THE SCOTTISH ECONOMY AND INDUSTRY

HL Deb 23 January 1963 vol 246 cc37-142

3.58 p.m.

Debate resumed.

THE EARL OF DUNDEE

I am sorry to have made such a long interruption in your Lordships' debate, such a very long statement, but we can now return to the Motion which has been moved by my noble friend Lord Polwarth. I should like to begin by firmly contradicting the rumour that the Foreign Office has briefed me to speak in this debate in the belief that Scotland is a foreign country. No such comfortable delusion is ever entertained by any of my officials.

My Lords, my noble friend the Leader of the House regrets that Ms absence in the United States makes it impossible for him to be (here and to speak himself as Leader of the House for the Government in this debate, which he regards as one of major importance, and he has therefore asked me to intervene in his place at an early stage in the debate. Although, as a member of the Government, I have no departmental connection with the Scottish Office, I am glad to remember that a few months before I joined the Government in June, 1958, I introduced a Resolution about unemployment in Scotland on which the discussion was probably mot unlike that Which we may expect from your Lordships this afternoon; and I am glad to see that seven or eight of your Lordships who were kind enough to help me by speaking on my Motion at that time are speaking again on this one to-day, including my noble friend Lord Strathclyde, who replied on behalf of the Government.

I was particularly grateful on that occasion for the support of my noble friend Lord Polwarth, who made a contribution to that debate not dissimilar in content and in ideas from that Which he has so ably delivered to your Lord-ships this afternoon. The views of my noble friend on these subjects are given very great weight by hits work over a period of years as Chairman of the Scottish Council, and we are always glad to hear his views which he expresses far too infrequently in Parliament. My noble friend has argued to-day, forcefully and reasonably, that in order to hasten the transition from what he called a 19th century to a 21st century economy in Scotland, we ought to have a vigorous policy for growth combining special inducements to new industries with a more rapid programme of expenditure on power and transport, on housing and on schools—not as a temporary palliative for unemployment, to be abandoned as soon as the figures go down, but as a permanent aid to economic growth. And I am glad, since that is cleanly a very long-term policy, that my noble friend had the vision to go forward to the 21st century; although many of us, or at least some of us here now, will never see it. But the 38 years which separate us from it are only a short hour in the life of our country.

I am particularly grateful that my noble friend did not disparage the progress which has been made under the Local Employment Act. At the present moment it is rather fashionable among same people in Scotland to decry the benefits conferred by the Local Employment Act because it has not solved our industrial problem in 2¾ years; and in 1962 it has not at all kept pace with the loss of employment Which we suffered in that year. I remember that in the earlier debate in 1958 to which the noble Lord, Lord Polwarth, referred he used one simile which I thought was particularly apt: he compared Scotland to a person going up the down escalator of a moving staircase. He was going up the stairs and they were moving down against him, and he mare or less stayed in the same place. In 1962 the down escalator has been going down faster than we have been going up, and, in terms of unemployment figures, we are worse off than we were at the beginning of last year.

But the fact is that the Local Employment Act has brought a very substantial number of jobs to Scotland and a very valuable degree of diversity into our industries. This £41 million which has been spent in that short time (whether it has been provided by way of loan which has to be repaid or by way of grant which is not repaid) has all been used to build factories which would not have been built or extended if it had not been for the Act, and to provide 32,500 new jobs which would not otherwise have been there. That, I think, in less than three years is a large and a substantial achievement.

Of course, it is not enough and we must try to make our policy more fruitful in every way we can. I do not believe myself that in the immediate future, perhaps not in the foreseeable future, we can get on without a very tough policy of refusing industrial development certificates to an industry which seeks to expand in an area of high employment or in one of the great conurbations which it is socially desirable to restrict, if it is reasonably possible that the extension could take place in Scotland or in North-East England instead. I know there are some firms who will refuse to expand at all rather than go elsewhere, and this is more likely to happen at a time when the trade of the country or of the world is relatively slack and when the need for more industries in the development areas is therefore more obvious than usual. When trade becomes more active, then more firms will be willing either to move or establish branches in Scotland; although in these circumstances, of course, the need for more employment will not be so pressing as it was before. That is one reason why we must continue this policy all the time, whether unemployment figures are better or worse.

As for the improved inducements for which my noble friend has asked, the "more juicy carrot" as he described it, the Government will certainly consider whether we can make our inducements better known and more effective than they are at the present time. Our aim is to reduce the imbalance of industry in Scotland. We want to help the older industries, most of whom have a very bright future before them, possibly with a smaller labour force and possibly concentrating on a more specialised type of production, such as has been our aim in dealing with cotton and textiles. We want to help these industries and bring new industries into any part of Scotland, though principally in those parts prepared to receive them.

While it would be quite wrong to pretend that one can do all this in two or three years we should certainly like progress to be quicker than it is now. Together with the ordinary procedure of the Local Employment Act there are certain kinds of Government expenditure on aid to new industries which are supplementary or ancillary to it although they do not proceed from it. Looking through Lord Polwarth's speech 4½ years ago, I find one of his most pressing demands was that a strip mill should be sited in Scotland, and not long afterwards the Government did undertake to finance the two Colville strip mills at Gartcosh and Ravenscraig, in North Lanark. There is no doubt, in my view, that this was one of the facts which induced the British Motor Corporation and Roote's to go to Bathgate and Linwood. All I am going to say about the strip mill now is that although it is most valuable on account of the direct employment which it provides to its own workers, its main value to our economy will be the attraction which it will give to the growth of other industries in Scotland; and this, of course, was the chief consideration which induced the Government to finance it.

My noble friend at that time also asked about advance factories—factories which are built by the Board of Trade before they know who is going to occupy them. Noble Lords will know the history of these factories. After the war when it was very difficult to get a building licence and when it took an interminable time to get factories built any advance factories built by the Board of Trade were readily snapped up. Applicants were tumbling over each other to get them, because they wanted to take advantage of the sellers' market which then existed to restart their industries. Later on, when the sellers' market disappeared and building became easier, most firms preferred a factory built especially to their own measurements for their own requirements rather than a standard one, to which they had to adapt themselves. I have always thought, and have said so several times in your Lordships' House, that both kinds should be built, and that is what is being done now. Of course, we must have a flexible policy, having regard to the amount of demand which there is likely to be for these factories.

During last year, eleven new advance factories had been announced by the Board of Trade. The first, at the Royal Naval Air Force base at Donibristle, should be ready for occupation in June of this year. Then, in July, six more were announced for construction in Lanarkshire, Fife, Ayrshire, Dumfriesshire and Wigtownshire, which ought to be completed by the end of this year. And last November, four others were announced, slightly larger ones, in Glasgow, West Lothian, Dunbartonshire and Lanarkshire, which ought to be ready early next year.

The total area of these buildings adds up to 350,000 square feet. Since I happened to see on television the other night a speaker who declared that they would employ only 200 men, I think I ought to state that, on the basis of the average number of square feet per man, they are more likely to employ between 1,500 and 2,000. This is all in addition to the normal building ordered by firms availing themselves of the Local Employment Act. It is a comparatively small item, which we must consider together with other measures, in order to get a proper picture of the whole.

Together with the introduction of new industries, which is our main objective, we must also consider power programmes, transport programmes and house-building programmes, which are needed for an expanding and a balanced economy. Your Lordships will have seen from the White Paper last November on public investment, that public investment in Scotland is expected to increase from £140 million last year to £162 million this year. A great part of that expenditure is on the electricity industry, whose chief problem in Scotland is to keep pace with the increasing demand for its product. More than 1,000 new or enlarged switching stations are needed every year, and about £50 million a year will now be invested by the Scottish Electricity Boards to meet an expansion in demand which is hound to increase proportionately with the success of our industrial policy.

Another matter, which is vital to our economic development in Scotland, is good roads; and road building is increasing every year. In the five years from 1956 to 1961, £28 million was spent on major, trunk and classified roads. In the next five years from now, from 1953 to 1968, it will be £71 million—that is, two and a half times as much as it was in the last five. By 1970 we shall have in Scotland a system of dual carriageways, linking all the main centres, from Dundee to Perth through the main industrial areas of Glasgow, Stirling, Fife and Edinburgh, with the South. In building these roads and transport facilities we want not only to increase the internal trade and commerce in Scotland itself, but also to facilitate the sending of products to the larger markets in the Midlands and the South of England.

The slowest feature of Scottish economy, all through our lives, has been housing. This has always been an intractable problem. When I was at the Scottish Office before the war it was then our first preoccupation. In 1938, I remember, we built what was then a record number of 26,000 houses, in spite of a miserably poor performance by the city of Glasgow, and it seemed possible, if we could get Glasgow in line with the other authorities and at the same time make full use of the Scottish Housing Association, which had just been planned and instituted by Walter Elliot and was carried on by John Colville, we might break the back of the problem in ten years; but instead of that we had six years' war, which set us back a terribly long way. No building was done, and so little could be spent on repairs that the retrogression of houses towards being slums was tremendously accelerated.

Since the war, supplies of building labour and materials have enabled us to make only rather slow progress. Even if there were never any unemployment in the building trade, as there is now—and, of course, the Secretary of State intends to do everything he can to take up the slack in the building trade by encouraging works which can be advanced to be advanced, particularly by local authorities—and if our resources were used in the most efficient possible way, progress would still be slower than all of us would like. But some progress has taken place. We expect to have 35,000 houses under construction this year, compared with 31,000 last year. And the growth of our New Towns, although likewise slow, is, I think, considerable, and sometimes, I would say, impressive in its results.

The oldest of them is East Kilbride, which is already half-way towards its target population. I do not know whether my noble friend Lord Cones-ford is still here, but it is described by the Department as a target population—that means, a desired population—of 70,000. The economic significance of East Kilbride is shown not only by the fact that it attracts major new industrial units—the most notable of the new ones in 1962 were the factories now under construction for Satchwell Controls, employing 700 people, and for Standard Telephones and Cables, employing 800—but also by the large variety of other firms which have rented smaller standard factories. There are now 40 of these smaller factories in occupation for purposes which are very wide and varied.

The total factory area in this New Town now exceeds 2 million square feet, with a further 300,000 under construction. When it is all finished, the number employed in manufacturing industry alone will be over 9,000. And on the side of pure research, the National Engineering Laboratory, which was established at East Kilbride in 1954, has added 58,000 square feet to its space. Here is being built the research reactor for the use of the Scottish uni- versities, mainly as part of their nuclear power engineering courses.

This represents in one locality an intensity of activity and employment which is much more familiar in the Midlands and the South of England, and which in Scotland we hope in time to achieve in our other New Towns and expanding areas. The newest one of the four is Livingstone, which was designated only last April. This new development area will occupy a situation of central importance in the economic development of Scotland. It will be placed alongside the main road from Glasgow to Edinburgh, which is to be reconstructed as a fast traffic road, and it is near the approaches to the Forth Road bridge. It is in the centre of an area of the greatest economic potential which has already proved its possibilities by the attraction of the British Motor Corporation factory at Bathgate; and this development is now to be associated with the major project for rehabilitation and progress of the surrounding countryside.

My right honourable friend the Secretary of State, the New Town Development Corporation and the County Councils of the two areas, Mid and West Lothian, have commissioned a development scheme for over 80 square miles surrounding the New Town. This will show how the potential of the area can best be realised and how the incidence and timing of the large expenditure already committed in this area should be adjusted to produce the maximum return in the shortest possible time. So, from this scheme, we hope to learn a great deal about techniques for stimulating economic growths, and these lessons will be applied wherever opportunities exist.

My Lords, I have seen some questions in the Press comparing the plants for Scotland with those for North-East England which are to be organised by my noble friend Lord Hailsham, and wondering how the position in Scotland will compare with that in England: because the Government have made it clear that there are now two areas which they consider demand particular attention—namely, Scotland and North-East England. My noble friend Lord Hail-sham's job is technical in character. As regards Scotland, the Secretary of State, of course, already has Cabinet responsibilities of a similar kind, and executive responsibility for roads, housing, electrical power supplies and town and country planning which have a big part to play in reconstructing the Scottish economy.

One of the recommendations of the Toothill Report to which my noble friend referred was that there should be a new Department in the Scottish Office. The Scottish Development Department was set up last year to co-ordinate all these activities, and it is now intended to bring into this Department officials from other Ministries, who may be concerned but who are normally not under the authority of the Secretary of State, such as the Ministry of Labour and the Board of Trade. This inter-departmental group of officials to plan the economic and physical progress—which it is the duty of the Secretary of State to further—will include, in addition to the Ministry of Labour and the Board of Trade, the Ministry of Power, the Ministry of Public Building and Works, who are concerned with resources, building and civil engineering industries in Scotland and on whom so much will depend, and the Ministry of Aviation, because of their role in relation to air service's, and the Ministry of Transport who still control railways, though not roads, in Scotland. This group will operate in Edinburgh and will be serviced by a combined administrative and technical staff provided from the resources of the Scottish Office; and my right honourable friend the Secretary of State, with the help of my noble friend the Minister of State, will exercise direct oversight over the work of the group.

All these developments in housing, power and transport, which we must seek to accelerate year by year to the limits of our resources in materials and labour, are not merely aids for or stimulants to industrial expansion but are essential prerequisites of it. I put it to your Lordships that the present period of slackness in the economy is a challenge to our country, and in some respects, perhaps, an opportunity, too. The main task of all these numerous Departments for which the Secretary of State is responsible is to make the present pause in expansion into an opportunity, with the co-operation, of course, of industrialists and public opinion, to make sure that we shall have in Scotland, both in the Highlands and in the Lowlands, a good basis, properly equipped with the right services which will be attractive to industry, into which now industrial growth will easily fit and from which it can expand still further, to the permanent advantage of the Scottish economy.

4.27 p.m.

LORD TODD

My Lords, I rise to address your Lordships to-day with perhaps more than the usual trepidation. For one thing, this is the first occasion on which I have ventured to address your Lordships, and in that connection I must crave your patience and indulgence. Secondly, I fear that I cannot hope to match the dazzling array of statistics that has just been put before us by the noble Earl, Lord Dundee; and thirdly, I am not an economist, and I fear, therefore, that my views on economic matters may be of somewhat doubtful value, and certainly of a good deal less value than those of many of your Lordships. But I am naturally interested in the welfare of my native land, and I am concerned at the obvious industrial decline that has taken place there during this century.

The first thing one asks, I think, is why this decline should have occurred at all. Here I should like to follow the noble Lord, Lord Polwarth, and go a little into history, because I believe that the main reasons for the decline in the Scottish economy are to be found in the nature of Scottish industrial development in the nineteenth century and in emigration, two things which I hope to show are intimately connected. Scotland, as the noble Lord, Lord Polwarth, said, was very early to the fore in the Industrial Revolution; indeed, I would remind your Lordships that technical education, as we know it in this country, was virtually born there. As early as 1796 Anderson's University, the forerunner of the great Glasgow College of Science and Technology, was founded in Glasgow, as it was then said, for the good of mankind and the improvement of science. Three years after that George Birkbeck, who later founded the College which bears his name in Landon, became a professor at Anderson's University, and he ran a course on "Mechanical and Chemical Philosophy" which was open to the public. He had to run that course in the Trades Hall in Glasgow because he had an audience of 700 people, which is a somewhat remarkable thing when you remember that at that time the population of Glasgow was only 70,000 souls.

I mention these facts to indicate the avidity with which the Scots took to the new technical knowledge of these days; because this was, in fact, the basis for the development of technically based industry in Scotland which led to a period of great prosperity in the country later in the nineteenth century. But I think that Scotland, in certain respects at least, suffered from her early industrialisation, because, since the main natural resources were coal, iron and oil shale, her economy became too narrowly based. It was associated mainly with the development of heavy industries, such as steel, heavy engineering and shipbuilding. And then, later on, with the depletion of readily accessible sources of power, raw materials and chemical industry, one found that mining, for example, became less important, from the point of view of employment at least, than it had been in the past.

Now, of course, the world still needs steel, ships and heavy machinery. But the competition for the supply of these is a great deal fiercer in the world to-day than it was in the heyday of Scottish industry. The plain fact is that you cannot stay competitive in industries like that unless you continuously and vigorously apply the results of scientific research to the development of your industry—in other words, there must be continued research and development in the pursuit of new products and new processes. I am afraid that a great deal more is needed in these industries than we have seen in the recent past, because these industries which I have mentioned have, in plain truth, a rather poor record in the matter of research and development, as they have also in the matter of training schemes for their employees. I do not claim that the picture is entirely black: there are some bright spats, and there are, I believe, the beginnings of a general change. But, broadly, this lack of progressiveness has been, I believe, the main trouble.

When one thinks back to the vigour of Scottish industry in the last century, one wonders why this decline should have occurred, and why, once it showed signs of appearing, new science-based industries were not found developing alongside the older ones. It is a very complex thing to disentangle a matter like this, but a purely personal view of mine is that a good deal of the trouble has been due to the slow passage, in the latter part of the last century, of the control and direction of industry from technical to financial hands: because the entrepreneurs who founded and built up the Scottish industries were technical men, and the decline has come since they passed away and their position in control has been taken by others. Accountants are pretty good at keeping books, but accountants alone cannot hope to direct the policy of a modern industrial undertaking.

The decline that has set in there has, of course, accelerated emigration, and it is emigration that is really the reason why new industries did not readily develop alongside the older ones in Scotland: it is not simply that Scotland herself was unable to produce people of sufficient vigour and intelligence to maintain her economy. The fact is that emigration from Scotland has been on an absolutely staggering scale. I am told that between 1900 and 1950 something over 1,100,000 people emigrated from Scotland, whereas during the same period England and Wales, with about eight times the population, lost just about half that number—in round figures, about 550,000. According to the latest figures I have, which relate to 1957, this process of emigration was still going on at about 24,000 a year. although the average natural population increase of the country was only 33,000.

On the side of science and technology, which is one that interests me, I would remind your Lordships that at the present time (or, rather, using the 1961 figures of the University Grants Committee) Scotland is producing about 11 per cent. of all the graduates in science and technology in this kingdom. A few years ago it was producing a good deal more than that—very nearly 20 per cent. Yet in a survey which was made seven years ago by the Department of Scientific and Industrial Research it was found that, of the people doing research and development in industry in this country, only about 2.7 per cent. were employed in Scotland. To my mind it is no use our priding ourselves as Scotsmen on the magnificent contribution of Scots abroad, and it is no use talking about the historic rôle of Scotland in providing these emigrants. After all, she has not provided them in that number for such a very long time. The plain fact is that no country can stand a loss of its trained manpower at the rate Scotland has been losing it, and hope to maintain a sound economy.

I think that emigration, on top of declining industry, has been the major feature of what we have seen happening in Scotland. It is no use simply pleading for a decrease in emigration. People emigrate because of lack of opportunity at home, or because they see better opportunities elsewhere, and nothing will stop emigration except the provision of opportunity. So we come up against the essence of this problem: how to stop the decline in industry and the increase in emigration.

I said at the outset that I am no economist, but I should like to make just one or two observations here. In the first place, we must recognise that this is not a short-term problem with which we are dealing, though of course it has short-term aspects. There are problems such as temporary unemployment, and so on, which are very serious and must be dealt with; but solutions in solving the short term can be only palliatives and will not work in the long term. It is no use propping up an industry which has no future; in the end this will help nobody. Equally, I do not believe that, in the long run, bringing new industries into Scotland will solve anything unless these industries carry out on the spot research and development. You will not solve your problem simply by putting in production units or assembly units owned by firms the focus of whose research and development is located elsewhere.

The Government have already done a good deal in their efforts to attract or direct industry into Scotland, and I hope that they will continue with these. But I also hope they will encourage by every conceivable means, including fiscal incentives, the setting up of research and development units in association with these industries in Scotland because I believe this to be absolutely necessary. I should like to see the Department of Scientific and Industrial Research carry out a really intensive survey of the possibilities of technological development in existing Scottish industry. I do not believe that enough has been done in that way at present.

The noble Lord, Lord Polwarth, mentioned something about Government research stations. I do not believe that anything is solved by simply putting up Government research stations. Of course, Government research stations are a good thing, but from a national point of view they should be put up only in the most appropriate situations. I am quite sure that the Department of Scientific and Industrial Research, and other departments, will, where appropriate, locate any new stations in Scotland—witness the Torry Research Station and the National Engineering Laboratory. Having mentioned that, may I add that I should like to see Scottish industry take the maximum advantage from the presence of the National Engineering Laboratory at East Kilbride. And I should also like to see Scottish industry making more use than it is doing of the possibility that now exists of getting development contracts for civil industry.

In this respect, too, the universities have a part to play. The universities and the technical institutions of Scotland can play a considerable rôle by increasing their contacts, not only with places like the National Engineering Laboratory but also with industry, where they can do it also by research. I must confess that I was a little disturbed to see from the Report of the University Grants Committee that although in 1961 there were 280 first degrees in technology given in the Scottish universities there were only 11 higher degrees in technology: that is to say, less than 2 per cent. of the total number of higher degrees in technology awarded in the United Kingdom (excluding Northern Ireland). Glasgow University and the Royal College of Science and Technology in Glasgow produced between them four higher degrees—and these are institutions right in the midst of heavy engineering industries and hard by the National Engineering Laboratory. There may be various reasons for this, but it suggests to me that perhaps the Scottish universities could do more at research level in technology than they are doing. The universities should ponder this fact, because the power of a country to-day is measured exactly by its technological strength, and there is no country in the world to-day which is industrially strong which does not at the same time have strong academic technology.

I was very much impressed by a speech which I heard from the noble Earl, Lord Perth, in your Lordships' House on November 7, when he spoke about the Scottish economy. I do not agree with everything he said, but I agree with quite a lot of it. In particular, I feel, as he did, that a change has in fact begun in Scotland, in that we are moving to a broader-based economy. It is obvious that in a phase of this type there must be temporary difficulties, some of them very severe, and particularly very severe personal difficulties associated with unemployment, due to redundancy and movement from one industry to another. Here undoubtedly there is need for Government assistance—perhaps more than has been given up to the present.

The noble Earl, Lord Perth, spoke about communications, a matter which has been mentioned earlier this afternoon, and he spoke about road building and so on. These, of course, are important; but there is another area to which I should like to draw added attention, an area where I think there is room for a great deal more effort by the Government and local authorities. One needs only to travel casually through the industrial Lowlands of Scotland to see what a ghastly mess some of our forbears have made of what was beautiful country. I believe that there is room here—and not only room but need—for serious scientific study of these derelict areas.

There has been very much talk, both in your Lordships' House and elsewhere, about the drift to the South-East. In part, at least, that drift may be due to the attraction of better surroundings; because one must admit that the Home Counties are somewhat more attractive, from that point of view, than some of the industrial wastes we have inherited from the Victorian era. And when I say that a study should be made of these areas I do not mean that one should look at them and then put up two or three council houses in the neighbourhood of a slag heap. There should be a scientific study into the possibility of complete restoration of these areas, and I am sure that, with the technical help which could be available through the universities and technical colleges in Scotland, studies of this type, backed by public money and by action upon the results, would not only give temporary alleviation in the matter of unemployment but also lead to a long-term improvement in the economy.

My Lords, I thank you for your patience and forbearance in listening to me. I fear that I have perhaps gone on rather long, but if I have done so it is because I feel very strongly that what I believe we can describe now as the past decline of Scottish industry exemplifies very clearly something of cardinal importance; that is, that it is impossible to keep an industrial economy strong without continued and vigorous application of technology in the direction of new products and new processes to maintain existing markets and win new markets. And I think there is in that past history of decline a warning and lesson not just for Scotland but for the country at large.

4.47 p.m.

LORD BILSLAND

My Lords, it is a great pleasure to me, as a fellow Scot speaking immediately after the noble Lord, Lord Todd, to offer him very sincere congratulations on his maiden speech. The noble Lord brings to your Lordships' House a very distinguished record in science and affairs and we have heard this afternoon a thoughtful, well-informed and constructive speech, giving a number of facts which must cause concern and pointing in a very convincing way to the need for more research and development in Scotland. I hope that the noble Lord will frequently give your Lordships' House the benefit of his experience and knowledge in these affairs.

The Motion which the noble Lord, Lord Polwarth, has put down to-day is, I think, very opportune, and there is no one else who can speak with such authority on affairs in Scotland to-day as the noble Lord himself. We Scots all greatly admire the immense amount of work and leadership he has given in the affairs of the Scottish Council. There is, of course, serious concern in Scotland on the unemployment figures, but these figures are not the main cause of our concern: it is that the action taken by Her Majesty's Government in the years since the war, including the effect of the Local Employment Act, has proved insufficient to redress the ills from which Scotland has suffered. In relation to the record of unemployment which so seriously affected Scotland in the middle 'thirties, the figures of recent years have, happily, been low. Nevertheless, when one reviews the period from 1953 to 1962—the past ten years— it is seen that average unemployment in Scotland has been double the United Kingdom average. In the United Kingdom in 1962 the average figure of unemployment was 2.2 per cent., but in the Scottish development districts, which contain 63.8 per cent. of the Scottish population, the figure was 5.3 per cent.

Unemployment figures are a soulless gauge of the situation. Behind them are apprehension, frustration, hardship, waste of skills, and fear of the dispersal of proved workers, with the loss of efficiency which results. But there is another unhappy figure affecting Scotland, to which the noble Lord, Lord Polwarth, and the noble Lord, Lord Todd, have referred. It is a figure which I think is more serious and significant than those of unemployment, and that is the figure of migration. In the past ten years, 1952 to 1961, the average migration from Scotland was 28,000 per annum, of whom exactly half, on the average, went to England. These migrants, one may be sure, come from the young and virile section of the population whom Scotland can ill afford to lose, and they go to swell mainly the concentrations of population which the Barlow Commission referred to as long ago as 1940 as producing an alarmingly unbalanced distribution of industry. In the years 1951 to 1956 the insured population in London and the South-East increased by 12.5 per cent.; in Scotland, in the same period, by only 2.4 per cent.

I would quote one sentence from the Barlow Commission: A reasonable balance of industry and population throughout the country should be a main feature of national policy during the coming years. If that aim has been a main feature of national policy, and I do not doubt that it has, then the Government must realise that it has proved very far short of achieving its aim so far as Scotland is concerned. In the result there is real concern widely felt in Scotland to-day that the Government have failed to take cognisance of the situation and that there is need for a fresh appreciation of the situation and for the action that should follow. In saying that, I do not suggest that all remedial action depends on Government measures. Of course not. Industry in Scotland must play its part.

In the discussion of the position in Scotland to-day Lord Polwarth mentioned the reference sometimes made by very ill-informed commentators to the effect that the heavy industries in Scotland are in decline. Nothing could be further from the truth. Certainly they are very short of work but that is a very different matter from being in decline. I never felt more optimistic about their long-term future. A great deal of money has been spent in modernisation and re-equipment. For example, in the steel industry such expenditure has amounted in the last few years to £180 million, and equipment has been brought right up to date. Scotland now has a strip mill, as the noble Earl reminded us, and it is to be hoped it will make possible a wide range of new industry. Expenditure in the shipbuilding industry has been on a similar relative scale to that in steel.

We have long been hoping in Scotland that the Admiralty would accelerate and anticipate its naval programme. Here I must declare an interest as a director of Colvilles and a director of John Brown and Company of Clydebank. I welcome the statement made by the noble Earl in your Lordships' House this afternoon. As the noble Lord, Lord Hawke, said, it is a good beginning; it is a step in the right direction, I think were his words. But it is only a step, and I hope early action will be taken and on a considerable scale. Of the thirteen warship building firms in the United Kingdom six are on the Clyde. Therefore it is a very important matter for Scotland. It is well known that the Clyde made a massive contribution to armaments in both World Wars. In the present dearth of orders for merchant shipping, which is likely to continue for some time, it is surely of national interest that the teams of highly-skilled men in the shipbuilding industry should, so far as possible, be held together. The British shipbuilding industry made a strong plea in this sense some time ago in a letter to The Times. I would quote one sentence: The facts afford the Government an opportunity which they should not ignore. Its acceptance could immeasurably strengthen a branch of our defence structure which we neglect at our peril and could contribute substantially to the continued preservation of a great national asset—our British shipbuilding industry. May I turn now to the operation of the Local Employment Act, and here I have several suggestions that I should like to offer to your Lordships' House. In 1937, the Commissioner for the Special Areas invited me to set up the first industrial estate in Scotland, and I continued as Chairman until 1955. After the war, on account of our national financial crises, we had many frustrations. In 1947, 1948, 1951 and 1952 the provision of factories on a lease basis was held up or postponed for long periods. Nevertheless, when I retired Scottish Industrial Estates operated 20 estates and 35 individual sites, totalling 16 million square feet of factory space, with 355 tenants, giving employment to over 64,000 workers.

To what was that measure of success due? It was due, of course, to the provision of factories on a lease basis; but it was due also to two other things very particularly. It was due to the autonomy my Board enjoyed, within the Act and to the inducements we were authorised to offer. To-day, where are the autonomy and the inducements such as we offered? They are gone. The Local Employment Act changed the whole conception. The Boards were replaced by Management Corporations. The running of the enterprise as it had been run—the salesmanship, securing, establishing, fostering of tenants—was withdrawn into the impersonal hands of the Board of Trade. Conditions became rigid and stereotyped to the exclusion, inter alia, of the inducements that had operated so effectively.

In the Second Reading debate on the Local Employment Bill in your Lordships' House two years ago I expressed the opinion, based on my experience, that the change in conception was a major blunder; and I continue to hold that view. However, one must face facts, and I will offer one or two suggestions, which I hope will be helpful and practicable within the Act, to restore something of what that Act removed. Here may I say that I have the fullest confidence in the Management Corporation in Scotland, all men of wide experience, serving under the charmanship of Sir Robert Maclean, who had served as Regional Controller of the Board of Trade before joining the Scottish Industrial Estates Board on which he succeeded me as Chairman. But I regret their very limited powers. I acknowledge, of course, that impressive progress has been made, but more is patently necessary. From 1946 to 1960, factory space completed in Scotland was 10 per cent. of the British total. In the years 1960 to 1962 it dropped to 7.3 per cent., and in the same period it increased in London and the South-East from 13.3 to 14 per cent.

I offer my suggestions for improvement of the Act under three headings: inducements, salesmanship and simplification. I will conclude with two suggestions of a more major character. As regards inducements, I suggest the reintroduction of the small nest factory of 3,000 square feet or thereabouts at a very low rent to enable the man of limited means to develop a good idea. Several major projects at Hillingdon to-day, amounting to several hundred thousand square feet, started from such a seed. It is, of course, implicit in such a provision that the tenant be automatically relieved of his factory if he outgrows it, and be provided with a larger one, at of course an appropriate rent fin relation to space. There is a social value, I suggest, in building up such an entrepreneur who is more likely to become a useful citizen than an immigrant manager of a branch factory from elsewhere.

Scotland has been most fortunate in securing the British Motor Corporation and the Rootes factories; but the number of such projects is small. The small man, I would suggest, presents a field worth tilling. Special terms to encourage him would make no appreciable difference in the percentage return on the whole capital outlay. Secondly, it should be possible for the corporation to assure an applicant that an extension will be built for him at the same relative rental, whether the area has ceased to be a development district or not. The change of designation does not affect loans or grants already committed under the Act, arid surely it should not affect the growth of the factory on which repayment of the loans depends. The point I wish to make is the importance of encouraging the expanding firm. Thirdly, a system of rebates of rent applied in my time, which made the inducements obvious to the applicant. I do not recall that any difficulty arose in the Operation of this provision. Here, I should like to suggest a new inducement—an allowance for movement expenses to an operator moving into a development district. Finally I suggest, as the noble Lord, Lord Polwarth, suggested, that the Board of Trade reviews the terms on which loans are made. One former inducement—abundant supplies of cheap coal—is no longer available. It is to be hoped that this discrimination in price against Scotland, which of course has nothing to do with the Local Employment Act, may soon be removed.

As regards salesmanship—the presentation of the services offered by the industrial estates and the securing of tenants—the noble Earl spoke a great deal about new factories being built, and I suggest that it is of the utmost importance that a new and a better approach than is being made to-day should be made to secure tenants. On this question of salesmanship, I should like to ask whether an impersonal body such as the Board of Trade, hedged in by regulations, is more likely to attract the tenant, or an enthusiastic, imaginative and vigorous corporation run by experienced businessmen bound to operate within the Act and working on the spot? It would be interesting to know what happens to applicants refused an industrial development certificate. I ask, are they encouraged to go elsewhere, and do many of them in fact do so? Are the corporations given the opportunity of contacting them? It seems only common sense to make the utmost use of, and to give the maximum authority to, the men running the organisation.

I come to my final point, simplification. There is great need for simplification. I should like to ask three questions to illustrate this point. Why cannot an applicant for a factory be told at the time of his inquiry what his rent would be? Why need the purchase of ground be referred at every stage of the negotiations to ten separate people operating from a variety of local offices and headquarters, to give ten separate approvals? It is not surprising that an exasperating delay of five or six months frequently results before the project can get going. The corporation, I suggest, advised by the district valuer, should be empowered to carry through the deal. Is it not possible to simplify Clause 3 of the Local Government Act covering the provision of building grants? It is a masterpiece of obscurity, offering 85 per cent. of the difference between cost and current market value. A precise offer is essential. The terms and conditions under which factories are offered, and all the other facilities, must be clear, precise and available without undue delay to the inquirer, so that he can build up a table of costs and decide whether the proposition is viable or not. That is far from being the case to-day.

I conclude with my two major suggestions. The first is that the Local Employment Act be amended to make the facilities of the Act applicable in special cases where there are prospects of growth. The noble Lord, Lord Polwarth, referred to this matter. There are areas in Scotland where, through the help of the Development Commissioners, a measure of assistance has been given, but it would facilitate progress if the Act were to apply in similar cases. My second suggestion is that a Minister of the Board of Trade, a man selected for his experience of business, be placed whole time in charge of the distribution of industry policy, to review its operation, to work out standard formulæ of initial inducements and to examine the causes of delay and frustration, in consultation with those operating the policy in the corporations. Such a Minister should, I suggest, compare our methods and approach in this field with those of countries abroad, whose procedure has frequently been compared most favourably with ours in my hearing by American inquirers. The Minister meantime responsible under the President deals with distribution of industry policy as one of a large group of responsibilities. I suggest that this is a full-time job.

I base this suggestion not only on the case I have endeavoured to make for the introduction of inducements, salesmanship and simplification, nor on account of the Board of Trade commitments in the cost of financial assistance given and of the provision of factories built under the two Acts, which amounts to close on £200 million. I have another reason. It is that when I was responsible, with others, for the provision of factories under the Distribution of Industry Act, I was all along conscious of a real lack of appreciation on the part of the Board of Trade of the problems arising and of the need for clarity, dispatch and understanding, in presenting the facilities offered. There was, I should like to add, one period when the position was wholly different, when the late Sir Stafford Cripps was President of the Board of Trade; but after he had gone that interest and understanding was not restored in my time. My Lords, I feel that it is upon interest end understanding, at the top that real progress depends.

5.10 p.m.

LORD HUGHES

My Lords, I would start by joining the noble Lord, Lord Bilsland, in extending congratulations to the noble Lord, Lord Todd, for the maiden speech with which he has favoured us this afternoon. He has such a tremendous reputation in his own field that, in expressing congratulations to him, I feel almost in the category of the small boy who, in his first years at school, compliments the headmaster on the way he runs the show. What Lord Todd said in his particular field I am sure made most acceptable hearing to all of us. Like Lord Bilsland, I express the hope that we may hear him frequently in the future. I may add that it is a special pleasure to me to hear a Scottish Peer who makes it obvious from his accent where he comes from—who not only calls a spade a spade, but an Erroll an Erroll!

It is not mere politeness that causes me to express to the noble Lord, Lord Polwarth, my thanks for introducing this debate, particularly at a time when Scottish economic problems are more acute than they have been for a generation, and when, because of the national political situation, those who occupy the centres of power may be willing to listen to proposals designed to cure the causes of our difficulties rather than tinker with the results. As Lord Polwarth stated in Edinburgh on December 17, it is no solution to wipe up the puddle on the floor if you do not mend the hole in the roof through which the water has come.

My Lords, I was sorry that the noble Earl, Lord Dundee, denied the rumour—which I heard for the first time at lunch yesterday—that he had been briefed by the Foreign Office. It is a pity it is not true because, so far as I can see, Scotland would fare very much better if the Government were to treat it with the same courtesy normally extended to foreigners; and if he can prevail on his colleagues to let this be regarded as part of his normal activities, all may not yet be lost.

I was interested in what the noble Earl said, and a great deal of what he said about the history of this problem was factual; but I must confess that I did not think that it was particularly relevant to what we are discussing today, because we are concerned with the future. If there is one thing which is obvious at the present time it is that, whatever has been done—and I would be the first to admit that a great deal has been done—the simple fact remains that it is not enough. Therefore, to refer to "the past" really begs the point. To me the most interesting part of his remarks was the information that Departments for which the Secretary of State is not directly responsible are to be represented in the new Scottish Development Department, and, if proper use is made of that representation, I think it can be an exceedingly useful thing for Scotland.

Much of what the noble Lord, Lord Polwarth, said as Chairman of the Scottish Council (Development and Industry) was, of course, exactly what we would expect him to say because of his past knowledge of these problems and the tremendous amount of work he has put into these matters since he took over that position from the noble Lord, Lord Bilsland. I was also very pleased to hear the constructive proposals put forward by Lord Bilsland in the speech which he has just made. The one which impressed me perhaps more than any other, simply because it is so easy to put into operation, was his point as to what happened to the people who were refused industrial development certificates, and the suggestion that information as to such people should be passed on to the development areas. The Scottish Development Department should make it its business to arrange, as from now, with the Board of Trade that they should be informed al the, names and addresses of anybody who is refused such a certificate, so that the development areas and new towns in Scotland should get on their doorstep right away. That is most important.

The Government have constantly exhorted industry not to sit back and wait for business to come to them, but to get out after it. As chairman of a new town development corporation, I must say that I found this good practice when I recently followed it up by going to America, when an industry there had expressed an interest in Scotland. They were very impressed by the fact that the chairman of the corporation went to New York, to see them, and they have decided to come. The deciding factor between ourselves and another was that we were sufficiently interested in them to go to see them. If we get this information from the Board of Trade in East Kilbride, Cumbernauld, Livingstone, Glasgow, Fife, then we may well see new industries coming to those places. I would suggest that the Secretary of State for Scotland should be given a little more financial power in these matters. He approved my visit in seven days—that was in July; but it was on the day before I left to go to America, on October 5, that received formal Treasury consent to pay my fare. A little more speed than that is necessary.

My Lords, I do not believe that in a debate of this kind any useful purpose will be served by lengthy political attacks on, the Government or its members. In my opinion, that can be more appropriately and effectively done elsewhere. Such quotations as I propose to make from the Ministers' remarks are merely for the purpose of setting a background for my own proposals, because in the first instance there must be a radical change of attitude on the part of members of the Government. I was very pleased to hear the remarks of the noble Lords, Lord Polwarth and Lord Bilsland, on this subject because I find myself merely following a theme which they have already set.

Speaking in this House on May 21 last, the then Minister without Portfolio, the noble Viscount, Lord Mills, said [OFFICIAL REPORT, Vol. 240, col. 820]: I have become a little case-hardened over these unhappy pictures of Scotland. I meet them in so many connections. My own experience is that the Scots are very well able to look after themselves. Unfortunately, that particular attitude is not peculiar to Lord Mills; he was peculiar amongst Ministers only in admitting it. Of course, he was right in saying that Scots are very well able to look after themselves; they are in those fields where power to do so lies in their own hands. But that is not in the field of Government where it is necessary to enlist the aid of at least part of the non-Scottish majority, if Government action is to be taken. In this connection I would draw your Lordships' attention to the fact that while there is no appreciable growth in Scottish nationalism in terms of political membership or voting strength, there is a very great increase in the number of people who preface their remarks on Scottish affairs by the words, "I am not a Scottish nationalist, but—". It is a symptom of a very real dissatisfaction with results from Government at Westminster.

In Glasgow, on December 12, the noble Viscount who leads this House said: Strange movements of population are taking place within this island—movements not fully understood, and, not being fully understood, very difficult to control. If the population chooses to regard the invasion of Surbiton as preferable to remaining in the Highlands or in Newcastle-on-Tyne, it is difficult to say, unless we are able to offer altertives actually more attractive to them, that either the Highlands or the population are worse off, or that the people who vote in this way with their feet (which is the most effective way of voting) are wrong. I am a United Kingdom Minister and must hold no special brief for Scotland over and above any other part of the Kingdom similarly placed. Within weeks of making that statement he has accepted a special brief, and Newcastle may not be particularly pleased now about his normal view of their needs, as I may say most of the Scots who were present at that luncheon in Glasgow viewed the remarks which he made so far as we were concerned. Quite briefly, we boiled it down to this: that the noble Viscount was telling us that we must stew in our own juice.

The phrase "voting with their feet" was, I believe, first used about those people who fled from Communist-controlled countries, particularly East Germany. Does anyone believe that they do so because they want to leave their own land? Is it not the policy of their Government which causes them to move, and is it not true that if that Government changed, if that Communist creed were abandoned, they would go back to their homelands in their millions? Such a change would immediately put an end to this outward trek from these countries. The same is true of Scotland. If the opportunities for employment in their own land had existed, many now in the South would not have gone there. Create these jobs in Scotland, and many who otherwise would leave in the years that lie ahead will be proud and happy to stay, and many who have gone away will be glad of the opportunity to come back.

When the noble Viscount, Lord Hailsham, said that these movements were not fully understood, I frankly did not know what he was talking about. There is nothing mysterious about it. A man loses his job in Glasgow, in Kirkcaldy, in Dundee or in Inverness, and he cannot find employment locally. He knows from what he hears on television, on radio, and from what he reads in the newspapers, that there are more jobs—or there were at that time—than there are people to fill them in the Midlands of England and in the South-East of England. He goes there and finds a job, sometimes with the difficulties of being separated from his family for a period of two years until he is in a financial position to set up house for them. There is nothing difficult to understand about that. Men who must live by what they can earn must, in the present circumstances, go where the jobs are. When the noble Lord, Lord Polwarth, said he was glad that this policy of laissez-faire in that respect was disappearing, he could have added that it was not disappearing fast enough.

I receive from time to time copies of the journal Town and Country Planning, and I was interested to read in this month's issue a reference to these problems of Scotland and the North of England. This was said of Mr. Erroll: The President of the Board of Trade used the occasion to issue a clarion call to inactivity, on the grounds that any policy designed to strengthen the northern economy radically would interfere with personal liberty. All I would comment on that is that I hope it is not a doctrine which receives substantial support within the Cabinet. If it does so up to this moment, I should hope that one result of this Scottish debate would be to remove that attitude from their minds once and for all.

If Ministers are therefore prepared to change their attitudes and look at things afresh, what should they then do? First, as has been stated clearly by the noble Lords, Lord Polwarth and Lord Bilsland, there should be clearly defined lines of inducement to industrialists, either from abroad or from the South, which wild enable these people to make their own calculations of the assistance they can receive. That is done in Northern Ireland. An industrialist making inquiries in Northern Ireland can know within a week to a penny what he will receive in grants and loans. It may be a month, it may be three months, it may be longer before he knows what he will get from the Board of Trade, because there are no published rules available for him to know. Each case is dealt with on its merits, and only after the advisory committee have considered the merits of the proposal does the individual know what he is getting, if he is in fact getting anything at all.

Secondly, these terms must be more realistic as inducements than the present ones are. It is obvious that we are falling short of attracting industry to the extent which we require, because the inducement, the encouragement, the bribe—call it what you will—to industry is not enough. Now if it is not enough and you want to get results, you alter it. What is the present position? An approved applicant can get a factory built for him at rates which, for a limited period, cover only the interest charges, and later at a figure which includes an element of amortisation. He can receive certain limited grants in connection with the transfer of employees, he can receive loans which the Scottish Council has stated—and I am now quoting— are at rates only slightly more favourable than normal commercial loans—indeed, some companies have found that, with changing rates in the commercial market, they have obtained better terms over a period through their normal channels. What do I propose in place of this? First, it should be obvious to all concerned that the financial inducements are real, and better than can be got elsewhere. Secondly, they should be of sufficient duration to enable concerns to establish themselves firmly and permanently. I emphasise "firmly and permanently" because too often in Scotland we have experienced, as we are now experiencing, the fact that what is set up is merely a branch, a limb, and when the parent end gets into difficulty the easiest thing is to chop off the limb and we are back where we started. What I propose is that factories built in approved areas by the Board of Trade or by New Town Development Corporations should for a period of seven years be rented at 4 per cent. of the capital cost, and thereafter at current rates of interest plus a suitable amortisation figure; and that the general directions given to the Board of Trade Advisory Committee, in terms of Section 4 (2) of the Local Employment Act, 1960. should be to make their recommendations on the following bases.

The first is to lend to approved applicants an amount up to the applicant's own working capital at an interest rate of 4 per cent. Where additional working capital is required this should be provided at current rates of interest. Secondly, to make a grant of the cost of moving plant and equipment from a present location to the new factory. That goes a little further than what the noble Lord, Lord Bilsland, said a few minutes ago, but it is merely following a pattern followed in Northern Ireland, and I think it is a most reasonable and equitable proposal. If a man has to move his plant and equipment from somewhere in the South of England or elsewhere in this country up to a new location in Scotland, and it costs him £20,000 or £30,000 to do so, at the end of the day he has no direct return on that money. It seems to me perfectly reasonable that he should receive an outright grant of the cost of transferring that plant and equipment—a cost which is involved not necessarily for his own direct advantage, or the advantage of his company, but for the benefit of the economy of the country as a whole. The third proposal is to make a grant to cover the costs of removal and settling in of personnel transferred to the new factory. Basically, of course, that is what is done at the present time. I list it merely in case someone suggests later that by omitting to mention it I was suggesting its discontinuation.

Now these are the first of my proposals, and they can be done without any alteration of the law at all, because the present sections of the Local Employment Act covering these matters are in exceedingly broad terms and can cover directions of the kind I have mentioned. What I am now to propose (again, it is a follow-up of something which the noble Lord, Lord Bilsland, said, but I am again being a little bolder than he, and perhaps a little more incautious) would need action at the present time. I propose, in addition, that the Chancellor of the Exchequer should make arrangements for legislation to grant to industries setting up in approved areas total relief from income and profits tax for a period of five years, and a remission of 50 per cent. of such taxes for a further period of five years.

Having looked at the terms of the Local Employment Act I am aware that it contains a provision for the repayment of grants in certain circumstances, and it would be quite a simple system to extend that method to the remission of income and profits taxes which I have suggested to ensure the continuation of these industries in the approved areas for some years after they have received these grants. For instance, to suggest one possible method, before the remission of tax received in the first year became final, there would have to be one year remaining after taxation had remained. The twelfth year would make absolute the remission received in the second year, and so on; so that, to receive the full and final advantages of these remissions, these people would in fact be committed to remaining in the approved area for a period of twenty years. If I may follow up what the noble Viscount, Lord Mills, said about the Scots being well able to help themselves, if, after they have been there for twenty years, we have not impressed them with the desirability to themselves, of remaining there for their own sake, apart from anybody else, then we deserve anything that is coming to us.

These proposals are easily understood; they are generous and they are workable. Any one of us, meeting an industrialist from -the South, or meeting an industrialist in America, in Sweden, in Germany, or in any of the countries where they are considering setting up plants in Scotland, can tell him these principles, if something of this kind is done, and he can sit down and work out for himself what he will get. If I may, I will quote the case of an actual industry which proposed setting up in either Scotland or Northern Ireland. It was a product which, fortunately for Northern Ireland, could be just as conveniently manufactured there as anywhere else in the United Kingdom.

There came to Scotland the head of the firm—incidentally, although the subsidiary is British-based, the head of the firm was American, and he was over on one of their very rapid visits. He went first to Northern Ireland, and he was there for three days. When he came away after three days he knew the exact amount of money he could get under various heads; he had an idea of the amount for which he could sell his factory in the South-East. And putting the two sets of figures together, he came to the remarkable conclusion that by shifting to Northern Ireland he would be £3,000 in pocket. If he sold his factory for more than he anticipated, of course, it would be £3,000-plus. Then he came to make his inquiries in Scotland, and he learnt that, with the utmost speed, three months must inevitably elapse before he could know what he would get in Scotland. Is it surprising that he decided to set up in Ireland, and is it surprising, although regrettable, that within a year of that decision being taken his subsidiary factory in St. Andrews was closed down and the manufacture of his golf clubs in Scotland no longer continued? Fortunately for St. Andrews, another concern has taken over the factory and has taken over the manufacture of these golf clubs there, so that the local skill continues to be employed.

I have said that my proposals are simple, generous and workable. But an obvious query in matters of this kind is: what will they cost? I thought the easiest way of dealing with that was to take an actual case from my own knowledge as chairman of a development corporation. This is a case where the factory which the people are to erect will cost £100,000, where the working capital will be £250,000, and where the number of men (and I stress men, because that is the most important for us in Scotland: to get industries which will employ men, as distinct from women and girls) to be employed will be 300. Under the present set-up, the rental for that factory will start at £6,000 a year and will rise in due course to £8,000—an average, over a period of ten years, of £7,000 a year. Under the basis which I have suggested for rental, the rent over the ten years will be £4,000 a year, so that the cost per year under that head will be £3,000. Of the capital of £250,000 required, if the firm provided half they would then receive a loan of the other £125,000 from the Board of Trade, which, at present costs, would work out at £7,500 a year in interest. Under my proposal, it would cost them £5,000 a year in interest; so that the saving to them and the cost to the Exchequer under that head would be £2,500.

Now I come to the "64,000 dollar" part of the question—taxable profits. On a profit of, say, £25,000—and if the working capital was £250,000 I do not think it is unreasonable to assume for purposes of this kind a profit of £25,000—income tax at the present rate would be £9,687. Remission for five years and a 50 per cent. remission for a further five years would mean an average cost, at the present rates, of £7,265; so that the total annual cost of my proposals for that firm would be £12,765. At present rates, 300 men at present unemployed will draw (this figure, I must admit, was prepared before the statement made to-day by the noble Earl, Lord Dundee; so the new figures are obviously now altered in my favour), on average about £4 a week in unemployment benefit. That amounts to £62,400 per annum for doing nothing, instead of adding to the productive capacity of the country. It does not look like a bad bargain to me.

Some industries, of course, will be more expensive than others, and some will need a higher capital ratio or more expensive factories. But the costs I have given can be multiplied by five before they exceed the cost of unemployment benefit alone. In addition, the country will, of course, receive large sums in personal income tax from the wages and salaries earned in the new factories, so that the figures I have quoted are not the end of the finances.

I believe that it is possible to work out methods of applying these grants, loans and reliefs to those people presently located in the approved areas, to enable them to increase the number of people presently employed by them. I think that that is important, because at present it is a source of grievance. People say, "Why are we so dependent on people coming in from England, or on people coming from America? What is wrong with the Scots that they do not expand themselves?". So many of the people in Scotland would not be eligible for assistance, that I think it is important that, if those who are presently there can increase the number of jobs, they should receive proportionately the same sort of assistance as is given to the incomer. It is quite simple to work out, given the will to do it.

In the interests of your Lordships' time I will confine my remarks to proposals directed to encouraging new industry into Scotland. I have said nothing about electricity, the use of coal, the continuation of railways, the need for air services (by subsidy, if necessary) and expenditure on roads. These all have their part in the pattern, and neglect of any of them will, of course, have a profound effect on the economy of the country. But I leave all these aspects to others. I would emphasise to industrialists, management and workers alike, that Scotland has much to offer them. The amenities of New Towns in Scotland are as good as those of England, and life in the existing towns is not so different from that in their English counterparts. In most parts the climatic differences are minor: on occasions such as the present, Scotland fares better. Meteorological comparisons show that in rainfall, temperature, and sunshine, Fife is very similar to Kent, except in fog, where the advantage is with Fife. It is easy to get to golf courses, and the golf is cheaper. No one needs to go far to get to good bathing beaches, and even with all that needs to be done in Scottish road works, the traffic jams are not so common as on Southern roads. Almost everyone has lovely scenery within a short journey. Shopping facilities are first-class in all the large centres of population and wonderfully good in some of the smaller towns.

With all these advantages and sufficiently good financial inducements people should be queueing up to come to Scotland. If, in spite of the improved inducements, industry fails to come to the development areas in adequate numbers, then there must be something basically wrong with the private enterprise setup. I believe they will come, with these inducements, but I may be wrong. Maybe nothing we can do will persuade them. If that is the case, then the Government should not shrink from the only alternative—State investment directly in industry. And if that need should arise, and the present Government shrink from their duty, then I am certain that another and more bold one will not do so.

My attention has been drawn to evidence given to the Royal Commission on the Geographical Distribution of the Industrial Population (the Barlow Commission) on the 31st March, 1938. I have objected to the noble Earl, Lord Dundee, giving us history, and now I am going to do the same. It is a rather interesting snippet of history. Evidence was given by one Harold Macmillan, M.P. He was advocating a system of standard charges for the transport of goods, and he instanced, as a pattern of it, the fact that tobacco manufactured in Bristol is sold at the same price in Wick as in Bristol because the charges are equalised over all the customers. He was advocating an extension of that system, with all the difficulties that he recognised were involved in such a proposal. But what interested me particularly, because it seemed to me to be so appropriate, was one particular paragraph towards the end of his remarks. I have only extracts of his speech, and I do not know whether he was speaking for himself or for a group of people, or whether he was using the Royal and editorial "We". He said: It is in our opinion an aim which should be pursued even if it was found to involve some form of State subsidy. It would be better to spend money for this purpose and win freedom to determine deliberately the geographical distribution of population, the desirable size and location of our towns and the best means of preserving the amenities of the country surrounding the towns rather than continue our present huge expenditure in building sprawling areas of brick. To-day our towns are becoming larger and larger prisons within which an increasing portion of our people live in complete isolation from the countryside It is, moreover, costly. A wiser direction of expenditure on the lines we suggest would liberate them and by wider distribution in the country improve their health and vitality. My Lords, a quarter of a century has elapsed since Mr. Macmillan said these things. They are, in my opinion, even more true to-day than they were when he said them, and they can be applied in a much wider sphere than that of transport charges. I do not think I can do better, in closing my contribution to this debate, than to say that I adopt his words in putting forward my own proposal.

5.46 p.m.

LORD STRATHCLYDE

My Lords, my reason for intervening in this debate and intruding on your Lordships' time is that in my capacity as chairman of a public board I have acquired some practical experience of the subject under discussion which may be of some value. This comes about because the Act setting up the North of Scotland Hydro-Electric Board contains this provision: The North of Scotland Board shall so far as their powers and duties permit collaborate in the carrying out of any measures for the economic development and social improvement of the North of Scotland District or any part thereof. The Board have always taken this provision seriously, and although, in interpreting it, they quite naturally decided that first priority should be given to the extensive provision of electricity—at considerable loss—to the sparsely populated and remote areas of the Highlands and Islands covering no less than three-quarters of the land area of Scotland, they have also done their utmost to attract new industries into their district. In this they have had some success, for they have succeeded in attracting to the North a variety of new light industries with a high labour content. They include the manufacture of such items as electricity meters, small lamps, transformers, cookers, small tools and the like.

The Board's staff are continually seeking out further possibilities, and several very promising prospects are about to be signed up. They have reinforced these efforts by taking manufacturers to view suitable sites and by the publication of information in a booklet entitled The North for Industry in Scotland. In the process of doing this the Board, of course, have become well aware of where weaknesses lie in the procedure which presently applies before assistance can be given to those seeking to establish new' industry. It is in this direction that I think I can contribute something of value to your Lordships.

The problem which faces us in the Highlands and Islands is to stop people from drifting away until communities cease to be viable and then gradually cease to exist. What the Highlands require are measures that will keep people from drifting away; and by far the most effective measure is to provide employment. Forestry is already doing that, and will do it to an increasing extent as our forests grow towards maturity and industries dependent on timber are established in their vicinity. Industries of all kinds are hesitant about moving North to the Highlands and that part of our country lying North of Dundee and East of Inverness, and many are unwilling to venture there without some firm assurance of the measure of help they will receive from the Government. Naturally, where public funds are concerned, forms have to be filled up and investigations have to be made, measures which I suggest to your Lordships are quite unexceptionable, if carried out without undue delay and without going into matters of detail which have no very obvious bearing on the financial worth of the undertaking or on its future prospects. Above all, as other noble Lords have said, it is essential to avoid delays such as are likely to create feelings of frustration in the mind of the applicant.

One of the very real troubles is that when the industrialist is in process of making up his mind there does not appear to be anyone who can tell him what measure of help will be forthcoming. My noble friend Lord Bilsland and the noble Lord, Lord Hughes, have both referred to that aspect. There is no one to tell what the rent of his factory is going to be or what financial assistance he will obtain if he wants to own his own factory. I will give an example of the kind of thing that happens, but before I do so, I wish to make it abundantly plain that I am not attacking anyone or imputing blame to anyone. My sole purpose is to point out the difficulties which have arisen and do arise and Which would appear to be inherent in the present system.

The case I have in mind is that of an industrialist who, having decided that he would like to come to Scotland, entered into negotiations with a view to having a factory built for himself. During these negotiations it was indicated that the rent would be about 2s. 6d. per square foot, and it was on that understanding that he decided to go ahead. Later he received notice that the rent would be 5s. 6d. per square foot. In these circumstances, it appeared probable that the deal was going to fall through, but, fortunately, after lengthy negotiation, the rent was restored to the original 2s. 6d. Another case of which I know is that of a foreign company with an international reputation which was seriously considering setting up a factory in the North-East of Scotland. They had visited several sites and found them suitable. They had acquired all the information they required, with the exception of the amount of Government assistance they could expect if they went ahead and built their own factory. The project has not been proceeded with.

There are other questions which have been mentioned and gone into somewhat deeply, but I just want to mention them and no more. Questions on which it is difficult to obtain a ready answer are: Is Government aid available, such as exists in Northern Ireland and Eire, towards the cost of equipping a new factory? Is help available where persons from the area in which a factory is to be, built are required to go to the factory of the parent company for training? Are loans available towards meeting the initial outlay involved in setting up a new factory?

There is one matter which appears to be an insuperable obstacle to some people. This was a case where a loan was in question. All the preliminary hurdles had been successfully negotiated. When the conditions under which the loan was to 'be granted were formally placed before the company, the terms included this clause: The Board— that is, the Board of Trade— have the right to call on the company to remove and replace directors if their advisers report that the company has been incompetently managed and to require the company to alter their Articles of Association to allow for the removal of any director holding office for life. The company refused to accept the clause and the project fell through. And I know of another case of a company refusing to sign an agreement which included that clause. Your Lordships will no doubt have your own views as to the merits or otherwise of a clause of that nature. My own view is that if there is any doubt about the competency of the management, a loan should not even be considered. But further, I should like to suggest that where a loan is in question, the terms on which it would be granted should be made plain at the outset, so that the time and effort involved in the initial negotiations should not be wasted. Once agreement has been reached in principle that a project should go ahead, is highly desirable that it should be completed without any undue delay. That, unfortunately, is not always the case.

At the end of December, 1959, a company made known its intention to manufacture in the North of Scotland. Three months later, full details of the project and the actual site on which the factory was to be built were given to the Press. Thereafter, for various reasons, on which I will not comment, there was one delay after another and the factory was not finally ready for occupation until August, 1962. It had taken two years and nine months to provide the company with a standard—I repeat, standard—factory of 7,000 square feet. Another case was in connection with an extension to an existing factory. Here the company had already been provided with a factory of 20,000 square feet. In August, 1961, agreement was reached to provide an extension of 10,000 square feet. A year later, in August, 1962, work on the extension was just starting, and according to my latest information the extension is not ready for occupation yet. In neither of these cases would there appear to be any real sense of urgency, although both factories were situated in areas of high and persistent unemployment.

There is another matter which, I suggest, calls for some consideration, as it is a source of irritation, and sources of irritation should be avoided in a matter of this kind. In one case of which I know it very nearly resulted in a project falling through. It is that an industrialist wishing either to lease a factory or to have one built for him, is required to sign a letter of indemnity which makes him financially responsible for expenditure incurred by other parties, in the event of the project falling through, not at his wish or through any fault of his, but as the result, it may be, of a mere change of mind of some other party over whom he has no control.

I have a very considerable correspondence with chairmen and managing directors all over the country who, I have reason to believe, may be contemplating programmes of extension. The object of this correspondence, of course, is to interest them in the north of Scotland. The great majority of those to whom I have written—and I have written to some 500 within the last nine months—reply telling me of their interest and their intentions. Many of them tell me that they have recently completed their extension programme but, if they had known what the North had to offer prior to committing themselves, they would certainly have come and seen for themselves before finally deciding on the location of their new factory.

One chairman wrote to me some two months after I had written to him. He told me that he had been on a prolonged visit to the United States and that during his absence negotiations had been continued for a factory in the south of Scotland. He had no knowledge whatsoever that such facilities as I had made known to him existed north of Glasgow. He told me that in negotiation no mention was made of sites available out with the main industrial belt. On receipt of that letter, I got in touch with this gentleman and he asked to be shown what Dundee had to offer. He visited various sites there, called on the Lord Provost and had discussions with local officials, and left saying that he was completely satisfied that Dundee was entirely suitable for his purpose and that he would so report to his board. Some few days later I had a letter from him informing me that at a meeting of his board one of his colleagues had disclosed the fact that to all intents and purposes he had entered into a binding agreement to go to East Kilbride, a situation which he said he would have to accept.

I sometimes wonder—and I wondered during the speech of my noble friend to-day—why some people, when they speak of Scotland, can see no further than the valleys of the Clyde and Forth. They seem to be quite unconscious of that other three-quarters of our country where the introduction of industry is essential unless depopulation is to be accepted and a sportsground is to take the place of what was once, and still can be, a happy and prosperous countryside. Is it perhaps that they can take little interest in projects such as our northern burghs would find suitable and could support? If so, it should not be forgotten that a small project, employing, it may be, only 20 or 30 people, can mean as much to the majority of the communities in the Highlands as one giving employment to hundreds in the industrial belt.

Some of the letters I have received from industrialists speak of the cost of transport prohibiting their coming to the Highlands. Earlier I spoke of an extension to an existing factory. The people who made that extension wrote this: If you have not visited the factory for some time, you will find a very active and efficient unit, which saves about enough to offset the disadvantage of transport of raw material and finished products. Perhaps we make too much of the disadvantages arising from the cost of transport, which, as the experience of this firm shows, can be compensated for by the advantages gained through lower rates, ideal sites, freedom from congested roads and a labour force highly adaptable, very skilled, hard-working and intensely loyal.

I am not one of those who fail to recognise the great benefits which have accrued to our country through the operation of the Local Employment Act and other measures which the Government have taken. That Act, however, deals with a situation where there is a high rate of unemployment or where a high rate of unemployment threatens. Unemployment there must be, it seems, before the provisions of the Act can be brought into operation. In other words, it is not a preventative but a remedy to be applied in the hope of stemming the disease once it has broken out. As I have said before, what faces us in the Highlands and Islands is that people drift away until communities cease to be viable. The Local Employment Act gives little or no help to deal with that situation. What the Highlands require are measures which will keep people from drifting away, and by far the most effective measure in this respect is to provide employment.

There are people who say—and it has been said this afternoon—that even then the drift will continue and the people who have left the Highlands will never return. That is far from being true. Forestry has brought people back from Glasgow to their native glens. When one of the new enterprises in the North advertised for people to go South and train in the new techniques, many of the applications came from England, from places like Corby, and also from the South of Scotland, stating that the applicants desired to be trained so that they could return home again.

If, then, the population of the North is to be retained, work must be provided. If it is not provided, the drift will continue until a stage is reached where the Islands and the northern counties may well have to be garrisoned to prevent unauthorised citizens of other countries from settling there. Your Lordships may think I am exaggerating. But go to the Orkneys; go to the Shetlands; and go even to the shores of the Moray Firth, and look to the horizons and you will see the ships in the distance that will be only too glad to land. For myself, I do not believe that that state will be reached. What I do believe is that, with abundant supplies of electrical power available; with the great improvement in communication by road which the Forth and Tay bridges forecast and which have been spoken of by my noble friend Lord Dundee this afternoon; with a modern freight transport system such as we have reason to believe may soon be forthcoming; with air services which bring Wick, Inverness, Aberdeen and, I hope before long, Dundee within a few hours of London and the Continent; with magnificent sites situated adjacent to safe deep-water harbours convenient to Europe and giving access to the oceans of the world and to every continent (just consider for a moment the potential of a place like Invergordon), industrialists in the not too distant future will discover the advantages which Scotland still has to offer.

But this must come quickly. To hasten the start, to increase the flow of the industrial migration from the South and from across the North Atlantic, the Government must prime the pump; they must provide incentives other than those which they have hitherto offered and must wholeheartedly play their part in selling Scotland to the world. I claim, with all modesty, that the Hydro Board and the Scottish Council are playing their part along with the Government. If the Government will continue thinking in terms of that help, this great area, one quarter of the area of the whole of the United Kingdom, may still be restored to prosperity and enabled to contribute its share to the economy of the United Kingdom.

6.7 p.m.

LORD McCORQUODALE OF NEWTON

My Lords, I venture to intervene in this debate as one whose family, along with many other Scotsmen and Scotswomen, moved South to England to seek their fortunes more than 150 years ago. All I can claim is that we went back to Scotland: the firm that I represent has factories both in Scotland and in England; indeed, I have been fortunate enough to have other business connections in Scotland of which I am very proud. For that reason, as I say, I venture to intervene for a few minutes on a subject which I do not think has been touched upon to any great extent this afternoon. Before I embark on that subject, I would say this. I hope and trust that the Government, and Edinburgh in particular, will pay every possible attention to the speech which we heard from my noble friend Lord Bilsland. It seemed to me that, of the many speeches we have heard in this House on many subjects, none was more authoritative. He knows Scottish, industry probably better than any other living man, and I trust that the Government will profit by what he said, as I am sure that Scotland will profit if they do so.

Let me say straight away that, so far as work in the factory is concerned, in my industry and in other industries with which I am acquainted there is no difference that one can detect in the average productivity or efficiency of the workman or woman between England and Scotland. I have always been brought up to believe that the Scottish farmer is superior to the English farmer, but I have no real method of judging that. I am sure, however, that, so far as industry is concerned, there is no difference in the quality of the industrial personnel. Therefore the point that I wish to make is that it is essential for the continued prosperity of industry in Scotland—after all the things that have been suggested to—day have been done; when all the new factories have been built and the people placed into work—that Scottish industry should be able to compete successfully, both with England and overseas, in the markets which lie open to both. To do that, Scottish industry must become and remain at least as efficient as, if not more efficient than, certain parts of English industry which have advantages of location and one thing and another.

So far as wages are concerned, trade union and employer organisations tend to embrace both Scottish and English industry, and the wage rates are normally the same in both countries. There is one small point—it is only a small point, but it is one of many—that in Scotland, by and large, the rents, especially of those in the municipalities and under the local authorities, are very much lower than they are in England, and the extra charges are borne ultimately by industry. Therefore, in Scotland we must remember that there is an extra charge on industry for the low rates, while in fact the Scottish trade unionist or worker in the factory is getting the best of it so far as money is concerned.

There are many points in regard to this matter which need to be equalised out in some way if we are going to maintain the efficiency of Scottish industry on at least a par with that in the South. A point I wish particularly to mention is in the matter of industrial relations. Good industrial relations are a vital, possibly the most vital, factor in efficiency in any industry or any factory. Good industrial relations are a key to increased output and increased productivity. It would appear, especially to those who stand somewhat outside, that the old antagonisms between employer and trade unionist, which were a lamentable feature in the past, are breaking down rather more slowly in Scotland than in England. I say it would appear to be so, and in discussion of the matter with other industrialists that would appear to be their opinion.

I believe, and believe most strongly, that nearly all enlightened leaders of industry, both management and trade unionist, are now fully persuaded that benefits for both employer and employee come from co-operation rather than from conflict. But I have the uneasy feeling that, with this modern outlook—and Scottish trade unionist leaders will, I know, agree with this statement just as much as their English counterparts do—it takes longer to reach out to the rank and file on the shop floor, especially in some of the older industries. In the admirable Toothill Report on Scottish Industry some pertinent remarks were made on this subject which I think should be borne in mind by all. I think the state of industrial relations in Scotland has been misinterpreted in many quarters, and misunderstood both at home and abroad. It is a fact that time lost by industry in Scotland, although relatively small, about half a day per man per year, is nevertheless considerably more than it is in England. Why is this? The higher Scottish figures of absenteeism and stoppages are often regarded, and I think rightly regarded, as reflecting the true state of industrial relations in the area. The aim far Scottish industry, I would maintain, must be to achieve a record which is as good as, if not better than, that of the rest of the country.

Any economy which is trying to improve its position, as that of Scotland, must look at the factors which are under their own control. I would suggest—and I have said this before in this House—that good relations are a responsibility primarily of management, and it is for management to take the first steps to see that relations in their concern are good. Management must recognise the benefit of modern outlook, of good communications, of proper consultation and the like. But the trade unionists also have a most important responsibility for improving relations, especially, if I might say so, in the matter of indiscipline within their own body, which is causing a good deal of difficulty at the present time. I am sure that nothing would improve the efficiency of Scottish industry more than that steps be taken by the trade union leaders to relax such restrictive practices as demarcation of labour, which is a curse of so many of our industries. I would urge that these matters should receive every possible study by Scottish industry until we can be assured that the time lost in industrial disputes in Scotland is as small as it can possibly be made.

There is one other question to which I should like to refer on the subject of employment, which always seems to be one which has been rather overlooked. The problem of employment in Scotland is mainly, as we have just heard, a problem of unemployed men and of unskilled men. I have long been of opinion (and I have said so in your Lordships' House before now) that it seems to me almost crazy, on social and employment grounds, that we should go on spending large sums of money ion hydro-electric schemes in the Highlands when coal-burning thermal schemes could give steady, permanent employment to the badly hit Scottish mining industry, especially if the economics of the question are more or less in balance. Up to now we have never really known whether they were, but we now have the authority of the admirable Mackenzie Report placed before us which shows that the balance is very small either way—on economic grounds coal-fired thermal stations can be justified just as much as hydro-electric stations. Indeed, the steady, permanent employment provided for Scots miners by the use of coal-burning thermal stations is large and highly beneficial. It is estimated in the Mackenzie Report that the big thermal stations which they suggest should be built in the East Fife coalfields, I think, would provide permanent employment for some 10,000 men.

It may be said that there is not a great deal of unemployment in the Scottish coalfields at the present time. If that is so, it is because of an almost complete cessation of recruitment, the allowance of wastage and encouragement to people to go and look for other jobs. We want to train our young people in skilled work, and coal mining is skilled work. We are assured in this Report that there is plenty of coal to sustain these thermal stations, arid I would urge, as part of the rehabilitation of Scottish industry from an employment point of view, that the Government should act quickly in accepting these recommendations made in this Report, especially so far as coal-burning thermal stations are concerned, so that the Scottish coal-mining industry can recommence to recruit and train young people, knowing that they can promise permanent employment in the future. This seems to me to be nothing more or less than plain common sense, and I cannot for the life of me understand why it is not done and done speedily. Therefore, in intervening for a few moments in this Scottish debate, I put that point forward for most urgent consideration.

6.20 p.m.

BARONESS ELLIOT OF HARWOOD

My Lords, following the noble Lord, Lord McCorquodale of Newton, I wish to intervene in this debate for only a very few moments on one aspect of our Scottish life which, though, strictly speaking, I suppose, is not economic, in the sense of applying to factories and other places which have been discussed, was mentioned by the noble Lord, Lord Todd, in his admirable maiden speech. I refer to the quality of the people of Scotland who are growing up to-day; who are being educated in our schools, in our technical colleges and universities, and who are going to be the people upon whom the responsibility of all this great efficiency, which the noble Lord, Lord McCorquodale of Newton, has so rightly stressed, is going to fall. I believe that it is tremendously important that we should look not only at the material side of our Scottish life but also at the side of the training of our young people, the education and social services. It is for that reason that, for a very few moments, I should like to draw attention to this aspect and to ask the Minister one or two questions with which I hope he will be able to help.

To begin with, there are a great many encouraging things about Scottish education at the present moment—and I am speaking now as chairman of an education committee of a rural county, responsible for ordinary State schools, to which the big majority of children go at the present time. There are to-day far more children studying at school after the age of 15 than there has ever been. In 1956, 31,000 children stayed at school after the age of 15; to-day, there are 50,932 children still at school after the age of 15, an increase of 64 per cent. I think that is a very encouraging sign. It means that people are taking an interest in equipping their children for the technical age.

There has been introduced into the junior secondary schools—and I should like to congratulate the Government and the Scottish Education Department on this step—the new ordinary grade examination; and that has led to a great increase in the number of children taking that certificate. The number has gone up from 18,000, the total when it was started, to 43,000 in 1962. Although that is not a qualification of very high character, it does mean that children in schools are staying on and taking the trouble to do a certificate course; and that is very encouraging indeed.

In Scotland we are also to some extent free from what I understand in England is the great bogy of the 11-plus examination. That is due, first of all, to the fact that our children transfer from primary schools to the junior and senior secondary schools at the age of 12. Secondly, the transfer is done, apparently more successfully, by the transfer boards, and there is much less dissatisfaction. That is also, I think, a very good thing. The junior secondary school has a curriculum which is geared to try to fit a child for an environment in which it is living and is not academic, in the sense of leading on to academic certificate courses. But it is a very important aspect of our education that in these schools there is the greatest shortage of teachers. I hope that the Government will take this question up very seriously, because if we are going to obtain the full benefit of the junior secondary schools we must get more teachers into these schools.

In the senior schools again we are encouraged, because the standard is going up, as well as the number of children who stay on to take these further courses and who go to technical institutions and on to universities. This raising of the level of examinations, particularly the advanced level examination which is at the moment being discussed, and which I understand will be of great importance in the training of the young to-day, will also be of very great help. All these advances, which are improving the quality of the young people who are going to work in all these factories we have been discussing, are excellent.

Furthermore, we have done quite a good job in the rehousing of children, in that 50 per cent. of the school population to-day is housed in new schools. Again, I should like to congratulate the Government, because I think that is a good proportion. Moreover, it makes a great deal of difference both to the teachers and to the children. We have, in fact, spent £1 million on new schools since the war; and that is a very good thing indeed. But there are one or two things which are not quite so good, and perhaps the Minister might consider these, because although we in Scotland have not had the kind of report which came out the other day on the condition of schools in England, I can testify from my own experience to the fact that in rural areas there are still old buildings; and the fact that none of the sanitation in the schools is inside is quite a serious problem. Certainly, it is a very serious problem in the weather we have been having recently, when all the lavatory accommodation which is outside has frozen. That is a matter I think the Government might look at; to improve some of the old school buildings and their accommodation. I should like to draw the Minister's attention to that point.

It is also of great importance to get more teachers in the primary schools. It is extremely difficult to get teachers for primary schools, yet what an important thing it is! Because if there is a really intelligent and delightful primary school teacher from the word "Go", the child is then interested in learning; whereas, how many children have been put off because in the primary schools there were far too many children in the classes and far too few teachers? And the teachers have the heart knocked out of them by what they have to tackle. I should like to appeal, if such a matter is possible in your Lordships' Chamber, to those boys and girls who are benefiting from the great improvement in our educational system to look upon teaching as one profession to which they might well turn; to become teachers when they leave school. It is extremely important that we should get more teachers for our Scottish schools because, unless we do, we shall not be able to keep up, and, I hope, improve, the standard. I do not know whether it is a fact that conditions and salaries are not good enough. Certainly negotiations are always in prospect; but I do not think it is entirely that. I think it is that we want the whole community to care so much about education that people feel it is really a worthwhile profession to go into.

Perhaps I might also draw the Minister's attention to one other aspect of our economy, in the sense of the prosperity and happiness of the community in which we all live. We have another service to do with children, the Child Care Service, which is also absolutely essential. It is doing a fine job; it is doing what it can in difficult circumstances. And one of the difficult circumstances is that new responsibilities are placed upon the Child Care Service in the Bill that we are to debate in your Lordships' House to-morrow; and I am sure that another Bill will come up for Scotland at some time. For child care officers we have in Scotland no proper training; no professional status. They are paid lamentable salaries; local authorities, on the whole, treat the children's departments as a sort of Cinderella. I believe that that is a very great pity indeed.

I should like to see in Scotland a proper training scheme for children's officers, with proper salaries and professional status, so that local authorities have to employ people with knowledge and skill for what is a very difficult profession, since they axe dealing all the time with deprived children, foster parents, adoptions, broken families—all problems which make for unhappiness in the community, an unhappiness which spreads throughout any industrial area. The salaries paid to these officers are disgracefully low. They are not even comparable to those of teachers or probation officers. They are, in fact, much too low, and it is essential that the Scottish Office should look at this situation and try to produce some suggestions to remedy it. I am Chairman of the Advisory Council for Child Care for Scotland, and we have been fighting this battle about training, professional status and so on, for these people. But it is a long struggle, and we cannot get the powers-that-be to take the interest in it that they should. If we could do that, I think that the local authorities would have to look into this matter and see that they had fully trained and good people for this very important job.

There are other shortages in our social services which again, thinking of the importance of the happiness of the whole community, we ought 'to look for and to beware of. Local authorities throughout the country are starting homes for old people—and very important homes they are, too; and very successful. Children's homes also are being started. There is a desperate shortage of all kinds of trained and semi-trained domestic workers to staff these places. In some areas the shortage is acute, and, of course, it applies to hospitals and other institutions of this kind. I should like to see the status and the importance of ordinary simple domestic work, whether it is trained or trained on the job, as many people are, given its proper importance; because without that we shall not be able to keep up our social services and social work in these various ways. I think it is extremely important.

I should like to see the senior schools, when they are making recommendations to boys and girls (I am thinking particularly of girls leaving school, who perhaps have not the academic training which will take them to the university) encouraging them to go into these other forms of community service which are so extremely important, and not just to think that distributive or other trades are good enough. I would appeal very strongly to women and girls to look upon the service they can render to the community, through social work and domestic work in the social institutions, as something of the very greatest importance.

I do not want to speak at any length. I have put one or two points which I hope the Minister of State will consider, because, although they are not closely associated with the economic situation, they are to this extent: that in the education system, in the training of our young people, in the happiness of the community, lies to some extent just what the noble Lord, Lord McCorquodale of Newton, was talking about, the good relations between employer and employed in the communities in which everybody is working and living. This is all part of the economic situation, although it does not figure in exactly the same way. I should like to ask the Minister, when he is considering the development of Scotland, to realise that it starts at the very beginning, in the primary and secondary and technical schools, and extends right up to university. That is where we need to spend more money. We must pay more attention to, and must get more enthusiasm and more support for, this work. If that were done, I believe the development in factories and industry would benefit immensely when the population came to maturity and went to work in these various factories. I beg to support the Motion which the noble Lord has introduced.

6.35 p.m.

THE EARL OF HADDINGTON

My Lords, before making my few remarks, may I associate myself with other noble Lords who have spoken in congratulating the noble Lord, Lord Todd, on a most excellent and convincing maiden speech. I think that Scotland owes much to the Scottish Council (Development and Industry) for all that it has done, and is doing, to improve the Scottish economy, and we owe much to its Chairman, Lord Polwarth, for having put down this Motion in your Lordships' House to-day and for expounding the problems which Scotland has to meet at the present time. I would not venture to criticise the work of a body so experienced in guiding industry and employment. But as the noble Lord's Motion has laid stress on the distribution of industry, I should like just to refer to one aspect of that problem, because to me as a countryman it seems one of major importance.

Although Scotland's population is rising—not very fast, but it is rising; I think it has risen some 82,000 since the Census of 1951—we still have the extraordinary situation where four-fifths of the population of Scotland are living and working in the narrow industrial belt: either there or in the major cities in the country. They work and live there because that is where the best chances of good employment lie. And yet we have the other side of the picture; we have the extraordinary situation where many of the rural counties are suffering a decline in their population. This is always a sad thing to see, because I believe that the old tradition of rural community life is something which is of great value and should not be lightly cast aside. Cannot we spread out a little more? Of course we must deal first with the major problem of unemployment in the big industrial areas. That is vital. We must see that is done. But cannot we make a little more employment in the country as well, always remembering of course the very important point that the kind of employment must be appropriate to its surroundings? After all every job is a job, whether it is in the Forth-Clyde belt, Greenock or Grangemouth or a remote Highland glen.

What sort of industries are appropriate to the country? I do not believe that farming in the South can absorb a great deal more. We have come to the position now when wages are so high that farmers cannot afford to pay them and are going in more and more for mechanisation. But Scotland is a land of incomparable scenery and I would point to the rather obvious industry of tourism first, because I believe that herein lie very great possibilities which even our own climate seems unable to stem. This is a rapidly expanding industry which the Scottish Tourist Board reckon might in five years' time be worth about £100 million. At any rate we see the figures, which show an increase of £30 million spent by tourists in Scotland since 1956; from £50 million spent in 1956 we have come to a figure of £80 million spent in 1960, and it was probably even more last year.

But, of course, we must not lag behind other countries in providing the facilities which the visitor may reasonably expect to enjoy. I believe that the Scottish Tourist Board are fully alive to the problems involved; but they cannot do everything and they must have some practical help. First of all, we want better communications, particularly in the Highlands. I was glad to hear the noble Earl, Lord Dundee, mention roads and what has been done to improve the roads in Scotland. But we must have roads in the north, in the Highlands, as well as in the south. Roads and ferries must be improved, because nowadays people are not content, as they used to be, to wait for half an hour to cross a narrow strip of water.

Then at present the season in Scotland is quite short. It must, and I believe can, be extended, as it is, for example, in the case of the ski-ing season in the Cairngorms. When it is extended it will be worth while for private enterprise to build more and better accommodation for tourists. Noble Lords may well ask, who is going to pay? That is quite a reasonable question. As regards finance, the public services would have to be looked after by the Government, as nobody else can do that. Individual enterprises would have to be responsible for their own finance. That I think is reasonable. But the common local amenities can, I believe, be properly provided only by the local authorities concerned. As these scenic districts usually have a low rateable value, I personally can see no objection whatever to a local tourist tax, an optional tax by the local authority concerned. I know that taxes are not popular, but this would be so infinitesimal—a levy of 6d. to Is. per person per night—that it would really not be noticeable at all; and it is reckoned that it would bring half a million pounds a year into the Scottish industry. That is not a negligible amount at all. Such has been recommended by the Scottish Tourist Board and many other responsible bodies, and surely it deserves some serious consideration, particularly when we think that many continental countries employ this particular method of raising a useful amenity fund with great success. Certainly many of them, I regret to say, can teach us a good lesson in litter-mindedness. So much for tourism.

Another potential source of employment in country districts is the utilisation of timber and its products. I am not going to delve into the subject of forestry, because this is not a forestry debate. I would only say that the forestry industry is capable of enormous expansion. Not so long ago an Under-Secretary of State stated in another place: I need hardly say that forestry, especially in Scotland, is one of our major industries. Then, again, we have the Chairman of the Scottish Woodlands Association, who wrote a most excellent article in The Times this month, which no doubt many of your Lordships read, in which he stated: If the target of five million acres is achieved, there is a possibility of some 200,000 jobs being supported by forestry alone. This, in Scotland, would be a Godsend. But forestry can be a major industry only if the trees grown can be readily and profitably converted for industrial purposes into timber, board, pulp, plastics, cellulose products, chemicals, dyes or whatever you will. The uses to which we were accustomed to put timber are now becoming out of date, and a hundred new ways are being found. There will always, I believe, be a demand for wood so long as it is one of the required species and is properly grown, for, unlike most of these raw materials, wood is inexhaustible and can reproduce itself in a generation. We have the vision of a pulp mill to be built near Fort William which, it is said, is to consume ten million cubic feet of timber annually. How many this pulp mill will employ does not seem to be quite certain; some say hundreds, some say thousands, but at least it will give a lot of employment and I welcome it as a real sign of an integration between forestry and industry. It is a beginning.

I sincerely hope that much more will follow, for I, and I am sure many other noble Lords interested in wood, should like to see more and more industrial forest centres which might be made use of by both State and private tree growers in various parts of Scotland. The Forestry Commission has, I believe, a fine research branch—second to none, I am told—Which has many technical gains to its credit. But I often wonder whether we could not achieve a much closer liaison between the growers of timber and those who wish to make use of its products. Surely this would benefit employment in many industries which forestry can support. My Lords, I have no more to say. I believe that the two points that I have mentioned have a considerable bearing on the Scottish economy. But, above all (things, it seems to me vital that Scotland should have a more equitable distribution of her industries and population.

6.47 p.m.

LORD AMULREE

My Lords. I do not want to take up a great deal of your Lordships' time at this rather late hour, as a great deal of what I was going to say has been said by other speakers and therefore I do not propose to repeat it. But there are just one or two points I should like to make, the first of which arises from the very good maiden speech which we heard from the noble Lord, Lord Todd. I should like to add my congratulations to the many which have been given to him on that speech. He spoke about the value of technological and university education. I should like to take that point a little further because I think I am right in saying that the number of students taking technological courses, either by night study or by day release from work, is considerably smaller in Scotland than it is in England. I have seen some figures quoted to the effect that, whereas the number of students in England and Wales doing this work for their higher National certificate is something in the neighbourhood of 20 per cent., in Scotland it is only just over half that figure, something between 11 and 12 per cent. I wonder whether that sort of study could not be encouraged, because I am sure the noble Lord is quite right in saying that if you can get more people doing that sort of work it would be good for the Scottish economy in general.

I think the same thing applies to the number of children who remain on at school at the ages of fifteen, sixteen and seventeen. So far as I can remember, the figures for Scotland do not compare at all favourably with those for England and Wales. Again, that seems to me an extraordinary thing to happen now, because not so long ago Scotland was extremely proud of its educational system and of the number who were getting a full education in Scotland: more people were getting a full education there than in the South. One wonders whether that aspect is something that could be encouraged, and whether more of that work could not be made available for these young people to do.

Then, one wonders whether possibly there is not a need in Scotland for a new university. It seems a very strange thing that, while in England we are building something like five or six new universities, in Scotland, so far as I know, there does not seem to be a project to build one. Those we have there already are certainly very large. When a university becomes too big, with too many undergraduates, it tends to lose its value. One has seen these enormous universities in America, some of which cater for 17,000 to 24,000 people, and the place becomes so impersonal and so vague that no one knows what is going on, and I do not think this serves the best kind of purpose. I wonder whether it would not be possible for new university projects to be encouraged in Scotland.

My Lords, I should like to mention building and public works programmes. I may be wrong about this, and if I am, perhaps I shall be corrected, but although there has been a Hospital Plan for England and Wales, I have not seen one for Scotland. I think this is very strange because the hospitals in Scotland are just as much in need of modernisation as are those in England.

LORD STRATHEDEN AND CAMPBELL

My Lords, there is in fact a Hospital Plan for Scotland.

LORD AMULREE

Then I can come on to my second point. I would hope the Plan might be put into operation much more quickly than was originally intended, and that, rather than wait ten years, we try to aim at a period of five years.

Then, again, there are too many areas in Scotland where local water supplies are extremely bad, and one would have thought that schemes for the improvement of water supplies would assist in the total employment picture. In the part of Scotland in which I lived for a long time the water supply was extremely inadequate, and, because it was a sparsely populated part of the country, the value of a 1d. rate was not such that very much could be done by the local authorities. I think that this is a point which might certainly be considered.

One enormously important thing in a prosperous economy is a really good and efficient transport system, and it is here that Scotland seems to lag some way behind England—I agree that we are not very good in England on this score, but I think that in Scotland there has not been so much done as there might have been. I should like to give another example of daft planning. At the present time we are building a road bridge across the Forth; we then propose to build a road bridge across the Tay, and that traffic, so far as I know, is still going out into the bottleneck of Edinburgh because no firm plan has yet been made for a ring road or bypass. We discussed this matter at some length a short time ago, and much play was made of the wonderful circular thing around Edinburgh called "the ring route". It is not a ring road, but a ring route. It crosses six or seven main roads, and seems to serve no purpose at all except to make people more frustrated and annoyed. If we are going to keep the traffic moving and to improve the road from Edinburgh to the north, we must have some provision for traffic to by-pass Edinburgh, otherwise there cannot be a proper link with the south, which is one of the important things trying to be achieved.

One has heard—and I hope they are not true—certain melancholy 'things said about the railways in the Highlands, and that they do not really provide an economic service that pays its way. That is possibly true, 'but they are a public service, and I do not know whether there is going to be any question of shutting them down. I think that they should be maintained, and possibly expanded. In Norway, for example, they have areas of a similar sort where the railways run at a considerable deficit, but in that country they realise that they are run as a public service. They are not cutting them down, but in fact are thinking of expanding them. If you are going to improve your economy, surely it is very important to make your transport as good as possible, because that is an encouragement to manufacturers and other people.

My Lords, because of the unemployment in Scotland at the moment there is a certain amount of surplus labour, labour which will be available for some time. One knows quite well that some of the European countries, particularly Western Germany, have very big shortages of manpower and have to import people from Italy to do normal day-to-day work. I am not suggesting for a moment that we should export the Scottish population to Western Germany, but I suggest that one ought to do as much as one can to encourage West German factories and businesses to put up branches in Scotland, which will be good for them and good for the economy of Scotland in' general. It is something which has already been done up to a point, but it seems a form of creating employment which might be encouraged a great deal more. This is nothing to do with whether or not we join the Common Market, but I should like to put that forward as a third idea of something which might be done quite quickly to absorb some of this unemployment. I feel that, with the 'best will in the world, no plan can be made which will absorb it immediately, and we therefore have to take a large number of measures which will play their part in assisting to bring back work to Scotland once again.

6.57 p.m.

THE DUKE OF BUCCLEUCH AND QUEENSBERRY

My Lords, more than anyone I am always delighted to hear my noble friend and kinsman, Lord Polwarth, speaking for Scotland, and to recognise the ability with which he works for Scotland on these occasions. I would ask the Government to support the proposals for employment and industrial prosperity in Scotland in every helpful way they can. With all the international and financial problems which exist all around us, there is naturally a call to the Government in many specific ways. We in Scotland must also show that we will continuously do our best in this situation.

I should like for a moment or two to follow the noble Earl, Lord Haddington, who I was pleased to see drew attention with his usual charm and ability, to the more rural activities of Scotland. Although forestry does not immediately provide a large increase in employment, it would be right for anyone concerned with the use and development of land to draw attention to the opportunities there. With the changes in farming that have taken place, with the number of farms steadily falling, the expansion of forestry is the only other way—and it is an excellent way—to keep families in the countryside and make fuller use of our natural resources in the land. The more I have listened to the suggestions this afternoon, the more it seems to me that much can be done, at less outlay, by the natural utilisation of the land to assist in solving our problems in Scotland both at the present time and in the future.

The points in the debate apply even more strongly to forestry—in the way of expansion by the State and by woodland owners to provide new employment and to create new national wealth in conjunction with the new forests being grown by the State. While we should endeavour to keep the numbers in farming as high as possible, and while more upland in Scotland is being brought into permanent economic activity, forestry as a complementary industry can supplement this by a much more extensive use of land better suited for growing trees. I would ask the Government not to overlook the chance of a much larger contribution in this way. The Forestry Commission and the woodland owners working side by side, have already made a tremendous effort since the war and valuable progress has been made.

My noble friend reminded us just now that this is not an occasion for a debate on forestry, but I hope that your Lordships will allow me to make one or two points to justify our claims. Because, though it may appear that there is less demand for timber as it is being displaced from certain of its former uses, this is, in fact, not so: the total consumption of timber, in Britain and elsewhere, continues to go up year by year, and the demand is always increasing. Unfortunately for those growing timber here, the imports have increased faster during the last two years, and home-grown timber, including that grown by the State, has been difficult to sell. I hope that it will be remembered that only 8 per cent. of our timber requirements are provided from British forests, and that over £200 million is spent annually in foreign exchange. It will be realised how much our balance of payments can be improved. The nation already has a big investment in timber, and many more trees are needed now to take full advantage of this, to enable timber merchants to modernise their plant and equipment, and to justify the establishment of more up-to-date wood-using industries in this country, and to make both economic. The two go together, and between them can help employment and can make good a serious omission in our economy, as has been done by Bowaters, on the Mersey, and as is about to be done at Fort William, where a prospective pulp factory is of the greatest importance for the Highlands.

It may be felt that the British taxpayer has been spending large sums of money on growing good timber but is apparently getting a very small return for the expenditure. I think that to some extent this is a serious matter, and that the taxpayer is justified in expecting a larger return on what is now sold by the Forestry Commission, and what is sold also, with great difficulty, by the ordinary woodland owner. I hope, therefore, that the question of the marketing of timber will be looked into a little more thoroughly at the highest levels.

In that connection, I would ask that forestry be treated as a national industry in the future much more than it has been in the past, both by Governments and by other industries. Home-grown timber should have an equal priority and an equal value if it is of equal quality. Often British timber is of equal quality but, because it is home-grown, is denied an equal demand and is sold for a lower price. Your Lordships may read of a well-known industry in Scotland being horrified if a foreign firm, or even an English firm, is allowed to tender, whereas an industry using wood is apt to ask for imported timber, and accepts British at lower prices only if imported is not available. I hope that this situation can gradually be changed, and there is good reason for doing that. I think we should remember also that the quality of imported timber is no longer necessarily as good as it used to be, or as good as that which is home-grown.

If we are to have an expansion of forestry it is essential to have more housing where the houses are needed. Attention was drawn earlier to-day to the need for more and better housing in Scotland, and if new houses are to be built in different places it is just as well that a proportion should be built in country districts near to places where an expansion of forestry is possible. A family will always be found to occupy them if they are on or near a bus route, with electricity and hot water. But it should be remembered that in forestry, unlike other industries, the owner, whether a woodland owner or the Forestry Commission, has always to provide a house, and a good house, well-suited, in order to get a forester. In other industries that additional capital charge is not borne in the same way. I hope that, when housing, which was raised earlier, is being considered as a result of this debate, this side of the matter will not be overlooked.

My Lords, in concluding I would say that there have been many recommendations for an expansion of forestry, by the Zuckerman Committee in a Report a few years ago, by others since, and by the Food and Agriculture Organisation of the United Nations. I aim also reminded that grants and charges for forestry under private ownership in this country are low compared to those in other countries, and I am quite sure that this is a worthwhile industry to which more attention could be given.

7.7 p.m.

VISCOUNT STONEHAVEN

My Lords, so many eminent speakers have dealt with the quarter of Scotland in the industrial belt that for a short while I want to deal with the other three-quarters of Scotland, a quarter of which, roughly speaking, is inhabited by—again, very roughly speaking—onetenth of the population. Figures like that are very rough and are only indicative, and I think they show that the amount the Scottish Council have done for us is simply terrific. Obviously, their first, pre-occupation must be with the nine-tenths of the population who do not live in the really difficult areas. We in these areas have always been credited in the past with an independent spirit; we paddle our own canoe, and we have got along all right. It may be asked: "Why are you worrying now?" Perhaps we are suffering from a slight overdose of welfare; I do not know. That is a possibility. Nevertheless, that spirit is still there.

I live close to a very small burgh in one of these parts. Last year when the weather was like it is at present a clerk who is employed by the local bank was caught in Aberdeen in a blizzard and no bus could get through. He wanted to get back to this burgh by next day, so he just walked. It was as easy as that. Then we have very fine youth services. I cannot resist bringing this point up, because our Sea Cadets won the championship of Scotland and defeated Dundee into second place. They are now competing for the United Kingdom trophy. For a burgh with a population of under 5,000, that is not a bad effort. So the youths and the lads are there. I want to see jobs for them, not in running England; I want them to run Scotland for a change.

Our education has been mentioned. We have an academy there—a very fine academy indeed. I personally owe a debt of gratitude to that academy. I was coached there long ago by the rector for my common entrance exam into Eton. He dared me to get in. He said, "A silly little boy like you? You are so stupid you will never get anywhere." Well, I did. That is the kind of men you have. To show how we assimilate things, I may mention that last year a tenant of mine, an old man of 73—he was a Belgian who was wounded in the war before last, settled there and recovered, and who now runs a business in the town—thought it would be a good thing to show people he could walk from Land's End to John o' Groats without batting an eyelid, and he did. The spirit is there all right: all that is needed is a slight shove in the right direction.

Therefore, perhaps for a very few moments I might dwell on some of the difficulties one comes up against when one tries to help in pushing the expanding industries—of a very limited nature, of course, because they must be on a very small scale. There are local industries there; some of them are relatively flourishing, and others are contracting. Why expand an industry if you are doing very nicely as it is and, if you do expand, you run into difficulties? You can market the things you are making in the numbers you are making them without any real cost, but the moment you start making more than that, the moment you take on a bigger show, you have all the difficulties of marketing and you have all the problems of running a bigger show—and what rewards do you get? The reward is remarkably little more, if more at all, than you are getting already. What is more, people grow older, and I know that as I grow older I grow more idle; and I am afraid a great number of people are just the same as I am. I think there is a great deal to be said for the argument that if you are going to take a risk with your money, if you are going to invest your capital in a risky project, you ought to be able to get a comparable reward for doing so. The Bible says: Thou shalt not muzzle the ox when he treadeth out the corn". I think there is a very great deal in that; and the nigger in the wood pile, as usual, is, I am afraid, the Treasury.

Nevertheless, there are some other ways in which I think we ought to help ourselves more than we do, and where I think we can. In our special circumstances it is useless for each small borough to try on its own to catch an industrialist. Just like fishing, you flick over your pool where you think the industrialist is swimming along and, if you are lucky, you strike one. You strike him, you play him, and you take him up. If you can get him up to have a look, you feast him and take him round. Then you find all the other people at once trying to pinch him off you. The scrapping is simply terrific. In the end, the industrialist gets off, just like most of the fish in Scotland. We must get together—and if anybody thinks that easy, I would invite him to come and try to get the Aberdeen County Council and Aberdeen City to sit round the same table, or even go into the same room, and he will see that he has "got another think coming". However, there it is; it has got to be done.

Moreover, I think we must consider our own particular part. Scotland has been described by the optimists, among whom I am, as a springboard to Europe. We have wonderful port facilities, and are nearer to the middle of Europe than to London—nearer to Hamburg, at any rate. We have to get together; we must do it on an area basis; we must, in some way, plan it; we must know where we are going: and industry must change. Industry has changed in the past. If you read the statistical account you will find that Aberdeen developed on the textile industry, that the granite trade came in only recently and that shipbuilding has been going on there for a long time. Some of the great days of the shipyards in Aberdeen were the clipper days, when the "Thermopylae", among others, was built in Aberdeen. The "Cutty Sark" was built around the coast a bit. These were the great days of shipbuilding. But we still have great yards. Our particular desperate plight as regards unemployment has been averted, because those yards have secured a very good order to start them off again; but it is a hand-to-mouth existence.

It might be advantageous if I were to mention one or two snags, showing why some fish have got off. We had a company which was interested in Scots pine. They made a Scots-pine-with-cement building slab. It was a very good slab, used a lot by an English company. They were pleased with the site, with the prospects and with everything else. Then it came to the question of cement. The Cement Marketing Company will deliver cement in Aberdeen at a special rate, because most of the cement going to Aberdeen—I cannot remember the figure, but it is several thousands tons a month—goes by sea, though a good deal goes by rail in Presflo wagons. I wanted them to give us the Presflo wagons (we are on the main line) in the station there. The railways were keen to have the traffic. It was an order of 6,000 to 7,000 tons a year; it was not nothing. The price was 10s. a ton higher in Stonehaven, which is sixteen or seventeen miles south of Aberdeen, than it was in Aberdeen, but if one went into Aberdeen and fetched it out one could have it at the same price. The industrialist went off and said, "Really!" There you are. I am an optimist, but if you are going to do that kind of thing, why try?

That was one fish that got off: I will now talk about another that got off. I wrote to the noble Lord, Lord Craigton, about this. He has not had time to reply to my letter, and I was therefore not going to mention it, but I said before the debate started that I would mention it, subject to the fact that he has not had time to look at it and go into it. I think the points are correct. This was a matter between our local authority and Edinburgh. We had an industrialist who came along and wished to put up a small factory next door to a showroom which he had already got, but that part of the countryside was zoned for recreational purposes; it was right on the edge of it. That meant a change in town planning. There was a good deal of argument on the side, which occupied a week or so—a reasonable length of time. The matter was then sent to Edinburgh. Now, to the best of my belief—I hope the noble Lord will correct me if I am wrong, but I have had no chance to investigate it further; I sent him copies of the official correspondence—it was the better part of three months before anybody from Edinburgh took any part in the thing at all. In the meantime, the industrialist just said, "You cannot run a business like this, and I am not coming; I am sorry". If we are to get industry into these difficult parts of Scotland we must be a team; we must all play together. I hope—in fact, I know—that the noble Lord will take this matter up. If I am wrong, I apologise to him, but I am sure I am not wrong basically, though I may be wrong in detail.

Then there are a few other points which I thought might be worth mentioning. We had some figures about what the aid would amount to per man employed. The figure produced by one noble Lord was about £200. If we look at it from the other point of view it is an interesting figure. Roughly speaking, if by mechanisation a farmer can displace a man for one year, it is worth his while to spend £5,000 on equipment.

I should like an answer on another point which cropped up concerning our effort to attract industry. Suppose a local authority says, "If the Board of Trade will put up a factory and let it to us, we can let it to an industrialist." Can that local authority qualify for aid from the Board of Trade? Nobody was able to tell me the answer to that. This was a little time ago and I hope that is now being thought of. It is important because very often the local authority are the chief contact; they own the sites, et cetera. It is just possible that, were we able to have that assistance, we could attract industry into that part of the world. I should like to congratulate the Board of Trade. They have translated into German their pamphlet which I believe is called "Make it in Britain". I thought that was an excellent move, and I have read that there was a very large distribution of that pamphlet in West Germany. I think that is all to the good, because I know that several firms in West Germany were interested in coming to our part of the world, and they still are. Of course, these things take a great deal of time.

I must refer a little to forestry. Forestry has been talked about. The pulp mill which we understand is coming along is being built in the best place for the purpose. Nobody will complain about that. But there is a road haul which could be cut by something like 60 or 70 miles if the Glenfeshie scheme were put through. This would be a very great advantage to the tourist trade and would open up a great deal of Donside and that part of the forest; in fact it could even get through to the forests on that side of Scotland. Not only that, but the paper mills at the moment are situated largely on the Dee and Don in Aberdeen. It is cheaper for transport to come back with a return load, say by carrying logs one way and pulp the other, although there would be only a limited amount of this. It seems to me high time that we had this scheme completed. There is a lot of local opposition, but it is one of the old droving roads and the Government should overcome the difficulties here and get things done.

There is one other thing that surprises me in talking about industry. I do not think anybody has mentioned the industry which is by a long way the biggest, and that is agriculture. There is a crying need for better marketing arrangements for grain, for grain-handling, and I would say the same thing goes for meat and meat marketing. These are natural industries which should be thought of as very suitable for these difficult places and which are not suitable for the industrial belt. Nevertheless, there are abattoirs and such places in the industrial development areas. They are in the wrong place. Agriculture is the kind of industry you can—I was going to say, with a clear conscience—really push in the right direction in our part of the world.

One other point is that during the difficult transition period of the timber industry, there is a lot of small wood of inferior quality, because while every effort is made to grow good timber, one must cut out the worst timber and sell it. The point is that you do not cut out the best quality timber but the worst, and yet you must sell it. In the early stages you have nothing else to sell. There are two uses which could be explored, but in the early stages they require a little sympathy and help from Her Majesty's Government. One is block board. Aberdeen is ideally situated for making this, because the two outside skins can be imported from Finland. It is a kind of three ply board and the quality of the part in the middle does not matter, so long as it is wood, because it gets no stress; our own home-grown timber would be adequate. But nobody in this country uses block board and therefore there would be heavy marketing expenses in the first five or six years, perhaps longer, for any company taking it up. Her Majesty's Government could help here.

The other use that has not fully been gone into is that of laminated timber. People may say that this is nothing new in this country. That is perfectly true. You may also tell me—and again it is true—that most firms in America who tried using it have gone broke. The reason is that you must have a run of standard articles: you probably will go broke if you make one particular thing, but if you make standard articles well it can be profitably used. It is a magnificent medium for making the brace frame for a Dutch barn and farm buildings, and it is far lighter than concrete. Local material could be used for parts of the structure, with inferior material where no stress is taken. That is all I want to say on this important subject, except to congratulate the noble Lord, Lord Todd, on a magnificent speech, and also the noble Lord, Lord Polwarth, for initiating this debate.

7.29 p.m.

LORD FERRIER

My Lords, my first contribution to this debate is to make apologies to your Lordships on behalf of my noble friend Lord Gosford who has had to keep a long-standing engagement and who has asked me to make some points, about roads particularly, which he had it in mind to make. I do this gladly, and more especially as the points accord with my own personal view. He, as I do, congratulates the noble Lord, Lord Polwarth, on the robust efforts at self-help which have been shown by the Scottish Council in the matter of attracting industry to Scotland At the same time I would congratulate the noble Lord on his statement at the annual general meeting of the Council and the speech he made to-day leading up to this valuable debate. That, in a measure, stems from the Toothill Report, which has attracted so much merited attention.

The point which my noble friend and I would draw to your Lordships' special attention is the Committee's call for the removal of the delays and uncertainties in transport to the South, accepting that that would call for increased expenditure on trunk roads. In this respect, reference may well be made to the statement made by my right honourable friend Mr. Boyd-Carpenter, Chief Secretary to the Treasury, in the debate in another place on the White Paper, to which the noble Earl, Lord Dundee, has referred. My right honourable friend said [OFFICIAL REPORT, Commons, Vol. 668 (No. 21), col. 220]: …if we can improve road communications in areas that suffer from unemployment, the benefit from that is not so much the employment directly given by the road projects as the much more substantial and permanent benefit to be derived for making the areas more attractive and more likely to attract industrialists to settle permanently there. I quote that section of his speech because it links up in a measure with what the noble Lord, Lord Hughes, said in his most attractive speech this afternoon.

Accepting that much has been done, we think it is not unreasonable to say that it is clear that there is a great deal more to be done; and in that sense my noble friend has drawn attention to the statement in the Scottish Council's policy that …a greater sense of urgency and drive is still needed. over the whole field of road communications for the purpose of improving Scotland's economic situation. It is easy to say that, but do the means permit? It is possible to point out that the Treasury is the source of the wherewithal from which such developments will stem, but, as the noble Lord, Lord Hughes, pointed out, to say that Scotland's proportion is roughly the same as what England spends on roads is not a fair comparison. It cannot necessarily be held that what is spent on roads in England is the right amount.

I am sure that I am right in recalling that when the report on the South Wales and Monmouthshire road situation was debated in your Lordships' House the findings of that examination were to the effect that a good deal of development could be done with advantage to the area outwith the plans which the Government already had in hand. Would it perhaps be prudent to call for a similar assessment of the needs of Scotland, particularly in the industrial belt? Such a survey, if it were undertaken, would almost certainly indicate further directions in which road communications could be improved.

I feel that we can congratulate the noble Lord, Lord Polwarth, in initiating this debate. At the same time, I feel that there is a great deal of praise due to Government for the manner in which they have faced the problems with the means they deem to have at their command. My noble friend Lord Craigton, the Minister of State, and my right honourable friend the Secretary of State, are right, I believe, when they put the first priority so far as roads are concerned, on the duplication of A.8, though, in my view, in doing that they have not gone far enough.

I was particularly glad to hear the noble Lord, Lord Amulree, draw attention, from another angle, to the importance to the whole flow of road traffic in central Scotland of a by-pass for Edinburgh. I feel no shame in mentioning the matter again in your Lordships' House at this moment, when the hard weather we have been having has interfered so heavily with traffic over the Southern Uplands. Despite the massive expenditure on A.74, the fact remains that Bowes Moor has been closed for ten days and inevitably industrial traffic has been diverted through the bottleneck of Edinburgh. Not only has Scotland's ancient city been flooded with through-traffic, but other cities, perhaps not so noble, have also been flooded with through traffic which could well be diverted from main road to main road.

That brings me to the question of amenity. I am thinking of the need to preserve Edinburgh, particularly the new town and its whole character, from being simply a stopping place for through-traffic. It is true that good roads of all classes provide 'amenity, which has a bearing on this problem of Scotland's economy. It may not seem to have great importance, but I believe that the problem is not only what the Toothill Committee referred as "the need for making personal contacts in a country where distances are great". Admittedly, roads contribute to that, and in a measure the Committee are correct in saying that we are not troubled in, Scotland with roads jammed with traffic, as they are in the South. At the same time, it is fair to say that the time will come when this volume of traffic will increase.

I believe that in the industries which are developing in Scotland, not only in the industrial belt but also elsewhere, we have to bear in mind that to the workers, both labourers and white-coated workers, reliable and swift transport to and from work is important, because it is linked in some measure with the problem of housing. Further than that, despite what has been said, it is not certain that all housing areas provide such acceptable accommodation for the white-coated workers, the technicians and their families, as is available in South-Eastern England; and When climatic conditions are against them it is important to such workers and their families that markets, shops, schools, entertainments, and even sport, should be readily accessible by good roads in all weathers and all the year round.

The proportion of technical workers is increasing in terms of all employees of industry as the old heavy industries develop into the light industries of today. I pause in my speech here because my mind goes at once to the fascinating maiden speech made by the noble Lord, Lord Todd, on this very question of the incidence and importance of the white-coated workers in the industry of Scotland to-day and the reasons why they are so inclined to leave the country. The investigation of the Toothill Committee showed that, by and large, in terms of income, for the young married, say, of the age of 28 or 35, conditions of pay differ but slightly as between Scotland and England, if a little to the disadvantage of Scotland. Is it possible that this problem of amenity, in terms of road communication and housing, also has a strong bearing upon this problem of the inclination to stay in Scotland or to go abroad?—and when I say "abroad", I include England, because of the 24,000 annual emigration to the South only some 50 per cent. go abroad. Another contribution to the debate which has a bearing on this is what the noble Baroness, Lady Elliot of Harwood, said in regard to providing amenities for teachers in Scotland. There again is a type of what I might call white-coated workers who deserve and demand amenity if they are to remain in their native country.

I now turn to a quite separate matter (I apologise to your Lordships for a somewhat rambling speech, but it is difficult to do otherwise near the end of such an interesting debate) and refer to the question of air services. This is a point that has not yet been mentioned in the debate. It is important not only that there should be readily available air services between Scotland and London but that there should be available air services direct from Scotland to the Continent. This should always be borne in mind. As the Toothill Report says, and as my noble friend Lord Polwarth said, this problem of air transport direct from Scotland to potential customers is one which might well merit the consideration of a subsidy.

If I were to criticise the Toothill Report (and it is open to criticism), it would be to say that I agree with my noble friend Lord Stonehaven that it is a little surprising that so little is mentioned in the Report of the importance of agriculture as an industry; and also, as my noble friend Lord Strathclyde said, that it seems to bear entirely upon the central industrial belt and not to deal with the Highland's clamant need for reliable transport both by road and rail. Because weather conditions such as we have had recently make it manifest that there are areas which must be kept open, and must be kept inhabited and provided with services which can be supplied only by the railways. I think it is fair to say that, though people pay large sums to take the Road to the Isles in the summer and the autumn, some would pay large sums not to take that road under present conditions.

That brings me to the problem of migration. As a member of the Migration Board, I should like to say in no uncertain terms that the Committee are right in deploring the absence from the Government records of statistics of air-borne migrants. This is a failure which makes any study of the figures necessarily almost theoretical, and it is a grievous shortcoming in our statistics. Incidentally, in my view the ebb and flow of the Prestwick—Montreal traffic, of which no record is kept other than can be culled from the Labour Department's returns or from Canada, is a subject which deserves considerable study and might reveal important seasonal migration between Scotland and Canada. The fact is that Scotsmen, as the noble Lord, Lord Todd, said, are probably the most important Scottish export, if not in a financial sense; and, as he said again, the trouble is that it is often the most enterprising who emigrate. Here perhaps I may refer to a note in the Toothill Report: that the Committee: could find no connection between unemployment and emigration rates. As I listened to the speech of the noble Lord, Lord Todd, it seemed to me that there were slightly different tacks here. Whereas, certainly in recent years, the pressure of unemployment has not necessarily had a bearing on emigration figures—nor have they been related—I think it is fair to say that the pressure on technicians has been such that the best ones go: it is the quality, rather than the quantity, that is being lost.

That leads me to another conjecture. Is it possible that there is a decline in the ruggedness of the Scottish character, especially in the industrial belt? This is a matter of self-criticism, but I think it is fair to deduce that this may be due to the bitter experience of the 'thirties; the long decline in the coal industry, with the hours and days of enforced idleness; the increased dependence on the rented house, often at a rent which is subsidised by the taxpayer, and the pressure of restrictive practices imposed by trade unions that have contributed to a situation where a painter in Edinburgh can paint a noticeboard and refuse to put it up by putting in two screws because, he said, "That is a joiner's job".

I give that instance from my own experience, but in general terms, if we are using this debate for looking at ourselves and at the worker (we have looked at the Government, at industry and at local authorities), I think it is fair to say that in Scotland there is another economic problem that we must face; that is, the problem of the building and structural trades. There is far too much overlapping. Too often the joiner has to wait for the slater; the slater has to wait for the sweep; the sweep has to wait for the mason; the mason has to wait for the joiner; and on and on it goes. This is something that one does not have to face to the same extent in the South.

LORD SHEPHERD

Oh!

LORD FERRIER

The noble Lord, Lord Shepherd, says "Oh", but if you have to wait in the South you wait for the whole contractor; you do not have to wait for the craftsman who is waiting for another craftsman to the same extent as happens in the North.

To conclude, my Lords, there is something for us all to do. In my view the Government have done a good job, but could they not do more? As I asked at the beginning of my speech, could they be given more means to do more? But as the Toothill Committee have said in their conclusions, the whole community must work together wherever the prime responsibility happens to lie. If this debate has served to stimulate interest and energy all round, then the time has been well spent.

7.50 p.m.

LORD FORBES

My Lords—I can still just say "My Lords", but there are very few present, I am afraid—probably this is the most important debate for Scotland for this decade. The question surely is: will the unemployment rate in Scotland remain twice that of England, or is Scotland to be lifted out of the rut and enjoy the same economic growth as England? I believe that the future of Scotland is as important for England as it is for Scotland herself, as one weak part of the body means that the body as a whole does not flourish. Although this is a most important debate for Scotland and, I believe, for Her Majesty's Government, it should be one of the easiest debates for Her Majesty's Government to answer. We have had very straight speaking, and I now hope that we are going to get a very straight answer from the Minister when he replies—no vague promises or hopes, just a very straight reply.

Scotland has the underlying difficulties which have been known for some time: over-dependence on heavy industry and insufficient industrial mixture. But for about a year the Government have had the remedy presented to them by the Scottish Council, whose untiring chairman, the noble Lord, Lord Polwarth, introduced this debate. The Scottish Council gave Her Majesty's Government the Toothill Report. Most people with the interests of Scotland at heart are, I believe, agreed that the Toothill recommendations should form the basis of recovery in Scotland. The Government have obviously read the Report, because they have issued a pamphlet called Observations by the Government on the Recommendations of the Toothill Report. Now action on that Report is required.

It was, of course, hoped that existing Government measures, mainly the Local Employment Act, would be sufficient to pull Scotland out of the rut, but now it is blatantly obvious that that is not to be the case and further measures are required. Either the Act must be amended or a new Act brought in. Whatever it is, I believe it should cover such suggestions as were made by my noble friend Lord Eccles on November 28, when he said that the Government should put up £200 million over a period of ten years to encourage economic expansion in the United Kingdom in a few selected areas where development would go on simultaneously. I believe that the policy of reinforcing success in a few areas might become contagious and spread to others. Above all, it must be possible for the Government to implement the Toothill recommendations. They must have the necessary powers. We must never forget that redeployment of industry and employment is essentially a human problem. Workers not only have to be rehoused, but also probably retrained. Possibly most important of all, the wives must be happy in their new surroundings.

Scotland must have, in the towns and in her villages, amenities which those who live in the South expect and take for granted. Our house-building programme must be given a new impetus and, above all, private developers must be encouraged to provide attractive housing estates suitably situated for industrial growth points. Then the right environment is essential, and I entirely agree with the noble Lord, Lord Todd, in what he said about derelict areas. May I, at this moment, congratulate the noble Lord on his remarkable maiden speech? It is no good telling prospective industrialists that they can make a rubbish dump into a garden. The very sight of a horrible mess is going to put an industrialist off. How much more attractive would places like Coatbridge and Airdrie be if the squalor of long-decayed industry were cleared up? Also, the old Monckland Canal is certainly not an attraction, and is a considerable danger to children.

The Toothill Report and a great many speakers this afternoon have placed great emphasis on the importance of good communications. In fact, the Toothill Report could hardly have stressed their importance more. I believe that improved communications are a first priority. Although the distances in the United Kingdom are not great compared with those in other countries, they nevertheless present barriers, mainly owing, I believe, to the location of London and to the massive concentration of industry in the Midlands and the South-East of England. We are now in the space age. Barriers, whether real or artificial, cannot be tolerated. Industrialists, naturally, like to live cheek by jowl with their fellow industrialists. This means that if an industrialist is to consider locating his factory elsewhere in the limbs of the country, he must know that he can see his fellow industrialist and return home easily that day. Of the three main types of communication, road, rail and air, I am certain that air is the one that can revolutionise the situation.

First, a brief word on railways and roads. To-day a number of railway lines are not paying their way. These, if proved vital, must be kept going by the Government. If they are not vital, they must be axed. But the money to be spent on keeping unremunerative lines open is the taxpayers' money, and it is the Government's duty to spend taxpayers' money to the best possible advantage. In this connection, we should be wise to remember that the stagecoach went into the museum because a more efficient form of transport was evolved. One day the same may happen to our railways. That day has not yet come, but nobody should have blinkers on. We must not prop up our railways and by so doing ignore newer and more efficient types of transport. Of course, the day when almost everything will be moved by air is a very long way off, and roads will be of considerable importance for a great many years—longer than any of us can foresee. A proper road system between Scotland and the South is, I believe, vital, and for this a main road of lesser specification than dual carriageway will be of little use if traffic is to move at a reasonable speed—and it must move at a reasonable speed.

Therefore I find it very disappointing to know that in spite of the much publicised increased road programme for Scotland, there will be only about 32 miles of dual carriageway by the end of this year between Aberdeen and the Scottish Border. The actual figure disclosed by the Government is 16 per cent. Surely some of the slack should be taken up by increasing the road programme.

Of course, development of air travel is where the greatest impact can be made on communications. In this connection Her Majesty's Government must give a lead. First of all, an internal airline or airlines must be given an annual grant to greatly improve the services. Secondly, the public works programme should be extended and concentrated on improving airports and also building a number of airstrips which would take light planes. These light plane airstrips would serve as feeders to the main airports. So Scotland would get what I would call an air bus service. As traffic increases some of these airstrips might later be developed into airports. The aim would be to establish airstrips so that nobody on the mainland of Scotland, except where the population is very sparse, would be more than 50 miles from an airport or an airstrip. Then Scotland would truly become a land of unparalleled opportunity if the nerve centre of industry, technology and Government, at present far away, should become and remain, through good communications, just round the corner. If this could be brought about, Scotland would no longer envy the economic growth in the South-East of England. Instead, the whole situation would be changed and she would receive stimulation from the expansion in the South-East of England because she would feel close to the South-East of England.

In addition, given highly efficient and cheap air travel, I am confident that many hills and glens would get new vitality from people coming from England, where the congestion is now almost hopelessly bad, to enjoy the open parts to be found in Scotland; and many lonely Highland cottages to-day which are becoming unoccupied and left to decay would be occupied, at least during the week-ends and during the holidays. Any boost to the economy, however small, must not be shut out. Scotland has the opportunities. They must be taken up. But if this is to take place Her Majesty's Government must create the right conditions. Once the Government have given the lead the Scots themselves must grasp their opportunities. I believe that every Scot must become air-minded, and this is the way to overcome the difficulties which centralisation brings in its wake. The magnetism of centralisation often leads to economies but it can also lead to the limbs of the country becoming sorely sapped of vitality.

For a moment, my Lords, I must become parochial and say something about the imperfectness of the present air service between Aberdeen and London, because I think it gives a good illustration of why our air services must be improved. The present popularity of the air service between Aberdeen and London is much diminished by the fact that it is not a non-stop service and it is possible for businessmen and others to become stuck at Edinburgh or Glasgow. The risk is only small, but it is out of all proportion to the deterrent to travel by air. I know it is difficult for British European Airways to assess the popularity of a non-stop plane service between Aberdeen and London, and possibly B.E.A. are not in a financial position to experiment. So, my Lords, the only way to find out the possibilities of such a service is to give it a trial, and for this very reason I suggest that British European Airways should be given a grant. Only in this way will real and quick progress be made in the sphere of air travel.

Notable success is seldom unattached from an element of risk, and in the interests of progress the Government must back this element of risk, because Scotland, with her good labour force, comparatively low rents, comparative freedom from fog, magnificent countryside and freedom from congestion, has opportunities for all, including the industrialist, the tourist, even those who cannot tolerate the killing pace of life, the fog and the congestion in the South East of England. Scotland has a great deal to offer, but the opportunities are not readily available until she has a highly efficient air service. The Government must take action now and really ring the bell; not just a little tinkle from a short-wave transmitter in St. Andrew's House, but a resounding, rich-toned peal that will be heard throughout Scotland. If the Government do this, I can assure them that the Scots will not be slow to respond.

There are many who are saying that the Government have no new ideas for Scotland and that whatever is done will take a long time to materialise. My Lords, the answer is the key to greater economic growth in Scotland as stressed by the Toothill Report: vastly—and I underline "vastly"—improved air services. This means one bold measure, because it would have the greatest and quickest impact on Scottish economic growth; one suitable measure, because it would cost the Government and the taxpayer least; one sweeping measure, because lit would stimulate every city, village, glen and island in Scotland. Then Scotland, with the best possible air service, would soon get that vitality and economic growth she has been striving for for so long.

8.9 p.m.

THE DUKE OF ATHOLL

My Lords, in the interest of brevity I am afraid some of my remarks may appear a little staccato, but I am sure your Lordships will be grateful for this. First, I should like to say a word about council house rents, endorsing what my noble friend Lord McCorquodale of Newton said. It is interesting to note that, as a rough-and-ready rule, there is some correlation between high unemployment and low council house rents, and I feel that the fact that industry has to subsidise these very low council house rents in many Scottish towns and counties has an enormously deterrent effect on industry's moving to those particular areas. I would commend the Government, therefore, on what they have already done in this direction, but ask them whether they could not become a little more vicious in this policy and refuse to give any grants at all to any town or county council whose rent for, say, a post-war three-bedroom house is below 30s. or some similar arbitrary figure. This, I think, would soon have the desired effect, or, at any rate, what is in my opinion the desired effect.

Secondly, I do not think anyone has mentioned the sea fishing industry. This is, of course, one of Scotland's prime industries and a very ancient one. I feel that unless the Government take speedy action in increasing the limit to twelve miles very soon, this industry will be going the same way as so many other industries, such as the shale mines, which have been overtaken by the march of time and the inertia of the Government of the day. There is undoubtedly a great demand for sea fish, so there is no fear that its product would ever be unpopular. But in my view there will not be anything for the fishing industry to produce if the limit is not extended soon to twelve miles.

Thirdly, I should like to endorse what every noble Lord has said about communications. It seems that, as always, they concentrated on that Forth—Clyde belt, with possibly the Kingdom of Fife thrown in for good measure; indeed, we in the Highlands have been particularly unlucky, in some ways, in communications. At the moment it is made much more difficult to get any industrialist to show interest anywhere North of Perth because of the fact that every other day the newspapers say that all railways North of Perth do not pay and may be closed. I am sure that we all agree that that would be a disaster, and I think it would help the towns and counties North of Perth if the Government could tell us what is their policy in this respect and give the exact lines which they consider it essential should remain open, as well as a guarantee that the trains will continue to run over those lines for at least the next 20 years, or until there is a method of transport which can compete with the railways both in cost and in reliability of running. Let us face it: in the winter the roads are not entirely reliable.

Fourthly, I should like to say a little about forestry. I think that at the moment many private individuals are holding back on their planting programmes because of the fear that markets may be flooded by the vast amount of timber which the Forestry Commission are obviously going to be able to produce in the near future. I am not criticising the Forestry Commission's planting programme in any way. It is an excellent thing: they have brought a lot of employment to areas which otherwise would have virtually none, and I sincerely hope that they will continue with the programme. But I feel that it would encourage private individuals to plant more if the Government would give some guarantee for prices in the future of timber under 30 years old. There is no difficulty at the moment in selling timber that is over, in round figures, 30 years; it is quite big and has a great many uses. But there is absolutely no market at the present time for first and second, and even third, thinnings of softwood plantations, with the possible exception of spruce, which is in a slightly different category. In my view, people would be much more encouraged, and would feel more able to go ahead, if the Government could give some guarantee of this. I also feel that it might help if a fund were set up to finance people who could not afford to do their own planting but did not wish to sell or lease their land to the Forestry Commission. This fund might give loans which for the first 20 years should be interest-free, interest thereafter being at commercial rates.

Lastly, I should like to say a few brief words about tourism. The tourist trade is Britain's fourth biggest export, and I think it should be regarded as such. It should now be regarded as an industry and not as a plaything, which appears to be the way the Government regard it at the moment. It brings employment to areas where employment is most needed, because, on the whole, people like to take their holidays in fairly remote areas—at any rate, they do not like taking their holidays in large industrial towns. I think the Government can help the tourist industry in several ways: first, by keeping the railways in the tourist areas open, even if they do have to be subsidised a little, and, secondly, by building roads. Up till now, as always, everyone—including the noble Earl, Lord Dundee, who said with pride there would be dual carriageways between all the major cities in Scotland, mentioning a series of towns in the Forth-Clyde belt—has concentrated on the Forth-Clyde belt. But I can assure your Lordships that although there have been plans for at least seven years to improve the A.9 between Perth and Inverness, so far only three miles has been improved. The rest, with the exception of a piece where a narrow bridge has been removed, is in the same state as it was before the war. I think it would help tourism if trunk roads were improved and brought up to a good standard, so that one could overtake a car towing a caravan, which cannot be done on 90 per cent. of them at the moment.

The next point concerns hotels. The hotel industry find it very difficult to borrow money commercially because they are still regarded by the banks, rightly or wrongly, as a bad risk. I fully appreciate that the Government cannot influence the banks in any way as to whom they lend money to (indeed, at times they try to cause them not to lend money at all, which I think is a pity), and that the banks must be allowed to pursue their own course. Sir Hugh Fraser has set up what is called the Highland Trust Development Council, which has done a great job for a very small area. I wonder whether the Government could not set up something of the same kind which could cover the whole of Scotland and not just one or two small areas.

It is interesting to note that between 1950 and 1960 only five hotels were built in Scotland and they were all very small. This, for an industry which has grown enormously in volume over the same ten years, seems to me to be remarkable; and shows that there must be some difficulties in the hotel industry which do not afflict other industries. Another thing which would help the hotel industry would be to treat the equipment in the same way as the equipment of every other industry in the country; that is to say, if hotels were given initial allowances, which at the moment they are not given, on their furniture or equipment. I cannot quite see why this distinction has been made, and it seems to me it should be ended.

I should like to give a bouquet to the Government for amending the licensing laws in Scotland last year. I am sure that this has been of enormous benefit to tourists. I would ask once again, as I did last year, why we must go on having State management areas, which give us an oasis in the comparative normality of the drinking laws in Scotland, where it is impossible for a private individual to get a licence to run a hotel or public-house or off-licence. Without having the bar trade it is almost impossible to make a hotel pay, and so in these areas there is virtually no incentive for any private individual to start a hotel. Could the Government not consider repealing these State management areas? It would require only a very small Bill which I am sure would be largely non-controversial.

I should like to mention very briefly the development of other tourist attractions, all of which cost money and for which, at the moment, there is no finance. I myself am basically very much in favour of some form of tourist tax, kurtax, but, unlike my noble friend Lord Haddington, I think it would be a great pity if this were administered locally and not over the whole of Scotland. The amount of money that this can produce in one local area will be entirely inadequate to build a ski-lift or a swimming pool, or a major development of that sort, for at least ten or twelve years, and we want the amenities now to attract the tourists of the future. We do not want to collect sixpence or one shilling from them now and not have anything to show for fifteen or twenty years. Even though people are likely to be keener on the idea if it is administered locally, I think that in the long, run it would be a great pity if this were so. I am sure that a tourist tax would be of enormous benefit to Scotland, but that it should cover the whole country and should be administered with a view to helping the whole country and not just the areas in which it is collected. Having said that, I apologise for being so staccato, but I feel strongly on all these points and I think that the Government should help us in some way.

8.22 p.m.

THE EARL OF AIRLIE

My Lords, I had not intended to intervene in this debate at all, but I want to say how much we appreciate the efforts of the noble Lord, Lord Polwarth, in initiating this debate in your Lordships' House and in all the work that he has done for Scotland during his time as Chairman of the Scottish Council (Development and Industry). I also think we should congratulate noble Lords on their attendance, because a great many noble Lords do not live in England; they have come from Scotland especially for this job, and it is no fun travelling on British Railways these days, as your Lordships all well know, because the heating has completely gone and is a thing of the past.

I want only to emphasise one or two things: first, that Her Majesty's Government should remember that Scotland is a country itself with its own laws and customs, and not just a collection of counties added on to England, such as people often believe. I believe in unity. I am a strong believer in decentralisation, but I am not a nationalist, although I am often taken as one. I think the noble Lord, Lord Forbes, mentioned a fact that affects the Government as much as anybody else—namely, that you cannot have a body that is well and an arm that is sick. You must have Scotland as well as the rest of the country, otherwise you will merely have a sick whole, and you cannot get on in that way.

There is no doubt that Scotland is extremely sick, and something must be done about it. Whether it is perhaps our own fault that we have been so long subservient to England and, so to speak, second in command for so long that we have lost a good deal of our old self-confidence and independence, I do not know; but we must get it back. Above all, we must get back again our self-confidence and independence. It may be that perhaps, as I think was mentioned by the chairman of the Hydro-Electric Board, we have failed in our obligations towards certain people.

Therefore, I make certain suggestions. The first is one which will not he well received by the Treasury in this country. It is that there should be a Joint Treasury Board. I think that it is essential that there should be a body of opinion in the country, living in Scotland, which can advise on financial matters. I know the names of several young people who would come forward and serve in that capacity if they were so wanted. It is vital that this should be done.

The second thing that was mentioned was the question of immigration. I give your Lordships only two instances which are interesting. I happened to travel on a train the other day and there was a woman who said that she was going home. I always talk to people and I said, "Where do you live?" She happened to live in my own county. She said, "I am going home. My husband is a chartered accountant and he is working in the Midlands." I said, "Is he? Why is he doing that?" She said, "Because in England the salary is £2,000 a year, but in Scotland it is only £1,000 a year." So this immigration question has a great deal to do with salaries.

The second thing is that the Treasury has the appointment of civil servants to the various Departments. The No. 2 at the Scottish Office, who is a most efficient man, was eventually shifted down to the Home Office. I said to him, "How can you do this?" He said, "I cannot afford to do anything else. This is the land of opportunity. I must go South. I have sons to educate." Therefore I cannot help feeling that immigration has a lot to do with this question of salary. This general exodus of people from Scotland to England must be attended to. Salaries must be put up so that people in Scotland can earn the same as it is possible to earn in England.

Certain matters have already been dealt with by noble Lords. One such thing is tourism. Tourism is an industry, and I think that we must increase tourism in the Highlands. Finally, there is the question of housing. If a man has a good house he and his wife are happy. This question of housing must be looked into. In the rural districts of Scotland the housing is fairly good, but there is a lot to be desired in the urban districts of Scotland, where there is room for great improvement. Most of these matters have already been dealt with and. owing to the late hour, I will close, having put forward merely those points to which I hope the Government will give attention.

8.27 p.m.

THE EARL OF PERTH

My Lords, we have had a good debate, if a somewhat long one. I think not only that the noble Lord, Lord Polwarth, is to be congratulated on moving the original Motion, but that all those who have taken part have dealt a fair blow for Scotland. I am hoping that the debate is going to be even better when we have heard the reply of the Minister of State and all the good things that I am sure that he has up his sleeve for us. I feel the more confident of that because the noble Earl, Lord Dundee, spoke very much of the past, as the noble Lord, Lord Hughes, pointed out. It is a good past, but it is the past, and we have at the present moment over 100,000 people unemployed; so we must not be too satisfied with the past, even if the record is fairly good.

My general impression of the debate is that it is one not of defeatism, not of our being down and out, as Lord Polwarth pointed out, but rather that there have been many constructive suggestions for the resurgence of Scotland, for its leading the way so that it will be one of the main strengths of the United Kingdom. This has been a non-Party debate: Scotland has come first, which is what we all expect. One of the most interesting things that have come out of the debate has been the fact that one or two speakers not only have said that "the Government must do this", and "the Government must do that", but have also told various Scots at home what they should do.

The noble Lord, Lord Todd, in his remarkable maiden speech, said that we lag behind on research and development. That, I think, is largely a problem for management. Then, the noble Lord, Lord McCorquodale of Newton, pointed out that good neighbour relations were a key thing for us. Again, that is primarily something for management. Then my noble friend Lord Stonehaven made the point that it was most important that local authorities should get together. It is not only the Government who have to do things. We have to do things ourselves.

My Lords, as I see it, there are two sides to what has to be done. The first is the very short term action to take care of immediate unemployment. There was the suggestion of dealing immediately with the derelict areas. That is a good example of providing immediate employment to take care of the immediate situation. The second is the long-term problem—the provision of better schools and improved education. One can start on this now, but the result will not show for many years to come. There are certain things which will kill two birds with one stone, if I may so put it: that is to say, it will help in the short term as well as in the long term. The most obvious example is roads and bridges. We have heard of their importance to tourism and to forestry in the north; we have heard of their importance to the industrial areas. The noble Earl, Lord Dundee, has said that we are going to spend £71 million in the next five years on roads, and that is an impressive figure. But I should hope, in the position in which we are to-day, that we should try to do better than that and try to spend a large part of that sum in the first year or two.

Here is our opportunity. We can all give examples in different parts of Scotland. I will give an illustration about Grangemouth. It is true we are going to have two fine bridges in this great port, but when you go north you find that Chesterton with his English roads has nothing on the roads there. You will recall he spoke of A reeling road, a rolling road that rambles round the shire. I assure your Lordships that the roads going north do a good deal more than that. They want widening and straightening, and they want it now. Then, again, another excellent stone for killing two birds is to deal with the housing and the new towns. I do not wish to elaborate on this point because so many other noble Lords have already done so. I think that we ought to encourage private builders to get on with this work. Nothing would be better for providing employment and bringing about a new feeling in the country. I do not understand why there has been so much hesitation in Scotland in the past over having private housing. Wherever I look I see people busy with their gardens, and if you are proud of your garden you should be proud of your house.

My Lords, I want to touch on one or two bits and pieces, as I call them. First of all, I should like to touch upon the Fort William pulp mill, because I am not sure that it is "in the bag", as it were. We have heard from the noble Duke, the Duke of Buccleuch and Queensberry, about the importance of forestry. If we do not get this pulp mill up at Fort William, then the whole of the Highlands will be in a bad way. I only hope that the pressure will be kept up and that there will be no hesitation at the last moment so that the thing will not see the light of day. Forestry to-day provides employment for one person to every 100 acres, but once the trees have grown, once the thing has really got going, I think we shall find we need four or five men per 100 acres. That is the experience in Germany, and I see no reason why that should not be the case here. We must go all out on this.

The next item in my "bits and pieces" is what noble Lords have talked about again and again, and that is that the industrialist must be allowed to see the carrot. I find it absurd that, for some unknown reason, the Board of Trade has to keep up its sleeve what it is prepared to give as a minimum to help industry. I simply cannot see the reason behind it, nor could the noble Lords, Lord Bilsland, Lord Hughes, Lord Strathclyde and others who have spoken. I hope that there will soon be a change in this matter. Then there is the question which we have heard so often this evening: where are we going to use the carrot? I find it very curious that under the Local Employment Act, as I understand it, as soon as a thing gets going you have to stop. When I was in business I was always told: "Cut your losses and run your luck". If business proceeded on the basis of the Local Employment Act, they would go bankrupt to-morrow. Therefore, I hope that to this extent it will be changed, that the Government will recognise the well-known saying that "Nothing succeeds like success", and will carry it out.

Again among my bits and pieces, I want to touch on the question of the coal-powered station. I would underline the word "coal", because in regard to this large new power station that is proposed I understand that there have been inquiries as to whether the oil companies might tender for the fuel. I can understand that that inquiry might be made as an exercise, but, thinking of all the arguments that must be weighed on the other side, I hope it is nothing more than an exercise. There is the saving of foreign exchange through having the coal produced at home; the uncertainty from the source of the supply being abroad; and the realisation of the employment it is going to give —new jobs for 10,000 miners, and all the ancillary jobs that must flow from it. I understand that it costs at least £2,000 to create a new job, if you can find a new job to create. Here is one offered to us without any great, difficulty at all. If my calculation is right, if oil is used one will have to spend some £40 million to create an equivalent number of jobs.

I should like to mention the Scottish Council. I do not know whether I should be saying this—and perhaps they would not like me to say it—but what a splendid job they do, especially having regard to their budget of only £70,000. The only reason the Government get away with this very low figure is because of the immense amount of voluntary work that is done and because of the considerable sacrifice on the part of the people involved in it. I think the Government should seriously consider doing the same for the Scottish Council as they do for the Dollar Export Council: match pound for pound the subscriptions that may come from all over Scotland. I believe that with that additional certainty of funds the Council would be able to expand their representation and agencies, as they have done to an extraordinary extent already when one considers their "shoestring" budget. I do not know how they manage to carry on at the present figure. My Lords, I cannot develop all the various points, having regard to the time of the evening. Obviously, there are many others—for example, the Rochdale Report on the importance of the Port of Leith. Let us now get on with it.

I now come to my last point, the implementation of the Toothill Report, which, if it is not a five-year plan, is a framework, a broad industrial plan for the economy of Scotland. I know that the Government accept many of its recommendations; we have seen that from their observations which were published in August. We heard further from the noble Earl, Lord Dundee, about the additions to the new Scottish Development Department, which are very satisfactory. Then, behind them, we have the Scottish Council, the "ginger group", as it were. But there is still a demand for something more. The Scottish Trades Union Congress have suggested that there should be an Economic Conference; and if one reads Scottish newspapers, one sees demands for the setting up of regional and other bodies. Even if the existing organisation is adequate, as has been in some degree argued by the Government, it still has not caught the imagination in Scotland; it has net succeeded in doing the trick of letting the people in Scotland feel: "We are all in this together, and can all, directly or indirectly, play our part". It has not succeeded in touching the spirit of Scottish nationalism.

The other day the Government produced a secret weapon (if I may put it that way) for the North-East, in the noble Viscount the Leader of this House, Lord Hailsham. But I would suggest that, while we do not necessarily want a secret weapon, there is something else that we might consider. What I have in mind, following the suggestion made by the Scottish trade unions, is that a conference should be called in Scotland. Who should be in that conference? Well, obviously, the industrialists, the agriculturists, trade unionists, local authorities, and universities, with their scientists and the technicians. There might even be some M.P.s and one or two Peers.

If I am asked "What would be the agenda of the conference?", my answer is that it would be the carrying out of the Toothill Report, or seeing how it is carried out. What may be the outcome of the conference? I do not know. If I knew, perhaps there would be no point in the conference. But it may produce something new; it may strengthen existing organisations, or do something like that. If it goes well, then I suggest that a year later we should have a second conference, following up all the work done during the year. It would be a sort of annual report to the nation, rather in the same way as f think occurs to-day in America. But this would be a particularly Scottish affair just to see how they are getting on, and everybody would feel he was taking part. So I hope that that suggestion will be considered by the Government, although it may be that, with hard logic, everything is beautiful as it is to-day.

My Lords, we are all anxiously awaiting the speech of the Minister of State. I hope, and I know all your Lordships hope, that he is going to produce some good things for us, and a promise of more to come after he has had a chance of considering all the points that have been made by your Lordships. I would assure him of our strongest support in any battles he may have with other Government Departments as a result of the debate, in trying to get the things we want which will enable Scotland to go forward. I know also that he will not be surprised if I say that if there is a faltering, then the Scottish Peers who have come down here tonight will not hesitate to come down again to attack and to return to the charge.

8.43 p.m.

THE MINISTER OF STATE, SCOTTISH OFFICE (LORD CRAIGTON)

My Lords, I must first thank the noble Lord, Lord Polwarth, for giving us this opportunity to have what has been, I suppose, one of the most important debates about Scotland that we have had in this House for many years; and I agree with the noble Earl, Lord Airlie, that we are sincerely grateful to the many noble Lords who have come to speak to-day, often at considerable difficulty.

As my noble friend Lord Dundee said, four and a half years ago there was a very similar debate in this House, in which some of your Lordships here to-day made constructive and farsighted speeches forecasting the problems that lay ahead, and wondering what, if anything, the Government were going to do about them. As my noble friend said in his speech, the noble Lord, Lord Polwarth, made a plea for a steel strip mill and also for a graving dock. I hope that history will repeat itself over many of the suggestions that your Lordships have made to-day. But my noble friend Lord Strathclyde, who on that occasion wound up the debate for the Government, was cautious: he referred to neither of these points. I am in the same position to-day. I will try to answer adequately as many points as I can, but I am well aware that what your Lordships want from the Government spokesman is not pious hopes and promises that are not fulfilled; you want results, and before results are certain Ministers must often frame their words carefully.

I hope to satisfy the noble Lord, Lord Bilsland, that, even though we have not met with the success he and I would like, he is going a little far in saying that the Government have failed to take cognisance of the situation. I hope, too, to satisfy the noble Lord, Lord Hughes, that the Government realise to the full that, however well we have done, we still have not done well enough. The noble Lord, Lord Todd, whom I should like to congratulate on such an excellent maiden speech, has referred to Scotland as the birthplace of technical education. It is good to realise that we are still providing a lead in spite of the losses of skilled manpower to which he drew attention. At the highest level, the Royal College of Science and Technology is on the threshold of a new and unique development as a degree-granting institution in its own right. As announced last year, the University Grants Committee has accepted in principle the case for its elevation to this status. Arrangements are now being worked out so that it will be ready to start, in the light of the Robbins Report, on a new career as the first separate technological university in Great Britain. At apprenticeship level, the Stow College of Engineering in Glasgow introduced an experimental scheme for apprenticeship training last September. The scheme, which is the first in Britain, is designed to ascertain the value of an alternative to the traditional type of training in relation to standards of craftsmanship. This full-time course will extend over three years, and it will be followed by a period of two years in industry to complete the normal five years' apprenticeship. We are very grateful to the bodies who have made this course possible.

The noble Lord also suggested that there should be an intensive effort to stimulate technological development. In this field the central institutions can help, and are in fact doing so. Some years ago, as he will know, a pioneer scheme was tried out at the Royal College of Science and Technology in co-operation with the Department of Scientific and Industrial Research. Wider developments are now being launched, again in co-operation with that Department. The governing bodies of the Heriot-Watt College in Edinburgh, Robert Gordon's Technical College, Aberdeen, Dundee Technical College and Paisley Technical College are each in process of appointing an additional lecturer with teaching duties so limited that he will be able to undertake liaison with local industry as his main task.

The noble Lord said that he would like to see Scottish industry making more use of the National Engineering Laboratory; and how I agree with him! In this field, and indeed in many fields where the State provides services for the common good, we are beginning to realise that it is not enough just to provide the services, however helpful or however efficient they may be. The noble Lord, Lord Polwarth, said in another context—and we keep on quoting Lord Polwarth to-day—that it is no good keeping the carrot in one's pocket; the services have to be well and intensively sold. If a good course is badly attended, or a good service inadequately used, the organisation sponsoring it should re-examine its own selling methods and take steps so to revise its arrangements that suitable staff are free to visit those who could benefit and spur them into action. Such is human nature that this applies as much to services that are given without payment, if not more so, as to those for which the user has to pay. In the past we have all been to blame here, but we are learning fast, though I must say that my criticisms of past failures cannot be applied to the Atomic Energy Authority in Scotland, whose contribution has been truly outstanding.

The noble Lord, Lord McCorquodale of Newton, spoke about industrial relations, and though he is not here I should like to answer the point he made. My Lords, this is a field in which, as the citizens of this country are now beginning to realise, a very great deal needs to be done. In a society such as ours, public opinion is the most potent force as an arbiter of proper behaviour. Its support of laws as necessary and wise is an essential part of the machine of Parliament and Government. In this stirring of public opinion, I believe an essential step has been taken in the improvement of industrial relations, both by management and by men.

In practical ways the Minister of Labour has taken the initiative. His National Joint Advisory Council has discussed a number of basic problems, such as joint consultation, dismissals procedure, and training for supervisors and Shop stewards. The Minister of Labour has taken even more direct action with industries with a high incidence of unofficial strikes. Joint talks with employers and the trade unions in the motor industry have led to practical steps to improve relations on the shop floor. Similar talks with the shipbuilding industry have led to the setting up of a working party. The Contracts of Employment Bill, With its many benefits, has been presented this Session; and the National Joint Advisory Council have been asked how improvements can be made in other directions, such as better provision for redundancy, improved arrangements for sick pay and retirement pensions, and a guaranteed minimum wage. In short, our overall aim is to improve the security and the status of work; and to achieve this, regardless of Party politics, we need, and I believe we have, the support and understanding of the majority of our people.

Now the noble Baroness, Lady Elliot of Harwood, spoke about education, and I will answer her shortly. On the question of the shortage of teachers in primary and secondary schools, as she will know, everything possible is being done—and I endorse the appeals she made. On the question of rural areas, she mentioned old schools and outside toilet accommodation—not very pleasant at this time of the year. I will tell her that progress is being made on modernisation, and the policy is all in the White Paper, Education in Scotland—The Next Step. If she has any particular case in mind—it is mainly a local authority matter, as she knows—I should be very glad if she would bring it to my attention. I will look, as she asked me to, at the whole question of the status and training of children's officers.

The noble Lady asked for more money for all types of educational establishments, and she gave figures for expenditure on schools. I should like to give her some information about how her wishes are being met in relation to technical colleges. I agree with the noble Lord, Lord Amulree (who told me he could not be here to listen to my reply), about the importance of technical education. The story of the building of technical colleges, which is gathering momentum, is a really good one. In Scotland, 54 major projects have been approved at a cost of £27 million; three new colleges came into use last year—at Falkirk, Glasgow and Arbroath; and that at Paisley will be completed soon. Ultimately, there will be 27 new technical colleges in Scotland, and, in addition, 27 major extensions or improvements to 17 existing colleges. The number of whole-time teachers has risen, and must increase still further: 1,350 in 1956, 2,000 in 1961, 3,500 in 1970. Many of these must come from industry, and a special course for teachers from industry was started last year at Jordanhill. To assist authorities, a central register of potential teachers now in industry and commerce has been established. Day release has been gathering momentum, though unfortunately not yet over the whole field. This is a challenge which still has to be met, but the figures are encouraging: 1946, 5,000; 1961, 42,000. Several factors will cause these figures to increase further. First, they must increase as the new technical colleges open; and, secondly, the new craft courses devised by the City and Guilds of London Institute, together with Commonwealth Technical Training Week, National Productivity Year, and the hard fact of increasing competition from Europe, will all act as inducements.

Now on another matter, my noble friend the Duke of Atholl, who is here, referred to rents, and so did the noble Lord, Lord McCorquodale of Newton. The unjustifiably low rents of many local authority houses have for many years been a source of worry to the nation, and I agree with noble Lords that they have been a brake to progress. Local authority finances have been distorted; the burden on the rates of low-rented houses has left too little money to build houses and too little to provide other essential services; and as other noble Lords have said, it has affected industrial expansion. Especially has it affected the movement of labour, which is understandably unwilling to move from a low-rent area to a higher-rent area. Low rents have also affected private house building. After all, the cost of the pride and pleasure of owning your own house seems rather high when you are living in a fine, modern, corporation house paying about 12s, a week for it—and that is what the average rent in Scotland is today. But in 1960 it was 9s.—9s. ld. to be exact; so our efforts are beginning to succeed. After all, 12s, is one-third up on 9s; but there is still a long way to go.

Only recently, there have been two legislative measures which will tend to increase rents: the strengthening, in the Housing (Scotland) Act, 1962. of my right honourable friend's default powers where a local authority is found, after a public inquiry, to have failed in its duty to review rates; and then, again, the provisions in the Local Government (Financial Provisions) (Scotland) Bill designed to prevent expenditure which is used for meeting housing deficits, and which is therefore attributable to unduly low rents, from attracting Exchequer equalisation grant. We intend to keep up the pressure here until a proper balance is achieved, which is, of course, reasonable rents which give no subsidy to those who do not need one, combined with rent rebate schemes to ensure that no one in genuine need pays more rent than he can reasonably afford. We think then, to use the noble Duke's word when he said we should be vicious, we are so far being vicious enough.

Many speakers—the noble Earl, Lord Haddington, I think, and others—spoke of the problems of the Borders and the Highlands. That is a debate in itself, and it is very difficult for me to reply adequately and shortly. Fundamentally, it is a question of depopulation, and those noble Lords who spoke of the value of forestry and agriculture and complementary activities, and the indigenous industries such as fishing, were, of course, absolutely right. If one may separate the Highlands from the Borders for a moment, my noble friend Lord Strathclyde was worried about getting industry into the Highlands. Over industry, the Highlands Panel has recently established a development group with the assistance of my own Department and of the development officers, for whom, I believe, my noble friend Lord Forbes was originally responsible. Here I must say that the Highlands Panel, whose minutes I read with great interest, do a wonderful job both in helping industry and in helping the Highlands in every way possible. In the Borders, our difficulty is the attraction and the stimulation of industry, and here I could not agree more with what the noble Viscount, Lord Stonehaven, said about local authorities working together. He was not referring to that area; but this is one of the areas in Scotland where I believe much could be done if the local authorities would work more closely together and not, as the noble Viscount said, compete with each other for one unfortunate, incoming industrialist.

Much was said by the noble Earl, Lord Haddington, by my noble friend Lord Forbes and by the noble Earl, Lord Airlie, about tourism being an industry. In both areas, tourism has been the subject of a special effort, though much more so, I think, in the Highlands than in the Borders. I believe the Borders could do more, but this is too wide a problem for me to deal with to-day. My noble friend the Duke of Atholl knows the position as well as I do, and I must say that if there is anything the Government could do properly but have not done, I personally am not aware of it. We realise that this is one of the major industries in Scotland.

One or two other questions were asked. The noble Earl, Lord Haddington, welcomed the pulp mill and so did the noble Duke, the Duke of Buccleuch and Queensberry, but, as my noble friend Lord Perth said, the position is a little more fluid as of now. Since Scottish Pulp (Development) Limited first approached the Government for financial assistance their requirements have greatly increased because the original consortium has now been reduced to a single firm, Wiggins Teape Limited. I can tell noble Lords that the final position is now being established and when this is done the Government will lose no time in reaching a decision.

The noble Lord, Lord Todd—and I thank him for his suggestion—spoke of a scientific study of derelict sites, and my noble friend Lord Forbes also mentioned this as a matter of considerable importance. It is essential, I agree with the noble Lords, to give a new look to the older areas and to clear away the relics of past activity which continue to disfigure them. Under the Local Employment Act, grants are available for this purpose and some important work has already been done. I should like to mention some of the places where work has been done, although I do not usually like comparisons between one area and another. A substantial forward programme is now being prepared by Fife County Council and work on their first scheme is in hand. Work is already complete on the piping and filling in of part of the Monckland Canal and the establishment of a tractor servicing firm on the site of a cleared bing at Coat-bridge. Similar clearance work has been done in other parts of Lanarkshire. I am encouraged to find that in Glasgow itself one of the largest derelict sites in the city, the old Dixon Iron Works, is being cleared by private developers to make way for a new industrial estate. In fact, 14 projects involving a capital cost of something like £250,000, and covering some 160 acres, have been authorised. This shows what can be done. I mention this at some length because I agree that much more ought to be done. My right honourable friend is considering ways and means of accelerating and extending the scope of this work.

The noble Duke, the Duke of Buccleuch and Queensberry, and the noble Earl, Lord Haddington, both referred to the contribution which forestry could make to the economic rehabilitation of rural areas. This is wholly accepted in principle by the Government. My noble friends have pointed out that very much has already been achieved in Scotland by the Forestry Commission and by private owners with the Commission's help. There is already evidence that the new forests, and the housing provided for the forestry workers and their families, are rehabilitating the areas where they are located and stopping the decline in the population.

The noble Earl, Lord Haddington, asked for the improvement of communications by road and sea for the Highlands, and the noble Lords, Lord Ferrier and Lord Forbes, spoke of the importance of roads. Over the whole field, as I think noble Lords realise, we are spending as much as our national resources permit. On the trunk roads, the effort is rightly put on improving the flow of traffic in the central industrial belt. Three years ago we spent £3.3 million for this purpose, and this year our expenditure will be over £5½ million. Classified road expenditure has increased in the last three years from under £5 million to over £7½ million. Industry has already reaped many benefits, and will soon reap many more, especially from the two great river crossings, over the Forth and the Clyde.

There are other schemes designed to serve specific industrial needs. Between 1960 and 1962 we provided substantial road improvements associated with the new B.M.C. and Roote's factories, and we have authorised, or are shortly to approve, schemes to assist Ferranti's, at Dalkeith, the strip mill at Gartcosh and the Hillington Industrial Estate. But we have, to the best of our ability, used road expenditure—that is, expenditure on maintenance and repairs as well as capital work—to help immediate unemployment. The yardstick we have taken is schemes that would cost no more than £15,000 each and which could be started before March 31 and completed within six months. It is hoped to spend £1½ million in this way. That is one of the ways, as the noble Earl, Lord Perth, said, of killing two birds with one stone. In times like these I agree that expenditure on roads is a most useful outlet for creating employment, especially the type of short-term expenditure to which I was referring. But there must be reservations on the employment angle. It is all right for schemes costing something like £100,000 or less, especially in areas or potential areas of high unemployment. But road works, as I think noble Lords realise, are highly mechanised and the amount of unskilled labour they can use is necessarily limited.

The noble Lords, Lord Ferrier and Lord Amulree, mentioned the Edinburgh ring road. We have debated this matter more than once in this House, and I would only remind the noble Lords that a survey undertaken by Edinburgh Corporation showed that the amount of traffic wanting to by-pass Edinburgh completely, even when the Forth bridge is opened to traffic, was very small. But I understand that more detailed traffic studies are still being made, the results of which are not yet available.

Noble Lords referred to road traffic and roads, but I would utter a brief, cheerful word about sea transport. As is already known, the Secretary of State has placed an order for three vehicle ferry vessels with Messrs. Hall, Russell, of Aberdeen. The vessels are due to be delivered early in 1964, and to be in service in the summer of that year. They will carry 600 passengers and up to 52 cars. The vehicle space can also be used for conveying livestock, and there will be a cafeteria, a shop, a smoke room and bar and cabin accommodation. These new vessels will be chartered to Messrs. David MacBrayne. When they are in commission, Mull, Skye and all the Long Island except Barra, will be linked by vehicle ferries. Buses and lorries will be able to drive from the mainland to Mull, and through Skye to Lewis and the Uists.

This is an entirely new pattern of service and its effect on the Western Isles could be revolutionary. The attractions for the tourist are obvious: entirely new areas will be opened up, and the Islands will share the tourist trade that has hitherto been confined to the mainland. But farmers and crofters, shopkeepers and businessmen also should benefit from the door-to-door deliveries of goods. Oban, Fort William, Inverness and Dingwall should all find themselves in a better position than ever before to make the most of the Island trade. It has often been said that communications are the key to the solution of the Island problem. Here is a real improvement. It comes at a time when there are widespread fears and rumours that Highland transport is going to be worsened. Instead of a setback, we see here, in fact, a great step forward. It is now up to the islanders to make the most of it.

The possibility of improvement is not confined to the Western Isles. The North isles of Orkney have recently received their fine new ship, the "Orcadia", and the company are proposing to experiment this year with hydro-foil craft, which, if they are suitable for the waters, could carry passengers and mail around the islands cheaply at 35 knots.

And Shetland County Council are being energetic and far-sighted, too. They realise the great advantage of linking up the main Shetland Islands by vehicular ferries. The lessons learned about ferries by the Highlands Panel in Norway are being energetically followed up. A Norwegian expert visited Shetland and reported. A deputation of Our own people then visited Norway, and further studies are being made. I have the highest hopes.

The noble Lords, Lord Ferrier and Forbes, rightly stressed the importance which industrialists attach to good air communications, and the Government fully appreciate this. That is why, as my noble friend Lord Dundee said earlier, the Ministry of Aviation are being associated with the work of the group now being established in Scotland to co-ordinate the planning of what we need to reinvigorate our economy.

I come to another phase in the debate. I will study with great care what the noble Lords, Lord Bilsland, Lord Hughes and others, said, with great knowledge, about our industrial estates, and I am grateful for their constructive thought on this matter. I will study, too, the constructive criticisms made about the Local Employment Act by the noble Lords, Lord Bilsland, Lord Hughes, Lord Strathclyde and others. I will draw these speeches to the attention of my right honourable friend the President of the Board of Trade. His Minister of State has been sitting here throughout almost the whole of this debate.

To one particular point which the noble Viscount, Lord Stonehaven, asked—Can a local authority qualify for BOTAC?—the answer is, only when the local authority is the undertaker and therefore directly providing the employment. The Duke of Atholl spoke about the effect of rail closures. At this juncture I think I cannot do better than quote from the speech of my right honourable friend the Secretary of State in another place on July 19, when he said [OFFICIAL REPORT, Commons, Vol. 663, col. 673]: We are all anxious about the risk that considerable lengths of railway line in country areas may be closed entirely. Until the Beeching reviews are completed, no one can properly assess this risk. I can, however, make it quite clear that where a railway closure is the right course in the long run, we will ensure that it is not carried out in such a way as to leave an area bereft of adequate facilities for transport of passengers or freight. The noble Lord, Lord Polwarth, has referred to the necessity of another large thermal power station. The position briefly is this. The Cockenzie Station should be fully commissioned in 1968–69. If the increasing demand is to be met and if the Mackenzie Committee's suggestions are followed, we shall need to have a new station in commission by 1969–70. This next station, with a capacity of between 2,000 and 2,500 megawatts, which may cost the best part of £100 million, will have to start build- ing next year, 1964. This year, therefore, is the year of decision, and we are anxiously awaiting the Report which the Electricity Board expect to receive soon. The South of Scotland Electricity Board, the Coal Board and the Government are very conscious of the economic and social problems that may arise if, in the Report, there is a clear conflict between coal and oil-firing. I can say no more than that we all realise that when these vast capital investments are made, every facet of the national interest in the widest sense must be taken into consideration before making the inevitable decisions.

My noble friend Lord Stonehaven spoke of an individual case of town planning. I am not going to argue the case. His facts are substantially correct. All I can say, on behalf of the Scottish Office and the County Council, is, "Sorry." I will try to ensure that this incredible delay does not happen again. But I must add this. With our rapidly changing and expanding Scottish scene, I have been very concerned about the length of time these procedures take. In the last year, the many steps in the procedures have been carefully analysed. Every step is essential for the proper protection of the individual and sometimes of the taxpayer—the inquiry and land acquisition procedures, the advertisements and the many Government Departments and local authorities directly concerned. Delays can build up at every stage without really being noticed. I will not go into details, but we have tried recently to shorten every single step, within, of course, the many statutory requirements, and by doing this we are already effecting a substantial overall reduction of time between application and decision. So the Stonehaven case is a fish that has slipped through our net, and I am sorry.

The Government recognise that the long term modernisation of Scottish economy is the primary task. While the steel strip mill, followed as it was by the great motor vehicle industry undertakings at Bathgate and Linwood, was a spectacular breakthrough, the full results of which have yet to mature, the process has been a continuing one—office machinery at places like Cumbernauld, Vale of Leven and Hillington; earth moving equipment at Newhouse and Peterhead; electronics at Edinburgh, Airdrie and Hamilton, to take only a few instances. It would be misleading, in face of these developments, to paint a picture of Scotland as still a nineteenth century industrial economy. But within established Scottish industry itself progress and modernisation goes on. Indeed, it is this dynamic in Scottish industry that produces on the Scottish Council's estimate 80 per cent. of Scotland's annual increase in production and employs the great proportion of the 1,900,000 men and women at work in Scotland to-day.

It would, I think, be fair to say that many of the principles so lucidly expounded in the Toothill Report are, at least in part, a reflection of the evolution of Government policy in recent years. For example, the Scottish device of linking distribution of industry with the movement of overspill population to the new growing areas, thereby setting up a new series of growth points at such places as Irvine, Kirkintilloch, Arbroath, is commended by the Toothill Committee as perhaps one of the best instances of what they have in mind in their recommendation that there should be the maximum concentration on growth. Even more striking is the record of new towns like East Kilbride and Cumbernauld, to which my noble friend Lord Dundee referred earlier, and the intensive development of the large new trading estates as strategic centres in the industrial belt of Scotland.

Finally, although the Scottish Office has no direct responsibility at first hand for either the policy for the distribution of industry, or its detailed application, an immense amount of work has been and is being done in St. Andrew's House in surveying in physical terms the Scottish potential and making sure that what the economists call the infrastructure (a terrible word!) or firm base will be strong enough to support the modern twentieth century economy that we are determined Scotland shall have. As your Lordships may know, it has been part of my task in the Scottish Office to show the flag in one or two countries abroad. I am satisfied, from what I have seen, that the best of our industries and our products can stand comparison with the best anywhere.

But perhaps as significant, though much less well known, I find that our planning techniques can hold their own with those of other countries of comparable resources—planning techniques which are now producing such new projects as Cumbernauld and East Kilbride, the large new trading estates, the Forth Bridge, and before long, if all goes well, the Tay Bridge, the large new power stations like Kincardine, the plans for the new Glasgow and the projected Loch Lomond water scheme which will send across central Scotland as much water as at present feeds Glasgow and all its industries. All this basic planning will be given a new dimension and dynamic by the new group of senior officers from the expert departments to which my noble friend has referred.

The noble Lord, Lord Polwarth, has generously conceded that the Government have already done a great deal of valuable work on the technical and detailed recommendations contained in the Toothill Report, and that on only a few, but very major, issues are decisions outstanding. We appreciate the urgency and importance of conclusions on these questions of finance and financial inducements to industry and of specific measures for growth. But, as I am sure your Lordships' House will appreciate, these matters raise issues which go much wider than Scotland, important as Scotland's problem undoubtedly is. These issues affect and are affected by the central economic problems of the United Kingdom as a whole. The Toothill Report concluded that there was no panacea ready-made for solving the Scottish problem; they also very properly pointed out that the Scottish economy is inextricably bound up with the economy of the United Kingdom as a whole. The Government's first task then, above all others, is to net our whole economy moving forward again in terms of a real increase in our productive effort, without at the same time damaging our overall balance-of-payments position. If this can be done, we are adopting the speediest means available to us of stimulating economic activity in Scotland also. This has been amply demonstrated in recent years. If we can, at the same time, give Scotland a proportionately larger share of public investment—as we are doing—then we are taking two steps in one and helping to achieve a better equilibrium in the Scottish economy itself.

For all these reasons, the Government, while concentrating pre-eminently on reinvigorating the economy as a whole and steering more public investment into Scotland, have felt bound to look more carefully at any measures which might suggest that Scotland is in economic terms, as it were, a "nation apart". Nothing could be more damaging in the long run to Scotland's prospects. We will continue to develop the policy already set in train and described by my noble friend for modernising the Scottish industrial structure, and such development will, of course, take account of Scotland's special needs and resources and will be applied with all the energy at our command. As my noble friend Lord Polwarth knows, he and his friends in the Scottish Council will shortly be meeting the Prime Minister, when they will be developing in more detail many of the arguments that we have heard to-day. It would be wrong of me to think of anticipating or to speculate upon the outcome of these discussions, but I can assure my noble friend that we in the Scottish Office are seizing every opportunity we can by the development of all our resources to ensure that we are ready to catch the tide when it begins to flow again.

But more than that, we are determined to press forward and accelerate the modernisation of the Scottish economy. This requires immense support and encouragement from every quarter—Scottish industry, our scientists and technicians, our craftsmen and other workers (as able as any in the world), the local authorities (and we commend those who have by the use of their housing and planning powers taken on new responsibilities in accommodating new industry and population), and, last but not least, all those who provide the indispensable around base for the whole structure of modernisation: the building and civil engineering industries, and the workers in those industries. Their role is crucial in the years ahead.

We must, above all, present a good image to the world—and we have quite a lot of good things to boast about, even if we have a rough road immediately ahead of us. The Scottish Council is playing an immense part in this vitally important task of "presenting" Scotland, by its work far exports, its regular links with the United States, Europe and the Commonwealth, its organisation of the exhibitions of the products of Scottish industries and in many other ways. I should like to assure the noble Lord, Lord Polwarth, that the Government are indebted to him and his friends for the great services they are rendering to Scotland at this time.

VISCOUNT STONEHAVEN

My Lords, before the noble Lord sits down, may I thank him most heartily for his very handsome apology? I did not want to interrupt his speech.

9.27 p.m.

LORD POLWARTH

My Lords, we have had a long and full debate and I am sure your Lordships would wish me to be brief as possible in my reply, but I cannot leave without expressing my warm thanks to all noble Lords who have come here to support me, some at personal inconvenience and discomfort. I know that some noble Lords, and one noble Lady, spent twelve or fourteen hours in night trains devoid of heat. That, I hope, is sufficient to emphasise the importance to us in Scotland of adequate personal communications. I should like to thank, in particular, the noble Lord, Lord Todd, for, if I may humbly say so, a thoughtful and perceptive maiden speech. I can think of no better new inducement that the Government could devise for the benefit of Scotland than one that would bring back to Scotland people like the noble Lords, Lord Todd and Lord McCorquodale of Newton, so that we may benefit from their knowledge and experience.

As I said at the beginning, because of the circumstances of the times, and for the reasons just explained by the noble Lord, Lord Craigton, I did not expect that in this debate we should be told of any major change or advance in Government policy for the distribution of industry or the encouragement of growth in Scotland. We have, however, had two most helpful replies, in particular the one to which we have just listened. Lord Craigton's coverage of the vast number of activities going on in Scotland at the present time in the hands of his Department was, I think, a most impressive one. I think we should take heart from the knowledge of the great number of undoubtedly useful developments that are in hand or are on the drawing board, and I think that Scotland should know how much it owes to its Ministers and their servants for the great devotion, skill and, above all, enthusiasm, which I thought was evidenced in the speech which we have just heard. That, I think, is most encouraging, because this is the sort of spirit we must have if we are to achieve what we have been seeking this afternoon.

If we have heard nothing in the wider field of economic policy, at least I think we have made it plain, with the great variety of knowledge and experience that has been put forward by a great number of speakers, what Scotland needs; and I think there was even a hint in the speech of the noble Earl, Lord Dundee—batting as he was, if I may say so, on a somewhat sticky wicket, from an unfamiliar Department and with a theme which most of us have already heard before—that there was not complete satisfaction that present measures are adequate to deal with this side of things. So I think we can leave here this evening confident that our time and our journeys have not all been wasted. As the noble Earl, Lord Perth, said, we shall undoubtedly return to the charge in due course. I hope your Lordships feel that this debate has been well worth while, and I beg leave to withdraw my Motion for Papers.

Motion for Papers, by leave, withdrawn.

House adjourned at half-past nine o'clock.