Government.

What would be the result if the protection at present given to the jute industry were to be removed? That is a question on which opinion is not unanimous. Some authorities who have great knowledge of the industry believe that without protection Dundee might still be able to produce certain special classes of jute goods, employing perhaps 8,000 or 9,000, instead of 20.000 workers. Other authorities, who have great knowledge of both Dundee and the Indian jute industry, hold the view that the post-war capacity of the Indian manufacturing industry, their vast export surplus and the ease with which Indian factories can adapt themselves to any special class of jute manufactures make it probable that if protection were to be abolished the Dundee industry would be reduced not by 55 or 60 per cent. but by 100 per cent.—in other words, there would be no more jute production at home at all.

I cannot give your Lordships any useful opinion of my own on this question, because I have no expert knowledge of the subject: I have no business connection with jute, nor have I any financial interest in it. But whichever view we take this is certain: if safeguarding were now to be brought to an end, Dundee and its neighbourhood would soon be transformed from a progressive, thriving, confident and industrially 'happy area into an area of heavy unemployment and social misery such as we used to associate, before the war, with areas like Jarrow and certain parts of South Wales, which were not only an industrial disgrace to this country but also a heavy financial liability to the rest of the community.

Since the war, protection has been afforded to the jute industry by the State purchase of jute imports and the release of those imports by the Jute Controller at prices which were considered to be fairly competitive with the most efficient manufacturing firms in Dundee. In 1954, the present Government brought to an end the control and State purchase of raw jute—which could be done without affecting the degree of protection given to the home manufacturing industry—but stated at the same time that the State purchase of manufactured jute would be continued until some alternative method of protecting the home industry had been thought out and put into practice. Statements to that effect were made in both Houses of Parliament—in your Lordships' House by the noble Earl, Lord Woolton. May I say to the noble Earl how greatly I appreciate his kindness in coming here to take part in this debate, since he no longer has any ministerial responsibility. I am very grateful to him for doing so.

Some of your Lordships will remember that in April, 1954, in reply to a Question by the noble Lord, Lord Barnby, the noble Earl said [OFFICIAL REPORT, Vol. 187, col. 1]: … public trading in imported jute goods must continue until appropriate measures to safeguard the United Kingdom industry under conditions conducive to efficiency can be worked out and introduced.

I think that was a very clear and unambiguous statement of the Government's intentions. But a year later on March 24, 1955, in another place, Mr. Thorneycroft, who was then President of the Board of Trade, went even further, I think, than the noble Earl, Lord Woolton. Mr. Thorneycroft, who was replying to a Parliamentary Question by the Member for East Dundee, said [OFFICIAL REPORT, Commons, Vol. 538, col. 2245]: Unless an alternative method of safeguarding the United Kingdom jute industry can be worked out and introduced, the removal of control over the import of jute goods would have a serious effect on the prosperity, efficiency, output and employment of the industry. In view of the heavy concentration of the industry in Dundee and its distance from the main centres of population, there would be a danger of continuing large-scale unemployment. It is in view of this position that Ministers decided that the industry must be safeguarded.…. Then he referred to a previous Answer he had given, in identical terms to that given by the noble Earl, Lord Woolton. I had the pleasure of hearing, from your Lordships' Gallery in the other place, this statement by Mr. Thorneycroft, and it seemed to me, as I think it seemed to the House of Commons—and it certainly seemed to public opinion in the east of Scotland—that the Government were resolved to give effective protection to the whole industry and not to abandon the present method of doing so until some alternative, some better method, had been found.

My Lords, the statement last July of the present President of the Board of Trade, Sir David Eccles, announcing a reduction of 10 per cent. in the markup of certain widths of imported hessian, undoubtedly had the effect of creating very great uncertainty about the future of the industry and of removing the confidence which had previously existed. As I have reminded your Lordships, half the capital sum of £10 million on reequipment had been spent since the statement of the noble Earl, Lord Woolton, in 1954. The statement last July by the Board of Trade created uncertainty, for a number of different reasons. Those people who are not themselves engaged in the jute industry, but who are interested in it on grounds of public policy, such as Members of Parliament in Dundee and in Angus and Fife, and those of your Lordships who live in the area, had not heard anything except that the President had met leaders of the jute industry in May and that the discussions which had taken place had been confidential.

When the announcement was made in July the official statement was to the effect that this decision had been arrived at after consultations with the industry. But when we—that is, those outside the industry—inquired into the matter we found that there had been nothing that could really be described as "consultations" at all. All that had happened was that the President of the Board of Trade had met the leaders of the industry in May and informed them of a certain decision, which he, did in confidence. Then he met them again in July—nothing at all had happened in between—and he again informed them of a different decision, which was announced on July 17. There was no real consultation at all. That is not the kind of procedure which is likely to create confidence in any industry or in any industrial area.

The reasons given for reducing the markup last July were, I thought, a little puzzling. The President of the Board of Trade said that, according to his information, the high cost of jute sacks was pricing them out of the market, and they were being displaced by paper bags. Therefore, he said, in order to save the Dundee industry we must reduce the markup so that jute sacks must be produced, if at all, at a lower price to compete with paper bags. In other words, it is impossible to compete either with paper bags or with Indian cloth and the remedy is to do something which makes it impossible to compete with anything at all. But the figures on which he based this view, as I think appears from the Scottish Council's Report, were very doubtful indeed.

During the Suez crisis there was a very heavy stockpiling of jute bags which increased the demand during that period. After the crisis was over it was a long time before the stockpile was all used up, with the result that there was naturally a greatly reduced demand; and as the Council's Report points out, it is very doubtful whether there was any change in the effective demand as between jute sacks and paper bags. The Report inclines to the view that it depends more on convenience than on price, and I think the situation is summed up by one sentence in the Council's Report which declares that: .… The Government's action has pleased nobody in the trade: one side is unpersuaded of its relevance, the other convinced of its inadequacy. The reduction did not make any appreciable difference as between jute bags and paper sacks. It has simply had the effect of transferring some part of the market from Dundee cloth to Indian cloth. I have gone into that point because I want to show your Lordships why we were disquieted and made so anxious by the manner in which the Board of Trade were dealing with the matter. And our anxiety was greatly increased by the fact that Ministers specifically refused to give an affirmative reply to requests for an assurance that they did not intend gradually to reduce this markup until it was finally abolished, without having produced any of the alternative methods which were promised by the noble Earl, Lord Woolton, and the President of the Board of Trade a year or two earlier. Perhaps the most unfortunate effect of the announcement last July, however, was that it made it absolutely inevitable that the affairs of the jute industry should be continually discussed in public, in Parliament, and on political platforms and in the Press. That, of course, is a very bad thing for any industry. It is not a good thing for confidence that the fate of one local industry should be continually a matter of political debate.

As to the actual damage done by this 1957 reduction in the markup, the Member for South Angus, Sir James Duncan, after getting the best information he could, gave the tentative estimate in debate in another place that it would result in a reduction in employment of about 3,000 people. The latest figures I have been able to get are for March of this year, and they show that, while the number of employed in March, 1957, was 19,700, the number in March, 1958, was 16,500—that is, a reduction of 3,200, which is almost the number diffidently: and tentatively suggested by the Member for South Angus. This reduction in employment is notsy reflected precisely in the increase in unemployment, because a considerable number of workers who were paid off were married women who have not continued to register, so that they have vanished statistically, so to speak. Perhaps Professor Colin Clark would tell them that they ought to be earning £11 a week as married women, but I am afraid that that is rather beyond the capacity of most husbands, even though they are fully employed; and some of them are not.

The unemployment figures in Dundee, which, of course, are not entirely due to the jute situation, although they are heavily affected by it, both directly and indirectly, can be brought a little more up to date. In another place last week, the Minister of Labour gave the figure for May as 5,330, including those temporarily stopped. I am sorry to say that when I went to the Dundee employment exchange at the week-end to check these figures I found that the figure for June, which is now available, is rather higher. The June figure, including those temporarily stopped, is 5,668. That represents a percentage of 6.9—very nearly 7 per cent.—of the insured population, which may be compared with the figure of 3 5 per cent. for Scotland as a whole and about 2 per cent. for the United Kingdom.

However, I have not raised these matters in order to deplore what has been done. I have raised the subject in the hope that the Government may be able to say something which will remove, or at least diminish, the prevailing uncertainty and which may increase confidence in this industrial area in Eastern Scotland. Since last July the attitude of the Board of Trade has been: "We are still adhering to the undertaking given by Lord Woolton and Mr. Thorneycroft three years ago. We want to find some alternative method of safeguarding the jute industry. Tell us what you want to be done. We haven't any idea upon the subject ourselves; we haven't really thought about it. But we should be delighted to hear what you have to say." And people who go to see them to put forward their ideas on the subject are sometimes rather apt to be met by what Sir Winston Churchill, referring to the attitude of his own departmental officials, once described as The padded cells of indubitable fact and the solid masonry of unanswerable objection. I do not want my noble friend the Secretary of State to form part of this masonry. I do not want to have to say to him like Pyramus O wicked Wall, through whom I see no bliss! Cursed be thy stones for thus deceiving me! I want my noble friend to be like Thisbe, sitting on the other side of the wall, in a nice cooperative, amorous mood.

I do not think that a Parliamentary debate is the right occasion to try to go into detail about alternative schemes for safeguarding the jute industry. There are a vast number of alternative possibilities —tariffs, levy-subsidies, all kinds of devices, and I would not exclude the continuance of the present system. Although I know that State purchase may in some cases be inefficient, and some noble Lords may consider it to be socialistic, it is not morally wrong, and the amount of jute manufactured goods which has to be bought is not large enough to be unmanageable by the very efficient Jute Controller and his highly efficient staff who at present are doing the job under the Board of Trade.

Of course, there are all kinds of problems that will have to be considered when we have, if we ever do have, a European Free Trade Area. All the other European countries have a high tariff against jute. We cannot have a tariff against a Commonwealth country; and we do not need one against Europe because Dundee's industry does not need any protection against European competition, only against Indian competition. So we might have this three-cornered situation: that other free trade European countries have high tariffs against Indian jute manufactures and we have to let in their goods free, yet India may say to us that we cannot let in free a few odd exports of jute from France and Belgium when there is a tariff against goods from India.

I am not asking the Minister of State to try to jump that hurdle this afternoon, but I would put this point to him. Before long our trade agreement with India will have to be revised, but before that time comes vie shall have the Commonwealth Trade Conference, which is to take place in Montreal in September of this year. It is essential that at that Conference the peculiar position of the Scottish jute industry should not be overlooked or forgotten. I do not mean, of course, that a complete policy should be worked out at Montreal. What I mean is that the Commonwealth Trade Agreements made at Montreal should not be framed in such a way as to make it impossible for us later on to arrive at a fair and reasonable agreement with India, under which the market will be reasonably fairly divided between us.

The Indians are naturally ready to profit to the utmost extent by any situation that affords them the opportunity of doing so, but they have not shown themselves unreasonable in discussing this matter. They have the greatest jute export industry in the world, and I do not think it is impossible or unlikely that the British and Indian Governments, if they are allowed to do so by the terms of the Commonwealth Trade Agreements reached at Montreal, will be able to find a reasonable solution fair to both countries. But I do suggest to my noble friend that, since jute is not one of the largest industries in the United Kingdom, its peculiar position might easily be overlooked at this great high level Commonwealth meeting at Montreal, and that the Secretary of State for Scotland, as a Cabinet Minister, has a special responsibility for seeing that jute is not left out from the agenda. If my noble friend could say anything to that effect, I think it would go some way towards restoring confidence and removing the present uncertainty in the industry.

My Lords, I have felt it necessary to make a few criticisms, which I hope have not been immoderately expressed, about the Government's handling of the jute question within the last twelve months, and it is therefore a particular pleasure to me to conclude my remarks with unqualified support for the Government's present policy under the Distribution of Industry Act, which is so closely connected with this subject. In Dundee there is a fine and beautifully situated industrial estate, which the Secretary of State for Scotland told us the other day was employing 6,000 people; actually it is a little better than that, because some of the factories on the estate have branches elsewhere employing a great many more people who do not come into the estate figures. Development was stopped by the Government a few years ago, as it was elsewhere; but last July, in view of the expected unemployment in the jute industry resulting from the Government's decision about the markup, it was announced that the development of the Dundee estate would again be proceeded with. Since then two or three actual extensions have been started, and five others have been approved, which it is estimated will employ about 1,900 people when they have been finished.

I think it right to say that I know that some members of the Government have personally exerted themselves a great deal to get new industries to come to Dundee. All these new factories are extensions of existing ones, which everybody has been glad to welcome there: and one might be even more delighted—and I am sure the Government would be, too—if some entirely new businesses could be persuaded to go there. I have only one comment to make about this development, and that is the time factor. The most important of all these new factories which the Government have approved, as announced last February, is the Morphy Richards factory, a new extension estimated to employ 800 men. The site is a considerable distance from the parent factory, in a field which is now being grazed and which has high tension electric cables over the top. These will have to be taken down and removed, and altogether it will be about two years before all the necessary formalities have been completed, the factory built and the men employed. That is quite natural and normal; we ought to expect that there should be a considerable interval between the time when a factory is approved and the time of its being in full production—there is nothing to complain of in that. All I would ask my noble friend to remember is that two years is a long time for a man to wait when he is unemployed and looking for a job.

It is important that our planning in this matter should look a long way ahead. The plans for industrial extension which we make now should envisage the employment situation we expect to find in 1960 and 1961. We have to think of the servicing of the sites, the provision of water and electricity and of transport, which is particularly important to Dundee. In the not easily accessible situation of Dundee, one of the best things which the Government could do to promote the prosperity and expansion of this area would be to proceed with the Tay Bridge, which was planned by the local authorities three years ago. An estimate (only about one-fifth of the original estimate of the Ministry of Transport) was obtained from a wellknown firm of engineers, and by private subscription a sum of £10,000 has been raised to carry out the preliminary soundings in the river. Everything is ready to go ahead when the Government give the word, but they are still delaying. Now that the responsibility for transport has been transferred to the Scottish Office, we hope that these plans may be expedited and go ahead more quickly.

I would ask my noble friend to believe that these representations are not made to the Government in any spirit of local particularism. Of course, people living in or near Dundee who are fond of it, particularly if they remember the bad days of unemployment before the war, are naturally anxious that these conditions should not recur. But these representations we are putting to the Government now are made in the belief that the prosperity and expansion of this growing industrial area in the East of Scotland are in the best interests of British commerce and of the British national economy. I beg to move for Papers.

3.37 p.m.

LORD GREENHILL

My Lords, I think it will be generally agreed that we owe a debt of gratitude to the noble Earl, Lord Dundee, for raising this subject this afternoon. I took advantage of his kindness in depositing the Scottish Council Memorandum (a closex2014;reasoned and detailed statement of an inquiry into conditions in Dundee) in the Library to read it, and one of the sentences I came across was: The Government's action has pleased nobody in the trade. Apparently, the Scottish Council is of opinion—and I think we should all agree with them—that the future intention of the Government is not yet known. That leads to the uncertainty and loss of confidence to which the noble Earl has referred, and so creates reluctance on the part of the industrialists in Dundee to spend money on reinvestment in the jute industry.

Although I am not speaking from personal knowledge of conditions in Dundee, I took the opportunity of consulting my friend Mr. George Thomson, one of the Members of Parliament for Dundee, and he drew my attention to the fact that conditions there were such as to require the close attention of the Government. As recently as June 11 he asked the Minister of Labour and National Service what the figures of unemployment there were, and he was told (I just give the total) that there were 4,352 unemployed. Apparently, according to the noble Earl, Lord Dundee, that figure has gone up still further. But Mr. Macleod said [OFFICIAL REPORT, Commons, Vol. 589 (No. 118), col. 208] The honourable gentleman will appreciate that this is largely a matter for my right honourable friends, but I can say that we have done a great deal to help Dundee, and it is clear that we must do a great deal more—and we certainly will. If that is the intention of the Government I think none of us will complain, and we can all hope that they will succeed.

From my own point of view, I think I should prefer to pursue the tail end of the noble Earl's Motion, which is to consider the problem created by the recent increases in unemployment in other parts of Scotland. For reasons which may differ from place to place, unemployment appears to be endemic in certain parts of Scotland. Dundee is one of them; Greenock, as most noble Lords know, is another; the North of Scotland agriculture and fishery area is another. Although one cannot say that the same cause applies to each of those places—and there are others—the fact is that it compels us to consider on a somewhat broader basis what are the underlying causes of unemployment —unemployment, let it be borne in mind, which is still with us in these days of what we all call full employment and some people call overfull employment.

I accept the view of the noble Earl that no only is there this unhappiness and shortage of pay on the part of those who suffer unemployment, but it is a wide social problem which no local body can undertake and which demands for its cure action by the Government as such. I am told that in the case of Dundee, in the industrial area that was built up, the Government, as we have already been told, stopped further progress but have now resumed that progress. But I am told that whereas Labour Members suggested that one of the means of increasing the opportunities for employment would be to erect standard unit factories, that suggestion was turned down by the Government, who preferred the older method of building Government-financed factories for rent.

I do not want to go into that in any detail at all, but I should like to say that in these days of rapidly changing products and methods of production the need is for a method of rapidly adapting oneself to those changes. It is not enough to leave it to haphazard chance for people to find jobs in these new industries. There must be a period of training and a period of time lost in entering into the new industry, and this cannot be borne by individual firms or local authorities. It is the kind of problem which only the Government, with its powers and resources, can undertake in any acceptable way. That is the attitude that we think the Government should adopt towards this question.

Greenock is the outstanding example. There, because of changes (maybe necessary changes) in our defence programme, because of changes in the industries which were peculiar to Greenock (such, for example, as the sugar trade, in which bags of sugar used to be unloaded from ships by large numbers of dockers but are now partly unloaded by the bulk method which demands a comparatively small number); because of this general disturbance in the very nature of the industry which was peculiar to Greenock, it finds itself in the position of having the largest percentage of unemployment, I think, in the country. I gather that the figures of unemployment on June 6 were 2.1 per cent. for the country as a whole; 3.6 per cent. for Scotland; and, I think I am right in saying, 7 per cent. or even more for Greenock. Those are figures which are not to be tolerated; and surely the Government, with the powers it has, could do a great deal to keep them down. I, for one, wish to associate myself with the more general aspect of this problem, and I hope, along with the noble Earl. Lord Dundee, that the Government will do something to remedy the present-day conditions.

3.45 p.m.

THE EARL OF WOOLTON

My Lords, I discovered this morning that I have a financial interest in the subject that your Lordships are discussing. It is not a personal one, but I discovered that a fund for which I am trustee but in which I have no personal interest at all has some financial holding in this trade, and I therefore thought it was proper that I should mention that fact before I began to speak, in case anybody misjudged my motives.

I am daring rather greatly as a Sassenach to step on this Scottish soil. One of your Lordships told me outside that he was surprised to find that I was going to speak and he expected that I should probably be howled down by people who had a different birth from myself. But I plead in justification two things: one is that the noble Earl, Lord Dundee, asked me to speak—he told me that he proposed to quote something that I had said; and secondly, and perhaps more importantly, I have had in office some experience of this particular industry. In the First World War, when I was a civil servant, I was responsible for supplying sandbags for the Allied troops, and of course it was to Dundee that we looked, and never looked in vain, for a full supply of the things that we needed. Again in the Second World War, when I had some responsibility for equipping the Forces, I had to call on Dundee to make considerable efforts away from their normal production, and again they never failed us. I mention these two factors because I want to join the noble Earl, Lord Dundee, in saying that I think the jute industry (and I propose to confine my remarks, brief as they will be, entirely to that industry) is an industry of national importance and strategic importance as well as local importance, and that Her Majesty's Government would do well to see that it is preserved.

I had, of course, more direct responsibility, as the noble Earl has indicated, when, as Minister of Materials, I found myself called upon to deal with this industry; and, as some of your Lordships may know, I closed down a good deal of Government trading, but I retained Government trading in manufactured jute goods. Now I do not think I need to tell your Lordships that it was a rather difficult thing for me, with my political prejudices, as noble Lords opposite would call them—I call them convictions—to decide that the best thing for the country and for the 20,000 people who were employed in this industry was that we should continue State trading in manufactured jute goods. If I may correct the noble Earl. I would point out that he said that I promised that the Government would find some other plan. I did not; and the reason why I did not was because we could not find one. We tried very hard to find some alternative and we were not able to do so. That is why we continued this particular protective system.

I rise today not to criticise what the President of the Board of Trade has done. If I may be quite frank, I do not think that the Government have any elbow room at all in this matter. They are bound by the old agreement into which we entered a long time ago. whereby goods from within the Commonwealth can come into this country free of duty. That is a condition which calls for quite extraordinary treatment, and I, as a Conservative. adopted the extraordinary treatment by continuing the Socialist practice of State trading as the only alternative. I rise to give support to my noble friends from Scotland in asking Her Majesty's Government that when they go to Montreal in a few months' time they will give serious consideration to this question of the free import of all goods from anywhere within the British Dominions. I hope that they may, by that means, be able to find a solution, other than the present one, to the Dundee problem. Perhaps your Lordships would have been a little surprised if I had not at the same time recognised that there may be some parallel in the cotton industry. I hope that that, too, will be considered.

3.53 p.m.

LORD POLWARTH

My Lords, I am sure that my colleagues from North of the Border would agree with me that, far from howling down the noble Earl, we have welcomed his most helpful contribution to our debate. As Chairman of the Scottish Council who prepared and submitted to the Secretary of State this report on the jute industry, I should like to say how grateful we are to my noble friend Lord Dundee for bringing this subject forward today. With his very intimate knowledge of Dundee and his territorial and titular connection with that city, I think it is only natural that he should have placed first emphasis in his Motion on the problems of Dundee. I hope he will forgive me if I do not follow him but accept his further invitation to cover a rather wider field of employment in Scotland. So far as that report of ours is concerned, all I would say is this. The two important things are, first, that the Government should remove as far as possible uncertainty about their intentions towards the industry; and secondly, that they should take no hasty steps which will make it difficult for the firms in that industry to seek new projects and new methods of production and to prepare themselves for the future.

I say the problem of employment in Scotland, because I think that that is a more constructive way to look at it than to talk of the problem of unemployment. As the noble Lord, Lord Greenhill, said, we have a position where the overall rate of unemployment in Great Britain is 2.1 per cent., whereas the rate in Scotland is nearly double. Scotland. with 10 per cent. of the population of Great Britain, has 17 per cent of the unemployment in Great Britain. That is a position which we do not think should persist. According to Lord Beveridge's classic definition, an unemployment rate of 3 per cent. is not an unhealthy state of affairs, even in a society that is committed to full employment. So that, on the face of it, a rate of unemployment of 3.6 per cent. should not be anything to get unduly worried about, and it would not be if that unemployment were evenly spread throughout Scotland. But, unfortunately, that is not the case.

If we look at the latest figures which I have available, as at May 12, we find that even in the Scottish Development Area, where so much has already been done by Scottish Industrial Estates to attract new industry, the rate of unemployment is 4 per cent. In Dumbarton and Alexandria it is 5½ per cent.; in both Dundee and North Lanarkshire it is over 6 per cent.; in Greenock and Port Glasgow over 8 per cent.; and if we go further afield into the small coastal and fishing towns, we find figures of 9 per cent. in Oban, 10 per cent. in Campbeltown, 12 per cent. in Buckie and Portknockie, 15 per cent. in Lerwick. and no less than 30 per cent. in Stornoway, although, of course, these figures reflect much smaller numbers in those places.

Those are some of our black spots, and, as your Lordships know, spots on the human body are usually an outward sign of a general disorder in the system. It is the same with the body industrial. One of the recent tasks which the Scottish Council set itself was to diagnose this disorder and prescribe the appropriate remedies so far as it can do so. To some extent, Scottish economy has felt the force of outside events in the general world recession and the credit squeeze. I think it was President Eisenhower who said that it was recession when the other man lost his job and depression when you lost yours. Be that as it may, we, like everyone else, have been affected, but at least we can be thankful that Britain as a whole has not so far felt the effects of that recession so seriously as our friends across the Atlantic.

But nearer home there are a variety of causes. There are the cuts in the defence expenditure which, glad though we are to see them, have borne, I think, unduly hard on Scotland. Then there is the long-term downward trend in certain industries—the jute industry has been mentioned particularly to-day. I do not think anyone believes that it can maintain its rate of production in any circumstances. The shale oil industry of the Lothians, some sections of the textile industry and of the heavy engineering industry—all of these have a downward trend and the workers must be absorbed elsewhere. Finally, there are the areas throughout Scotland where there is virtually no industry at all; and as agriculture employs fewer and fewer men through increasing mechanisation, jobs must be found in those places, too. So, however great the temptation to concentrate all our efforts on the black spots—. on the ambulance cases, as it were—in Dundee, Greenock and so on, do not let us forget that in the long run it is the much wider field which must claim our first attention.

In terms of employment, what, then, is the size of the problem? It is not just a question of finding jobs for the 40,000 or so men which would bring our employment rate parallel with that of the whole country. By 1971 it is estimated that there will be an increase of 60,000 people in the working population. The rundown of the defence services, together with the end of National Service and the bulge from the school-leaving age, might contribute another 50,000 for whom jobs will have to be found. Then, there is the further rundown in the declining industries which I have mentioned. I think it would not be too much to say that, over the next ten years, we shall probably be faced with finding something like 120,000 more jobs for men and women in Scotland, and that is without taking any account of the continuing drain on manpower by emigration to the South and overseas.

At the same time, do not let us be too dismayed at this prospect, or forget what has already been achieved. Between 1951 and 1956, in five years, the number of employed people in Scotland increased by 60.000. in the last ten years Scottish Industrial Estates' factories in the development areas have given 40,000 new jobs. At the same time, we must not be complacent, because, while so much has been done. so much still remains to do. It is rather like running up the "down" escalator and succeeding only in standing still.

What then must we do about it? First, we must have more industry and a greater diversification of industry, because the lack of this has been at the root of our troubles. We must have more of those industries that have prospects for the future: industries with prospects of growth based on scientific techniques such as the electrical and chemical industries, electronic and precision engineering, instrument production, and so on. It is very instructive to look at the figures Which show the different percentages of certain industries in England and in Scotland, because if we look at them we find that Scotland has a higher proportion than England of such things as coal mining, iron and steel, shipbuilding, mechanical engineering, textiles, and food and drink. In general, these are the older, traditionally more stable and less rapidly developing industries. On the other hand, Scotland has a smaller share in such developing industries as electrical engineering, motors and aircraft, chemical production and oil refining.

Here, again, let us not forget what has been done. Many completely new products are now being made in Scotland. For instance, by next year Scotland will be the second largest producing country in the world of earthmoving equipment and of office machinery, neither of which were made in Scotland before the war at all. Much of this has been achieved—and much more will have to be achieved —by the attraction of new companies from outside Scotland, and in particular from North America, because it is only these countries which have the techniques, the know-how, the resources and the worldwide sales organisation to establish this type of industry. In addition, it is so much easier for them to move into completely new localities than for our existing Scottish firms to move from where they are sited and to develop in new places.

Now, these companies are attracted here very largely by the access which this country gives them not only to our British market of 50 million but to the Commonwealth and sterling area market, and, of course, increasingly, the European market. There has of late been a slackening in the flow to this country of these companies from North America. It was made quite clear to me when I was in the United States a few weeks ago by industrialists, by the United States Government and by our own Embassy, that the reason for this was that many companies over there with expansion plans are just waiting to see what comes of the Free Trade plan. If we go into it, they wish to come and set up in Great Britain; if we do not go into it they will go and set up on the Continent, and to that extent we shall lose them and—an aspect which is very often forgotten—they will be our competitors and not our friends. That, I think, is one of the most pressing reasons for us to go into the Free Trade area.

There is one minor obstacle, too—a minor but an irritating one. The number of American industrialists who have set up here, or who have expressed a wish to set up here, have raised this point with me. That is the complexity of the formalities that they have to go through in dealing with Government and other departments here before they get final clearance to start operations. I know that this is not an easy problem, but I would suggest for consideration that we might have a look at the system which operates in Holland, where there is one department whose sole responsibility it is to handle these applications and to carry them right through all the different formalities that are required. If something of that kind could be done here, I think it would be a very great help in encouraging companies to come to this country.

In the attraction of new industry, our experience has been that one factor counts above all others, and that is the availability of factories to rent, to which the noble Lord, Lord Greenhill, referred. On this aspect I should like to say what a wonderful job has been done by the Board of Trade, through the Scottish Industrial Estates. As your Lordships know, however, the exercise of these powers was more or less suspended two years ago, owing to the credit squeeze. Although we welcome the partial lifting of this suspension in certain cases and certain areas, it is always much more difficult to get a thing started again once it has been stopped, particularly at a time when industrial momentum is in general slowed up. In the Scottish Council we have for a long time felt that the restriction of these powers to build factories in the development areas was unnecessarily rigid. Therefore, we warmly welcome the introduction of the new Distribution of Industry (Industrial, Development) Bill which will shortly be before your Lordships' House, under which it will be possible for assistance to be given to an incoming company in any area where the employment situation makes it desirable.

I ask the Government to use their powers under both these measures boldly, promptly and generously, because so often the time factor counts. As the noble Earl, Lord Dundee, has said, it may be two years from the passing and clearing of a decision to build until the jobs are there. For some ten years local planning authorities have had powers to build factories for incoming companies, but in the past those powers have been used only on a small scale. We have therefore been particularly encouraged by the lead given recently by the Roxburgh County Council in agreeing to build a substantial factory to house an incoming American engineering firm in the town of Jedburgh, where there was a most serious need for a major new industry. I hope that this lead will be followed by other local authorities.

Then, of course, there are the powers of the new towns and powers under the plan for overspill of population and industries from Glasgow. I know that my noble friend Lord Bilsland means to speak on this subject, so I will not say any more. But I do not want to give the impression that I am suggesting that the remedy lies entirely in the hands of Her Majesty's Government. Far from it. However powerful their influence and that of the local authorities can be, industry itself, through individual companies, through its trade associations, chambers of commerce and bodies like the Scottish Council, has got to build its own future. There are many ways in which it can do that. We are trying to help by looking vigorously into new lines of production, just as the jute manufacturers are now doing, by signing agreements to manufacture under licence from abroad—a field in which we are becoming increasingly active—and by the training of more skilled craftsmen, which is most necessary. The Government have helped in this, but will have to help more.

We believe, too, that there is a great need for a major new industry of some kind in Scotland: a sort of stone which will be thrown into the pool and which will send the ripples as far as the banks. Such, for instance, will be the manufacture of strip steel. That is why the Council has been so urgently pressing that under the next Bill strip steel production should be sited in Scotland. Another great stimulus to our economy should be the establishment of a major electrical engineering enterprise, because few industries have such potential for expansion in the future. At present, Scotland only has one-third of the proportion of people employed in that industry that England has,

On a smaller scale, but no less vital in the area, is the project for the construction of a large graving dock and fittingout berth at Greenock. This is a project which, after years of talk, is at last within sight of realisation. The shipbuilders and repairers have come together. The Government—and we are most grateful to them—have held out the promise of financial assistance, and a great lead is being given in this matter by General Sir Gordon Macmillan, to whom a great deal of credit must go. I do implore shipbuilders and ship repairers to realise that unless this project comes about they will lose not merely the chance of development in the future but even their existing business. New ships and new tankers are getting bigger, and we must see that ships that are built on the Clyde can come back to the Clyde for repair and overhaul.

Finally I would say this. The great contribution which industry can make towards solving this employment problem is to have faith in itself and in the future. However uncertain the outlook may be at the moment, I cannot but believe that, with the advance of science and the expanding markets which rising world consumption holds out, the future holds immense promise for industry in the long run. If industry has faith, and if Her Majesty's Government and other authorities use their powers wisely, purposefully and ungrudgingly, then I am confident that, between us, we can ensure that the problem is solved and that Scotland will no longer lag behind England in the opportunities she can offer to her people.

4.12 p.m.

LORD BILSLAND

My Lords, I wish to refer to a matter which I suggest arises under the second part of the Motion submitted by the noble Earl, Lord Dundee, and which may well have an adverse effect on employment in Scotland unless it is carefully handled. That is this proposed dispersal of population through the redevelopment of the congested areas. I suggest that this is a matter which is relevant to this discussion. It affects mainly the city of Glasgow. It is on record that it is intended to move 200,000 people out of Glasgow in the next twenty years from twenty areas scheduled for clearance and redevelopment, all of which contain industry in some degree which will have to be cleared.

The resettlement of that number of people, and the provision of employment for them without undue disturbance of the industrial structure, is a major operation, especially when viewed against current unemployment problems. Everyone will admit that the clearance of slum dwellings and the provision of better housing is long overdue. It is true, also, that the scheduled areas contain some slums of industry as well as of housing. But it is earnestly to be hoped that the authorities concerned will have constantly in mind, as a matter of major importance, the necessity of minimising the effect of this operation on employment.

I suggest that employment may be affected in two ways: by the dispersal of workers living in the areas to be cleared who are now employed in factories not located in such areas; and. secondly, by the removal of factories from the clearance areas. I believe that the former factor will prove much more disturbing to industry, even to the extent of causing a labour shortage in Glasgow. I make a strong plea for a clear understanding by all the authorities concerned —both Her Majesty's Government and local authorities—of the difficulties which will be faced by industry in the areas to be cleared, and for the utmost consideration for them.

The two main requisites, I suggest, are adequate warning of the clearances, with as nearly as possible a definite date by which premises must be vacated and secondly, generous compensation. Compensation must, of course, have regard to more than the value of the premises. which may be worth little. It should cover reasonable cost of resettlement and take account of and justly assess the circumstances of each case. I know of a case of which the Minister is aware in which compensation recently offered appeared to be very much less than was reasonable. I hope that an assurance will be given by the Minister that these matters will be closely watched so that industry affected may feel that the whole question of resettlement, including the financial aspect of it, will receive the attention which it demands. This is an operation in the public interest, and I suggest that its cost, in its effect on industry, should be borne by public funds.

In my judgment much the more difficult problem in this whole operation will be the provision of suitable employment in the areas outside of Glasgow to which the 200,000 people will be moved. I believe that some of these areas have an unemployment problem today. Probably one might look to three main sources from which the employment required in the receiving areas might come. There is the industry moving out from Glasgow, new enterprise or branch factories coming from elsewhere, and immigrant industries from overseas, notably from the United States of America. I should myself not place a high value on the volume of employment which might be offered by industry moving out to those new areas from Glasgow. Some of the smaller businesses in the areas to be cleared are likely to go out of business. There are some businesses in these areas which exist to serve other industries, such as ship-building, for there is a great deal of interdependence in Glasgow industry; and these businesses will seek premises elsewhere in Glasgow. I believe it is anticipated that there will be a measure of spontaneous movement of industry from Glasgow to the new areas. It will be interesting to know how far an effective inquiry has been made to test the position. In the absence of information, I should very much doubt the possibility of a spontaneous movement arising to any extent unless effective inducements are offered to encourage such a movement.

Today the costs of industry, if it is to maintain a really economic basis, the weight of taxation and many other considerations, including the interdependence to which I have referred, weigh against a spontaneous movement. In so far as the necessary employment does not become available in these new areas, the whole operation would result to some extent in the creation of further dormitories from which people would travel to and from their work—a result which would have an adverse effect on production.

What are the inducements required? I suggest that necessarily, both as regards factories moving from Glasgow and to encourage new enterprise and branch factories from elsewhere, they are: the provision of factories on a rental basis—which I do not suggest need be other than an economic basis—with, if desired, an amortisation element in the rent which will provide for ultimate ownership by the tenant. I understand that the local authorities concerned in this operation are empowered to build factories to let at an economic rent. This is not a normal local authority activity, but I suggest to the noble Lord the Minister who is to reply that consideration might be given to utilising the machinery of Scottish Industrial Estates, who would, I imagine, with their long experience in this field, be able to provide factories at much greater speed and at much less cost than a number of local authorities unaccustomed to this work and working independently. That, however, is an administrative detail.

I ask this question: Is a surge of new enterprise or an inflow of branch factories likely to offer the employment required by the new areas which are to contain the 200,000 people? Is such a surge of new enterprise or branch factories likely? I think it depends upon the inducement to be offered, but one is bound to take note of the fact that the number of inquiries for factories on a rental basis from industry in Scotland today is very small. This, in my view, is much less a reflection of recession in industry than of the fact that the large demand which arose after the passing of the Distribution of Industry Act, 1945, has for the time being been. satisfied. There remains the possibility of inquiries from overseas, and notably from the United States of America, to which my noble friend referred. In the meantime, they are at a minimum, partly owing to recession and partly because development in the European Free Trade Area proposals is awaited. Inquiries will be resumed if the United Kingdom becomes a member in some form of a Common Market arrangement. But I submit that success in securing fresh enterprise from this source will depend largely on the efficiency of the arrangements in the United Kingdom for handling inquires. The Scottish Council have for long been concerned by the cumbersome character and unwelcoming attitude of the Board of Trade practice in dealing with American inquiries-a practice which compares unfavourably with that followed in Belgium and Holland and Western Germany.

There is one final point to which I should like to refer. No one will deny that a resettlement of 200,000 people in new areas and the provision of work for them is a major and complicated operation. For some of the local authorities it is an unaccustomed undertaking to be dealing with industry in this way. I venture to doubt whether there is a full realisation by the local authorities of what it means for industry and what is involved to secure and maintain the largest possible measure of stable employment. Three Government Departments, and about thirty local authorities will be. concerned in the direction of the whole operation. I submit, therefore, that there is a clear case for continuing oversight and imaginative handling of the operation and, of course, for co-ordination. These are matters for Her Majesty's Government.

4.24 p.m.

LORD FORBES

My Lords, let me first of all thank the noble Earl for introducing this very important Motion on unemployment. Whilst I do not intend to cover unemployment in the whole of Scotland, I will attempt to give some picture of the problem in the north-east and the Aberdeen area. Since Aberdeen itself has no major heavy industry, any unemployment there is usually seasonal or temporary, due to people changing their occupations, and in this way figures alone can be most misleading. For the first quarter of this year, figures show that unemployment in the north-east went up by nearly 25 per cent. In the last quarter of 1957, the figure was about 3,000 unemployed; and in the first quarter of 1958 it was about 4,000.

For those who would like to cry that a wave of mass unemployment is about to hit the country, these figures might provide fine, dry ammunition. Proper investigation, however, soon shows that all the excess unemployment was accounted for in the building trades, distribution and transport. Here, further explanation is necessary, for while officials in Whitehall and St. Andrew's House were building castles or houses in the air and moving imaginary goods all over the north-east of Scotland, in reality the people there were digging themselves, their cars, their lorries, and even trains, out of snowdrifts. So, my Lords, so far as increased unemployment is concerned in the northeast of Scotland, not even the most diehard person can blame the Government; rather we must lay the blame fairly and squarely on the shoulders of that good old British topic, the weather.

Nevertheless. there is no room for complacency, because the figures show that unemployment in the north-east is above the average for the whole of the country. The unemployed in Aberdeen are in small pockets, and I should like to give one instance of this, in the hope that the noble Lord who is to reply for the Government may be able to give some help. It concerns a small firm of agricultural engineers who specialise in making threshing machines. Some time ago they had to go on to short-time working, mainly due to the popularity of combine harvesters. Then, quite suddenly, they had an order to send a number of threshing machines to Egypt. The order involved several thousands of pounds. The firm were given an import licence and a letter of credit from Egypt. They then applied to the Export Credits Guarantee Department for cover against the risk of their manufacturing these expensive machines and then having the import licence cancelled owing to some political upheaval in Egypt. Unfortunately, this cover was not allowed. This means that the firm must either "chucksy" the order altogether or produce the machines one at a time and export them one at a time, so as to reduce their risk to a minimum. Whichever course they adopt, it means that full-time working is once more going to be jeopardised. Not only will the refusal of this cover probably lead to more unemployment, but the action of the Export Credits Guarantee Department will deprive the country of much-needed foreign currency. When we consider unemployment we must face up to the fact that it is known by everyone, though admitted by only a few, that the country as a whole benefits by a small percentage of unemployment to provide some incentive for people to strive to work to the highest standards instead of to the lowest standards, which automatically become good enough when there is 100 per cent. employment. The vast majority of workers, I am convinced, prefer that there should be a small percentage of unemployment, at least among the almost unemployable, because then the good workers are not tempted to keep on changing their job at the first sight of an attractive but often misleading advertisement in the local paper.

With more and more mechanisation of farming, and the lack of a principal industry in Aberdeen, the future of employment in the north east seems uncertain, especially as those in Whitehall and in Edinburgh are apt to forget the fact that. from a commercial point of view, the north east is badly situated geographically, being a long way from markets as well as from raw materials and fuel. Without any of the much-wanted concessions in transport rates, I fear that the north east may be badly handicapped in the future unless new light industry or modern power equipment is brought into the area. What would, however, lift the mist of unemployment off the hills of the north east would be an announcement from Her Majesty's Government that they will introduce tapered transport rates and that the area will qualify for any financial aid to new industry.

There is, of course, a steady depopulation of the rural areas. Fewer and fewer farm workers are required, mainly due to the mechanisation of agriculture. Fortunately, these stalwart and hard-working farm workers have little difficulty in finding alternative employment. There is no doubt that the wages spiral is leading to the replacement of humans by machines, as every employer in turn tries to cut his cost of production. I think that to farmers this fact is abundantly clear. I know of one farmer who five years ago employed five men and who to-day employs three men; yet his wages bill is twice what it was five years ago. This is a typical example of what is happening in the agricultural industry, and I have little doubt that urban industry is following much the same pattern. Surely the root cause of unemployment is the wages spiral, which Her Majesty's Government are doing all in their power to halt, and anyone who tries to disrupt the Government in their duty is, I would maintain, doing a disservice to his or her fellow-countrymen. Unemployment is like garlic; a little is an incentive or an appetiser, but a lot is obnoxious.

4.34 p.m.

Viscount STONEHAVEN

My Lords, I also want to confine myself to the second part of my noble friend's Motion—namely, to the problem created by the recent increases of unemployment in other parts of Scotland". I was going to deal with Aberdeen, Peterhead and the north-east, but my noble friend Lord Forbes has dealt adequately with the outstanding problems in Aberdeen, so I shall not have to inflict so much on your Lordships as I should otherwise have done. There is one aspect of unemployment in Aberdeen which I do not think my noble friend mentioned —that is, the position of the innocent victims of trouble-making in industry. I am not concerned with what the trouble is about, but I am concerned about the fact that these "go-slows" and unofficial strikes put out of work a number of innocent people whose jobs depend on material coming through Aberdeen docks. In the last week or so the activities of these people have succeeded in closing the Port of Aberdeen—quite a feat, from their point of view—but it has caused a great deal of distress to. innocent people whose jobs and livelihood depend upon the ports being kept open. We can hardly blame shipowners for realising that close to Aberdeen, there are reasonably good ports at Peterhead and Montrose. The fact that these people are cutting their own throats is their business and cannot be blamed on any action of the Government.

I should also like to emphasise the point made by my noble friend Lord Forbes. about increasing costs cutting the farmers' returns and increasing wages. This is causing the farmer not only to turn to mechanisation but also to put down a greater amount of land to grass and to let it go out of cultivation. The price for grazing is very good at the moment and the return is attractive. There are more empty cottar houses in landward areas in that part of the country than there have been for twenty years. Although this problem is small in proportion, it is serious in degree. Agricultural labour is mis-called unskilled labour. There never has been such a misnomer in any definition. Whenever the agricultural labourer is forced to leave the land, he has no difficulty at all in getting a job in the town. He is hard-working, adaptable and extremely skilful., and the unskilled town labourer finds it difficult to get work when the farm labourer appears on the scene. The result is that when jobs are made available it has to be for unskilled labour; and the training of that labour is another irritation and aggravation facing those trying to introduce new industries. I think that anything that aggravates that position is unfortunate.

I regard the proposed increase in rating on salmon nets as a case in point. It is a very small matter, I know; but if the livelihood of 3,000 men is taken away from them, or if any action that may have that result is taken, especially when these men work in places where it is difficult to produce new industries—and around the coast of Scotland is not the sort of place where industries can be produced "out of the bag" the possibility of unemployment is increased. These things should be thought over much more carefully. Of course, it is nice to have tidy legislation and no exceptions; but if by that tidiness the livelihood of many people in a difficult area is jeopardised, then I think it is deplorable.

For a long time Peterhead has been a black spot for unemployment. Depending largely on the herring industry, it found itself, for one reason or another, badly placed. At the moment the situation in Peterhead is indeed rosy. Owing to the strenuous efforts of its most energetic Provost and Town Council, and to the hard work and assistance of the Scottish Council, they have succeeded in attracting two new industries to the town. The first is the Cleveland Twist Drill Company, who have established a factory there and are in full production. After eight months working they are so satisfied with the results and the quality of the labour that they are embarking immediately on an extension scheme. I do not know how great an increase is contemplated, but it may well double the production. That is most satisfactory. The other thing which I think gives satisfaction is the earth-moving equipment, about which we heard from my noble friend Lord Polwarth, which is being manufactured in Scotland for the first time and used in this country and exported. A great deal of the auxiliary equipment is being made by a factory which was taken over (it is not a new factory) and is being reorganised and redesigned by, I think, the General Motors people—I am referring to the Euclid earth-moving equipment.

Then there is a herring cannery, and Crosse and Blackwell are employing the one hundred extra hands they annually take on at this time of the year, which does help. But what has done Peterhead more good than anything at the moment is the London dock strike. Four ships have gone to Peterhead and unloaded there. The handling of the cargo has been so satisfactory that shipowners may seriously consider sending ships there again. With the idea in mind that at smaller ports the turn-round is possibly quicker, and conditions may be easier. that is something that might well be extended beyond the time of emergency. There was no question of "blackleg" labour—the ships and cargo were consigned to Peterhead; but it is fair to say that had it not been for the dock strike the ships would not have gone there.

From what I can gather, the general trend in the north-east of Scotland, as it is in the rest of Scotland, is a steady increase of unemployment among unskilled labour. Scotland, like everywhere else, has got to stand on its own feet in a world of competition, and the only way to do that is to employ mechanisation, time and motion studies and even automation. This is essential to Scotland. as it is to everywhere else. Nevertheless, that can result only in a transition period, which is difficult for a certain section, usually the unskilled section, of labour. That is why I can only express the greatest regret that the Government, for an insignificant financial consideration, have not found it possible to give a concession to the shale oil industry, which would mean a great deal of difference to the area. People talk of this being a dying industry. It is an industry with a limited future, but it is no more dying than anything else. If a transition period is necessary, surely it is a good thing to keep an industry going and to say: "You have five, ten or twenty years in which to reorganise yourself and find another job."

Do not let us throw a man on the scrap heap and say that we hope to get an industry there. The time factor is something which creates considerable suffering: people are turned out of their homes; they desert a district because there is no work there; houses fall into disrepair, and when the people go to another district other houses have to be built in order that they may be rehoused. With a little thought given to the matter of these small concessions, I am sure that a great deal of the suffering could be, as it should be, avoided.

4.45 p.m.

LORD KINNAIRD

My Lords, being a near neighbour of Dundee and having been asked by my noble friend Lord Dundee to say a few words, with the leave of the last two speakers I would go back to Dundee and the jute industry. I do not propose to say much about the jute industry, because it is a difficult subject, and I am not competent to do so. I am sure we are all glad that my noble friend has brought this matter forward and in such an able way, and I am certain the people of Dundee will be particularly pleased. My noble friend Lord Strathclyde will have noticed the remarks made by my noble friends Lord Dundee, Lord Woolton and Lord Polwarth on the efficiency of industry in Dundee. I think it is a point well worth remembering that, in the end, it is efficiency that will control employment.

For all my life, which has been a long one now, people have said that Dundee jute could not survive. I think it started in the Crimean War, and shortly after came the Indian competition. Dundee, with its high wages and so on, has survived the Calcutta competition for all those years; and so far from the jute industry in Dundee being a dying one, I think it is growing and will still be able to meet that competition. The noble Earl, Lord Woolton, referred to the experience he had during the war. I have had some experience of a factory in Dundee started by the Americans. The manager of that factory has told me that they are making goods in Dundee which are selling in America and beating the American production in those goods. I should like to say a word or two about another problem from a general point of view—namely, communications. I feel that one of the main things from which Dundee suffers is a certain lack of communications. They have road, rail, water and air. If one looks at the map, one sees two huge blanks. I should think that Dundee, which is one of four cities in Scotland, is unique in that it has not got a single road going to the South. One would think that there was no city in Scotland that had not got a road going to the South, unless it was on the sea; but Dundee is an inland city, and still it has not got a road going to the South. The reason is that they have the River Tay. The railway companies got over that difficulty. In my lifetime, a bridge has been built over the Forth and the Tay, but seventy years after that there is still not a road bridge over the Tay at Dundee, or over the Forth; and the Kingdom of Fife, where the noble Lord lives, has been hemmed in with these rivers on both sides and never had the obvious road communications it needed. It is almost unbelievable. I am thankful to know that now, at last, the Government seem to be waking up to the need. The distance from Dundee to the next bridge is twenty-two miles, and, as a result, all communications in between Dundee and Fife have to go twenty-two miles to the west before they can get across the river, a matter of fifty or sixty miles by road.

This problem has two aspects: one is the long-distance problem and one is the local problem. If the Minister could tell us about the long-distance problem, I think many people would be interested to know. I refer to the main road, London to Edinburgh, and from Edinburgh to Aberdeen. Is the road going by the centre of Fife across to Dundee and on to Aberdeen, or is it going to be taken in a more westerly route through Perth, up Strathmore to Aberdeen by way of Stonehaven? I know these matters are still under consideration, and it would be a help to us to know what the Government view is going to be. Whether the road goes through Perth or through Dundee is bound to affect employment in Dundee.

Then there is the local problem, and there are three things which have some bearing on this. There is, first of all, across the river the question of Leuchars Airport. An airport is the second great need of Dundee—a bridge and an airport. I believe I am right in saying that the question of having an airport for Dundee at Leuchars has been considered, and not favourably. I would not be discouraged. I have an idea that one day things will change. Perhaps the naval people will find that they do not want Leuchars. One day it may make a first-rate airport for Dundee. Another thing is that ten miles south of Leuchars one comes to the beet factory at Coupar. That takes all the beet from the farms north of Dundee. At present it goes some sixty to seventy miles by road to get to the beet factory.

Then there is the question of St. Andrews, only eleven miles from Dundee. A very important point, from the point of view of education. is St. Andrews University's connection with Dundee University. At present they have the river and the ferry between them, which is a barrier. If there were a road bridge across at Dundee. the St. Andrews and the Dundee University professors and students would be closely connected. The one and a half hours needed to get there, the one hour to Leuchars and the one and a half hours to Coupar, would be reduced to twenty or thirty minutes. It seems to me an important point when the Minister is thinking of whether or not to have a road bridge at Dundee, and he might bear that in mind. I thought I would bring up those three points from a local point of view, in the hope that the Minister might be able to tell us what is in the mind of the Government.

4.55 p.m.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I always hesitate as a Sassenach to butt in upon these strictly Scottish debates. I would ask your forgiveness tonight because although we have had an excellent speech from the noble Lord, Lord Greenhill, who came to my rescue in leading off for us to-day, owing to the illness of the noble Lord, Lord Mathers, I have not been able to find another genuine Scot to take part in the debate. So will you please put up with me for the moment?

When I listened to the noble Earl. Lord Dundee, this afternoon I kept saying to myself. "At last you must make up your mind that you have joined the veterans", because as I listened I told myself and I told my noble friend, Lord Greenhill, that this was the best advocacy on behalf of the jute industry I had heard since Tom Johnston in 1923. I must say that in those days the situation in Scotland and in Dundee, and the Angus burghs especially, was so grave that it was a constant source of debate, I think even before the noble Earl came into the House of Commons and continuing after he had become one of our respected junior Ministers down there. Now we have the same problem arising again. and in circumstances which are really very different.

One could not but be enthralled, as a veteran looking back upon the debates of 1923, with the story the noble Earl put to your Lordships' House on what has been done to develop this vastly important industry and his figures of the increase of output. He was postulating the fact (although he may not have been expressly doing it, I am quite sure it was his general aim) that if it had not been for our native jute industry in Scotland in the period 1947 to 1951-52 we should have been at a very serious loss for raw material, and sometimes finished material, without which our industry could not have been so well served. It was to me enthralling to listen to him.

The sadness of the situation now is that we seem to have gone into a nationally orientated policy which more and more sets our course away from planned economy and industry and makes it much more a "free-for-all" in Europe and elsewhere. Even the Scottish Council, whose report I have looked at with great interest, seem to have committed themselves absolutely to the European Free Trade Area, and mention it in one of their recommendations. Yet when it comes down to any kind of recommendation (I am looking at paragraph (f) of the recommendations of the Scottish Council) they have to suggest a course over a prolonged time for the steady adjustment of the industry to new circumstances, which could be done efficiently and well only by having a national policy, directed by the Government, of a planned economy. You may be as certain as you sit in the House tonight that if there is not a planned economy there is an inevitable tendency to unemployment. That is the story of our nation's industrial development. In so far as you have not got nearer to this dreadful disease of unemployment in the last four or five years it has not been because you have followed the policy of 1951 of setting the people free from all controls, but because there was such a solid, substantial result in actual production from a planned economy for all the other years succeeding the war. That is why you have been able to carry on without too much difficulty. It is a great satisfaction to me and, I am sure to Her Majesty's Government, that so far in the last nine months, whilst we have had some increase in unemployment, it is not nearly as serious in its volume in relation to our industry and population as seems to have been at certain times evident in the economy of the United States of America, and also of that future competitor which so many people in industry speak about, West Germany. Certainly, at one period of the winter West German unemployment was far and away worse than our own; and in the United States unemployment has been most serious.

There is, however, a steadiness in the rise of unemployment, much lower though our level has been in this country, which is more disturbing than usual. We ought already to have been able to see a recession in unemployment in the last two or three months, but when we look at the figures quoted by the noble Earl, Lord Dundee, as to certain months and weeks —I think he brought the position right up to this month—they show that in some of the pockets of industry in Scotland to which he was referring, the unemployment rate is not going down, although this is the season of the year when the general state of industry in the country usually shows a better result.

I am sure the noble Lord who is going to reply to the debate will admit right away that the Government have not been without significant representations about this problem from the localities in Scotland. I have not seen them all, but I have seen the memorial which was submitted by the burgh of Greenock last September. That is quite a time ago, but from the way that the debate has gone to-day I should imagine that the figure of unemployment in Greenock to-day is worse now than it was last September. The noble Lord, Lord Polwarth, in his most interesting speech to-day, gave a number of reasons for this position. He said that there are the effects of the cuts in national defence expenditure. On that I would suggest that he is quite right. But the full effect of the cuts in the national defence items has not yet been felt; and if you bear that in mind in regard every part of the Defence Estimates for all three Services and the Ministry of Supply, then it certainly is most important to remember that that contingency has still to be met.

I feel that we should be wise to try to deal with the problem of unemployment at the earliest possible date. I know it is sometimes said that in different periods of Labour Government we have said that x per cent. over all the country is not a figure about which we need to worry very much. But that is really not our attitude to particular places in which unemployment becomes much more concentrated and at a higher rate than is the general average. I have heard references this afternoon by more than one speaker to the possibility of development estates and the like in different regions. This all comes under the existing legislation and now the projected legislation for redistribution of industry. I am delighted to know that there is going to be a development towards a better use of the existing machinery, and that it is hoped to improve the machinery for expanding the distribution of industry in such a manner as will help to obviate the concentration of this problem of unemployment in certain areas.

It is not so many years ago that contempt was poured on our attempts in a planned economy to utilise fully the machinery of legislation for the distribution of industry. I am glad to know that it is now recognised, and I hope that it will be utilised to the greatest possible extent. I see the noble Earl, the First Lord of the Admiralty, is now present with us. I would particularly draw his attention to the pockets of unemployment that by the policy which the Government have adopted he is bound to create in the naval and dockyard spheres. I would say that, if necessary, places like Greenock or Sheerness ought to be given all the help that the Government would be prepared to give on another basis to a special area.

When I look at the case of the burgh of Greenock, which has now reached the unenviable position of 8 per cent. of unemployment among its insurable population, I think of the days when I used to visit Greenock during the war and of the enormous service that that burgh was giving to our general national effort and the way in which the workers responded., on the south bank of the Clyde as well as on the north bank, in shipbuilding—about which the noble Lord, Lord Bilsland, perhaps knows even more than I do myself. I hope, having regard to the services they have rendered, that they are going to get all the assistance that can possibly be given them.

The noble Viscount, Lord Stonehaven, made quite a notable contribution to the debate. I always look forward to listening to him. Not only does he remind me of his father, but I am always proud to hear a Royal Marine speak. He speaks with the same amount of preciseness and determination that one expects from a person with such excellent training as we give to Royal Marine officers. I was most interested to hear what he had to say. I thought about the various things he went over, and I thought about what the noble Lord, Lord Kinnaird, said in regard to the distribution of industry in his locality, and in particular the sugar beet industry. I do not know whether the noble Viscount has read all the speeches of his father on the beet industry that I used to listen to in another place. When I think of Greenock now I am quite concerned to see how the other side of the sugar industry, the sugar refining side, is progressing. There used to be great battles in the House of Commons between the late Sir Godfrey Collins and the noble Viscount's father about the claims of the sugar beet industry and about the refining of imported raw sugar. In regard to Greenock, there is going to be a most considerable reduction in the number of workers required as registered dock workers because of the probable establishment. I think within the next twelve months, of mechanical unloading processes for the heavy cargo ships carrying raw sugar to Greenock. The actual number of registered dock workers there will probably be down to a little more than one-third of the normal number so registered.

For all these reasons, it seems to me that the noble Earl, Lord Dundee has raised a most important debate to-day. I listened to him with great interest. I always listen with great pleasure to an old colleague from another place. But I hope that he will be a little more insistent upon the achievement of his desires than it seemed to me he was at the end of his speech. Apparently the Government that he is supporting are doing everything that he could possibly desire. But I think he made a substantial case against them: that in fact the promises made to the jute industry have not been completely fulfilled. They have left a condition of uncertainty whether the great capitalisation already entered into has been justified; whether, as Lord Kinnaird said just now, it is not a dying industry but one which can be made to live and to expand; and whether they are going to assist now by a proper method of protecting what is, in my view, a necessary industry for Scotland. I hope that the noble Earl will be more insistent than he seemed to be earlier in regard to pressing his Government. Of course, it is quite natural that, speaking from the Opposition Box, I should say that to him. But may I say that there is nobody on this side of the House who would not support, not only him but any other member of the Party opposite. to get such a policy carried into effect to deal with unemployment. We do not want unemployment to become endemic, but we want the workers' homes in the future to be free from all the fears that are now gradually creeping in upon them

Many of our young people to-day have no idea what the organisation of their trade unions and the like by their parents, and their fight against unemployment, have meant for them to-day. They do not know anything about the hardships and the terrible results of the unemployment which their fathers and grandfathers suffered. We would look for support anywhere in this House for such a policy as would prevent unemployment becoming endemic and our returning to such shocking conditions in Scotland as brought about the great outburst of the people's desire for representation of their grievances in 1922, 1923 and 1924. That was spontaneous resentment—revolt—against the conditions that came to the workers' homes because of endemic unemployment. We should look with great pleasure upon efforts from any part of the House to see that that kind of thing never arises again.

5.11 p.m.

LORD SALTOUN

My Lords, what the noble Viscount has just said about planned economy has brought to my mind one of the causes of the desertion of the countryside mentioned by my noble friend Lord Forbes. Twenty years ago the married farm servants engaged themselves on one day of the year, the 28th May. They engaged themselves for a whole year, and they left their employment, if they left at all, on the 28th May following. From their point of view that practice had certain clear advantages. In the first place, the men learnt to know and love their horses that was always a great point with them. Then they saw the whole season round on the land; and to the old farm servants of those days the land came first. I take the words out of their own mouths. Thirdly (and this is the important point), if a married man left his work he found work and a house ready for him in some other place, because all married men left their employment, when there was plenty of notice, on the same day, and if a man was not going to stay on he could always find a job and a house elsewhere.

That was what I call a planned economy, but the industrial leaders of the farm servants complained about it. They said that shorter engagements were much better, and that it was intolerable that a man could not leave his job much sooner if he wanted to. They urged the men to press for shorter engagements. The farmers jumped at it. They said: "If I have a bad worker, why should I not get rid of him?" Before that, they could not do so, because the sheriffs—and nobody knows this better than the noble and learned Viscount on the Woolsack-were the trustees of the men and looked after their interests before anything. But now engagements are short. I am told that they are as short as a fortnight. If a married man loses his job, it is very doubtful whether he can find anywhere in the countryside in which he is accustomed to working another place with a house. So of course he goes to the town—he must; and, as a result, he is lost to the country for ever. It is an enormous loss to the countryside that that should be so, but it reinforces (though perhaps not in the way he desired) the noble Viscount's remarks, that we have now gone from a planned economy to one that is totally unplanned.

5.14 p.m.

LORD LOVAT

My Lords, I shall be as brief as possible. I have just arrived from the Highland Show, and I am not on the list of speakers; but, inspired by the Scottish Peers who have gone before, I should like to say a word for the crofter counties of the Highlands. In the County of Inverness-shire from which I come, the population has decreased in the past seventy years from some 95,000 in the landward area of that county—that is to say, excluding the town of Inverness—to 53,000. I think that that is an indication of the problems that we have to deal with in the North.

I gather that the noble Earl, Lord Dundee, whose speech I missed, fully covered the problem of his area and the City of Dundee, but the Highland problem is a much more malignant one. It has been going on very much longer and ii has no reliefs. In fact, I think I should be right in saying that, had it not been for the great work of the Hydro-Electric Board and the Forestry Commission, and for a revival in tourism at the present time, there would be fewer and fewer people in the crofter counties—and heaven knows! there are few enough of them now. I feel that the Highland population have a real part to play and that, man for man, they can take on anybody in the community. We are intensely proud of our Highlanders. I hope that the Government will bear in mind that we in the rural areas have to pay a great deal more than the South for everything we buy, and likewise that we have to sell for a great deal less. I do not know whether any other speaker besides Lord Forbes has mentioned the question of freight rates, but if you live 600 miles from London they are simply prohibitive. I do hope the Minister will bear that point in mind.

5.17 p.m.

LORD STRATHCLYDE

My Lords, I think we must all be most grateful to the noble Earl, Lord Dundee, for providing us with this opportunity to debate a subject—I might even say subjects—of such interest to Scotland. The noble Earl has dealt with two matters. The first was the situation in Dundee, with particular reference to the memorandum on the jute industry which was submitted to my right honourable friend the Secretary of State by the Scottish Council (Development and Industry), copies of which, as the noble Earl reminded us, are to be found in your Lordships' Library. Secondly, he dealt with the recent increases in unemployment in other parts of Scotland.

Before I deal with these two aspects I should like to dispose of something that I thought was implied by the noble Earl in regard to the pledge given by Lord Woolton. That pledge, as I understand, was to continue State trading until a suitable means of safeguarding the industry had been found. State trading in jute still continues. I think the noble Viscount opposite said that the promises had not been fulfilled. That one has been fulfilled. The second half of the pledge was to safeguard the industry under conditions conducive to efficiency. The industry is still being safeguarded, and the mark-up to-day is 30 per cent. That was the figure at which it stood when the noble Earl, Lord Woolton, gave his undertaking in 1954.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I am rather reminded of the position on agricultural guarantees, where we have the same safeguarding of guaranteed prices but there has been a continuous decline in their value. As I understood from the noble Earl, Lord Dundee, such a decline in value of the guarantee had started from last July.

LORD STRATHCLYDE

Certainly the mark-up was reduced last July from 40 to 30 per cent., but it is still at the same figure as in 1954. when Lord Woolton gave his undertaking.

The Scottish Council's memorandum deals primarily with the jute industry in Dundee, and perhaps it will be for your Lordships' convenience if I deal with that matter first. Her Majesty's Government are acutely conscious of the special problem in the Dundee area, and my right honourable friend the Secretary of State for Scotland paid a short but very rewarding visit there just before Whitsun, when he saw representatives of all the local interests under the chairmanship of the Lord Provost.

Dundee's difficulties arise from its excessive dependence on one industry—which is no new problem. Nor are the current problems of the jute industry of recent growth. Various factors contribute to these difficulties. Some result from long-term changes, such as increased mechanisation of processes, which, after all, is a sign of progress to which we have to try to adapt ourselves. There have also been for some time changing fashions in consumption. The jute industry is suffering from competition from paper, as the noble Earl told the House, and also from slackening in demand arising from the increased bulk handling of goods which used to be packed in jute bags or sacks. These long-term difficulties have recently been aggravated by the general recession overseas, which has led to a very considerable decline in export orders; and we have also lost much of our export trade to the United States in jute goods as the result of fiercer competition from India.

There is another factor which the Scottish Council's memorandum brings out very well. That is, the inevitable conflict of interest within the industry between the spinners and weavers, on the one hand, and the bag and sack sewers, on the other. It has, of course, been the task of Her Majesty's Government to reconcile these conflicting interests and to take such action as seems to be in the best interests of the industry as a whole. The position which had developed by last summer was one that Her Majesty's Government could not reasonably allow to continue, and so my right honourable friend announced on July 17 last a change in the arrangements for the Government's support for the industry.

I do not want in any way to minimise the seriousness of the situation in Dundee. Undoubtedly there has been a steady fall in employment in the jute industry in recent months, and that fall has been accentuated by the normal seasonal recession at this time of the year. But I would point out that the reduction in the figures of those employed in the jute industry does not necessarily mean that these workers have been thrown out of work. There are reasons other than the withdrawal of married women mentioned by the noble Earl. I am told, and in fact I know, of one firm whose employees until recently were included in the statistics as jute workers. That firm having gone over to rayon production, those employees are naturally no longer included in those statistics. Surely that is the type of development which we welcome and which may well be the real answer to Dundee's problem. Her Majesty's Government have always recognised the very precarious economic position of an area that is largely dependent on one industry. One-fifth of the workers in Dundee are directly concerned with the jute industry; and the policy of Her Majesty's Government all along has been directed to securing a greater diversification of industry within the area, and I believe that I shall be able to show your Lordships that our efforts in that direction have had a considerable measure of success.

The Scottish Council's memorandum lays great stress on the need for diversification, and I know full well that we can count on the assistance of the Council in encouraging new firms to start production in Dundee or its neighbourhood. The Council also, quite properly, underline the importance of the jute firms themselves diversifying their own industry by branching out into new lines with a more secure future. I am glad to say that some firms have already made a good start in that direction, and I hope that their example will encourage others to adapt their resources of ideas, skills and equipment to the changing conditions of the present day.

Your Lordships will recall that when my right honourable friend the President of the Board of Trade announced last July the decision of Her Majesty's Government to reduce the mark-up of certain imported jute goods he said at the same time that the Government would step up their efforts to get new industries to go to the Dundee area, and that the Board of Trade would meet any reasonable request to provide any additional factory space for firms already established and for others coming into the area for the first time. He also explained that in appropriate cases Treasury loans would be available to such firms under the Distribution of Industry Act. I believe it is now well known that considerable success has already been achieved in carrying out that policy. Perhaps I may supplement the figures which were given by the noble Earl. Since July last, approval has been given for the provision of new Government-financed factories amounting to over 400,000 square feet, and these are expected to provide 1,500 new jobs, besides about 400 jobs due to mature in projects already approved but which have started production only since July. In addition, there are 370 jobs still to mature in privately financed factories.

I can assure your Lordships that we have no intention of resting on our oars. The Dundee area will, of course, stand to benefit from the further measures recently announced by my right honourable friend the Chancellor of the Exchequer to deal with areas of persistently high unemployment. Under the Distribution of Industry (Industrial Finance) Bill, which, as has been said, will soon be before your Lordships' House, the range of projects eligible for assistance under the Distribution of Industry Act will be widened to include trades and businesses, as well as industrial projects proper. Although, of course, Dundee, being in a scheduled development area, is already eligible for assistance under the Act, she can still benefit from this extension; and neighbouring areas in Angus which are not at present within the development area will be able to take advantage of the Bill if heavy unemployment develops there and seems likely to persist.

Her Majesty's Government are also requesting the banks and other finance organisations to deal sympathetically with apilications for finance in respect of projects in areas of persistently high unemployment. That should enable Dundee firms requiring finance to make their arrangements more easily. Similarly, applications for financial approval from the Capital Issues Committee in respect of projects in these areas of unemployment will receive sympathetic consideration.

There is one particular point raised in the Scottish Council's memorandum on which your Lordships will feel that I should say something—it is a point that has been raised to-clay by the noble Earl, Lord Dundee. The memorandum suggests, as did the noble Earl, that Her Majesty's Government should give an undertaking that there will be no further exposure of the jute industry to competition from India-in other words, that there shall be another reduction in The mark-up 7—before alternative sources of local employment have actually been built up. I hope that in what I have to say I shall not he accused of endeavouring to deceive the noble Earl or any other noble Lord. I have tried to show that Her Majesty's Government are doing everything they can to speed up the diversification of industry in the area, and I believe that your Lordships may be able to agree that it is quite impossible to foresee the future in this industry, which, moreover, benefits at present from a protection that is quite unique in character. Therefore it would seem to me to be most unwise for the Government to commit themselves now to any course of action that might prove inappropriate in conditions which may later arise. I can, however, give this full assurance: that the Government would certainly never contemplate making any major change which might affect employment in Dundee without prior discussions with those directly concerned.

The position in the other towns in the county of Angus which depend to a greater or less extent on the jute industry continues to be very carefully watched, but though the Board of Trade will continue, as appropriate, to stimulate the development and expansion of industry there, the situation, in the Government's view, does not call for exceptional treatment at present. In Angus, outside the city of Dundee, there were 1,076 people registered as unemployed at the middle of May; that is a rate of 3.4 per cent. Unemployment was heaviest in Arbroath and Carnoustie, and for the rest of the county the rate was 2.6 per cent. In present circumstances, when our financial resources and the number of new projects coming forward are both limited, we must, I am afraid, concentrate remedial measures rather on the areas of still greater need.

The noble Earl's Motion also refers to the problem created by recent increases of unemployment in other parts of Scotland. I think he is right to refer to such unemployment as being in parts of Scotland. Of course, unemployment has, it is perfectly true, shown an increase in Scotland gas a whole since the autumn of last year, but with an average unemployment rate of 3.6 per cent. we are far from the condition of deep depression in which, if one judged by some of the statements that are made from time to time, the country might be thought to be plunged. The noble Lord, Lord Polwarth, referred to the different proportions of heavy to light industry in Scotland as compared with England. But one of the features of recent years has been the strength and the stability of the basic and traditional industries of Scotland, and for that we are very grateful indeed.

Of course, there are temporary dislocations involving short-time working, for example in iron and steel, and one has to recognise the real anxieties to which such shifts in demand give rise; but, surely, it is wrong to exaggerate the extent of the problem. I would suggest to the noble Lord, Lord Greenhill, that it is against the total level of employment in Scotland, which during the last two years has probably been higher than ever before, that our current unemployment should be regarded. Moreover, a very great deal is being done to strengthen our economy, and there are encouraging achievements in both the basic, heavier industries and in the development of new, lighter industries.

A number of modernisation schemes have been carried out in the shipbuilding and the iron and steel industries, notably at Colville's new works at Ravenscraig; we have secured a sizeable share of the nuclear energy programme; and the reorganisation and development of the coal-mining industry is, I submit to your Lordships, a fine achievement in the face of very real difficulties. In the field of new factory development, the building of something like 2½ million square feet of factory space was started in the five years from 1952 to 1957, with an employment potential of 13,000 people. About 37 per cent. of this building has been provided with Government finance, and we are still energetically carrying on this good work. That is shown by the fact that at the present time Scottish Industrial Estates have building on hand or approved amounting to another 1 million square feet, with an estimated potential of employment of 5,000 people.

Perhaps I might here reply to the suggestion made to me by the noble Lord, Lord Bilsland, that Scottish Industrial Estates might be allowed to build in relation to overspill problems that are cropping up, and that their experience should be used. The fact of the matter is that we have already come to that conclusion ourselves. The Secretary of State and the Board of Trade have agreed that Scottish Industrial Estates should put their knowledge and experience of factory building and 'management at the disposal of the local authorities. I can assure the noble Lord, therefore, that we shall be most happy to arrange for Scottish Industrial Estates to advise any local authority wishing to build factories for rent, as he has suggested.

There are difficult problems which we have to face in these pockets of unemployment. which have persisted in a number of areas, such as those mentioned by the noble Viscount; and the causes of these manifestations of localised unemployment, though varied, generally have a common factor—namely, a past over-dependence on a single industry or groups of industry, such as the jute industry in Dundee and fishing on the north-east coast. The unfortunate thing is that the growth of new employments has not kept pace with the losses of employment in the old staple industries of those localities. I do not think there is any easy, short cut to the solution of these difficulties. In some cases the answer may lie in the strengthening of the staple industry itself; and that has been done, for example, in the fishing industry by grants and loans for new boats and new engines and by the fish suubsidies, and also by the assistance which has been given for the improvement of fishing harbours.

In other areas the development of new lines of production must be fostered, and in these the development of new industries is being encouraged and assisted by the Government. If I may just allude to the various areas, I would point out that it has been done in Dundee, Greenock and Port Glasgow by Government-financed factory building under the Distribution of Industry Act. In the Buckie-Peterhead area special arrangements, as your Lordships will recollect, were made in 1952 for assistance to be given from the Development Fund for factory building, through the agency of Scottish Industrial Estates. There has also been, in three cases in the Highlands, assistance from the Development Fund for factory building by the local planning authorities. The contribution which this Government-financed factory building has made to employment in some of these difficult areas is very considerable indeed. May I give the situation in Dundee? Employment there in the industrial estate has risen to 5,500, and within recent months work has been started or approval given for the building of new factories and extensions which will employ in the region of 1,600 more workers; that is, a total of 7,100. It means that 8 per cent. of the insured workers in the town of Dundee are at present employed in Government-financed factories. So far as Greenock or Glasgow is concerned, the new industries developed with Government assistance there are already giving employment to well over 3,000 workers; and there is a large extension project recently approved and a further one under consideration which will provide another 1,000 jobs.

The noble Lord, Lord Forbes, raised the question of freight charges in relation to the north-east and Buckie-Peterhead, on which Lord Stonehaven spoke. That matter has been considered time and again. I would remind the noble Lord that when the British Transport Commission put forward their new railway merchandise charges scheme three years ago, though the basis was hat charges should be based on weight. distance and loadability, they claimed that, compared with the previous system, the new system would give greater relative advantage as distance increased. As your Lordships may remember, that new scheme was confirmed by the Transport Tribunal during 1956, after a lengthy public inquiry, at which the advantages of still more tapering were argued, but they were rejected by the Tribunal. Of course, the Buckie-Peterhead area suffers under the disadvantage of remoteness, but three factories are being built there, or are to be built, under the Government's special arrangements, providing employment for some 700 workers.

I suggest that these figures are indicative of the efforts that have been made with Government finance to stimulate new industrial development in the areas of higher unemployment, but the Government recognise that even more flexibility is needed in the provision of such assistance. I have already referred to the Bill to amend Section 4 of the Distribution of Industry Act, 1945, and to the request of the Chancellor of the Exchequer to the banks and other financial organisations. It is the Government's firm hope that these new arrangements, when added to the measures already existing, will provide sufficiently flexible means of stimulating and assisting industrial development and expansion in those areas that most need it.

The noble Lord, Lord Bilsland, and other noble Lords referred to the problem of Glasgow's overspill, one of the greatest problems of its kind that has ever faced any local authority or any county. The noble Lord spoke of the need of industry to receive adequate compensation, and referred to a particular firm in the Glasgow re-development area who are not satisfied with the compensation assessed by the district valuer. If a firm consider that the district valuer's assessment of compensation is unacceptable, it is always open to them, under the Acquisition of Land (Assessment of Compensation) Act, 1919, to have the question referred to an independent arbiter. But I think that it would be very unfortunate if we were to arrive at the conclusion, on the basis of one case, or even a small number of cases, that the statutory compensation will normally be insufficient to meet the requirements of displaced firms. These firms will receive the full value of their present premises and additional compensation for disturbance.

One cannot generalise on a matter of this kind, but the conclusion we have reached, after consultation with the Inland Revenue Valuation Department, is that in many cases the compensation pay-able for displacement will go a long way to provide the funds needed for re-establishment. Of course, there will be exceptions, but in these cases, I have no doubt —and I think this is important—that the willingness of the new town development corporation or the local receiving authority to build a factory for lease or on mortgage terms will often be a decisive factor in the situation.

As your Lordships will know, the overspill problem is being met by the new towns, which are making a great contribution to the problem, and by a number of receiving authorities that is, authorities who have indicated their willingness to receive overspill from Glasgow. I will put the situation as shortly as I can, as time gets late. In East Kilbride, a number of new factories there eventually will provide employment for some 6,500, and at this moment over 5,000 are employed in the new town. I think that that is a great achievement, certainly one as good as in any new town in the United Kingdom, and it reflects great credit on the Corporation. I should like to take this opportunity of recording our appreciation of everything that the new town corporation has done, and also of recording our appreciation of the part that the noble Lord, Lord Bilsland, himself has played, in his former capacities as Chairman of the Scottish Industrial Estates and of the Scottish Council, to encourage industrial development not only in the new towns but elsewhere as well, and particularly during the early years of East Kilbride. This also applies to his successor, the noble Lord. Lord Polwarth, who has addressed us to-day and who speaks with great authority. He is continuing energetically the great work which the noble Lord. Lord Bilsland, started. To them we are eternally grateful. The development corporation have not just rested on their oars: they are going ahead. They have four new factories under construction at the present time, and are receiving a number of inquiries from industrial firms interested in setting up at East Kilbride. One of the encouraging features about these inquiries is that more firms from the Greater Glasgow area are thinking in terms of the advantages which a location in a new town can provide for them.

In Glenrothes, the last year has seen a substantial change in the outlook and prospects. The Rothes Colliery has come back into production and will ultimately employ 2,500 men, and two new factories, one providing over 30,000 square feet of factory space and another 50,000 square feet, are going ahead. These units will provide employment for about 600 workers; and what is particularly satisfactory is that they will provide a substantial number of jobs for women, which is very much needed in that area. In Cumbernauld, the latest of our new towns, the new town corporation have got away to a flying start with a large factory for a firm making adding machines and office equipment. Already the first phase of this factory has been completed, and 350 workers are employed there. The ultimate target of this factory is 4,000 workers. Another encouraging development in dealing with overspill is the number of authorities who have indicated their willingness to take overspill. An American firm is already building a new factory at Haddington, and negotiations are at an advanced stage for a new factory at Jedburgh. As has been mentioned by the noble Lord. Lord Polwarth. that project is of great interest. It is the largest single scheme so far promoted by a planning authority in Scotland in the exercise of their planning powers to secure industrial land and undertake industrial building. I am sure your Lordships will agree with the noble Lord. Lord Polwarth, that the County Council of Roxburgh are to be commended for the initiative they have taken in this matter, and I would say that the help of the Scottish Council has also been invaluable in this and in other similar developments. There is no doubt that there is more interest among industrial firms in the possibilities of securing new locations outside the congested Clyde Valley area, provided that they can be assured of labour of the right quantity and quality. Also, there is no doubt that the question of compensation for disturbance will be in their minds. I believe that this trend will develop, particularly when Glasgow Corporation's plans for dealing with the vast problem of clearance and redevelopment of the city are more widely known.

I can assure the noble Lord, Lord Bilsland, that the Corporation of Glasgow hope to co-operate fully with the new towns and with the receiving areas in this respect. It is their intention, for instance, to give wide publicity among industrial interests in the city of what the receiving areas can offer, and in this and other ways to attempt to ensure that the movement of population will be accompanied by the resettlement of industry. They are conducting a detailed survey of the areas they propose to re-develop, as a result of which they hope to identify the firms that are capable of moving and to obtain close co-operation with them. Both the Corporation and the receiving areas are much impressed with the fact that overspill cannot be achieved unless there is employment for the people moving out to new homes in the new areas.

It may be that I have failed so far to answer some of the questions asked, and I shall endeavour to remedy that quite briefly. The noble Lord, Lord Forbes, referred to export credit guarantees for threshing machines. I should be grateful if the noble Lord would give me details so that the matter can be taken up. The noble Lord, Lord Kinnaird, stressed the advantages of the proposed Tay Road Bridge. Well, we are still collecting information as to the need for it and the use to which it would be put, and it has been arranged that an "origin and destination" survey will be taken in August to provide information about the long. distance traffic likely to use a bridge across the Tay at Dundee. Noble Lords will not expect me to enter into the controversy as to whether the bridge should be at Dundee or, as some people have suggested would be as good a solution, if not a better one, nearer Perth. I cannot take sides in relation to that matter. The noble Viscount, Lord Stonehaven, spoke about the shale industry. When the Scottish Office announced that the Winchburgh Works and the associated areas were going to be closed this year, they said they hoped it would not be necessary to make further closures in the near future. We hope that that position will be adhered to.

My Lords, I have endeavoured to answer the questions put to me. It may be that some of them I have failed to answer if so, I will see that answers are given to those noble Lords who asked the questions. I would again say how grateful I am to the noble Earl, Lord Dundee, for having initiated this debate, and to all those noble Lords who have taken part in it and made such helpful contributions.

5.55 p.m.

THE EARL OF DUNDEE

My Lords, I do not know why English Members in both Houses of Parliament always seem to think it necessary to apologise for intervening in a Scottish debate and express the fear that something dreadful is going to happen to them. My experience has always been that Scottish Members in both Houses are delighted to hear contributions to their debates from English Members, and I have certainly never heard of any Scottish Member who has the least reluctance or makes the least apology for intervening in an English debate. I am grateful to the noble Viscount the Leader of the Opposition for his intervention, and we all deeply regret the illness of the noble Lord, Lord Mathers, who, if he had been here, would have no doubt supplemented the contribution made by the noble Lord. Lord Greenhill, from the Benches opposite.

I am doubly grateful to the noble Earl, Lord Woolton, who intervened with his great authority: both for explaining the reasons why he, as Minister, found it necessary to continue the present methods of safeguarding The jute industry and also for supporting the request that I have submitted that the jute industry should be placed on the agenda at the Montreal Conference. I should like to assure the noble Viscount the Leader of the Opposition that when I said the Government were doing everything they possibly could I was referring only to the efforts they are making to attract new industries to the industrial estate in Dundee. I think they are doing everything they can in that direction, and I was glad to hear the Minister say that they do not intend to rest on their oars.

With regard to the jute industry, the Minister pointed out in his reply that the present mark-up of 30 per cent. is exactly the same as it was in 1954 when the noble Earl, Lord Woolton, gave the undertaking which has been referred to in the debate. That, of course, is perfectly correct. What the Minister did not point out, however, was that since 1954 the price of Indian jute cloth has been reduced by £20 a ton, while at the same time the price of raw jute from Pakistan has been increased by about £20 a ton. So that this 40 per cent. mark-up last year was a much less effective measure of protection than the 30 per cent. mark-up in 1954.

LORD STRATHCLYDE

The noble Earl will remember that the 30 per cent. mark-up applies only to one part of the industry. For the other part, the markup to-day is 55 per cent.

THE EARL OF DUNDEE

So does the reduction in the price of this particular class of Indian goods competing with the Dundee product. I know that the mark-up varies in relation to different widths of cloth and has always varied from time to time. The real point is not so much the actual amount of the mark-up for any particular moment as the belief and confidence in the future of the industry. That is what we are concerned about. I do not know how what my noble friend has been good enough to say will affect this question of confidence in the industry. When he pointed out that the present method of safeguarding the industry is being continued, so that the pledge given by the noble Earl, Lord Woolton. has been fulfilled, I hope he intended to convey that the Government still mean to maintain that pledge in future.

I am disappointed that the noble Lord did not say anything about Montreal, but perhaps he has no authority to enter into a subject of that kind in a debate of this nature. I hope, however, that he will put to the Secretary of State what has been said in this debate, especially since it has been reinforced by the authority of the noble Earl, Lord Wootton. I am also a little disappointed that my noble friend should have said he had not made up his mind where to build the road bridge across the Tay. This is a matter on which I should have thought the volume of evidence was by now sufficient. It is not only a question of long-distance traffic, but also a matter of giving proper transport communications to this expanding industrial area in Dundee and its neighbourhood. I should like to thank noble Lords, both from the Lowlands and from the Highlands, for all the contributions which they have made to this debate, and I beg leave to withdraw the Motion for Papers.

Motion, for Papers, by leave, withdrawn.