SCOTLAND

HL Deb 06 December 1967 vol 287 cc668-772

2.35 p.m.

THE EARL OF DUNDEE rose to call attention to the present condition of Scotland; and to move for Papers. The noble Earl said: My Lords, when I put this Motion down to get a day for a Scottish debate I had hoped that one or other of my noble friends who do not sit on this Bench might be able to move it in my place. As this has not turned out to be practicable, I will do my best to kick off in a manner in which a kickoff ought to be made; that is, gently and a little obliquely, with the purpose of helping other members of the team, either on your right wing or your left wing, to score a goal.

At the present time, Scotland is in a state of political discontent which might easily grow into a much stronger and less confused demand for separate government than any which has yet been expressed. I shall not argue the case either for or against separate government, because I want to put before your Lordships the measures which I think ought to be applied to Scotland in the lifetime of this United Kingdom Parliament, which may still have another three years to run. Scotland and England ought each to benefit from their partnership with each other. But as for the present discontent and the accompanying separatism, I think the root cause is to be found in what Lord Radcliffe has called "the rapidly deteriorating standards of public administration." But I would add that as public administration declines in quality, it multiplies in numbers; it grows continuously in power, and it hardens in centralisation and impenetrability, which often most annoys those who live furthest from the capital.

Scotland, of course, has always the right to ask at any time for a revision of the Act of Union. When that Act was agreed to, 260 years ago, I do not think that anybody in Scotland really wanted to lose independence. But the majority of Scotsmen thought it preferable to risk losing it rather than risk the accession of a Catholic Sovereign. There was a very large minority, only a few of whom were Catholics, who took a different view. Many of them who took up arms in support of their principles lost their lives and their family estates. Some who were taken prisoner the English Whig Government put to death by the horribly barbarous punishment of hanging, drawing and quartering—an action which left behind long and deep bitterness. I remember, when I was very young, being told by an old lady in Angus that she could remember her grandmother's chamber pot, which had a miniature portrait of the Duke of Cumberland set in the centre of it, so that she might express at reasonably frequent intervals her sentiments towards the House of Hanover. But the majority still thought it best to have an English Government and a German King in order to safeguard, as they thought, the Protestant religion.

In the next century Scotland led the world in agricultural improvements, heavy industries and shipbuilding: great new wealth was created. This was the age of laissez faire, when Government Departments in Whitehall left people alone and did not interfere. Queen Victoria, unlike her predecessors, spent a great deal of her time in Scotland, which restored affection for the Monarchy, and in the 19th century there was very little, if any, resentment against the seat of Government being in London.

But now, in our own 20th century, every industrial country, whether capitalist or socialist, controls its national economy and its social services from the centre, and the huge bureaucratic machines which have grown up are often unimaginative and insensitive to public feeling. In countries where two or more nationalities are combined under one sovereignty, like Belgium, France, Canada or Britain, the bureaucratic worship of uniformity often revives or provokes the latent desire for political separatism which is so eagerly encouraged by General de Gaulle in Quebec, but not in Brittany.

In Scotland many people have for a long time felt frustrated by the hidebound attitudes of Whitehall, which Sir Winston Churchill described as: the padded cells of indubitable fact and the solid masonry of unanswerable objection". Dearly though I love the Scottish Office, where I spent so many happy times, I cannot exempt them from the general description. In all the 36 years since I first became a Member of Parliament I do not believe I have ever encountered a more pachydermic imperviousness to rational argument or a more obstinate persistence in pursuit of the indefensible than the Government's determination last July to deprive Orkney and Shetland of the management of their own water supplies. No wonder the Secretary of State received such a violently hostile reception when he went there the other day! And I am afraid that some of the islanders were a little hurt that your Lordships did not insist on the Amendment which this House carried against the Government at the end of July, giving back to Orkney and Shetland what they wanted. Of course, the reason why we did not insist was that we were advised that, if we did so, in hardly more than three months, at the beginning of the new Session, the Government could, and would, use their majority in the other place to send the unamended Bill over our heads to receive the Royal Assent. And that is what the Prime Minister calls "the vast powers of the House of Lords"!

For more than thirty years every Administration has tried to correct the excessive reliance of Scotland on the old heavy industries by giving financial and other advantages to new light industries, and I would certainly never seek to underrate what has been achieved by every Government and by all political Parties. When I was a junior Scottish Minister in 1937 I had the duty of moving in another place the Second Reading of the Special Areas Bill, under which the industrial estate at Hillington was developed; and many of your Lordships who are here to-day, on both sides of the House, have helped to advance and greatly to expand that policy since the war.

As I think I told your Lordships in our debate two or three years ago. I really believed in 1964 and in 1965 that we had at last won the battle. When we got the great new motor works at Bath-gate and in Renfrewshire, the £100 million strip mill at Ravenscraig, the development of growth points in central Scotland with which housing and road construction programmes were co-ordinated, and the tremendous response of new industry and investment to the 100 per cent. depreciation allowance in the 1963 Budget, all this was followed by a record rise, a rise of 9 points, in the Scottish industrial index of production for the year 1964, and a further 5 points in 1965. Since then there has been a check. There was only a 2-point rise in 1966, and I am sorry to say that in the first six months of the present year there has been an average drop of 3 points compared with the previous year.

Investment has been well maintained in some industries, but its momentum has not been enough to balance the run-down in others. Unemployment, which was just under 3 per cent. two years ago, is now just under 4 per cent. Emigration, which we hoped two years ago might be beginning to decrease, has, on the contrary, increased. The number in 1964 was 40,000; in 1965 it was 47,000, and last year it was 45,000. According to the figures published the day before yesterday by the Registrar-General, there has been a big drop in emigration to England but a large increase in emigration overseas, so I am afraid it looks as though a great many Scotsmen were determined to get out of the country somehow, wherever they go.

Why have we had this check, which I hope is only a temporary check? When I listened to the speech of the late Chancellor of the Exchequer, Mr. Callaghan, in another place on November 7, during the debate on the Address I was impressed by his courage in stating that the unemployment rate of 0.6 per cent. which had prevailed in some parts of England was too low because it meant that too many vacancies were chasing too few applicants. I noted his announcement that for the first nine months of this year, eight and a half million square feet of new factory space has been approved, and his assurance that the special measures given to Scotland and the other development areas would be continued.

My Lords, as I see it, the central fact of the situation now is this. The financial privileges and the industrial development certificate priority which has been given to Scotland for a long time, and which we all support, has too little weight to counteract the unusually frequent and long periods of deflationary measures that have had to be taken in the last two years to balance our economy, and will now probably have to be intensified as a consequence of devaluation. The economic trouble in England, which the Government are trying to cure, is that of exporting too little and consuming too much. Does that condition apply to Scotland at all? I do not think it does.

According to the figures which were published recently by the Scottish Council (Development and Industry) and which were quoted in the debate on the Address by the noble Earl, Lord Perth, over 18 per cent. of Scottish production is exported, compared with only 15 per cent. for the United Kingdom as a whole. Wages in Scotland are lower, so people cannot spend so much on consumption. Unemployment is about four times what it is in the Midlands and South East England and more than 50 per cent. above the general level for the United Kingdom. All the evidence, in my submission, points to the conclusion that the Scottish economy is in balance and that it does not require any deflationary measures at the present time.

I should be very glad if the Government or anybody else could produce official figures which would either confirm or disprove that conclusion, but I know only too well how difficult is this kind of inquiry. When the father of my noble friend Lord Clydesmuir was Secretary of State, he got the Treasury to issue a White Paper on Scottish taxation and expenditure, but the Treasury found itself unable to disentangle the taxation paid on profits earned in Scotland by firms whose head offices were in London and whose taxes were therefore all credited to England. And much more recently the report of the Catto Committee confessed itself unable to overcome this difficulty. If the circumstantial evidence which we have available to us leads us to the conclusion that Scotland needs reflation and not deflation at the present time, surely our administrative machine ought to be capable of applying a different fiscal policy and a different economic policy to Scotland, in the same way as for the last thirty years it has always applied a different industrial policy, and all the more so, I would submit to your Lordships, since taxation in our age has a double purpose: the purpose not only of raising revenue but also of steering the economy.

If the noble Lord, Lord Hughes, and his colleagues at the Scottish Office were to propose that we should have a lower bank rate for Scotland, I expect the Treasury would probably react like a hedgehog when it is barked at by a dog; its eyes, ears and feet would promptly disappear and nothing would be visible but a forest of hostile quills. But why should the deflated economy of Scotland have to bear a bank rate of 8 per cent., which means 10 per cent. on overdraft interest because the Scottish banks charge 2 per cent. above bank rate on their overdrafts to their customers, which I would say is in itself an argument for having a differential bank rate for Scotland or, if necessary, a different central bank? Why should everybody in Scotland have to pay 10 per cent. interest on his overdraft in order that more "hot" money may be attracted to the City of London? It is a crippling deterrent to every kind of investment which Scotland now requires and requires urgently.

On the fiscal side, I would propose that Scotland should be entirely exempted from the selective employment tax. I know, of course, that since devaluation manufacturing industry in the development areas will continue to receive the premium from this tax, which will no longer be paid to industry in other areas. But this is a very bad bargain indeed for Scotland. It has been calculated that the net cost of this tax to the Scottish economy is £130 million a year, or £2½ million a week. A great deal of that is paid by the Scottish tourist industry, which earns so much, and could earn so much more, in foreign currency, and by the Scottish building industry, which contains 9 per cent. of the insured workers in Scotland.

I would also propose that the Government's declared intention of increasing the corporation profits tax should not apply to Scotland. Whatever justification there may be for increasing this tax in an inflated economy, its only effect in Scotland can be the discouragement of investment and incentive to new industries. If these things are not done it seems to me that this 8½ million square feet of new factory space which has been approved this year may not actually be built in time to correct the damage to our economy which will arise from the closing down of so many of the coal mines in Scotland. I would also propose that the new Transport Bill should not apply to Scotland, because that will undoubtedly increase by a very large amount the cost of long distance road haulage, which is of such vital importance to the Scottish economy. At the same time, I would ask that the programme of road construction in Scotland, which was slowed down two years ago, should now be speeded up to a point beyond that which it would now have reached if it had not been retarded.

I hope that these things may be done, and I think they could be done now, by a United Kingdom Government and a United Kingdom Parliament. The reason why a great many people do not pay much attention to the Scottish Nationalist Party is that their proposals are so terribly confused. They have got a kind of kaleidoscopic inconstancy; they vary from one person to another, from one place to another and from one time to another. I am told that some of them are proposing that an independent Scotland should have customs barriers against England, although I should have thought that any serious and responsible Scottish Government would have the sense to see that a free trade area with England and Ireland, not to mention EFTA and the European Economic Community if possible, would be enormously to the advantage of Scotland.

But I am not now contemplating separate government, or, at least, not yet. My argument is that differences of economic policy can be applied without it. If the Government consider that English exports should in present circumstances be boosted by restricting home consumption the Government may be right, and we can all agree in hoping that the restriction may be only temporary and will not last too long. But if your economic data are quite different in Scotland, then if you pursue your English policy there the only result may be that you will stifle, instead of stimulating, the Scottish export drive, very much to the detriment of both countries, England as well as Scotland. My contention in moving this Motion is that more liberal economic measures applied now and not later on will enable Scotland, within the next two or three years, to make a much bigger contribution to the welfare of Britain as a whole, and will hasten the time when both countries together can enjoy a more secure and a less troubled economic life. My Lords, I beg to move for Papers.

3.0 p.m.

LORD HUGHES

My Lords, a year ago, through the kindness of the House, I was permitted to divide my speech into two sections: the first dealing with what might be described as the Government line on the subject of debate, and the second confined to answering the points which had been raised in debate by noble Lords. With the leave of the House, I wish to adopt the same course on this occasion.

I am grateful to the noble Earl, Lord Dundee, for having initiated this debate, because I think it is a most appropriate time at which we should be taking stock, not just of the present condition of Scotland, but of the present condition of and the prospects for Scotland, because the prospects are even more important than the present condition. Almost at the tail end of his remarks the noble Earl said that he was not talking about a separate condition, where there was a separate government in Scotland, but about what could be done in Scotland with a United Kingdom Government.

The intention of what I have to say at this stage is to agree with that point of view, and to show what is being done and what can be done within the context of a United Kingdom Government. I should say, incidentally, that I wondered whether the first dividend coming from the presence in our midst of the noble Lord, Lord Bannerman of Kildonan, to whose maiden speech I am looking forward, was the noble Earl's reference to "more liberal economic" policies in Scotland; but I think probably he was talking with a little "1" in mind rather than a large one.

Last year, I think it was generally agreed that one could not expect that Scotland could be completely insulated from the general economic difficulties to which the United Kingdom was subject. This is still true, but it is also true that an important element of the Government's national economic policy is to accelerate change in the basic structure of employment and industry in those parts of the country where unemployment, the decline of older industries, and emigration have become almost endemic. This, I would suggest, is a considerable difference in attitude adopted by the present Government from that of their predecessors. We have accepted that it is not only possible, but that it is essential, that in a state of deflation different values are necessary for the development areas from those necessary in the overexpanded areas. I would remind your Lordships that this Government are the first to have attempted to do that. I will come back on that later on in my remarks.

We have acted on the basis that it is a gross misuse of the nation's resources for a major industrial complex such as Central Scotland to be working below its real potential, and for so much of its best labour and skills to be siphoned off in emigration. This is recognised both in the special measures designed to protect Scotland from restraint imposed on many other parts of the country, and in the now impressive range of implementation flowing from the White Paper on the Scottish Economy of January of last year. I will of course admit that there are a number of people who do not wish to be impressed, and they will find it quite easy to close their eyes to what is happening.

Of the special protective measures I will only remind your Lordships that the Scottish banks are required to deposit at 1 per cent. with the Bank of England compared with 2 per cent. with the English Clearing Banks, and that the abolition of the selective employment tax premium to manufacturing industry in non-development areas, as a complementary measure to regional employment premium, will be a powerful stimulus in diverting the flow of job creation to those parts of the country where it will do most good.

What I really want to talk about to-day is the groundwork now being put in which will radically improve Scotland's long-term future. Given the massive trends of decline in our older industries, some of which are still continuing, it is not always easy to see the effects of the basic changes and improvements that are taking place; but to this one must add that many deeply significant measures take some time to implement and then some time to bear fruit. This is a simple point, but one which is often forgotten and in some cases ignored.

I think an example of just how this works out will be infinitely better than just making a statement of this kind. I would just remind your Lordships of what is necessary in the passage of time by referring to the pulp mill to which the noble Earl referred in his speech. This scheme was first announced at a Press Conference in April, 1963; the first sod was cut in July, 1963; it was officially opened on September 15, 1966, although it had been in operation for a few months at this date.

THE EARL OF DUNDEE

My Lords, may I intervene at this point to say that the mill to which I was referring was not the pulp mill, but the steel strip mill in Lanarkshire. But I should be interested to hear what the noble Lord is saying about the pulp mill.

LORD HUGHES

My Lords, it was only to-day that I thought that there was ample opportunity for showing how the passage of time is necessary for these projects to take effect, and I asked to be given information about one or other of three projects: the pulp mill, the strip mill, or the B.M.C. factory at Bathgate. In fact, the information which came most speedily concerned the pulp mill. You will know that from the time the project was announced until it started operations three years have elapsed. But this does not in any way diminish the value of the project. It shows that when people hear a Government announcement about a decision to build so many hundreds of thousands, or so many millions of square feet of factory space, and then a year later they say, "How many jobs have come from the factories which were announced last year?", how completely unrealistic and unfair this is! On the average it is not less than two years, and in many cases more than three years, before the results begin to come, so that even what was being done by this Government in its first year in office is not yet showing its results at the other end of the pipeline.

This is something that fair-minded people must take into consideration. The short-term fluctuation in the economic climate can easily distract one from appreciating the longer-term consideration which is really what matters.

I should like to review some of these measures which are shaping the new Scotland, but first of all I would refer to one of the deep-seated ills which has seemed a depressing condition of existence to us in Scotland. I refer to unemployment. The noble Earl referred to the unemployment figures in a way which was strictly accurate, or almost strictly accurate. I am not certain that he was completely accurate when he said that it was four times what it was in London and in the Midlands, but when he spoke about the figures being half as much again as in the country as a whole he was right. The change in the numbers of wholly unemployed, excluding school leavers, between October and November was an increase of 3,636, bringing the total to nearly 83,000. If the increase had been what one would normally expect at this time of the year, it would have been more than 5,000. This is the third month in succession during which the Scottish wholly unemployed figures have shown an increase less than could be expected if the average had in fact taken place.

In Great Britain as a whole this trend emerged only in October, and although there cannot yet be certainty that the underlying rise in unemployment has been checked, there is no doubt that the trend of these three months is encouraging—especially when considered alongside the fact (and this is where one sees the effects of applying to Scotland different degrees of treatment from those in the United Kingdom as a whole) that since July, 1966, the increase in the total numbers unemployed in Scotland has been 56 per cent., whereas South of the Border the increase in unemployment during the same period has been 137 per cent. Under the Conservative Administration and the policies then adopted, right up to 1964, we can be certain that if at any lime unemployment in England South of the Border had gone up by 137 per cent. it would have gone up even more than 137 per cent. in Scotland. So that is the measure of the difference brought about by the standards which the Government are applying. Over this period, therefore, the change has been relatively more favourable in Scotland than in Great Britain overall, and Scotland's position has certainly not been worsened by movements over recent months. I repeat that this is something new and it is well worth noting.

I now turn to a survey of some of the ways in which the forward-look at Scotland contained in the White Paper is actually being implemented. For the first time we had a document which dealt with the whole of Scotland—not part of it for special treatment, but the whole of Scotland. While recognising the importance of the main industrial area, we also recognised that there were other parts of Scotland which held possibilities as well as problems. Of these, the Borders were identified as being in the greatest need of early attention if their difficulties were not to become insuperable.

The White Paper contained a firm commitment to do something about this and, as your Lordships know, an important stage in the honouring of this commitment was reached a few days ago when my right honourable friend the Secretary of State announced his decision to approve the amendment to Roxburgh County Development Plan zoning land near Galashiels for housing and industry. The land has still to be acquired, of course, but no one should be under any illusion about the great significance of this decision for the Central Borders. It creates an altogether wider perspective for the area—the prospect of new population, new labour, new industry providing the sort of development which will make a powerful start to the economic integration of the textile towns where before the only prospect was that the decline of the last one hundred years would inexorably continue. Their highly individual identities will remain; but their economic potential must become progressively united if they are to play a really constructive part in the Scottish economy and offer widening opportunities for Borderers. May I add that the consultants at Edinburgh University have virtually completed their work on proposals for implementing the full Government commitment—the introduction of 25,000 more people into the Central Borders by about 1981—and these proposals will be published very soon.

I am glad to be able to say, too, that in the Eastern Borders the two advance factories which are being built for the Development Commission are well under way, and the general climate of optimism which the Government's commitment in the Borders has created has encouraged the exceptionally go-ahead Burgh of Kelso to do some highly successful factory building of its own, supported by an ambitious housing programme. Already six firms have decided to set up projects there with a likely employment of 250 people. This shows what local authorities can do if given the necessary encouragement by the central Government. I hope that before very long there will be many other burghs in Scotland which will wish to take the same sort of advantage of the situation as the Burgh of Kelso has taken in the Borders.

For the other parts of Scotland outside the central belt—except the Highlands and Islands, which I will come to in a moment—the White Paper set out the basic diagnosis and prognosis, but left the detailed prescription for cure to be worked out. This is now being done. For the South-West this means principally concentrating on building up the main centres, and the development area status of Dumfries, the regional capital as it were, is to be exploited by the Board of Trade's acquisition of land there for industry. In the North-East Aberdeen University are helping us work out a detailed programme to guide future investment and help build-up the population of Aberdeen and the main urban centres—essential if real diversification of employment is to be achieved.

Then there is Tayside. Here I hope I may not be accused of local prejudice when I say we are moving into the first division. Dundee, Perth and their region, with its rapidly improving links with the heart of central Scotland, is the open end of the industrial belt. The Government's Tayside Study is now being undertaken by teams from both the Scottish Office and Dundee University, working jointly in Dundee. I am sure, however, that my noble friend Lord Tayside, to whose maiden speech I am looking forward, will have something to say about this, since he is Vice-Chairman of that body.

I said I would mention the Highlands and Islands. Undoubtedly the biggest issue now under consideration is the question where the proposed aluminium smelters will go. As your Lordships know, two of the firms concerned are interested in the lnvergordon location. The very complex questions involved in siting these plants are under intensive examination, and I know your Lordships will not be surprised, although you may be disappointed, that I cannot say more at this stage than that the Government are fully aware of the great importance a project of this kind would be to the Highlands.

On the industrial front the Highlands and Islands Development Board have already had some success in attracting industrial enterprises to the Highlands. A firm of clothing manufacturers has opened a new factory employing mainly women at Fort William; a firm engaged in the manufacture of fishing flies has started work in Inverness; a London firm of engravers has set up a branch factory at Bernisdale in Skye; a shipbuilding concern and a light engineering company are being established in Campbeltown; and a firm have set up a factory on Barra for the production of spectacle frames and optical components.

None of these is a very big project by any standard, but it is the sort of thing which a few years ago was never happening in the North. It is what we can expect to happen with increasing frequency under the new policies. Meanwhile, the Board's grants and loans scheme has accounted for assistance to the tourist industry of more than £705,000. My right honourable friend has approved the Board's proposal to provide five hotels or motels on a build-and-lease basis on the Islands and remote parts of the mainland where it would be unreasonable at present for them to expect private investment.

Particularly important, too, is the Board's involvement in both the expansion of the Highland fishing fleet and processing facilities on the mainland. In March, 1966, they were given approval by the Secretary of State, for a scheme designed to provide 25 new inshore fishing boats over a five year period. The main purpose of the scheme was to increase the fleet fishing out of Stornoway but crews from other areas can apply, and have done so. The estimated cost of this scheme is £750,000. The Board have also just been given approval to extend the scheme by a further ten boats and two years. I think they are announcing it to-day. The scheme is therefore now for 35 boats for seven years.

This proposal for an extension of the scheme arose primarily out of a specialist survey of Orkney fishing commissioned by the Board and the Orkney Fishermen's Society Limited. It is expected that most of the boats in the extension scheme will go to Orkney crews. I can, at least, ask the House to exonerate my right honourable friend from holding any hard feelings against Orkney for the reception which he got there, and to which the noble Earl referred in his ready approval of this extension of the scheme.

The Board have also in hand the preparation of surveys of agricultural, crofting and land use problems designed to give a better life to those in the High-lands and Islands. On October 19 the Prime Minister announced that the Government had asked the Forestry Commission to increase its present planting programme for Scotland to reach an annual planting rate of 50,000 acres. I List mention that, because we are not generally touching on agriculture or forestry in this debate. So I shall not elaborate on that at this stage. All this represents very considerable progress in carrying forward into action the strategy outlined in the White Paper for the parts of Scotland outside the central belt. But what of the central belt? It is here that the overwhelming bulk of investment bears, and I should like to select some of the main features of the present programmes which are transforming the picture there.

First of all, roads. The noble Earl, Lord Dundee, called for an increase in the programme. He referred to "hold back". One of the difficulties about appreciating the real level of current road investment is that the most expensive parts of it are generally almost invisible until they are completed. A motorway, along a new alignment, is largely unknown to the general public until it is opened and they start having the opportunity of driving along it. But we should be quite clear about the high priority now accorded to road-building and the scale of work now being undertaken. Over £30 million will be spent on roads for Scotland this year, the greater part of it by the Exchequer, and over the period of 1965 to 1970 £180 million will be invested in road construction, in accordance with the plan set out in the White Paper. This is more than twice as much as is being spent on new hospitals and Health Service buildings, and almost 50 per cent. more than on schools and colleges. The only investment in Scotland which has a higher rate is housing, where the expenditure for the 1965 to 1970 period is nearer £600 million.

Translated into practical terms, this means the completion of about 200 miles of motorway or dual carriageway by 1970 (of which 90 miles will be motorway) to be increased to 290, 115 motorway, in the following few years, so providing Scotland with a network of first-rate roads in the central belt and between Glasgow and Carlisle which—I wish to emphasise these words—relative to traffic, will be far superior to anything anywhere else in Great Britain. This is not to deny the need for improvements on other trunk roads, particularly those affected by peak holiday traffic, but the Government took a deliberate and, I believe, correct decision to concentrate attention on the improvement of the routes on which Scotland's economic growth depends so much. Not until these are completed can we afford to switch the balance of trunk road spending to the reconstruction of the less important trunk roads. In spite of this, however, a considerable amount has been spent on improvement of the worst spots on these roads, by a comprehensive programme of straightening bends and strengthening or replacing weak bridges. After 1970 we expect that a much higher proportion of the funds for trunk roads can be spent on the comprehensive improvement of other roads.

Complementary to the provision of this improved road system is our efficient use of it, and of its integration with other modes of transport. The Scottish Office and the Glasgow Chamber of Commerce are jointly sponsoring a study by Glasgow and Strathclyde Universities of the effect of container transport on wholesale distribution and land use. In connection with the development of container ships, contact is being maintained with Customs and Excise in the search for a rail-served inland clearance depot for Central Scotland. The provision of such facilities will be of considerable importance for the development of international container traffic.

Regular container services are operating from Grangemouth to America and Europe, and from Leith to Europe. Work is in progress at both Leith and Grangemouth to improve the entrance locks and to provide better and deeper berths. Preliminary work is in progress at Greenock where a container berth is being built to begin operations in 1968. A certain amount of containerised cargo is at present being moved through Yorkhill Quay, Glasgow, on conventional ships.

The need for good communications with markets and suppliers in the South is being met by the rail freightliner system and by the development of air cargo. There are now freightliner terminals at Glasgow and Aberdeen a third at Portobello will start operating in January next. Air cargo is growing rapidly, in 1966/67 Prestwick handled 40 per cent. more traffic than in the previous year, and cargo handled at Abbotsinch was 35 per cent. above that for Renfrew in the previous year. The development of good through links between Scotland and overseas, and, in particular, Europe, will be of increasing importance, and is being currently studied by the Transport Committee of the Scottish Economic Planning Council.

While discussing the most effective use of our new transport facilities, I should like to say a word about the significance of the new Scottish Transport Group announced yesterday by my right honourable friend. Transportation is one of the vital media of modern economic life. The efficient matching of our passenger transport resources to the huge and complex demands made upon them should be much more easy to manage in future. I was a member of the Scottish Transport Council which was set up, it seems now, a great number of years ago by the then Minister of Transport, Mr. Ernest Marples. I well remember that one of the first recommendations that came from that Council was that you could not have a satisfactory transport system for Scotland unless you have integration. It has taken until 1967 for these proposals to bear fruit.

Before leaving the investment side of the picture, I should also like to refer to one other aspect of the White Paper where real progress is now visible. A vital part of the strategy for Central Scotland is the more rapid development of the places that are doing well, and which can work for economic integration of many separate communities. The new towns and the major industrial estates are good examples, and it is the declared intention of the Government to select new locations for development which can make the fullest use of the labour available to Central Scotland and exploit the new communications network to the full. Irvine New Town is now getting into its stride. In addition, discussions and work are well advanced in proposals for the Larkhall area, close to M.74; Erskine, near the new bridge, and Lochwinnoch on the important Glasgow/Ayr axis. With the existing new towns, and some of the very large Board of Trade estates and local authority house developments, these will go far to create a totally new image of industrial Scotland, providing it, as it were, with a brand-new set of fittings, often in highly attractive surroundings, free from the dark presence and associations of the industrial past.

My Lords, I have been looking at the clock, and I am conscious of the fact that there is a lot left to say, but your Lordships will forgive me if I pass over some of these pages. It is not just the volume but also the content and the quality of Scottish industry that matters, and new industrial projects approved for Scotland since 1964 have included a high proportion dependent on modern technologies. Over one-third of the estimated employment expected from these will be engaged in making electrical machinery, photographic and scientific instruments and radio and electronic equipment.

The Government's own technological activity is also of great benefit to Scotland. The National Engineering Laboratory at East Kilbride, the Torry Research Station, Aberdeen, and the Royal Aircraft Establishment, West Freugh are examples; and, directly or indirectly, in these and other institutions the Ministry of Technology supports the largest group of research scientists and technologists in Scotland. One of the most important new developments, set up largely through the initiative of the Scottish Economic Planning Council, is the Institute of Advanced Machine Tool and Control Technology at East Kilbride, set up this year alongside the National Engineering Laboratory and in association with the University of Strathclyde. This will be a national centre, and should greatly enhance the prospects of attracting much needed machine-tool manufacturers to Scotland Scottish industry benefits from the full range of the Ministry of Technology's current advisory services to industry, and the universities and central institutions are steadily brought into closer association with local firms, through both the appointment of industrial liaison officers and facilities such as the low-cost automation centres which have been built up at two colleges. But, quite apart from the large and valuable block of research and development work which the Atomic Energy Authority carries out at Dounreay and Chapelcross, for example, it is interesting to note that Scotland already derives about a quarter of its electricity from nuclear energy—a higher proportion than in any other country in the world. Furthermore, the Authority placed contracts for some £2½ million worth of plant, equipment and stores with Scottish industry in the last financial year.

At the outset, my Lords, I mentioned the encouraging signs in the trends in unemployment, and it would be wrong if I did not say a word about emigration. To enable us to understand better the whole question of emigration, both out of Scotland and within it, and its economic implications, the Scottish Economic Planning Board now have a Working Group devoted solely to the subject. One of its aims is to co-ordinate the work of different Government Departments in this field—the Scottish Office itself, the Registrar General's Office, the Ministry of Labour and the Board of Trade. This should help us get a much better picture of what is really happening to our population, and enable us, for example, to use the material coming from the 1966 sample Census in a way that will enable us to achieve more efficient policies of population deployment in support of industry.

Emigration has been perhaps the most disturbing and serious of all Scotland's ills, but I should like to end on a slightly optimistic note on this point. Although the loss to overseas is still serious—and we must remember that Canada mounted a special campaign during the last twelve months, and I think Australia is working on one just now—there are signs that the pattern of net loss to England and Wales is changing, and that the inward movement is increasing. It is too early yet to assess the significance of the latest figures, but it is to be hoped that they indicate the success of the measures designed to make Scotland, within the United Kingdom at least, a place to which people will wish to come and in which they will wish to stay.

I think we must agree that, in the main, people have left Scotland for one or both of two reasons: in search of a job or in search of a house. I have said a good deal about what the Government are doing in the job-creating field. I should like to close on a reference to what is being done in housing. I think everyone knows that the Government's target is 50,000 houses by 1970. We accept that if we cannot succeed in providing more and more satisfactory houses for the people of Scotland then our efforts at job-creation will fail; and it is because of this that we attach overwhelming importance to the success of our housing activities in Scotland.

My Lords, it is too early for us to be complacent about housing figures. To the extent to which we still have deplorable housing conditions in Scotland, it would be wrong for anybody, Minister or otherwise, to have any complacency about the position. But in comparison with the years that have passed, we have no reason to be ashamed of what the Government have so far accomplished, and we have every reason to be happy about the stage which our housing figures have reached, bearing in mind the prospects for the period immediately ahead. Between January and October this year the number of tenders approved for public sector houses in Scotland—I will give just the round figures—was over 32,000. This compares with just over 23,000 last year, and with 30,700 for the whole of last year. So in the first ten months of this year we have done better than in the whole of 1966. The number of public sector houses started in the first ten months of this year, at over 28,000, is better than that for the whole of 1966. The public sector houses under construction at the end of October was over 44,000. The number completed up to the end of October was just a few below 25,000, compared with 20,900 in the same period of last year.

The year ended December, 1964, the year we came into office, was the best year in Scottish housing since, I think, 1953—somewhere a bit back. In the year 1964 the number of houses completed was 37,000. That figure had been exceeded once, I think, in 1953 or so, when it was 39,000, or just under 40,000. But in the years between 1953 and 1964 the figures were consistently well below 30,000; and while in 1964 we inherited a very high figure of completions, we also inherited a very low figure of starts; and, as my honourable friend the Minister of State said in another place on Monday, the one thing which is absolutely certain in housing is that you never finish a house which you do not start.

BARONESS HORSBRUGH

But a house is no good to you if it is not completed.

LORD HUGHES

Exactly; but, as the noble Baroness is bound to understand, there is a better chance of completing a house if you start it than if you never in fact start.

BARONESS HORSBRUGH

Hear, hear!

LORD HUGHES

This is the position in which we find ourselves. As I say, the position now is that our approvals, our starts and our houses under construction are far in excess of what they have been before, and they have reached a level where steady progress at this rate in the years 1968 and 1969 will bring us comfortably to our target of 50,000 in 1970. It is the addition of realism in housing production to realism in job production which will create for us in Scotland the sort of prosperity to which our people believe (and I think they believe rightly) they are entitled, and which will be increasingly their lot in the 1970's.

3.40 p.m.

LORD STRATHCLYDE

My Lords, like the noble Lord, Lord Hughes, I am sure we are most grateful to the noble Earl for having initiated this debate and for having given us the opportunity to debate the present conditions of our country. I must say that I was rather taken aback when he referred to the fact that it was in 1937 that he was a Minister at the Scottish Office. It is very difficult for me to believe, looking at his youthful countenance, that thirty years have gone by since then. I was struck also by the fact that at that time there were only two Scottish Ministers doing the job, whereas to-day we have five. There is one thing abundantly clear about the noble Earl, and that is that he has not lost his interest in his own country.

I think we also should be grateful to the noble Lord, Lord Hughes, who has just replied, for his very comprehensive catalogue of steps which the Government are taking in the hope of helping our country. I am sure that we all desire that these steps should be beneficial to us. But I must contradict the noble Lord—I am sorry to do so—his housing figures were all wrong. It was, in fact, in 1953 that the Administration under my noble friend Lord Stuart of Findhorn completed the greatest number of houses ever built in Scotland—just short of 40,000. During the next three years the average number of houses completed in Scotland was in excess of 37,000. I was surprised that the mistaken figures which the noble Lord gave—in all fairness I think—as to the fall in the number of houses completed during the succeeding years. As a matter of fact, my recollection is that only once in a great number of years did we ever fall below 30,000 houses; and I think that in that year the number was nearly 29,000. I am willing to refresh my memory on that point; but I do not think the noble Lord's figures were correct.

LORD HUGHES

If the noble Lord will give way, I would say that I shall do so when I reply and I shall be able to refresh his memory.

LORD STRATHCLYDE

Most people (though I except the noble Lord), when they consider the Scottish industrial scene, almost invariably concentrate on that part of our country which lies a few miles either North or South of a line joining Edinburgh to Glasgow. I am sure that few give more than a passing thought—even if they think of them at all in this connection—to such places as Dundee, Aberdeen, Perth, Inverness, or that part of the North-East which lies along the southern shore of the Moray Firth and down the East coast to the mouth of the Tay. But if Scotland is to prosper, then attention must be concentrated to a much greater extent to these areas which lie North and South of what we generally call the industrial belt, which the noble Lord referred to as Central Scotland. After all, it is from the North and the Borders—and I was glad to learn from the Minister of what is going on in the Borders—that the population is being drained.

This is due in large measure to a lack of variety and suitable employment available and, in consequence, its failure to meet the needs of a considerable proportion of the younger people. Added to that, there do not seem to exist facilities for study at advanced levels of science and technology, or for getting practical experience in a great many subjects. Around our coasts, for example, there are some excellent small shipyards engaged in building fishing vessels or small craft where experience up to a certain level can be obtained and where skills can be acquired. But those who wish to go further have to leave home for the shipyards and technical institutes, or, it may be, the University of Clydeside. And when they have qualified there they remain, or move further afield, until their working life is over, when they retire and return to the place of their birth.

Hitherto, we have sought to diminish, if not to stop, the drain from the North by improving amenities, the conditions of life, drainage, water supplies, electricity, transport and like services, and by providing or assisting in the provision of work in the hope that it might prove capable of maintaining the local population at standards comparable to that enjoyed in the industrial areas. Apart from forestry, no industry has yet been found, suitable to existing communities, capable of meeting their need of employment and of satisfying the ambitions of the more active and go-ahead element in the population. It may be that the ideal solution is still to be found in the setting up of small industries in towns and villages throughout the North. While not meeting the needs of all, they would be viable and would provide a variety of employment for the standard of life satisfactory to the great majority. In any event, it seems to me absolutely essential that we should continue our efforts in that direction.

Of course, over many years such efforts have been made. In particular, in recent years, those of the North of Scotland Hydro-Electric Board have met with a measure of success and I was glad to learn from the Minister that success is also following the efforts of the Highlands Board. Where success has been achieved in this direction it has resulted from a most intimate study of the conditions in various parts of the United Kingdom. In these places there are firms engaged in the manufacture of goods which could be manufactured economically in the North. They desire to expand but, due to the overcrowded nature of their environment, they have found that extremely difficult, if not impossible. The process of interesting such firms in moving North calls for the most patient and persistent research; for having located firms in these circumstances, and ascertained their desire to move, one must consider the sites that may be suitable for them, the kind of labour available, the services they require and how the local authority would be willing to supply them. And, most important, would the local authority be willing to give preference to housing the specialised staff required to set up the industry and to train the local intake. The question of communications is also of great importance, and proximity to an airport is, in some cases, a "must".

When one has satisfied oneself on these and other relevant matters, the representatives of the firm in question have to be taken to view the sites considered suitable, and introduced to the local authority so that all matters of detail can be discussed and the assurances given and received. Perhaps the most important aspect of these meetings is to establish confidence and friendly relations, without which there is little prospect of a new industry coming to that particular place.

Generally speaking, industrialists from the English Midlands are much impressed with the conditions existing in the North. They are impressed by the space available, by the amenities, by the facilities for recreation, by the willingness of the local authorities to help, and, most of all, by the undoubted quality of the labour available. While they are a little nervous of taking such a major step, there comes a time when the firm's representatives are satisfied and enthusiastic; and if only one were able to settle with the Ministry concerned without undue delay, such matters as provision of factory space and the amount of financial assistance that would be forthcoming, and other points of that kind, the actual decision to come North would be forthcoming and a new industry would have been secured.

But these matters have proved, in my experience, to take much time. And as the weeks, and then the months, drag on, while the correspondence grows in volume and the questions to be answered seem endless, the enthusiasm for the move gradually evaporates, doubts arise and finally it is cancelled or postponed to a more propitious time. I would not attempt to apportion blame for these failures. Where public money is in question, consultation and full investigation is proper: the taking of risks is not, of course, encouraged. But at times I have felt that caution has predominated to a quite unreasonable extent.

It is my conviction, my Lords, arising from my experience over a number of years, that to succeed in getting industry to move to the North of Scotland demands quick decisions. If these are not forthcoming there is created an impression that authority does not favour the project. That apart, nothing sickens potential movers more surely than finding that authority is unable, or unwilling, to say forthrightly the measure of assistance which will be forthcoming, whether in money or in factory space, and when it will be available. Speed in these matters is vital to success.

I have said that the persistent efforts of the Hydro-Board have met with some success and, as I have already said to your Lordships, I was glad to learn from the Minister what he had to tell us in this connection. My hope is that, with the advent of the Highlands and Islands Development Board, these two Boards, working together in closest possible co-operation, may achieve much more than has been achieved hitherto. That, I think, is something that we have every right to anticipate; for while the Hydro-Board has unrivalled knowledge of conditions and the accumulative experience of almost a quarter of a century behind it, all of which it makes available to the Highlands and Islands Board through its chief commercial officer (who, in this connection, works for both Boards), the Highlands Board has what the Hydro-Board has always lacked: that is, money. This money is available for the specific purpose of encouraging every kind of development within its area, and consequently it is able to offer inducements.

It may be, however, that the full needs of the North cannot be met by means of small industrial projects such as I have tried to indicate, and that some great industrial complex is required; some great industry, which will bring with it smaller, ancillary industries, and that these together will be capable of supporting educational establishments, universities or otherwise, to provide the most advanced teaching for those desiring it, without their having to leave their homes and go to some distant part of the country.

What I am thinking of is something of the kind which the Highlands Board obviously has in mind for Invergordon. Here, let me say that I have never understood why Invergordon has been overlooked for so long. There must surely be some industry which imports a very large proportion of its raw material and exports a good proportion of its finished product. For such an industry, Invergordon, with its land-locked harbour, its good communications and with all the great ports of Northern Europe almost on its doorstep, would seem to be ideal.

But, before proceeding with such a concept, do let us face the seemingly inescapable consequences. It might stop the drift from the North. It might bring a measure of prosperity such as the North has never known hitherto. On the other hand, it would attract labour from the entire North, probably leaving very few on the land. It would also attract many from other parts of the country; from England, Wales and Ireland, even from abroad, and such a population, it seems to me, would completely alter the way of life of the Highland people, their customs, their manners, their culture, their strongly held traditions and beliefs. The North, and particularly the Highlands, would undoubtedly lose very much of their Scottish character and the people, possibly, some of their distinctive virtues. That might be all to the good in some ways. But do not let us go ahead without fully taking account of the probable outcome, and setting the gains against the losses. It is true that we live in a material age, but material gain does not necessarily bring happiness in its train; and, surely, my Lords, our purpose must be to increase the well-being and happiness of our people.

3.55 p.m.

LORD TAYSIDE

My Lords, I beg the indulgence of the House in addressing your Lordships for the first time. In considering the condition of Scotland today we must, in fairness, take account of the potential not yet realised as well as adverse possibilities, so that we may have a reasonable projection of what the future holds in the light of to-day's knowledge. There are, of course, black—even bleak—aspects in some areas and industries, and I shall refer to some of them later; but as far as industrial opportunity is concerned, it seems to me that the specific measures in aid which the Government have taken since coming into office must, given time, transform the Scottish scene for the general betterment.

Foremost in these measures was the decision to designate all of Scotland (except for Edinburgh, Leith and Portobello) as a Development Area, for many special benefits arise from this. The general rate of grant for manufacturing machinery is at the present time 45 per cent., a most acceptable rate. Industrial undertakings receive the additional payment on the refund of the selective employment tax. They are also paid the regional employment premium. These generous benefits have already brought firms into Scotland, and more are on the way. The North of Scotland Hydro-Electric Board, of which, as has been said, I am a part-time member, is now dealing with 35 inquiries, of which it is hoped that many will come to the Board's area. If they do, something like 4,500 jobs will be involved.

Presumably, the Government will have a powerful voice in the location of any new complexes set up in Britain which enjoy special privileges. Quite apart from suitability of site, a strong case can be made out for guiding one of the aluminium smelters towards Invergordon on the mere fact that the area of North Scotland which the Hydro-Board supplies occupies nearly a quarter of the area of Great Britain but is lamentably weak in industrial strength. The average number of electricity consumers of all kinds in this area is only 20 per square mile. The next lowest figure, at March of this year, was the South Wales Area Board with 159 per square mile.

My Lords, it must be said at once that the Government have proposals to help correct in some measure the imbalance of population in the northern part of Scotland. They have designated Tayside as a growth area and have constituted the Tayside Consultative Group, charged with the duty of considering the various factors and problems and producing, under Scottish Development Department auspices, a plan for eventual consideration by the Scottish Economic Council. The immediate aim is to provide for an increase in the population of the area by some 300,000; that is, to double the population. Obviously, plans of this magnitude take time, but the studies are now under way and will, it is expected, be completed around the end of 1969.

One factor which has emerged from the early studies of the Tayside Group is the desirability for farmers in the area to grow a greater acreage of sugar beet. The sugar beet factory at Cupar, in Fife, which employs 200 people all year and 375 in the summer, is capable of processing more than double the quantity of beet which is being delivered to it, and I suggest that the Government, at their discussions with the National Farmers' Union, could usefully see what would be required to increase the acreage under beet. It may be that a carriage extra or a small regional premium would be sufficient to ensure that these people at the Cupar factory continued for some years yet, unless in the meantime alternative employment becomes available. Cupar has a population of some 6,000, so the beet factory plays an important part in the local employment situation.

By far the largest town in the Tayside area is Dundee, which has an excellent record of self-help. Ever since the war, under a succession of eminent Lord Provosts, among whom my noble friend Lord Hughes ranks high, Dundee has successfully attracted new industries to its industrial estates, and has set an example to all by the willingness of its chief magistrates together with its business people to go afield as joint bodies to meet overseas industrialists and to persuade them that Dundee is indeed a bonny place for them, too.

Despite this great success, however, a large part of Dundee's comparative prosperity depends upon the jute industry, in which I am actively engaged. Because of the recent difficulties through which the country has been passing, the review of the mark up on imported jute goods, which the Board of Trade had proposed to carry out in the autumn of this year, has been postponed until perhaps the spring of 1968. In these days of planning activity in the area, it seems to me to be essential that nothing is done to cause undue harm in an industry employing 20,000 in Dundee and nearby towns. For example, it is estimated that about 23 per cent. of the working population of the towns of Forfar and Kirriemuir are employed in jute works. If the Government are serious, as I am sure they are, in their expressed intention to halt the drift of population out of Scotland, they will require to take note of the serious consequences which would arise if drastic changes were to take place in the existing level of mark up.

The gravest industrial calamity in, or pending in, Scotland is the running down of the coal mines. In the short term, the Secretary of State for Scotland is appealing for the use of coal to be given priority over other forms of fuel wherever possible, and concerns that can do so, such as electricity, are responding to this plea. It is recognised that this can only be a short-term measure to give the Government a little time in which to do all that it can to persuade new industries to move into affected coal towns.

Meantime, everything possible must be done to retrain men for other work. It is incumbent then upon the Government, upon employers and the trade unions to encourage men to retrain, and to recognise such men as fully eligible for employment where their new skills can be used. Not miners only, but railwaymen also, come into this category, although it is to be hoped that the great bulk of rail closures have been completed and that future redundancies, whilst hard indeed for those directly concerned, will be few in number.

A particularly happy prospect for Scotland lies in the future of its tourist industry. This is more and more becoming an all the year round activity of one sort or another. I am particularly pleased to learn that the Highlands and Islands Development Board is giving this asset of Scotland its particular attention in all its aspects, from hotels and boarding houses to golf and ski-ing, and much more besides. The conception of this Development Board, with funds and wide powers, was brilliant. It has made mistakes, I am sure it would be the first to agree, but what body acting as quickly and as widely as it has done would not have made mistakes? It is the mistakes which tend to attract the publicity, for the successes just proceed quietly on their way without fuss.

Up to August, 1967, the 400 applications approved for assistance have created over 1,800 jobs, and the value of the assistance has been around £1¾ million. The Board recognises the overwhelming need for manufacturing industry in the crofting counties and sees in its drive for industry its best single method of stemming the drift of population. Manufacturing industry promotes the need for and the extension of service industries, and so generates a total capacity for employment greater than that of itself. The converse does not apply, for service industries can rarely attract manufacturing industries to their side. The Board's priorities of manufacturing industries and tourism are well conceived, and the recent decision to enlarge their work in the field of economic and statistical studies in the crofter counties will help to make the Board's future decisions more sure of success. The Highlands and Islands Development Board is vital to the future of the area.

In concluding, I should like to add a word of caution concerning the Minister of Transport's White Paper on the Transport of Freight. In general, I agree with the White Paper and with the forward aims set out in it. The part which I would ask the Minister to consider most carefully is that headed, "Abnormal loads charge", and in particular paragraph 66. It would be a tragic consequence if the suggested charge of up to £15 a mile for abnormal loads were to have the effect of causing certain industries to refrain from coming to Scotland, or of causing Scottish industries to become uncompetitive because of this charge or to move South to enable them to avoid the heavy charges. A supporting factor in this plea is the fact that so many of Scotland's branch railway lines are now closed or being considered for closure. Scotland, nearly all of which is a development area, expects all the help possible to increase its capacity for employment. It is receiving great assistance now, the benefits of which will accumulate and will be seen to accumulate in the near future.

4.8 p.m.

VISCOUNT MUIRSHIEL

My Lords, it falls to me to have the privilege to be the first to congratulate the noble Lord, Lord Tayside, on an extremely interesting, thoughtful and constructive maiden speech. There are two reasons why I value this privilege greatly. The noble Lord comes from an area with which for some ten years I had the closest possible political connections, and they were the happiest years in my political life. I know that good products come out of Forfar—and we have had a good one to-day. I congratulate the noble Lord most warmly.

The speech of the noble Lord, Lord Hughes, had a positively nostalgic appeal for me, as I think it may have had for my noble friend Lord Stuart of Findhorn sitting in front of me. He spoke of all the fine things that are happening in Scotland to-day. I could not help but feel that, but for the passage of years and a few other events, there went one of my own speeches of a few years ago. But I must warn the noble Lord, although he may be luckier than I was. Clearly, he profoundly believes in the merit and the value of everything he said about the great future that lies in front of Scotland a s a result of the plans of the present Government. So did I in my speeches. The trouble lies in what the noble Lord himself said about what used to be called the pipe-line, though he avoided using that word. He made an almost pathetic plea for people to realise that it takes a good many years for a plan to go from the original concept to full fruition.

The noble Earl, Lord Dundee, in an extremely interesting opening speech, made it clear that everything good happened before 1964, and the noble Lord, Lord Hughes, made it equally clear that everything good has happened since 1964. We must let that pipe-line run through the whole thing. The knowledge of whether we have really succeeded in changing the basic structure of Scottish economy, as it must be changed, will only come in about ten years' time. We can see some of it coming, and what we have seen is good, but we have to go on working on this problem. My noble friend Lord Strathclyde made an extraordinarily interesting speech about what can be done in the Highlands. We have been working on this for years. I know that the Highlanders do not quite believe it. It is a long process. The noble Lord made a number of suggestions which could be very valuable indeed.

I do not propose to detain the House for long, because I am going to the simple elements of the problem we are discussing—and I am afraid I shall revert to some of the matters that I have raised on a previous occasion in this House. What I should like to look at shortly is the strategy of economic development in Scotland, and the underlying structure on which the strategy is developed, should be developed, or can be developed. It may be helpful to look at the elements, because our relative position has improved; and this has not come about by chance. It stemmed, of course, from the efforts of a great many individuals, individual companies and individual organisations. But first and foremost—and may I say this with all deliberation, having seen quite a lot of it in my time—it stems from a great deal of invaluable work by the Scottish Council (Development and Industry), pre-war in its earliest incarnation and, above all, of course, post-war in these latter years, when the full weight of its efforts, backed by successive Governments, was driving on to do what we have to do in Scotland. I will say more about them in a minute.

Another element which it would be quite foolish to ignore is the Scottish T.U.C., who did a lot of useful forward thinking and were very vociferous about it; and, to be quite honest, I found it remarkably helpful, although in the process of being vociferous they were not always wildly polite about myself, but that did not matter; they were doing a very useful job. Then there is another element which, surprisingly, quite often gets forgotten, and that is the Board of Trade, who really are at the heart of a great deal of our efforts to get the economic structure of Scotland right. I will come back to them, too. Then there is, of course, St. Andrew's House. In more recent years there has evolved the Planning Board, and now the Scottish Planning Council and other subsidiary bodies. All these elements have played their part, and must go on playing their part in the future. But I would suggest that it is not a bad thing regularly to look at them all, to see that they are being properly used and are the right elements on which to base all our future work.

To take the Scottish Council itself, the part it has played in the past has been crucial, for obvious reasons. It is an independent body, independent of Government. It has had devoted leadership and devoted membership. It has been able to do things which no Government body could do. It has been able to be critical of Government in a way that a Government sponsored body would find difficult. It has been able to go to individual firms, at home and abroad, in a way that no Government Department can really do it, admirable as they may be. I emphasis this not just out of politeness to my noble friend Lord Polwarth, who is sitting there looking shy, and other people. I believe it has played a thoroughly important part in this whole change in Scotland. I stress that, because I hope that the advent of these newer bodies and the Scottish Planning Council, in particular, and the advisory local bodies related to it, will not be allowed to interfere with the close and constant contact with the Scottish Office and the Scottish Council (Development and Industry)—and I mean by that the Department not only at departmental level but also at ministerial level. I believe that that is a most important thing.

I have already in the past expressed some doubt about the long-term value of standing advisory bodies. I hope that I may be proved wrong. I think there is an extremely strong case for ad hoc bodies set up for specific purposes. What the noble Lord, Lord Tayside, was describing is probably a very good example of the admirable use of a body of that kind. But I would warn about these permanent advisory bodies. Any experience one has ever had of others in the past is that after the initial enthusiasm one gets bogged down in a mass of paper and loses all interest and enthusiasm, and it really becomes a matter of prodding from the Scottish Office to get anything out of them. I am sure this has not happened yet, but I would warn strongly against the risk of its happening. That is why I plead for the continued close contact with the Scottish Council, which is not subject to these risks, for obvious reasons.

I come now to the Board of Trade. A surprising number of people have said to me over the years: "Should we not have a separate Scottish Board of Trade? There is an obvious argument for it. Would it not be better? Should we not get more drive for the steering of industry into Scotland, the administration of the various certificates, if we had our own body in Scotland?". All I can say is—and I think those of us who have been involved closely in this will agree—that I do not believe it would be a good thing for Scotland. The truth is that we could never duplicate the range of functions carried out by the existing Board of Trade. It would be a great mistake to get into competition with an English Board of Trade. The Board of Trade, I would say, has with great loyalty and devotion worked on our problems, and the quality of their top representation is very high indeed. I believe the right answer is that there should be one body, working with full responsibility for helping every part of the country. The flow of information coming into them from all sources, from all quarters of the world, and made fully available for all our purposes in Scotland, could not possibly be duplicated by anything that we could set up ourselves.

The Planning Board, another facet in the whole element, I believe to be an admirable introduction. It has been evolving over the years. Started in a minor way, in my time it developed further, and it has developed, I think, further still. This is the right kind of technical body of officials, working under the general auspices of the Scottish Office and bringing together all the elements in government that need to come together.

What is all this about? What we have been trying to do, of course, is to widen the whole structure of our industry. There is a great deal of detailed day-to-day work that must go on. But what matters, above all, is the study of broad trends for the future and the continued search for whole industries which, of their nature, because of invention or for any other reasons, are on the move or at a particular stage of expansion. That is what happened with the motor car industry. We did manage to catch that industry at the moment of expansion and to steer hard and we got it back in Scotland. The combined efforts of a great many people did it. I only wish that we had got a bit more of it. That was an ideal example of watching in advance an industry that would want to move and to expand sooner or later, and catching it at the right moment. What is the equivalent of the future? I do not know. That is the kind of thing that I hope all these bodies, these studies that the noble Lord, Lord Hughes, has described, are looking at. Lord Tayside's work, of course, links to this, too. There is just a danger, in studying the (to use that horrible word) infrastructure—the kind of thing that the noble Lord, Lord Hughes, was describing on the Borders—of forgetting who is coming in to use that infrastructure.

My Lords, there are some strange and interesting things happening in the world. With the advent of these large deep-draughted tankers and bulk carriers the North Sea is becoming to-day a shallow ditch. The draught of some of these big ships is too great for them to use certain parts of the North Sea. Then there is the growth of the container movement. I was delighted to hear of the intensive studies that are going on now, because I believe that the growth of movement by containers in the overseas trade is one of the most important things that has happened since we turned from sail to steam. The full impact is not here yet; but it will come surprisingly quickly. It opens up a fascinating possibility. One could almost determine by deliberate thought where one's next point of development is going to be without worrying about where the seaport is. What matters is where the container filling centre is. This subject I understand, to my great relief, from what the noble Lord, Lord Hughes, said, is being studied very seriously.

But out of all this consideration, and remembering that the type of ship which is being built to carry containers is the equivalent of a 40,000-ton ship at the moment (they are getting bigger, too), let us realise that the Clyde and particularly the lower reaches of the Clyde, emerges as potentially the best situated deep-water facility that we have, not just in Scotland but in Britain. In the potential which may be disclosed by study of the lower reaches of the Clyde—there are several possible areas of land reclamation—we have possibilities that could be vitally important to the whole future of Scotland's development.

My Lords, that is all I am going to say this afternoon. The point I want to stress is that we are developing rather too many advisory bodies and various other organisations. Let us go on watching them the whole time to see that they do not get in each other's way. Still worse, do not let one of them think that somebody else is doing the job, and nobody do the job that really matters.

4.20 p.m.

LORD BANNERMAN OF KILDONAN

My Lords, although introduced only today to your Lordships' House, I do not feel myself to be a stranger because I see so many friends in all parts of the House. Nevertheless, I know that there is a word in Scotland, "brash", which describes the man who enters the strange house and starts talking even before he sits down. I have at least sat down in your Lordships' House before being brash enough to get up to start to talk, and I plead your indulgence. I am an average Scotsman and I do not like to see a good opportunity go past, because I understand that, alas! your Lordships do not discuss Scottish affairs as frequently as perhaps you might in this place.

Even so, I consider that your record is better than the record of another place and I hope I am not transgressing on the usage and the tradition of this House when I point out that the pressure of business in the other place constitutes a physical threat to its survival in its present form, and that the other place just avoids strangulation by running down and short-cutting the democratic processes, so that government by the people, and for the people, is no longer a reality, whether in England and Wales or in Scotland. In my opinion if the call for reform (which I acknowledge is often directed to the other fellow, instead of to oneself) is to be effective and is to help cure the widespread economic and social ills which beset our people, then the reform should begin not in your Lordships' House but in another place. In shooting parlance, which perhaps your Lordships may appreciate, you have been used too long as decoy ducks to divert the attention of the people from the over-centralised power complex which constitutes the Government of this country to-day, and I am glad to find myself in my first speech here in this House of historic tradition on the side of your Lordships when I place this priority of reform before you.

I am honoured and proud to have been admitted to this ancient House, and I thank the noble Liberal Lords who introduced me—the noble Lord, Lord Amulree, and the noble Lord, Lord Rea. I also thank them for taking the risk of introducing me to this House. But I am bound to say that as soon as the equivalent House is set up in Edinburgh I shall gladly take the shorter journey. There is always a dangerous risk, and particularly to-day, to the Scot who crosses the Border, of infection by the English virus. This has the paradoxical effect of fattening him as an Englishman while he wastes away with nothing but sentiment to sustain him as a Scotsman. Sentiment can never cure Scotland's social and economic ills; nor will London legislation, first devised and put on the Statute Book for the benefit of 50 million Englishmen, ever be made to fit the distinctive needs of Scotland and Wales. Nor, I think, is it entirely satisfactory for the remoter parts of England herself.

Yesterday, my Lords, I had the privilege of listening to the debate on legitimacy—or illegitimacy—when your Lordships quite nonchalantly altered a portion of the Scottish law because that alteration suited the particular Bill which you were discussing. For too long an addendum has been added to the bottom of the Whitehall Act which says, "This shall also apply to Scotland". The poor Scotsman then stumbles about in a legislative suit far too big for him, or, alternatively, in a political straitjacket that nearly strangles him. The primeval example—or perhaps, to make it clear, I should say prime and evil example—of this straitjacket is the selective employment tax, designed apparently to make the service industries give up service workers to the manufacturing industries. But two-thirds of our workers in Scotland are in service industries. Where, for example, are the manufacturing industries in the Highlands and Islands to which workers can transfer when we know that 75 per cent. of them are already in service industries?

This is a destructive, not a selective, employment tax, and it is the crowning folly of legislation designed for England and forced on Scotland. As has already been said, we lose 80,000 Scotsmen every year in emigration. This, I submit to your Lordships, is a most destructive tax and it can only swell this shameful total. The anger of Hamilton is now known in Westminster, and it is the symbol of widespread Scottish anger at the mis-government from Whitehall. Let no Englishman, or London-centralised Scotsman either, denounce this Scottish voice as "phoney" or without roots. This is not the anger of to-day, or even the anger of yesterday, but the swelling anger of Scotsmen through two centuries of time. That is the period during which Scotland has been condemned to be a sleeping partner in the United Kingdom set-up.

I acknowledge that there have been sincere but ham-fisted, piecemeal efforts by London Government to improve Scotland's lot from time to time. I agree with the compliment paid by the noble Viscount, Lord Muirshiel, to the noble Lord, Lord Polwarth, for his work in the Scottish interest. I do not decry that work at all, but I am concerned that we are allowed to remain a sleeping partner in the United Kingdom set-up, and that there has been no change in the picture for generations. It is indeed a dismal picture.

Our unemployment is always greater than that of England; our overcrowding is still far worse than England's. My noble friend the Minister, than whom few in Scotland know better the actual turning of the wheels of the economic part of Scotland's development, told us in his speech to-day that the Government are prepared to arrive comfortably by 1970 at 50,000 houses per year for Scotland. Why do the Government travel comfortably in this way? Why not uncomfortably, and let us have at least 60,000 houses? That is the minimum that we need in Scotland to-day to reduce the slum areas, and to give something of hope to the people who have been waiting so long for houses in Scotland. We shall be lucky if we get 40,000 houses built this year. The delay is dreadful and most uncomfortable for the people of Scotland.

As a Highland Scot, I welcomed the formation of the Highlands and Islands Development Board, but I am bitterly disappointed at the obvious limitation on its enterprise up to date. The Government and the Board no doubt will sponsor this Alcan development at Invergordon—the aluminium smelting development—and we welcome this in the Highlands. But what will it profit the Highlands if it gain an Alcan heart and lose its own soul? The Highlands constitute 9 million acres—half the area of Scotland; yet only 4 per cent. of the people of Scotland stay there and live there. The Kildonan clearances have had their counterpart throughout Scotland for two centuries, and they still continue, not so blatantly to-day, but numerically far worse.

If the Scottish Highlander is not to die off in a nature reserve the Highlands Board must renew the whole economic fabric of the Highlands. This it can do by making the owner of land—and I put this advisedly to your Lordships' House—in the Highlands a trustee of the nation for the production of folk and food. I do not suggest nationalisation or expropriation, but I feel that if the owner of land cannot do what he ought to do for the land he owns, then a fair rental should be paid to him to allow others to do the job. There are in the Highlands one million acres, undeveloped and bracken-covered, which, after survey and reclamation, could be allocated to the production of folk and food and timber.

As an ex-Forestry Commissioner and a sheep farmer, I see no reason why forestry and farming should not join together in the one Department with executive control in Scotland. The noble Duke, the Duke of Buccleuch, who has done tremendous work for the forestry development of Scotland is, I am glad to see, present to-day, and I should hope that he would back such a proposal as this, because if forestry and farming were in one Department it would have the effect of bringing together the forester and the farmer. Just now there is rivalry between agriculture and forestry as to the use of land.

There should also be reclamation by widespread arterial drainage schemes in great areas of alluvial soil, as in the Spey Valley, which once produced cereal crops. I am surprised that in all of your Lordships' discussions concerning conditions in Scotland to-day the question of land was never raised. I do not want the question of agriculture to be raised particularly, but the question of land is basic to the survival of our area of the Highlands, and of Scotland, and it must enter into any debate which concerns itself with the condition of Scotland. So I feel that the improvident neglect of our limited land resources in Scotland is a constant rebuke to Government.

One would imagine that the need to replace 100,000 acres of land taken from farming, and used for building and housing, since the last war would at least spur the Government to do something to look for new acres in Scotland. But these erstwhile fertile areas have become, through careless apathy, more waterlogged and useless as the years pass. This is in line with the short-sighted policy of Government which, in spite of the balance-of-payments problem, has sought to limit agricultural production in this country, rather than to pursue a policy of expansion. I have no doubt that the Potato Board is an efficient body, but to spend money to limit food production is crazy politics in this world of food shortage. Anyone who listened to the noble Lord, Lord Boyd-Orr, when he spoke on television will appreciate that.

I feel that the Highlands Board should first sponsor and encourage, by grant and loan, widespread land settlement throughout the Highlands, introducing also light industries. Here I would pay tribute to the Board and to Professor Grieve for the help they have given, as the noble Lord, the Minister, told us, in the development of the West Coast fishing industry, which was so very necessary, and for the introduction of small industries. But indeed these are small industries, making fishing flies, which are put forward as a basis for the reconstitution and the rehabilitation of an area which is half the size of Scotland, and where only 4 per cent. of the people live to-day. The Highlands economic fabric has been so often patched that there is no good cloth left to hold the stitches.

The Board must follow two comprehensive practical policies; and that right away. These should be widespread land settlement and the establishment of good communications, with sharply tapering freight rates, between the Highlands area and the main markets of Britain, and to the North East of Scotland, where Aberdeen and the fishing industry would benefit tremendously. These measures would be enough to bring spontaneous growth without any more incentive. Then might the Akan heart at Invergordon pump live blood throughout the Highlands, instead of sucking the remaining blood from depopulated areas to maintain a selfish urban existence. But I am afraid that this will remain another of our Scottish pipe-dreams so long as we have to accept the decisions of others: for I understand that we are to receive new transport legislation from Whitehall which, in the Highlands anyhow, can act only as another blockade against enterprise.

I thank your Lordships for the courtesy and the kindness you have shown me. I have many faults, and one of these may be my enthusiastic regard for Scotland. But there can be nothing surer in this life than the truth which we Liberals proclaim; and that is that the growth in stature of man depends on the extent to which he can control his own destiny. This is equally true of nations; and Scotland is a nation. That is why Liberals advocate federalism to replace the present form of centralised power government in Britain, so that all parts of Britain may be helped. There is a Border poet called Will H. Ogilvie, and he says in one of his poems: There is a fresh wind blowing Over moorland and dale. Aye, there is a fresh wind in the byways and in the highways, in the main streets of our villages and towns to-day. There is in it the warm purpose of the Scottish people to have a measure of determination over their own life and their own living, so that they may no longer be merely sleeping partners. That is not a selfish ambition. This is an ambition which we are determined is better for the United Kingdom set-up.

Finally, I would say this: that even Old England herself, in these proposals of federalism, would find peace and quiet and time to put her own house in order. So, my Lords, I hope you will agree that, for a Scotsman, I have made quite a non-controversial maiden speech.

4.41 p.m.

LORD RITCHIE-CALDER

My Lords, it falls to my lot and is my great pleasure to congratulate the noble Lord, Lord Bannerman of Kildonan, on his "non-controversial" speech. I have noticed it is the habit in this House always to say, "I hope we are going to hear more of him. "Your Lordships will recognise that that is a quite redundant remark, because not even the noble Lord, Lord Wakefield of Kendal, will be able to stop Johnny Bannerman, who happens to have the distinction, as I am sure your Lordships all know—everybody in Scotland knows—of having a record number of international caps. I know that was for chasing tangible objects round the rugby field. I wonder what he is going to do chasing intangible objects round your Lordships' House!

I had hoped that to-day he was going to add another record. In fact, as he himself said, he spoke almost before he sat down. He was introduced this afternoon, and has already made his maiden speech. This, I think, is a tremendous achievement, a really remarkable achievement. I had hoped that it was unique, but I was assured on the highest possible authority in this House, that is, the attendants, that it is not unique; that in fact it was achieved by Lord Craigton on one occasion. But, after all, Lord Bannerman of Kildonan will not mind tying with another Scotsman. I think it was a remarkable speech; I enjoyed it, as we all did, and I am quite sure that I do not need to say that we look forward to hearing from him again.

I am also glad on this occasion to follow another maiden speech, that of the noble Lord, Lord Tayside. It has been remarked in this House to-day that some good things conic out of Forfar, including Forfar bridies, and what-not. But I think to-day we are probably overrepresented. There are two recently introduced noble Lords from the town of Forfar itself. If you add the Dundee and Hughes axis, with Lord Muirshiel we are really over-represented here to-day. But think that Lord Tayside's speech was a most remarkable one, and again I say that certainly we shall hear from him again. Anybody trying to stop a Forfarnian or one from Kirriemuir is going to have a most difficult task.

I am grateful, as we all are, to the noble Earl, Lord Dundee, for initiating this debate on the state of Scotland. I think he was right in saying that we are discussing it at a quite critical moment and, as the noble Lord, Lord Bannerman of Kildonan, has just reminded us, at a most critical moment in the political history of Scotland. During the sterling crisis I met a banker friend from Edinburgh, and I asked him what had brought him down to London. He said, "flew down this morning to rescue the English pound!" As your Lordships know, the Scottish banks long ago forestalled the noble Lord, Lord Thomson of Fleet, in getting a licence to print money. But I doubt whether the most determined Scottish Home Ruler would believe in the circumstances that the Scots pound would salvage the sterling area. But, as I said to my friend on this occasion, it was a nice thought, a kindly thought. It was an amende honorable because, of course, it was a Scotsman who got us into this mess, when William Patterson founded the Bank of England in 1694; and I am not sure that General de Gaulle is not getting his own back on us for he thing that that other Scotsman, John Law, did to France when he set up the Central Bank in Paris in 1715.

I am only reminding my separatist compatriots that we will not solve this, nor many other problems, by disowning England. Indeed, I have been chiding my friends in the Scottish Nationalist Party—I am not sure that I did not work this off on Lord Bannerman of Kildonan on a programme called A Matter of Opinion—by telling them that they are not nearly ambitious enough in their expectations or demands for Scotland. I am sure that most of your Lordships would agree that there is a great deal more in common between the Lowlands of Scotland and the North of England than there is between the Lowlands and the Highlands. I can say that because, having been born at, or anyway near, the Highland Boundary Fault, I am ambidextrous, with a claymore in one hand and a spanner in the other. But there is this characteristic truth that there is a greater economic, and indeed I should think almost temperamental, commonalty than between the Lowlands and the North of England. I always wonder why those who want to separate in Scotland just hark back to the Union of the Parliaments. Why do they not go back 1500 years and claim as the Scottish Sudetenland the borders of Berenicia and Strathclyde? Then we would reach to the Tees and to Barrow-in-Furness, and we could legitimise the "Geordies'" accent. Also, we should acquire a large number of Northumbrian and other Peers.

I am afraid I still think that Scottish nationalism, which, I would remind your Lordships, is becoming not only vocal, but, I suspect, rather more effective than we would want in Parties, is still "Not so much a Programme as a Way of Life." But I am all for that way of life—most emphatically for that way of life; not the mawkish or maltish sentiment, and not, I may say, the tattered tartan, nor the greetin' and the girnin', but the sober virtues and solid values of a country and a people, with institutions like law and education and local government, which are quite distinctive from and, as we Scots think, much better than those of England—anyway, most distinctive. That is all too often forgotten in Westminster, although I think I am right in correcting the noble Lord, Lord Bannerman of Kildonan—I shall be corrected if I am wrong—and in saying that we do not say that "this Act shall apply to Scotland"; we say that it shall not apply to Scotland. I think it is put in negative form.

I am, above all things, an internationalist. But that does not preclude me from taking a proper pride in my own people, and being most sensitive about slights or affronts or neglects. I am also a Scottish Socialist. But I come from a tradition of Scottish Socialism which stems from Keir Hardie, Bob Smillie, Jimmy Maxton, Geordie Buchanan and Lord Bearsden's father, Davie Kirkwood, whom I recall demanding in another place 40 years ago the return of the Stone of Destiny, long before another generation took it literally.

Thirty years ago, with Tom Johnston, James Barr and others, I was with many Scots in the Labour movement in London very active in the London Scottish self-government movement. I would remind your Lordships that this was a Labour Party activity, but it was in response to the burning discontents of the younger Scots of the 'thirties who were being robbed of their opportunities in the wake of the great depression and were suffering very adversely in comparison with England. The Scottish Nationalist Movement in those days was generated by what I would call "dammed-up M.As.". We were not exporting our graduates in those days, and they were staying at home to brood over the injustices to Scotland—and they had plenty to brood over.

To-day, the grievance at the heart of nationalism is that we are losing too many of our lads and lassies o'pairts, as the noble Lord has pointed out, and are losing far too many of our young trained men. My noble friend Lord Hughes, indeed, said that this was the most disturbing of all of Scotland's ills. And while there are many ills in Scotland, I think that I would agree with him. This is a serious blood-letting, involving 45,000 people, mainly young (because it is the young who move), who are leaving Scotland, either to go to England or emigrating abroad; and this represents a loss of capital which has been invested in their education and in their training.

Your Lordships will not misunderstand me. I want the world—and I am generous enough to include England in "the world"—to have the benefit of Scottish brains and Scottish skills. It is our historic role forced upon us perhaps through circumstances, but not inconsiderably through the foresight of John Knox in establishing the parish schools under the "Book of Discipline" and giving us 400 years advantage in education over England. I do not want this brain-drain to continue. I want a circulation of brains, with the Scots coming back to base, back to Scotland, with the return benefits of their worldly experience to help equip our Scottish industries and institutions for their proper share of the new opportunities in a changing world. I believe that this is now the Scottish role in a changing world.

I am far from rejecting the valid arguments for a Scottish Parliament in Edinburgh, which is a matter for vigorous discussion, but above all I want Edinburgh—and I hope that the noble Lord, Lord Bannerman of Kildonan, will support me—to be more than a national capital: I want it to be an international capital. I want to move international thinking 10 degrees farther North out of the latitude of the New York-Paris-Geneva-Rome axis that now represents what happens in United Nations circles. And we definitely could do so. It is not arrogance, but the certainty of my own experience all over the world which makes me say that in international circles Edinburgh, evocatively, does not suggest the United Kingdom, nor does it even suggest Scotland. It has claims of its own which are quite unique.

This may sound arrogant for someone coming from Edinburgh, but I assure your Lordships that, at least geographically, it is true. These claims derive partly from the Auld Alliance, which, in a way, anticipated the Common Market many centuries ago, partly from our old associations with the Netherlands, partly from our trade with the Baltic, and partly from the tradition of the wandering students who beat the trail, hungry for learning, to Bologna, or Padua, the Sorbonne, Leyden, and to Edinburgh, with its reputation of being a university run for students and not for dons. It also derives considerably from the theological college of Edinburgh, which sent out and brought in so many people to and from all parts of the world; and even more considerably because of the centuries-old distinction of Edinburgh in medicine, and also because of the contemporary cultural significance of the Festival.

What I am trying to establish, my Lords—and this I believe to be true—is that the claims of Edinburgh are above and beyond the United Kingdom or, if you like, Scotland. Edinburgh has been cheated of its opportunities to be such an international centre. There was an opportunity for it to become the centre for I.C.S.U., the International Council of Scientific Unions, which incorporates all the learned scientific societies and congresses in the world. The late Sir Edward Appleton even had buildings earmarked for it. The opportunity to bring the head-quarters of I.C.S.U. to Edinburgh was frivoled away by pettifogging questions of diplomatic privileges—not diplomatic immunity, but the kind of international privileges that Switzerland, Italy or Paris offers and dangles in front of people in order to attract international bodies and from which, in the flow of international currency, those countries manifestly benefit.

A few weeks ago I was in Poland. The Polish Foreign Office official who met me apologised for the unimpressive airport of Warsaw. "You see", he said, "we had to rebuild the Opera House first". I think that is a highly commendable sentiment, and it helps one to put up with the inconveniences of Warsaw Airport. But Edinburgh has neither a proper opera house nor a proper airport, as your Lordships are continually being reminded by all the persistent Questions from Scottish Lords who languish at Turnhouse. Edinburgh could have, without any question, international conferences of the United Nations and its Agencies, or other international bodies. But it has not got them because it cannot house them: it has not the halls or the facilities capable of housing them. The redevelopment plans of Edinburgh ought to include such an international centre.

My bitterest complaint (and here I must declare an interest) is about the handling of the World Health Research Centre. I am not blaming the Secretary of State for Scotland; and I can assure my noble friend Lord Hughes that I know—in fact, I say them in my sleep—every explanation and every excuse. But I still think hat the United Kingdom lost an opportunity for world leadership, and that Edinburgh lost the opportunity of becoming a world centre for medical research. I ought, as I say, to declare an interest, since I was heavily involved in the matter, but only because, as a professor of international relations, I regarded it as the most inspired piece of functional internationalism which we have had since the war.

I will briefly recapitulate for your Lordships' information the facts, because in this matter involving the health of others I would insist that this is part of our future in Scotland. In the Pug-wash Movement—which is to world science what the Ecumenical Movement is to the world's churches: it is the mobilised conscience of the scientists it was proposed, as a means of abating world tensions, that scientists should have the opportunity of working together for something which would be for the positive benefits of mankind. The suggestion was for an international medical research centre. The late President Kennedy seized upon the idea with great magnanimity, because what was likely to be done could have been done by the Americans whose medical research programmes are now running at a level of 1,000 million dollars a year.

President Kennedy proposed to the General Assembly of the United Nations that this international research work should be undertaken under the ægis of the World Health Organisation. The Director-General of that Organisation, under the guidance of an international advisory committee of medical scientists of great distinction, undertook a feasibility study to see in what areas of research there were gaps and in what respects the World Health Organisation could best serve the intention. The report showed that there were problems which were not, and could not be, satisfactorily solved by the existing systems of national research.

The original scheme for a tripod—epidemiology, communications and biomedical research—was put up. This would have involved modern research, which includes molecular biology and chemical protection and therapy. It would have involved questions of the problems, of which foot and mouth disease is a conspicuous example, for no research on a national scale can solve the problems of virus troubles of that kind which are on an international scale. The object was to provide the basic research—and by that I mean directed research—which the World Health Organisation is not only entitled to do, but, by default of other means, is under instruction to initiate. The original scheme would have meant a budget of 145 million dollars, exclusive of the cost of land and buildings, over the first ten years. I would remind your Lordships that that is 145 million dollars of international money, not of British money. It provided for a staff of 710 scientists of all nationalities, and for 150 working Fellowships.

I had every reason to know how much depended on the reaction of Britain to those proposals; in fact, at one stage everything depended on it. One way of showing earnest was to offer to be the host country; to provide the site, but not to be responsible for more than a fair share of the costs of construction. I suggested at that time the site should be in Edinburgh, with its recognised reputation in medical science. Immediately, five sites within reach of Edinburgh were offered by local authorities which had the sense to see what an international scientific community could mean, not just in terms of the international money which would flow in and through, but of the great stimulus which it would give to the cultural life, creating a real international community of interests.

This scheme foundered—well, a small solatial fraction remains in the World Health Organisation—because the vested interests in the medical scientific world, and particularly in this country, prevailed. I warn your Lordships that one day I shall write the full story, and "James Bond won't be in it". What I know about the carpet slippers in the corridors of power and the poignards behind the arras surpassed my experience as Director of Plans of Political Warfare during the war. The idea had enormous support in Scotland—that is my justification for raising the matter here—and it has been represented in Scotland as having failed through the conspiracy of interests in the South. I say to your Lordships that it did fail because of the conspiracy of interests in the South.

We are talking now about young Scots leaving Scotland and emigrating, young Scots feeling frustrated, young Scots voting in Hamilton. Do not put it all down to self-interest or next week's pay packet or parochialism or narrow nationalism, because I know that, to a large extent, it is frustrated idealism about the world in which they live and of which their country, Scotland, is a part which ought to be taking its full and effective role.

5.5 p.m.

LORD BALERNO

My Lords, I have known the noble Lord, Lord Ritchie-Calder, for many years. I have seldom found myself in disagreement with him, and having heard him to-day I feel 100 per cent. in agreement with all that he has said. I would especially underline his remarks about the missed opportunity for Edinburgh as an international city, over the scandal of the World Health Organisation's medical research work going elsewhere. I certainly look forward very much to reading his book when it comes out, which will relate chapter and verse of that scandalous incident. I am not quite sure that I followed him, as the Presbyterian Humanist that he is, when he referred to the ecumenical processes, but it is very good that he should have approached that subject, too.

Where I agree with the noble Lord, of course, is in his congratulations of the noble Lord, Lord Bannerman of Kildonan, on his maiden speech. I cannot always agree with the noble Lord, Lord Bannerman of Kildonan. I have very seldom in my life agreed with anything that he has said—at any rate in the political field. I did not have the pleasure of ever playing rugger on his side, when I fear that one would have had to agree with him. So I not only hope but I know, as the noble Lord, Lord Ritchie-Calder, knows, that we shall certainly hear his voice very frequently again in this Chamber. Perhaps that is the best thing about him, apart from his feet, which won renown on the rugby field. He has a most euphonious voice, with that delightful and distinctive Highland accent that has charmed so many of his fellow Scots on radio and television, especially in films of fiction and romance.

I would venture also to congratulate the noble Lord, Lord Tayside, on his thoroughly thoughtful, down-to-earth speech, full of useful facts. It encourages one to know that the development of the complex of Tayside is in such understanding hands, if that is the right phrase to use.

I am grateful to the noble Earl, Lord Dundee, for raising this debate, because it gives me a chance to mention the parlous state of the Scottish universities at the present time, especially on the technological side. It is with considerable trepidation that I rise to speak on technology, because that happens to be the popular word at the present moment. It 'is the universal panacea of the day, and from the mouths of some the words slip out easily and frequently that it is the wonderful mystique by which British industry may be saved from itself. From the mouths of others we hear of it as that tremendous impact by which Britain is to bring salvation to the countries of the Common Market.

I would make neither a mysterious nor a pragmatic approach. The Scottish engineer is dedicated to precision. Mystiques are imprecise and pragmatical imprecision makes him writhe. Most Scottish engineers and technologists have been nurtured in either one of the ancient universities, or in one of the two modern ones—Strathclyde and Heriot-Watt. But those two modern ones have been teaching and researching in technological subjects for longer than the ancient universities. The younger of those two modern universities, the Heriot-Watt, has been at it for nearly 150 years, so perhaps it is worth remembering their founding object: for education in such Branches of physical Science as are of practical Application. It strikes me that those words serve as a good definition of what we call "technology" now.

I ask your Lordships to pardon this preamble which is given to show that technology, however modern is the usage of the word, has been practised in Scotland for many generations and has been the foundation of many of our industries. I was glad the noble Earl, Lord Dundee, made reference to the blossoming in Scotland of scientific discovery in the 19th century. It was tremendous, and it ended up with Glasgow having a higher standard of living than any other part of the United Kingdom at the turn of the century. Our success in this field during the past century, though, led to a serious brain-drain of Scottish technologists furth of Scotland to England and overseas.

Competing with the older universities for the best brains of the youth of each generation as it comes up, the technological universities in Scotland have come off second best. But now that we realise that our very existence as a nation is once again at stake, this time through economic warfare, it is beginning to dawn on us that our survival as a modern nation depends absolutely on our industries and agriculture. In all fairness to the Government and their agent, the University Grants Committee, there is a recognition of this in their letters concerning grants to the universities for the next quinquennium. But, my Lords, that is as far as it goes. The words do not appear to be matched in practice, at least so far as Scotland is concerned.

The Principal of Strathclyde University, Dr. Curran, talking of the cuts in the recurrent grants, has warned that applicants from the West of Scotland may find it increasingly difficult in the future to gain admission to a university, and many who would have been admitted a few years ago will find that next session there is no place for them. As Chairman of the Court of Heriot-Watt University, I myself should like to give your Lordships some idea of the consequences here. Unless some adjustment can be made to the recurrent grant, next October we at Heriot-Watt University will have to reduce our intake of students by something of the order of 25 per cent. Our undergraduate intake of science-based students last October was 492, and there are at present some 1,200 such students which we anticipated would, by merely continuing at the present rate of intake, rise to a total of somewhere about 1,500 in 1970. But the money the Government are now proposing to provide will allow for a total for the whole university of only something like 1,450 undergraduates.

Now it may be argued—and I am sure it will be argued—that there is a shortage of boys and girls at school to fill the science-based undergraduate places in all the universities in the United Kingdom, and that therefore there must be a cutback in the provision for this group at the universities. My Lords, that argument just does not apply to Scotland. In the Heriot-Watt University we had a record entry of science-based undergraduates this year, and I believe that also goes for Strathclyde. Scotland does not seem to have been affected by the swing away from science which has been detected among the sixth-formers in England and Wales. There are many reasons for this, and among them is one that in Scotland children do not need to make an early choice, as English children have to do, at the age of 14. Here is another proof of the value to Scotland of a system of school education independent of England and Wales. Up the bonnet of John Knox!

We are not content, however, with this position in Scotland. Technology is the infrastructure of industry, and mathematics is the infrastructure of technology. Our teachers of mathematics have done valiant work in the Scottish schools, but they are an ageing population, with far too few recruits to the profession. The Scottish Education Department, since the publication of the Report of the Committee presided over by the late Sir Edward Appleton, have been trying to ease the situation. They have encouraged the Scottish teachers who have prepared the new mathematics syllabus and have co-operated in the writing of a new textbook.

I do not underrate the importance of these developments. They are fundamental, and greatly welcome. But, otherwise, since the Appleton Report little seems to have been achieved—and the day of doom is approaching. The nation must be alerted to the fact that this brooks no further delay. The need to get young mathematics teachers is desperate. The reservoir of young men of ability to teach mathematics is ample, but the inducements to teach are quite insufficient. I would ask the noble Lord who is to reply: how many maths teachers are employed in the administration of education? Cannot they be pulled back, keeping their present salary rates? And what about some responsibility bonus for maths teachers to encourage the young teacher to take up mathematics?

Serious, however, as is the inadequate provision for science-based undergraduates in Scotland, even more so is the provision for post-graduates. As our industries become more sophisticated, so do they require for their development more sophisticated scientists. One of our troubles in British industry is that we do not look sufficiently far ahead. Very highly-trained men are required for this. The Vice Chancellor of Nottingham University, Dr. F. S. Dainton, has recently said that there is a tendency to fit students to solve to-day's problems rather than those of tomorrow. We cannot foresee to-morrow's problems, but fitting students for those of to-day is doing them a disservice. At the Heriot-Watt University, we have at the present moment 57 science-based post-graduate students. For the coming quinquennium, this figure is to be cut back to 40 post-graduate students for the whole University. A reason given for this cut in post-graduate students is that many of them are doing it from a reluctance to launch out into the hard world of reality. They want to prolong the sheltered life of the academic. I would grant that this holds good for a number of post-graduates, particularly in the liberal arts and, to a lesser degree, in the pure sciences. But this is only rarely the case with technological research, which is always directed, and must be directed, to specific applications. Technological research is not pursued for its own sake.

A very good reason for fostering postgraduate technologists is that the department in which they work gains additional contacts with industry. These experiences widen the understanding of the university departments, and this in turn leads to more and better applications. The initial selection of post-graduate students is not easy. I know of two young men whose applications for post-graduate work in this country were turned down. Their standard was not so high as that of others who were accepted. Both, however, were determined to do research. Both went to the United States, and now, some three years later, they have been established with small units of their own in anticipation of their making significant contributions of an applied nature.

Frustration drives our young technological graduates abroad, and these reductions in post-graduate scholarships certainly exacerbates the situation. Your Lordships will have seen, or at any rate will have heard about, the Report entitled Brain Drain from the Committee on Manpower Resources. I would draw particular attention to one of their conclusions. Discussing the negative control based on the false assumption that there is an over-production of specialists, Dr. F. E. Jones, who was chairman of the Committee, writes: We recommend that no special measure be taken to counter the brain drain by reducing the output in academic disciplines which figure prominently at any given time, but that the losses and gains from migration should continue to be a factor in the normal process of estimating the balance between demand and supply for qualified manpower. So that argument which we have sensed in the papers the university have been receiving is denied by the Brain Drain Report.

May I just give a last incident that I have noted in Scotland. "U.S. jobs halt computer project", is the heading of a paragraph in The Times, which reads: A team of research workers at Glasgow University's computer department have taken jobs in North America. Their departure means the cancellation of a new project which would ave provided a special computer service throughout the university. The noble Lord, Lord Hughes, spoke in glowing terms about the development of computer work in Scotland. Devaluation of the pound is not going to make this business of the brain drain any less. A newly graduated student, one who has not gone on for post-graduate work at all (he has not been taken, he is not going to get a vacancy) can reasonably expect a scholarship in the U.S.A., if he goes there, of the order of 3,000 dollars to enable him first to get his Master and then his Ph.D. A month ago that sum was worth about £1,070; it is now worth over £1,200. By the time he has got his Ph.D. the difference in salary between what he is getting there and what he can get here will be quite tremendous. If by then he has married, and if the reduction in opportunity to the graduate is added to the effect of devaluation, the brain drain is going to develop into a flood.

Deliberately I have stressed the problems of the two technical universities of Scotland; but the other universities are also making considerable contribution to the advancement of our industries. With possibly only one exception, all the universities in Scotland are of the opinion that for the coming quinquennium they are being cut back financially. There will have to be a freeze on any increase in the teaching staff of these universities. Some are, I know, contemplating the possibility of having to reduce the numbers of their readers and lecturers.

There is also a growing concern that for the Scottish universities the grant per student place for the next quinquennium—and I notice that the noble Lord, Lord Bannerman of Kildonan, is not here to pick that one up—works out at considerably less than for the equivalent type of student at the English universities. It is difficult to ascertain the facts, but we have reason to suspect that this is something of the order of 20 per cent. and I should be extremely grateful if the noble Lord, Lord Hughes, could give me some enlightenment on this point. I know it will be greatly appreciated, and I can promise him that many people in the universities of Scotland will examine his words with the greatest of care. I think that all the Scottish universities are fully aware that in the present parlous state of the economy of our nation we must properly direct our energies and resources and lay special emphasis on the education of the students for their role in society. To quote once more from Dr. Dainton: Many people forget that the creation of wealth is a noble, not a base, motive. More wealth leads to more health, welfare, education and more help to other countries … This fact must be introduced into university teaching, both in undergraduate and post-graduate courses. My Lords, the provision of scientific and managerial manpower for industry is a two-way traffic. Industry must be invited into the universities; there should be no sharp demarcation. University professors and lecturers must go out more into industry, as is done in North America. Then industry will appreciate how important it is to give graduates in the early stages of their career more challenge, more responsibility and, I would add, more remuneration. The voice of the scientist must always be heard at the point of industrial decision. The noble Lord, Lord Hughes, has said that the prospects are more important than present conditions. What are the prospects for technological development in Scotland? The reductions and constrictions in the recurrent grants to which I have referred come on top of the confusion of the cuts in the equipment grants for the universities which this House debated on July 25 last. Because of these, the universities have been driven to seek overdrafts—a thing that is more or less unheard of—and now, as the noble Earl, Lord Dundee, pointed out, the universities are paying 10 per cent. on those overdrafts.

My Lords, Sweden is a small country, and I rather think—I stand subject to correction—that it could be claimed that Sweden can contribute more in technology to Europe than can the whole of the United Kingdom. It is a fair argument. Why is this the case? It is because over many years a far bigger proportion of Sweden's resources have been devoted to technological development. It makes one wonder whether, if Scotland could have made her own decisions, we should not now be as technological as Sweden. We have still in Scotland sufficient resourcefulness and sufficient native genius to accomplish this. But the limitation that it now being imposed on the universities of Scotland do not present us with a very rosy prospect.

5.27 p.m.

THE EARL OF DUNDONALD

My Lords, I rise to say a few words this afternoon about tourism. Before I do so, I must offer my apologies to the noble Lord, Lord Hughes, if, through a prior, longstanding, official engagement this evening I am unable to remain to hear his reply to any questions I may put. In their first Report the Highlands and Islands Development Board said that the tourism industry is already one of the main prospects of the Highlands and Islands economy and that there is ample scope for its future expansion. There is one operative word in that sentence: it is the word "industry". Because up to now the Government have not recognised tourism as an industry, and they do not make available to it the benefits which are received by other recognised industries in Britain. Before developing this theme I should like to mention that the Government spend each year £3 million on asking the world to come and see Britain, but they have no positive policy to stimulate the growth of the industry.

However, for the first time in many years the tourist industry may receive some official support. The Hotel and Catering Economic Development Council, of which Sir William Sparrow is Chairman, submitted last month to the Government a new proposal which I feel they ought to accept and introduce with the least possible delay. This Report recognised tourism as an industry and suggested that the Government, too, should recognise it. It also indicates clearly that tourism is the largest single item in world trade and a pre-eminent growth factor in world economy. The Report forecasts a very substantial increase in the tourist trade and goes on to recommend the acceptance by the Government of an important new development which the industry has been seeking for some considerable time.

The Committee recommended to the Board certain main conclusions. They recommended that the hotel loan scheme should be continued and varied by removing the overseas visitors earnings requirements; extending the period of repayment of the loan to a maximum of, perhaps, 20 years; providing a moratorium on capital repayment during the first three years of operation of the hotel; providing a similar three-year moratorium on the payment of interest on the loan, as is done in other countries, and increasing the maximum amount of loan to 60 or 70 per cent. of capital cost. These proposals are not new in other countries, and the feeling was that the present Government might follow the example of other countries who give tourism a higher priority.

The Report makes a further proposal: that for fiscal purposes hotel development should be treated in the same way as industrial development. This would involve extending industrial building allowances to hotel building, extending investment grants to hotel equipment and furnishings (this also is done in other countries) and extending the provisions of the development area legislation in full to hotels. The Report adds: These measures should go far towards increasing the confidence of individual firms in new investments and enable them to finance a higher proportion of their capital requirements from cash flow, and should help to modify the attitude of lenders to financing such investments. These recommendations apply, of course, to the country as a whole, and it is right that the tourist industry should be looked upon from a national viewpoint. But in Scotland there are three factors (two of which have already been mentioned) which make the expansion of tourist facilities rather more difficult than in the more highly populated parts of England and Wales.

These factors are the selective employment tax, which the noble Lord, Lord Bannerman of Kildonan, mentioned in his excellent speech—and I fully endorse all his remarks about that tax; the higher cost of fuel and the 10 per cent. borrowing rate which my noble friend Lord Dundee mentioned. Before dealing with these three matters I should like to mention that a new situation has arisen of which I think we are all aware: that since the devaluation of the pound visitors from non-sterling countries will find it cheaper to come to stay here; and, due to the devaluation of our foreign travel allowance—the £50 being worth about £40 abroad—possibly more people in these Islands will wish to go to quieter parts of this country for their holidays. Here is a challenge, my Lords, to get on with improvements in the tourist industry in Scotland.

I spoke in an earlier debate on the subject of selective employment tax when it was first introduced. I have not a copy of his exact words, but the noble Lord, Lord Hughes, said on that occasion that he could not accept that S.E.T. had any material effect—or other than a marginal effect—on the Highland economy. My Lords, S.E.T. not only affects hotels, motels and other establishments where it is added on to and inflates the bill, but affects all forms of transport, because transport operators, be they road or shipping companies, are not entitled to an S.E.T. rebate. They have to pay, and they get nothing back. The result is that service costs are inflated by this ill-conceived tax.

Moreover, there have been three fuel price increases since July, 1966, and the devaluation of the pound will almost certainly produce another. In the remoter parts of Scotland distribution costs have always been higher than in the more populated parts of the islands, for the obvious reason of the distances involved. But when one adds up the cumulative effect on transport costs of S.E.T. and the increased fuel prices, the graph rises even more steeply in the remoter areas; and it is those areas which are least able to pay. I will say no more about the 8 per cent. bank rate which my noble friend Lord Dundee mentioned, except to ask what hotel or equivalent property owner is going to be able to borrow money at 10 per cent., even if he can get a loan at all?

Under the latest financial measures that have been announced, manufacturers in development areas will retain their S.E.T. premiums and manufacturers in other areas will lose them. Although, as I have said before, the whole idea of selective employment tax is ill-conceived (more unproductive people are employed to collect it and repay it), the latest move by the Government at last recognises that some areas should be treated differently from others. Now, my Lords, the whole of Scotland (I think it is actually the whole of Scotland except Edinburgh and Leith) is classified as a development area, and tourism, as introduced by the Highlands and Islands Development Board, is a very important part of the country's livelihood. The logical step—and perhaps we might have a logical step in future—would be to take off S.E.T. in Scotland and incidentally implement the recommendation of Sir William Sparrow. In spite of by-passes, bulldozers and other modern aids to living, we in these Islands still have a great deal to offer to tourists. In Scotland we have some of the finest scenery in the world. I ask the Government to back tourism now as an industry which will help to solve some of our financial problems.

5.36 p.m.

LORD FORBES

My Lords, I should like to add my congratulations to the two noble Lords who have made their maiden speeches. If I may say so, both the speeches were absolutely first-rate. That may sound a small tribute, but I think that other Scotsmen will appreciate it if I say that we in Scotland can often express a great deal with a very few words. Anyhow, that is my intention to-day. I met the noble Lord, Lord Tayside, for the first time when he was Provost of Forfar and I was at the Scottish Office and on a fact-finding tour of East Scotland. Then we were on opposite sides of the political fence, as we are to-day, but that fact did not mar the very useful discussion which we had on that occasion. Since then the noble Lord has done a tremendous lot for Scotland, and Scotland already owes a very great deal to him. I am quite certain that your Lordships will welcome the wise counsel of both noble Lords whenever they wish to offer it, and I only hope that they will give their advice as often as possible.

I am very grateful to the noble Earl, Lord Dundee, for introducing this Motion on the general condition of Scotland. It is right that from time to time we should look to Scotland as a whole. This afternoon I should like to do so through the eyes of a general practitioner to try to see where the sickness is, if there is any sickness, and attempt to pinpoint what should be looked into by a specialist. My general diagnosis would be that Scotland is not ill, but that, nevertheless, she is well below the top of her form. Of course, one aid in making that diagnosis is the upsurge of Scottish nationalism. I cannot in any way agree with Scottish nationalism, but I can see that on the surface it could appear to be attractive to many. This is no time to go into the merits or otherwise of Scottish nationalism. Let me just say that the one very good reason why Scottish nationalism does not appeal to me is that Scotland gets far more out of the Treasury purse than she puts into it. Being a "canny Scot", I must say that that appeals to me.

My Lords, I believe that Scottish nationalism is attractive to-day because many Scots are absolutely fed up with men in Whitehall who pay little heed to the real needs of Scotland. What has caused this revolt against Whitehall? Surely it is the failure to recognise the difference between those who live North of the Border and those who live South of the Border and the different conditions. Not many centuries ago blood was being drawn freely as a result of raids across the Border. I suppose the time when the Scottish and English people were closer together was during the Victorian era. Since then the gap has widened, and to-day it is again widening fast. This is largely due to the fact that South of the Border there is a highly industrialised country, with a dense population, while North of the Border, except for the industrialised central belt, Scotland is neither industrialised nor highly populated. In England, people have been moulded as cogs on to a vast wheel, but in Scotland people are far more individually minded and have a greater dislike for any regimentation, especially from Whitehall.

Although, as I have said, the Scots are individually minded, we must not forget that they are also clan-minded. The Scot visiting any part of the old Empire or Commonwealth will be greeted as a kinsman, as a member of a family, while an Englishman has to forge his own friendships on arrival—a very different state of affairs. Scots, being members of a vast family or clan, are immensely jealous of their heritage, their land, their homes and their history. All these mean much more to them than to those living in the rat-race South of the Border. There is no doubt that the rat-race can produce great efficiency. Nevertheless, this great difference between the two peoples must be recognised.

What about Scotland and central Government? One thing is absolutely certain—and I am sure that here the noble Viscount, Lord Muirshiel, will agree with me. If anything goes wrong in Scotland, the Secretary of State gets the blame. When things go right, as they very often do, there is always a departmental Minister who snatches the credit. To-day I find there are few who can think of anything the present Secretary of State has done for Scotland. I cannot believe that this is right. It certainly is not right that people in Scotland should think that way. Something must be wrong. Not only must the Scottish Office work but it must be seen by the people of Scotland to be working.

I know that Scotland gets a fair crack of the Treasury whip—in fact, per head of population she comes off extremely well. But that is not the whole story. Where things go wrong is that Scotland often gets a proportion of the medicine that is considered to be a tonic for those who live in industrialised England but in actual fact is little more than a sedative to those in Scotland. The truth is, of course, that the tonic is usually made up to suit best the areas where the majority of votes come from. That is why it often does not suit Scotland. So let the specialists have a look at the working of the Scottish Office to see whether more decisions affecting Scotland can be taken, and be seen to be taken, by the Ministers at the Scottish Office; and to see whether it is always necessary for the mighty Treasury to be well-nigh deaf and dumb to representations from the Scottish Office when it is a question of Scotland not wanting the same mixture as England.

A word about the general economy of Scotland. One thing that adds greatly to the economic difficulties of Scotland is the location of London—and nothing can be done to alter this. Scotland is favoured with much. There is no doubt that London is the centre of business and of finance for the whole United Kingdom. This is a point which is not appreciated by many and is seldom taken into account. Distance is one of Scotland's greatest disadvantages. Not only is it necessary for Scots to go to London from time to time to transact business, but it is healthy for the whole United Kingdom that there should be a constant flow of people from all corners of the country in and out of London.

Of course internal air services can do much to cure this disease. The subsidised internal air services have brought together East and West Pakistan. What is preventing this here is the high cost of travel. True, one can conveniently fly from, say, Aberdeen to London and back again in the day, but it costs £25 10s., plus another £1 for surface transport. That means under four trips for £100. That makes one think—at any rate, it makes me think. It is the cost of transport that is affecting Scottish economy more than anything else, and this is something we must investigate. With your Lordships' permission, at a later date I should like to introduce a Motion on this subject in the House.

The cost of transport not only affects the healthy movement of people, it affects alto practically everything produced in Scotland, since her major home markets lie South of the Border where industry and population are densest. There is no doubt that the outlook for Scottish industry is becoming healthier every year. What industry wants to-day is not carrots to persuade it to go to certain places it does not want to go to, or gimmicks in the way of advance factories, many of which, erected with taxpayers' money, to-day stand empty. The noble Lord shakes his head. I hope that when he comes to wind up, he will tell us just how many of these factories are empty to-day. It cannot be stressed too much that leading industry to places against industry's better judgment is a dangerous practice, as in the event of a recession those companies which have been led to a certain place will be the first to pull out and leave a terrible void in the district. Any industry we have in Scotland must have firm roots.

What industry wants to-day, my Lords, is incentives in the form of lower taxation. Industry wants to use a higher proportion of profits to plough back into expansion and modernisation. Above all, the captains of industry want to be left alone to steer their own courses. Where competition exists—and that, of course, rules out some State-owned enterprises—the captains of industry have the ability to steer their ships along the trickiest of courses. It is only when the pilots of what I would call the Port of Whitehall Authority get their hands on the wheel that the ship is in any danger of running aground.

When an advance is being planned, whether by the Services or by industry, it is often good practice to reinforce success. I wonder how much thought has been given to what is Scotland's greatest asset. Is it her raw material? I think the answer is definitely, No. Is it her scenery? I doubt it. Surely it is the Scottish people, the men and women of Scotland. There are great people South of the Border but somehow, in the process of being moulded as cogs of the great wheel, they have lost their individuality. In England uniformity is growing fast, and that, unfortunately, means that the pace is that of the slowest. That, in a nutshell, is the reason why the wish to do a good day's work South of the Border has, I believe, been damped to near-extinction.

This is not so in Scotland, where there are men and women descended from those who pioneered the Empire, men and women who are the best workers in the world. Some may say that the climate has a bearing on this; but that is not the whole story. There are men and women who as individuals take a pride in work, and in work well done. There are plenty of men and women in Scotland longing to play their part—even more than their share—in putting Britain back on her feet. All they ask for is some incentive. They are longing to do an honest day's work, and get satisfaction from having done it.

The people in Scotland want to get away from the present medicine of subsidies, centralisation and over-government. Instead, they want incentives. The best incentive is lower taxes; and that surely, at least in the short run, means a reduction in Government spending. Incentives will raise morale, and as a result production will also be raised. In Scotland, the best seed is there. For too long now it has remained dormant. Time is no longer on our side. The hour of decision should be upon us. Either the seed, which is the people of Scotland, will be damped out and wither away, or, as I pray will happen, the seed will be given an incentive so that it will burst forth and give Scotland the chance to play a glorious part in lifting Britain as a whole out of its present troubles.

The people of Scotland would welcome such a challenge. Like many Scots in the past, the people of Scotland to-day will face up to almost any task. The Scots welcome a challenge. They will do an honest day's work, and do it well, because they get satisfaction not only from doing a job well but also from seeing it through. They have pride: the Scots are a proud people. Let those in Whitehall not forget this, because on this depends not only the future of Scotland but the future of Britain.

5.55 p.m.

THE EARL OF PERTH

My Lords, so far we have had a splendid debate including two fine maiden speeches. There was one thing in those maiden speeches which certainly struck me very forcibly, and I hope that it also struck the noble Lord, Lord Hughes. It was that both noble Lords were very worried about the latest White Paper on transport and its effect on Scotland. I hope the noble Lord, Lord Hughes, will look at this most carefully, because it is unusual that two maiden speeches, which in their essence, anyhow, are uncontroversial, should both stress this particular point.

I do not intend to range wide on Scotland and our grievances, real or imagined, against the Government and against Whitehall. I did that about a month ago, and I will spare your Lordships any repetition. I was struck, as I am sure many of your Lordships were, by Lord Hughes's catalogue of achievements over the last years. But all the same, these achievements, anyhow for the last year and a half, were against a deflationary background. What I do not understand is why Scotland has had to have a deflationary background. As the noble Earl, Lord Dundee, pointed out, our record for exports is 18½ per cent. of our production. If only the rest of Britain could do as well we should have no worries at all. Surely this deserves encouragement rather than the same medicine as may be necessary for London or for the Midlands. I would ask that we should not legislate for the whole country, or take administrative action for the whole country, and then have to struggle somehow to undo the damage for Scotland in particular.

Listening to all the speeches this evening (perhaps this is an invidious thing to say), the one that I think was most critical and most worthy of attention by the Scottish Office was that of the noble Lord, Lord Balerno. He warned us that, given an administrative action for the universities which is in general for Britain, the effect on Scotland is going to be disastrous; that the Heriot-Watt University (formerly College) could this coming year have to cut down its intake by 25 per cent. When technology, to use the modern world, is something that we all agree is needed perhaps above anything else, I hope the noble Lord, Lord Hughes, will look at this, and at what the noble Lord, Lord Balerno, said, with the greatest possible care, and see that something is done to remedy it: because on that depends what happens to Scotland over the coming time.

I propose to concentrate for a little while on the matter of Edinburgh, about which the noble Lord, Lord Ritchie-Calder, spoke, and in particular on two important Reports which have just been published. One is that of the Royal Fine Art Commission for Scotland (Cmnd. 3364), and the other is a pamphlet by the National Economic Development Office, which is an independent body publicly financed, entitled More Hotels. Let me first deal with the Report of the Royal Fine Art Commission for Scotland. In paragraph 11 of that Report, generalising it says: … a crucial stage has been reached when the fate of much of our heritage of fine buildings is in doubt … in danger or being swept away. Then in paragraph 12, talking particularly of Edinburgh, it concludes that a new investigation and report is called for in regard to Edinburgh. It makes the point that it is perfectly possible under existing powers for the Secretary of State for Scotland to call for such an investigation, and how the Minister of Housing and Local Government has for England called for this report for no fewer than five of their historical towns.

It was represented to the Secretary of Slate for Scotland that a similar report be started for Edinburgh, but for reasons which are not clear to me, to date the Secretary of State has taken no action. That, I think, is a very critical and serious thing. I should like to quote from the Report one passage which I think will indicate why it is so critically important. Paragraph 29 says: In our judgment the greatest task of urban conservation and preservation in Great Britain is to be found in Edinburgh in its planned New Town which constitutes a national asset of World significance. We are of the opinion that its conservation demands nothing less than a comprehensive Government-sponsored investigation, perhaps on the lines of the Gorell Report which led to the successful rehabilitation of the famous terraces in Regent's Park, in London, or on the lines of the 'blue-print' studies referred to in paragraph 12. Those are the studies already called for by the Minister of Housing and Local Government for England.

I have two personal reasons for urging that this Report be undertaken as called for in paragraph 29. One is that the great Lord Provost of Edinburgh who was responsible for the New Town happened to be George Drummond, who must have been a clansman of mine. I think we have different political persuasions, but never mind, he was one of the, clan and I urge that what he started should not be destroyed.

My second reason is that I have had a certain amount of experience of this, being one of the Crown Estate Commissioners. We have had the responsibility for carrying out what was recommended by the Gorell Report in relation to the terraces in Regent's Park, but I can assure your Lordships that it is a great help to us in doing our work to know that there is a comprehensive Report of this kind in existence. It does two things: first, it enables us to resist pressures which may come on us to do this or that for economic rather than amenity reasons; and, secondly, it encourages the local authorities to give us help, despite the criticism; help in the form of special grants, perhaps, or special planning permission, recognising that we are undertaking things which are not strictly commercial but are of great importance for the country as a whole.

I hope the noble Lord who is to reply will either be able to give us, or to ensure that shortly we shall receive, a favourable reply to this question of an investigation. I know that such an investigation will take time, and it may be said that a lot of changes in Edinburgh cannot wait. But what are a few years in relation to something which, when it is lost, can never be regained?

In the meantime, the Historic Buildings Council and the Edinburgh Corporation are trying to work out a joint pilot scheme which is doing much towards the preservation of the buildings. Indeed, I should like to pay my tribute to the Edinburgh Corporation for the way in which they have again and again referred to the Royal Fine Art Commission for Scotland developments which people want to undertake, and again and again, when the Royal Fine Art Commission has had to say, "Is this wise? What is the overall plan? Will you please put all of this off until there is such a plan?", the Edinburgh Corporation has upheld the objection and the project has been delayed. But it cannot be delayed much longer. We have already seen Prince's Street, St. Andrew's Square and George Street change. Unless we are careful these changes will soon spread, and particularly with the advent of the tall buildings, the effect of which, even on such things as the Castle, can be disastrous. So please, may we have support for the Royal Fine Art Commission and what they ask?

Turning for a moment to the Report More Hotels, this is a fascinating study in the facts that it brings out about Edinburgh: for example, that Edinburgh is the most important overnight stop for Americans (other than London) in all of Britain; that one-fifth of the tourists who come from overseas in fact come to Edinburgh, and three-quarters of these tourists want expensive rooms, that is to say, rooms which are 50s. or more a night. Another fact is that by 1981 the demand from these tourists will increase by four times if the hotels are there. But what is the position? In the last three years, eight hotels, with five per cent. of the rooms in Scotland, have closed. At this moment there is only the possibility—and I stress it is only a possibility—of one luxury hotel being planned, that is, a hotel with rooms at 75s. or more per night. There is nothing in the 50s. to 75s. per night class. One of our great earning powers to-day is surely that of tourism, but the hotels in Edinburgh are in a desperate state.

Why are there no new hotels, despite the obvious demand, despite the fact that in the months of June, July, August and September the occupancy of the hotels is over 90 per cent., rising to 99 per cent.? Now people are even refusing to go to Edinburgh because they know it is impossible to get beds. I suppose quite simply the reason is that it does not pay to build new hotels. We can think of all sorts of reasons for that—S.E.T. is an obvious one, but I do not want to hammer at that. What I want to stress is that somehow or other I think we must try to ensure that if Edinburgh cannot be a development area, at least hotels can be developed there.

The noble Lord, Lord Hughes, said that in the Highlands they are having hotels on the build-and-lease basis. I wonder whether that is a possibility for Edinburgh—or perhaps there should be some other form of subsidy. It is quite clear that on the basis of this Report something needs to be done, and done quickly. As is customary, I warned the noble Lord, Lord Hughes, that I was going to raise these two points in the hope that he might be able to give me a favourable answer to both of them. I do not know whether I shall be lucky, but it seems to me that as we have the Royal Fine Art Commission for Scotland, with all the responsible people behind it to make representations to the Secretary of State for the preservation of Edinburgh, the machinery is there for it to be done. It has been done in England. Let us, for this once anyhow, follow the example of England and do the same thing in Edinburgh.

6.7 p.m.

LORD FERRIER

My Lords, we have had a wide-ranging debate containing two maiden speeches ranging as widely apart. I join with other noble Lords in congratulating the makers of these speeches, and it will be interesting to hear the noble Lord, Lord Tayside, and the noble Lord, Lord Bannerman of Kildonan, again.

I have three points to make in this debate. The first concerns rapid transport and the necessity for it in industrial development. I wish to concentrate on the problem of Scottish airports. I, for one, cannot understand the broad lines of existing policy in regard to the airports in Scotland. Turnhouse has been criticised often enough for years past. Indeed, it is years since the need for its improvement was first stressed in your Lordships' House. Undoubtedly there has been a grave lack of forward thinking in its planning, and it is not only the present Administration which is to blame. I will not repeat the arguments which have been deployed so often in the past, but it is fair to emphasise the situation in regard to cross winds, which was so well illustrated in a Written Answer given to the noble Earl, Lord Mansfield, to his Question in April of this year.

The Government now say that this second runway cannot be completed in time for the Commonwealth Games in 1970. Is it really too late? I am perfectly certain that, with energy, it would be possible if it was begun now—if, indeed, it has not already been started. The importance of the date 1970 is known to your Lordships as being the time of the Commonwealth Games in Edinburgh, but all the time millions of pounds are being spent in developing Abbotsinch. This is a location which is infamous for tog, and this is being done (I am talking in the broadest sense of overall policy) while Prestwick Airport, with its recent heavy outlay on buildings, is used far below its economic potential.

I have heard it said that with the money spent on Abbotsinch a motorway, express way, could be built from Glasgow to Prestwick and at the same time provision be made for rapid rail transport by diesel car. Indeed, it worries people in Edinburgh that the money is being laid out in Abbotsinch while it is denied to the Edinburgh airfield, where conditions are so utterly unsatisfactory to-day and will become increasingly so as the traffic increases, as the noble Lord, Lord Hughes, pointed out.

To return for a moment from the overall airport picture in terms of rapid transport through Turnhouse to what the noble Lord, Lord Hughes, said in his opening speech, in which he described the plans for motorways and for improved roads, and the millions of pounds which very properly are being set aside for the purpose. I feel it is fair to recall that all over the world—and it is especially emphasised in the Buchanan Report—the construction of trunkways can be greatly reduced in economic value if there are not adequate by-passes for bottlenecks. Edinburgh is a bottleneck which acts to a remarkable extent on the accessibility of the airfield to which I have referred. I have said it before in your Lordships' House, and I trust that you will forgive me if I say it again, that in the context of the road development which the noble Lord, Lord Hughes, has forecast, in the context of what we are saying about the Commonwealth Games in 1970 and the problems of making an airport not only effective but also accessible, a by-pass road for Edinburgh is an absolute "must", in my view.

My second point is quite different. I turn to the question of broadcasting and I tremble when I see the well-known figure of the noble Lord, Lord Reith, on his Bench there. My worry about broadcasting is this. I feel that the B.B.C. tries hard, with obviously limited expenditure, to serve Scotland, but technically and in terms of programme content I believe it could do much better. There are large areas where reception of anything but the Home Service, now called Radio 4, is either bad or not available at all. The same applies to television. There are large areas where it is impossible to get any television. There are large areas where it is possible to get the B.B.C. Television 1 through Channel 3, and at the same time to get Scottish Television on Channel 10, but the difficulties of getting either the second channel of the B.B.C. or, in the years to come, colour televesion, have not been overcome at all.

Many of us, when we read of the millions spent on research and development in colour television in the South here, feel that much of this money could have been better spent in rendering existing services available in wider areas. I will not go into the complexity of the actual frequencies of some of the programmes, particularly the second television programme of the B.B.C., which impinges on a number of the frequencies of the relay systems in some towns. I will not weary your Lordships with details of that; but until the situation has improved let us hear no more about the increase of the fee from £5 to £6 for a television licence in Scotland, until we have access to part, at least, of the developed channels which are available in other parts of the country. To increase the fee in Scotland, in my view, would be a fraud on many Scottish listeners, and, if I may say so, a gift to the Scottish Nationalist Party, of which I may say I am not a member, though, like the noble Lord, Lord Ritchie-Calder and many other Scotsmen, and as the noble Earl, Lord Perth, said the other day, one cannot help believing in their way of life and perhaps chucking one's bonnet in the air.

However, as far as broadcasting is concerned, I would now turn to the programme content. I believe that this could well be improved. The Scottish B.B.C. do a first-class job within the four corners of the programme time they get. The exceptions I would make to that are some of their evening programmes, particularly Sunday evening programmes, the later ones, for which I have the most profound contempt. However, with that exception, I think they do a reasonably good job, and they should have, I believe, more time to include major programmes with more Scottish material. On the T.V. side, I believe they should be able to compete with the S.T.V. in news and current affairs programmes, in which respect I think they are far behind the S.T.V. although I do not often look at the latter—I do not know why. My information up and down the country is that the ordinary Scotsman prefers S.T.V. for news and current affairs, not because he is too lazy to switch off the advertisements but because he really prefers the material in it.

The trouble with the B.B.C. is that it is too monolithic. There are district stations opening now in England—I am thinking particularly of the one in Leicester. Could not more be done for Scotland, not in opening more stations but in making programme content more Scottish? What I mean is that in, say, "The Week in Westminster", "Today in Parliament", "The World at One", and so on, Scottish affairs and Scottish commentators should have more scope in the main programmes. There are separate programmes we know, of course, but efforts like the replacing of the synoptic weather forecast at five minutes to six by a smattering of Scottish news only serve, in my view, to irritate.

LORD MITCHISON

My Lords, is the noble Lord suggesting that we should have "The Week in St. Andrew's House" instead of "The Week in Westminster"?

LORD FERRIER

No my Lords, I was not suggesting that, and I would say far be it from me to suggest such a thing. What I do say, and the noble Lord leads me on to what I was going to say, is this. In "The Week in Westminster", for instance—I happened to listen to it the last two Saturdays because there is no shooting going on, and I am generally in the field by 10 o'clock on Saturday morning—there was only one reference to the existence of the House of Lords and that was the fact that the noble Lord, Lord Wigg, had taken his seat. Incidentally, that is typical of what I mean. It seems to me that the broadcasting for Scotland in terms of current affairs, particularly Parliamentary affairs, could contain and should contain more matter in regard to Scotland, not only Scottish affairs but the Scottish angle of United Kingdom and world affairs as that is deployed in Parliament, both here and in another place.

One reason why it is necessary to use broadcasting as a means of conveying the business in Parliament is that the Scottish Press is—I do not say bad, but prevented from giving Parliamentary news by the fact that their papers go to press at about seven o'clock in the evening. Therefore it is more important in Scotland than in England, particularly the South East of England where there is this multiplicity of evening newspapers, that broadcasts should concentrate upon getting accurate and ample material over "steam" radio or television.

I now come to my last point, which is the general subject of the brain-drain, which has been referred to by many speakers. I have been "down the drain" myself for many years so I am not one who regards it with complete dismay. The fact that Scottish emigration is at such a high level is, in many respects, due to the shortage of jobs. Of course that can be accepted; and it can also be accepted that stout efforts are being made on all hands, not only by the Scottish Council but, as the noble Viscount, Lord Muirshiel, said, by the T.U.C. and, of course, by Government agencies to remedy this factor. Every effort is being made in that respect. But as the noble Lord, Lord Forbes, has said there is mighty little incentive in this country. Incentives, indeed, are absent; in terms of creating any work they simply are not there.

It is well to remember, too, that Scots have always tended to drift abroad where, perhaps by the particular reason of the wider horizons, they make better citizens than perhaps they do in their own country. After all, by their moral fibre, their physique and their energy and generous education they are most welcome abroad. The trouble is that in consequence it is always the more enterprising who go. That is one of the tragedies of the situation to-day. But there is another reason which has been touched upon this evening; namely, the monolithic structure of the Welfare State as we see it to-day—as in the case of the B.B.C., too much directed from Westminster. It is this monolithic structure, this sense of "Big Brother" somewhere, which irritates and frustrates the average Scotsman.

I could cite numerous instances of little things which should not have happened, and which I believe contribute to this sort of feeling. Take the replacing of local libraries by travelling vans. Our village library has been replaced by a travelling van, which comes on Wednesday between 1.20 and 2 o'clock. This is quite useless for working people in a wide-ranging agricultural area. How can working folk be expected to use such a service? Some readers transferred their allegiance to a neighbouring township. The next thing that happened was that the library there also closed and was replaced by a travelling van. There are other little irritations which I believe should not have arisen. A classified road was diverted to the side-streets in a neighbouring town and the by-roads in the neighbourhood, without either the town council or the police, or even the county council, being advised that this was going to be done, until the diversion notices were put up.

Another item is the new Registration Act which is now coming into operation in our neighbourhood, with all the disadvantages which were outlined by my noble friend Lady Elliot of Harwood when the Bill was introduced in your Lordships' House. Then here, only this week, we have been discussing the British Standard Time Bill. This is another instance of, shall I say? monolithic direction from a centre without proper regard for the needs of people in the North. All these things add up to the sense of frustration which I believe Socialist power brings upon a stubborn and a proud people. A general sense of apathy is. I believe, being engendered. The noble Lord, Lord Ritchie-Calder, touched on what I mean by that from a different angle. It is this sense of being a termite which sends many a Scotsman abroad to-day or, if he stays, drives him into the ranks of the Scottish Nationalist Party.

6.27 p.m.

LORD POLWARTH

My Lords, I hesitate to speak, both because of the lateness of the hour and because of the fact that I was guilty of the discourtesy of missing the first three speeches. I can only plead that I was detained by urgent business, arising from an all-too-uncommon event, the acquisition by a Scottish-based and controlled company of an English one. However, I arrived in time to hear the words of the noble Viscount, Lord Muirshiel, and I should like to say how much I identify myself with everything that he said. Few men have greater experience of Scotland's economic problems in office, and it would be hard to find a Secretary of State for Scotland who achieved more for Scotland in that sense than the noble Viscount did during his term. Because he was good enough to say some kind things about the Scottish Council, and because other speakers have mentioned both its and my own name, I feel bound to say just a few words.

The noble Lord, Lord Bannerman of Kildonan, whom we so gladly welcomed here this afternoon, has brought us a welcome accession of fervour and patriotism which will help to see that Scotland's cause is never forgotten in this place—if, indeed, it is ever in danger of being forgotten here. In view of that "non-controversial" speech which he made to us, as he told us, I should like to beg leave to take issue, quite mildly, on one statement of his; namely, that Scotland is the sleeping partner in the United Kingdom set-up. Whence have there come so many Members of Government's in recent years, of both Parties; so many of our senior administrators; so many of our captains of industry and commerce? Where did Britain's present policies for regional development have their main origin? In the Toothill Report. In what part of Britain are the fastest growing sections of industry growing yet faster still? And did we not hear this evening from the noble Earl, Lord Perth, that Scotland's exports represent some 18 per cent. of her production against 15 per cent. for the United Kingdom as a whole? I do not think that is indicative of a sleeping partner. If it is, it is of a most active, restless and uncomfortable partner to sleep with.

However much we have still to achieve in our economy, what has happened in the last fifteen years or so has been nothing short of an industrial transformation. It has been brought about by many hands. I should like here to pay a tribute, as did the noble Viscount, Lord Muirshiel, to the great work of the Scottish Office and all concerned in it, be they Ministers or administrators. We are extremely fortunate, compared with the regions of England, in having this institution within our bounds.

In the long run, however, Government cannot create industry or jobs. They can create the conditions, favourable or unfavourable, for them, but it is the individual engaged in industry or commerce who, in the end, is responsible for the creation of jobs. It is for that reason that the Scottish Council can claim a measure of success in this process, because it has drawn on the experience of individuals engaged in industry and commerce, in the trade unions, and in the local authorities—men of experience in their businesses and in local affairs.

Despite all the enthusiasm and efforts of these organisations, and the policies which we have all been pursuing, I want to sound one note of warning and to draw attention to one real danger that is with us to-day. More and more Government is becoming involved in the affairs of business. We have policies being described as "open intervention". This may or may not be a good thing. We may have differing views on the importance and value of this involvement, but the fact is that it is growing all the time. And it is not only direct Government involvement. Business and commerce are becoming involved with more and more organisations, of an official, or semi-official or private nature, whether they be the nationalised industries, bodies like the Industrial Reorganisation Corporation, the National Board for Prices and Incomes, the Land Commission, the Confederation of British Industry and many more.

All these bodies increasingly affect our business lives, and inevitably the centre of their activities is situated in London. This centralisation of power, of involvement and activity is something against which we must be constantly on our guard. I do not believe that the solution lies in political separation, or federalism, or any of these other remedies. Frankly, I think that we want less government, not more.

SEVERAL NOBLE LORDS: Hear, hear!

LORD POLWARTH

What we have somehow to bring about—and I do not pretend to know the answer—is a greater awareness throughout all these organisations, Government or otherwise, of the need for a full understanding of local needs, whether they are in Scotland, in Wales, in Cornwall, in Yorkshire, or wherever they may be. It is a question of bringing about a change of attitude and of mind. It is something that cannot easily be achieved, but it is something we must assiduously aim for.

The first and most important step is to see that those who are actively involved in the economic processes, in the creation of industry and of jobs, are brought into consultation, wherever they may be, on every possible occasion and that their advice is heeded. The solution is no easy one. I do not pretend to know the answer, but I feel that with all our enthusiasm for regional policies, which is universal throughout this House and the other place, we must bear this in mind, and strive somehow to get over, and steer our way past, the very real danger of the centralisation of so many of our institutions.

6.35 p.m.

LORD MITCHISON

My Lords, here at last comes one of the patient English, first of all to congratulate the two maiden speakers, among whom I was particularly glad to hear from the noble Lord, Lord Bannerman of Kildonan, that the proposition that God gave the land to the people was non-controversial. I had felt a certain doubt about it.

I am not a Scot; I am English. I have had close associations with Scotland all my life, and I am still very puzzled as to whether what the Scots say is inspired nonsense or hard, true realism. The thing of which I am quite sure is that they themselves do not know. I have been listening to this debate—all of it, of course, inspired—with that kind of thought in mind from time to time. A good deal of what was said to-day seemed to me to be rather offthe-mark—bits of political fireworks that went a bit damp when exploded. I should have thought that the answer to what we were doing for the Scots was contained in a table of Government expenditure which was given in a Written Answer in another place on October 30. The Goschen formula, if your Lordships recognise that strange object, is about 13¾ per cent. In fact, in the promotion of local employment 46 per cent. of the United Kingdom expenditure goes to Scotland. That, after all, is not a bad whack. Secondly, when one comes to things like agriculture and fisheries, forestry, and so on, again the Scottish proportion is a great deal more than they would get on any formula. What is also rather encouraging and significant, perhaps also for the English, is that the amount spent on education in Scotland, excluding universities and C.A.T.S., is well above the formula average.

The plain fact of the matter is that if Scotland is to be treated as a dependency of England it is quite an expensive one: but I do not think it is. I do not think that in either country they look at it in that way. I put down the result in Hamilton the other day not to anything about the relations between England and Scotland, but to a certain distrust of Parliament as a whole—of both Houses. I think that is quite clear. It was not distrust of the Government, or they would have voted Tory—and that is not what they did, since the Tories lost their deposit. I think that it was a distrust of Parliament. Therefore it behoves us to look at our system of government for a moment to see whether we have got things right.

It was truly said by one noble Lord today that the Secretary of State for Scotland always gets blamed for anything that goes wrong. But he is in a very peculiar position; he is a sort of Prime Minister without a Cabinet. In my limited experience (I need hardly say I have never been in the Cabinet; that is not for a chap like me) the English Ministers dare not say anything to him because he has simply to get on a sort of pedestal and say, "You do not understand. We cannot follow the English". And he has no other Scots Minister of comparable rank. Of course, if you get into a position like that, you are apt to be blamed for whatever goes wrong. I feel that a lot of the criticism which has been made in Scotland about the present Secretary of State is quite unjustified and derives from that consideration.

The Scots are very kind to us; they tell us that we should not have devalued. Bit they are the masters of devaluation. They used to have a pound, until a year or two ago; you will find this in the Income Tax Acts if you want to look for it. The Scots pound is worth nowadays Is. 8d.—a member of the Tory Government told me that. I do not think that Scottish banking need be held up as a perfect example of what English banking ought to be. The Scots are not slow to say how marvellous they are, and I would add, quite seriously, that of course this country owes an enormous amount to the Scots, and owes it perhaps beyond their numerical proportion. Some people say that this has been a matter of Scottish education; others say that if you can live in the Scottish climate you can live anywhere. Whatever the cause, there is no doubt about it.

I hope that this natural feeling at the moment about nationalism in Scotland is not going to obscure from us the real questions. One is the position of the Scottish Office, which has to be everything for Scotland and not purport to follow the English too closely. This makes it rather remote from many Scots. I have heard Scottish county councils do and say things which I believe no English county council would say, because the Scottish ones were, without thinking about it, assuming more of the attributes of national government than any English local authority would try to assume. That may also apply—I do not know—to some of the large burghs in Scotland. That is one of the difficulties.

The other difficulty is that, as I see it, you cannot draw an absolute line as to what is the right area of government nowadays. Look at the position of transport, for instance: that is obviously a matter which concerns the whole country. Education is perhaps more a matter for the whole country than we thought in the past. I will not go through the list, but one noble Lord mentioned the Board of Trade in a speech with which I completely agreed. I should have thought that that, too, was obviously a matter between the two countries. Therefore, my own feeling is that the right thing to do about the relations between the two countries is not necessarily to promote the Private Member's Bill which I spent many years wishing to promote. It could have been quite short and was open to a Private Member in another place. Clause 1 would have repealed both Acts of Union—there were two—and Clause 2 would have provided that the Act did not apply to Scotland. It might well have prevented the Scots from talking about it. Of course, that would have sent the business haywire, and the fact that it could send it haywire shows the artificial character of what has happened. So one is not surprised to find relics of the past hanging about.

I think my Party, the Labour Party, ought to receive credit from the Scots for having given Scotsmen at Westminster a much larger voice in their own affairs. If you look nowadays at what happens to a Statute affecting Scotland only, you find it hardly gets considered—or very little considered—by the British Members as a whole, at any point. Certainly the greater part of it in another place is considered in the Scottish Grand Committee. It is, perhaps, a somewhat cynical comment on the way in which we look at Scotland to say that I tried in this place to get the Report of the proceedings of the Scottish Grand Committee, but they are not in the Library and are nowhere to be had in the Printed Paper Office. Of course, if that happens you create a separation between the two.

But we were right, and I am sure we were right, to allow the Scots to deal with their own affairs to an extent at least as large as they would be able to do if they had a Parliament at Edinburgh instead of the Scottish Grand Committee in London, for they would always have come back to the incredible difficulty of fiscal arrangements. One reason for fiscal difficulty is simply that you cannot divide the profits of a large modern company like General Accident, which I think was probably being referred to a little time ago, between the two countries; and the consumption of whisky raises a number of other puzzling problems which it is much too late for me to go into now.

I trust I have not sounded too irreverent. I trust I have not sounded too hopelessly English and illogical. I have just been doing my best to help. I should be very sorry indeed if there ever were any real bad feeling between England and Scotland. I think it perished long ago, and I hope that none of us will ever do anything, directly or indirectly, to encourage it. Let us criticise by all means, but that is another matter.

6.45 p.m.

LORD BELHAVEN AND STENTON

My Lords, I do not know that the fact that I am at the bottom of the list, underneath the noble Lord, Lord Mitchison, can be put down to racial discrimination, as nearly every other speaker today has been a Scot. Like other noble Lords, I am very grateful to my noble friend Lord Dundee for putting down this Motion. I was quite electrified by his statement on the Scottish balance of payments, because I have quite recently been discussing with people in Scotland a matter which is to some extent in all our minds—Scottish self-government. The invariable comment is, "Can we do it? We cannot do without England". From what my noble friend has said, it seems to me that the question is not, "Can Scotland do without England?", but, "Can England do without Scotland?"

I should not like to continue without congratulating the two excellent maiden speakers we have heard to-day. I was quite electrified by the uncontroversial speech of the noble Lord, Lord Bannerman of Kildonan, which would have been received with more acclamation from any Scottish audience North of the Border than any other speech which has been made to-day.

The last fully Scottish debate which I attended in this House was on a Motion for Papers put down by my noble friend the Duke of Atholl. If I remember rightly, it was a little acrimonious, because the Highlanders got hold of it and we spent most of the time attacking the Highlands Board. I mention that fact to emphasise the difference in climate in Scotland in only six months, because as I recall it there was no mention in that debate of the Scottish Nationalist Party, Home Rule and all the other matters which seem to have come out into the open almost in the last few weeks. Certainly inside Scotland itself the Nationalist Party claims to be gaining quite impressive support, but we have heard all this before. We heard quite a lot about this about 1948, and it did not seem so very significant, but after the Hamilton result it is a little more significant than some noble Lords who have spoken to-day would think.

The country is in a very bad state. That would seem to be axiomatic. But I wonder whether noble Lords on the Government Benches truly realise the sense of humiliation and despair which is in the hearts of many people in Britain to-day. In times like these there is a tendency among people to turn to the Conservative Party, but in Scotland this has not happened. Though it has been going for a long time, in a way the Nationalist Party seems to be something quite new. Large numbers of people who used to support Labour are turning to the Nationalists for obvious reasons, but I think there is also a significant change of attitude among many Conservatives. There is a real sense of bewilderment among people whom I know, and my part of Scotland is a very Conservative area. There is a feeling that Britain is not getting anywhere; that we as a country are being humiliated on every front, not only because of devaluation, but in Aden, in Rhodesia and in all the other spheres on which I shall not elaborate.

Some of your Lordships may have seen the noble Lord, Lord Reith, on television last week, and I am glad to see that he is here this evening. Towards the end of the broadcast, he said something which surprised me, and which was to me very significant. He said that Sir Winston Churchill had not given Britain the moral leadership which she needed after 1945. As I said, that surprised me, and to start with I could not really agree with it. But on reflection I think the noble Lord made a very profound statement, and that though Sir Winston had given moral leadership in the war, he was played out after the war, and had not given the moral leadership which the nation required at that time. Basically, the trouble is that since 1945 we have not had anybody who has given Britain a lead, except perhaps Sir Alec Douglas-Home, and he was not with us long enough.

To my mind, if there is any point in the Union of Scotland and England, it there is any point in Britain, apart from the purely economic aspect, which my noble friend Lord Dundee seems to me to have disposed of to some extent, it is that Britain has, or should have, the moral leadership of the world. This was our place in the past, and it was in this light that foreigners saw us. But I think we could hardly lay claim to that position to-day. In the debate on the gracious Speech my noble friend Lord Perth, in a remarkable speech, enlightened your Lordships on the upsurge of nationalism in Scotland. There was not one word in that speech with which I would wish to disagree, and it comforted me personally in that it showed that the dilemma which has been worrying me for a long time was shared by a person of his eminence avid balanced judgment.

To an Englishman, there is little to choose between loyalty to Britain and loyalty to England. To him, there is no dilemma. But for us there is a dilemma, and this is becoming increasingly painful. To me, Scotland has always come first, and I have reconciled myself to the Union with the feeling that it was in Scotland's best interest. Until quite recently I have been sure that it was. But now I am not so sure; indeed, it seems to me that Britain's stock has fallen so low that we must all make a new beginning. The country is being tragically mis-governed, and in that misgovernment I fear that Scotland is getting more than her fair share. It is all very well to give more than one's fair share in an effort that all can comprehend and see the point of, but it is intolerable to got more than one's fair share of bad government. I am not going to elaborate on that, my Lords, because other speakers have already done so to-day. We have already had all this talk about S.E.T., and so on, and anything that I could say has already been said much better.

My noble friend Lord Perth, in the speech to which I have already referred, said he thought that at the next Election the Nationalists might capture the majority of the seats in Scotland. I think he is right. Anyone who has taken part in a large gathering of Scots recently, as I did last week, must be aware of a growing national feeling—a sort of ferment which is working in our people. I think there is certainly a growing feeling that we are faced with two choices. The first is to become for the foreseeable future an increasingly depressed province; and the second to seize our chance now and regain our ancient independence, or at the very least federal home rule, which I should say is now supported by a very large majority. To many of us, the first choice is becoming more and more unacceptable. In all this there is no hostility towards England—none that I have seen. I think there was a certain amount among the "lunatic fringe", but it is no use taking any notice of them.

My Lords, I believe that a choice on this basis will have to be made by every intelligent Scotsman or Scotswoman in the next few years. Each man will have to make up his mind what he himself thinks Scotland ought to do; and the rest of us, I am sure, will abide by that decision. For myself, I must say to your Lordships that I support the aspirations of those people who wish to see our ancient country re-established in the community of nations as an independent kingdom. I do not regret the years of Union; nor do I rule out further federation with England, with Europe or with the British nations of the Commonwealth. But in all such combinations I would rather see Scotland as a full partner than as a province of a full partner.

As I have said, I am fairly certain that the majority of people in Scotland to-day want home rule. Almost everyone to whom I have spoken does, although independence is another matter: I do not think that the majority want that. I think that perhaps many of the people who voted with the Nationalists are not quite sure what the Nationalists stand for, although the Nationalists themselves, of course, are perfectly sure. As we have heard, the curious machinery by which Scotland is at present governed does, in effect, give a fair measure of devolution, but it is not understood by the average Scotsman, and in my opinion this is sufficient condemnation. The average Scot feels that he is governed by Westminster and by St. Andrew's House, which is manipulated by Whitehall like a puppet on a string.

I would urge the two great political Parties to give urgent thought to this situation, and at least to prepare measures for eventual and fairly speedy home rule. I think that this is the very least that would be acceptable; and whilst I personally would go further than that, I do not think that I should at present carry the majority of my countrymen with me. If this question is neglected, I think that the Nationalists will carry the day in the next Election. Whether or not that would be a good thing I leave to your Lordships to judge.

6.55 p.m.

LORD HUGHES

My Lords, I assume that I have the leave of the House to speak again, and, that being so, I should like to start by referring to the speech which we have just heard from the noble Lord, Lord Belhaven and Stenton. It must be the nearest approach to a Scottish Nationalist speech that we have ever heard in your Lordships' House and it comes rather strangely from the Benches on which he still sits. I do not know whether it indicates his impending departure from those Benches, although quite frankly I do not know where a Scottish Nationalist would properly sit in this House.

LORD BELHAVEN AND STENTON

My Lords, I am a Conservative and I am in opposition to the Government, so I think that in an independent Scotland I should still be a Conservative.

LORD HUGHES

That is a fair enough point.

My Lords, we have had a most useful debate, and I should like to say at the outset that it is the sort of debate which almost every one of my English colleagues envies me. In fact, very early on in the proceedings the point was made to me, "It is a very friendly atmosphere that you are getting." Another of my colleagues said, "What a contrast to our recent economic debate!" Those of us who take part in these Scottish debates—and increasing numbers do so on each occasion—are not surprised at this, because when we are discussing Scottish problems in your Lordships' House, to a certain extent at least there always appears to be some element of coalition, in that we are seeking quite genuinely to find out what are the best ways of getting over Scottish difficulties. I greatly appreciate the fact that on this occasion there has been no useless recrimination about the past, and I would not have proposed to venture into the past in my reply except that the noble Lord, Lord Strathclyde—and only the traditions of the House stop me from referring to him as "my noble friend"—invited me to refresh his memory on certain facts, and if I do not do that he will go away under the misguided belief that he is right. But apart from that I do not intend to go into the past.

We are all genuinely grateful to the noble Earl, Lord Dundee, for having taken on the responsibility of initiating these debates. As things are in your Lordships' House, we find the noble Earl, Lord Dundee, having to shoulder responsibilities from the Front Bench in fields ranging very far wide of the borders of Scotland, and I think we are all indeed exceedingly grateful to him, not only for initiating the debate but for the way in which he did so. I think he will agree that the points of principle upon which he spoke were, in the main, the points of principle on which I spoke, and I therefore propose to go on to deal with points raised specifically by other speakers.

First of all, I must join other noble Lords in congratulating our two maiden speakers—my noble friend Lord Tayside and the noble Lord who has so recently come among us that he does not yet know that it is improper to describe me as his noble friend, although it is perfectly true—at least, the "friend" part is. I welcome these speeches very much. It means that we have added to our numbers two people who are going to make the voice of Scotland heard—but not necessarily in unanimity; for, in any event, unanimity is not the thing on which we most greatly pride ourselves in Scotland. I will come back to the points they made; but I am certain that everyone who said that they wanted to hear both of them again and frequently said so not just out of politeness, but because they were genuinely interested in what they had said, because they were genuinely looking forward to the opportunity to hear both of them frequently in the future. In the case of the noble Lord, Lord Bannerman of Kildonan, I must say, however, that I look forward with very intense interest to the day when he decides to be controversial.

My Lords, the noble Lord, Lord Strathclyde, spoke of a variety of things, and he referred particularly to what the Highlands and Islands Board have succeeded in doing in getting small industries into their area. He followed my own comments on that, and he welcomed it because it is a follow-up of what the Hydro-Electric Board had done. I should lilac to take the opportunity once again to pay a tribute to the work of the Hydro-Electric Board in regarding it as part of their prime responsibility to look after the social welfare of their area, as well as providing them with electricity. In that context, they have done a very great deal of work on very limited financial resources in seeking to attract industry into their area. They have not been beyond even a certain element of blackmail at times, when they could do so in the interests of Scotland, by saying—when they were in the way of putting a lot of business in the direction of particular people—that these people might gel a lot more if some of the manufacturing were done in the Board's area. And from time to time they succeeded. Credit for this must largely go to the noble Lord, Lord Strathclyde, who has just recently demitted office from that Board after a very successful period of chairmanship.

I agree with him to a certain extent about the importance of a variety of small industries; but not necessarily small industries spread over the Highlands. We must make use of the centres of population, and even in the Highlands travel-to-work distance is capable of extension just as it is elsewhere. No one of these small industries in itself is other than a drop in a very large bucket. We must remember that the smaller the community, the greater the importance a small industry assumes. After all, 100 jobs in a community of 1,000 is as great as 100,000 in a community of 1 million. We must bear this in mind in working out the importance of small industries to small communities in the North.

My Lords, I now turn to housing figures. The noble Lord, Lord Strathclyde, was perfectly correct in the figures which he quoted. But I was not selective in my figures, as he was in his. He said—in fact, he was so sure that he wrote me a note, and I am reading from it— The record year was 1953, when the number of houses built was 39,548. He is almost right; but he has done the Government of the day out of one house. The figure was 39,549. Then he went on to say that the average for 1953/4/5 was 37,490. I have checked the figures; he is accurate. Then he went on to say that it was not until 1959 that the figures fell below 30,000. Again he is correct. But that is only part of the story. You have to look at what was actually happening. It was the fact that year after year the figures were falling, although the problem was greater. There was neglect of a primary need for Scotland during these years. Let me give the figures. For 1953 the figure was 39,549; 1954, 38,853; 1955, 34,069; 1956, 31,901; 1957, 32,437; 1958, 32,170; 1959, 27,293; 1960, 28,592; 1961, 27,230; 1962, 26,761; 1963, 28,217; and, for 1964, 37,171.

We have a big problem to deal with in Scotland. It is not helped by the people who allowed—and I must admit that I am being completely political on this, for it is impossible to be otherwise—the figures to fall to that level during all these years, now to complain that the Government are building only 36,000 or 38,000 or 40,000. After all, if even the much-criticised figure of 1965, 35,116 houses, had been accomplished during all these years, there would have been a lot of people living to-day in homes of which they could be proud instead of homes of which they despair.

LORD STRATHCLYDE

My Lords, I thank the noble Lord for giving these figures. I think my memory was right up to a certain point; after that it was in error. But I thank the noble Lord, and I will say this: I hope that in the interests of Scotland the record which has stood for so long will soon be broken.

LORD HUGHES

I can give the noble Lord the firm assurance that the record will be broken, and broken decisively, in 1968. But as a famous Liberal said before, "Let us wait and see".

The noble Baroness, Lady Horsbrugh, interrupted me to say that it was not the number of houses that were started that mattered; it was the number of houses that were completed. That, of course, is perfectly true. I went on to say that if we did not start the houses we could not finish them; that no power on earth could do that. But I would point out this fact. In 1963, although the number of houses completed was 28,000-odd, the number started was 37,664. It followed, therefore, that 1964 was going to produce a very good figure. There were 37,664 houses started in 1963 and 37,171 finished in 1964. But in 1964 the number of houses started was 35,902, and in 1965 the number finished was 35,116.

So the first figure for which this Government can take responsibility—and I will accept that in terms of what Scotland now expects of housing it was a case of accepting blame—were the figures for the year 1966; because the 1966 figures were the houses that we started in 1965. In 1966 the total was 36,029. We should have liked to see a great many more. We should have liked to see a great many more than we are going to have this year. When I mentioned the 1970 target the noble Lord, Lord Bannerman of Kildonan, picked me up wrongly. He thought that I said that we would "travel" comfortably to a housing target of 50,000 in 1970. But I said that we would "arrive" comfortably. I meant to convey by that that the rate of progress we are now making brings the 50,000 target for 1970 comfortably within our grasp. I agree with him: if we can go on to make it 60,000, the better I shall be pleased. And if I still have responsibility for building Scottish housing at that time, I certainly shall not rest content with a target of 50,000. The target of 50,000 was chosen in 1965 as being one which was felt to be reasonably within the capabilities of the industry to reach within a period of five years.

My Lords, this is why the important figure, so far as next year is concerned, is the number of houses we are starting in 1967. This is what the people of Scotland should always be looking at. They should not look just at the houses completed, because houses completed represent the time which has gone past, no matter whether it is yesterday, last month or last year. It is time past, and they should be interested in the extent to which we are starting new houses, because these are the houses which will be completed next year. I make it my business to see that I am getting tenders approved, and then I chase the local authorities to see that they start the houses for which they have obtained approval. If I succeed in chasing these two figures I know that I need not do anything about chasing completions, because completions follow automatically from that point.

I proceed from there to my noble friend Lord Tayside, who spoke about the importance for Scotland of the run-down of the coal industry and the bringing of new industry into coal mining areas. I think that everybody now accepts, to an extent which perhaps was not possible a few years ago, that it is an essential that we should try to locate new industries simultaneously with run-down, instead of following it up three or four years later, when far too many people have lost heart and left the area. I think that what was announced quite recently, perhaps belatedly (I should have liked to see it done much earlier), will provide a considerable impetus for those areas where the coal-mining industry has been run down.

May I remind your Lordships, very briefly, what are the special measures for these areas? In addition to the ordinary grants for development areas, the 45 per cent. and the 25 per cent. (or 35 per cent. as it may be) this further aid is being given: a rent-free period of up to five years for firms renting a Board of Trade factory; building grants of up to 35 per cent., and loans at a moderate rate of interest; operational grants at the rate of 10 per cent. per annum of the net expenditure incurred in the acquisition of buildings, plant and machinery—these grants to be payable for the period of three years—and a continuous building programme of Board of Trade advance factories to replace those let, so long as letting prospects remain reasonable. May I just emphasise what that last item means? Every time a factory is let the Board of Trade will be willing to put up another one for the next customer, so long as there is a reasonable prospect that there are still new customers seeking to come into the area.

The noble Lord went on to ask for help for sugar beet. This reminds me that until the beginning of the year my particular responsibilities at the Scottish Office were for agriculture, and I have been involved in more than one battle on the subject of Scottish beet. If, therefore, I say to my noble friend that we will note the point he has made, and take refuge in the fact that this is not a debate on agriculture, it is not because of any lack of interest in the point. If my noble friend likes to keep pursuing the matter, it certainly will not cause me any embarrassment.

What can I say about the speech of the noble Lord, Lord Bannerman of Kildonan other than admitting to a general feeling of enthusiasm that he was here to make it, coupled with an extraordinary degree of disagreement with what he was saying? Because, unlike him, I am not a convinced Scottish Nationalist. I must admit that frequently, as more and more people in Scotland are—

LORD BANNERMAN OF KILDONAN

My Lords, I am not a Scottish Nationalist, I am a Liberal.

LORD HUGHES

My Lords, I must admit that I did not detect the difference momentarily then. I acquitted the noble Earl, Lord Dundee, of calling for liberal measures with a capital "L", and shall I therefore accuse, or congratulate, the noble Lord, Lord Bannerman of Kildonan, on being a scottish nationalist with a little "s" and a little "n", which might meet the point, because one presumes that one could be a scottish nationalist without the capitals inside the Liberal Party.

LORD BYERS

My Lords, the noble Lord is completely missing the point. Our policy is one of devolution and giving Scotland and Wales the right to run their own affairs while still having a Parliament at Westminster, which is quite different from Scottish Nationalism.

LORD HUGHES

My Lords, it is not quite different from Scottish Nationalism. It is only recently that the Scottish Nationalist Party, as such, has ventured into the field of complete separation. Before then, Scottish Nationalism was on the subject of devolution, except that they frequently said that they did not particularly like the pattern of Northern Ireland. That did not commend itself to them. However, let us not give to Scottish Nationalism (I do not want to make the mistake that at least one or more noble Lords have made here) at this point in time an importance which it does not deserve. Some people are making the mistake of assuming that the result of the by-election at Hamilton is the beginning of a great change. Let us wait a little while and see whether Hamilton is just Motherwell over again, because it has happened before. To a certain extent the Hamilton result was because people (if I could take the point made by the noble Viscount, Lord Muirshiel) are not able to look through the famous pipe-line. They may see things apparently going in at one end, but they are not seeing them come out at the other. That is the main theme of my speech: the time has not yet elapsed for them to travel out at the other end.

If I may jump ahead, a point was made that the Secretary of State for Scotland got the blame for everything and the credit for nothing. Of course that is true. There is no case where it is more true than in respect of the noble Viscount, Lord Muirshiel. I think it would be quite honestly believed that during the time he was at the Scottish Office he did absolutely nothing for Scotland. Yet, as the years have gone by, we have realised that he has been as unjustly accused of having done nothing as any other Secretary of State—and, in fact, more so. The noble Viscount is my favourite Secretary of State for Scotland because he decided that the Tay road bridge was going to be built, and it was also, noble Lords will remember, he who decided that the Forth road bridge was going to be built—no, that was his predecessor; the noble Viscount opened the Forth road bridge. Even I fall into error! He opened the bridge and so I am giving him the credit. In fact, it was the noble Viscount, Lord Stuart of Findhorn, who approved it, although I had forgotten that this was his particular piece of credit.

My Lords, although I cannot go along with the noble Lord, Lord Bannerman of Kildonan, to the extent to which he would wish in respect of devolution for Scotland, I am in complete agreement with him and with the sentiments expressed so totally differently by the noble Lord, Lord Forbes, which enabled that noble Lord to arrive at the same destination: it does not meet the needs of Scotland to be able to prove that Scotland is getting more money out of the Treasury than England is getting. That is the mistake that parents so often make who provide their sons and daughters with all their material needs and give them plenty of pocket-money. Every time the children ask for money they may get it, but if the parents do not show that they are really interested in their children and love them, they do not get the response that they desire. It is the same in government. The answer is not just to provide more money for Scotland; it is to show and to prove that the Government are interested in the future of Scotland and are doing things for Scotland. To that extent I am in complete agreement with the noble Lord, Lord Bannerman of Kildonan, and I am in complete agreement with the noble Lord, Lord Forbes. I think that there is not lone of us on these Benches who would dispute that aspect of Scotland's dissatisfaction at the moment. It is a feeling that we are not getting the affection, if I could use a family term, that as part of the family we are entitled to get.

My noble friend Lord Ritchie-Calder and the noble Lord, Lord Balerno, touched on the brain-drain. I will not go into that; we all appreciate the seriousness of the problem. I would rather go on to what the noble Lord, Lord Balerno, had to say about the intake of students. He spoke about the Scottish universities getting less than the English universities. On paper, at any rate, that is true. The figures which I have here, and which I am not going to quote, bring that out, but the situation is not so bad as it seems. Heriot-Watt have been on the job for 150 years, and Strathclyde for a fairly long time. The figures for the equivalent English universities are larger, because they are getting a greater amount of money for the erection of new buildings. Heriot-Watt want more buildings, and they are coming. In the year when Heriot-Watt get the buildings for which they are clamouring—and presumably they can get them this year, if the Government can see their way to allowing so—their figures will automatically rise. Beyond that, an investigation has shown that there is something wrong with the figures. I know that the noble Lord is meeting the Chairman of the University Grants Committee in the near future, and I should be surprised if he comes out of that further meeting completely empty-handed.

I have taken note of the points which the noble Lord made about new students. I am very much impressed by them. I do not think that we can afford to ignore either his figures or the conclusions he drew from them. At the same time, in replying to these points I labour under the disadvantage that this is not a Scottish Office problem, although it was perfectly correct to raise it in a Scottish debate in your Lordships' House. I must pursue these points further with the Department of Education and Science, and I am certain that I shall be able fairly speedily to write to the noble Lord. May I express the hope that, if at the end of the day he feels that there is a problem which requires further ventilation in the interests of Scotland, he will take the opportunity of putting down an Unstarred Question for my noble friend who looks after the affairs of the Department in your Lordships' House.

LORD BALERNO

My Lords, I should like to thank the noble Lord very much indeed for that invitation.

LORD HUGHES

I have a little information about the question of the shortage of mathematics teachers. The number of certificated teachers of mathematics in schools in December, 1966, was 3,326. But that sounds better than it is, because it includes teachers with qualifications in other subjects—for instance, physics, as well as mathematics, and cannot therefore be equated with the number actually teaching mathematics. We do not have separate statistics for those teaching only mathematics, nor is it possible to say how many of the 3,326 were headmasters of schools and therefore not teachers of mathematics as such. In addition to this figure, there are another 125 mathematics teachers in further education, and a small number in educational administration in schools.

The number obtaining teaching certificates in mathematics has increased from 168 in 1966 to 255 in 1967. These figures represent 16 and 22 per cent. respectively of the output of graduate teachers. We do not want to read too much into these figures yet, but the latest supply forecast suggests that the output of graduate teachers from colleges of advanced technology is likely to increase in the next few years from 1,134 in 1967 to about 1,700 in 1971. I cannot safely say that it might be expected that the output of qualified mathematics teachers will also continue to rise. Whether it will rise sufficiently for the purpose to which the noble Lord drew our attention is another matter, but the trend is a little better than we were able to say a year ago or two years ago.

The noble Earl, Lord Dundonald, who apologised because he would have to leave before the debate ended, spoke particularly about tourism. Like a number of other noble Lords, he revealed the fact that the selective employment tax was not his favourite fiscal device. I accept the point, but beyond that I cannot go. The noble Earl, Lord Perth, also spoke about tourism, particularly on the question of hotels. The booklet to which the noble Earl referred, More Hotels, is one which we are presently sudying. An investigation is going on inside the Scottish Office at the present moment into the ways in which the intense development of tourism can be of the best use to Scotland, and I assure both noble Earls that we shall not lose sight of the points which they have raised in still further stimulating tourism as part of our economy.

The noble Lord, Lord Forbes, said that at the end of the day what we really needed was to cut down Government expenditure, and many of my noble friends on these Benches said, "Hear, hear." But I would draw attention to the fact that in the course of what, after all, were only a few hours, noble Lords have called for more expenditure on roads, on schools, on universities, on airfields and on retraining facilities for industry. And we have to do all this while spending less money. I take comfort in the thought of my noble friend Lord Mitchison that we seem to have the ability of talking inspired nonsense. When noble Lords call for more expenditure and less expenditure at the same time, and more civil servants and fewer civil servants at the same time, I wonder how much of what they are asking for is inspiration and how much is nonsense. It cannot be both at the same time. This is the question every Government have to answer: how best to pour the pint out of the pot. You cannot pour one pint out of a pot and fill half a dozen pint pots out of it. You may be able to fill a certain number of gill dishes, but that is as far as it goes.

I remember many years ago, when I was with a deputation to Mr. George Buchanan, who occupied the position I now do at the Scottish Office, and we made a powerful case for an increase in housing grants. We almost fell on our backs when Mr. George Buchanan said: "Well, gentlemen, I have never heard a case so well put. You have convinced me completely that we are not giving enough money for housing, and I will readily concede it. Shall we not waste any more time arguing about that, but apply ourselves to the things from which you want the money to be taken?—because I shall not get another penny out of the Treasury."

Year by year we get a considerable amount of money out of the Treasury, but, even so, the amount is not nearly enough to met the considerable demands for increased expenditure, and we must make up our minds what we are going to do with it. Obviously the Government take certain priorities, and they think that these priorities are the best. Another Government might take different priorities and spend more in one branch than in another, but the one thing that is certain is that no Government can spend more in every direction and spend the maximum in every direction. If the country is to survive, there must be a limit on our total expenditure, and it cannot exceed what the country is able to afford at a given time. This must be my apology for not doing all the things that we all want to see. In time we shall see all of them, but in the interval there will be a lot of new demands coming forward. It will be no satisfaction if I am standing at this Box—which God forbid!—in 1977 saying: "All the things you asked for in 1967 have now been accomplished."

The noble Lord, Lord Forbes, criticised advance factories. I shook my head when he was speaking, not because I was disagreeing that there were advance factories, because they are. All I was shaking my head for was that I thought he was rather decrying the advantage of advance factories. I call in aid on that what was said the other day by Sir Robert Maclean in Scotland, pointing out the tremendous advantage it is to him to have a greater pool of factory space to offer than he had ever had before, and that this was one of the most useful weapons in Scotland's armoury at the present time.

The information which I should like to give is that the first round of Government advance factories, in November, 1964, was nine factories. Eight of these are complete, and six are allocated; and the ninth one is under construction. Of the second round, in September, 1965, ten are complete, and only three of these are allocated. Of the third round, in May, 1966, three are complete and one allocated. Of the fourth round of seven, in November, 1966, only one is complete, and it is allocated. So to date, with the exception of the second round in 1965, where seven of ten completed factories are still not allocated, the progress of allocation is following fast on completion.

Time has not permitted me to investigate where the seven of ten unallocated ones are, but it may well be that they are factories which have been located in areas to which it is most difficult to attract industry; perhaps the ones in the mining areas which are going to receive these greatly enhanced additional benefits. I know that there are empty factories at Leven. These factories will have the benefit of the new incentives, and I do not expect that they will long stand empty. I think there are few people, if any, in Scotland to-day who would argue against the policy of providing advance factories. At one time it was the subject of controversy, but not now. I would rather have twenty factories standing empty waiting for customers than have twenty customers going off in despair because there was not going to be a factory available for them in the next two years.

I come now almost to the final point. Away altogether from the question of jobs, unemployment and so on, was the noble Earl, Lord Perth, on the subject of Edinburgh New Town. In the sort of context that developed there was a certain criticism that at times we appeared merely to be following the English example. And yet the noble Earl was saying: "Look what the English have done. Five times they have done it, and not once has the Secretary of State for Scotland done it. Let us follow the English example". I must admit that we are not above following the English example when it is to our advantage. But I would point out that the fact that we have not followed that line does not mean that we are not doing anything in Scotland.

I would point out that from the first the Government, in 1966, decided to transfer the responsibility for the preservation of historic buildings from the Ministry of Public Buildings and Works to the Secretary of State. This was a demonstration of the fact that we were conscious that this was something which could perhaps be better done from the Scottish Office than from a London office, even from a Ministry with many points of activity in Scotland. Secondly, we felt that the administrative changes would put us in a better position to deal with the sort of problems exemplified by the New Town of Edinburgh. We have taken a different approach from the five blueprint studies in England to which the noble Earl referred. We have done that for the simple reason that we do not think that this is the best way to do it in Scotland.

We have a joint scheme for the New Town sponsored by the Historic Buildings Council for Scotland and the Edinburgh Corporation, and this is well under way. We are awaiting an interim assessment of the Melville Street pilot study. The first reports of the meetings held with the owners and occupiers of the Melville Street area on November 30 are most encouraging, especially with regard to the co-operation promised from the residents. I think the noble Earl will join with me in saying that this question of co-operation between owners, local authorities and the central Government is paramount to success in dealing with some of these problems. The difficulties arise really from the problems of reconciling preservation with the interests, both social and economic, of a living city. These problems are very complex. It is in this context that the New Town of Edinburgh is being considered both by the Edinburgh Corporation and by the Scottish Development Department.

If there is anybody who recently has been the subject of almost as much criticism as the Secretary of State for Scotland, the one running him a close second is the Corporation of Edinburgh. These days they certainly seem to be unable to do anything which meets with universal acclamation; whether it is action on the preservation of buildings, of putting up new buildings at a cost of x millions or 3x millions, or whatever it is, everything they touch is being criticised. But this is not necessarily because they are wrong; it is because the Edinburgh Corporation in these contexts are dealing with very difficult problems. I think the Corporation are to be congratulated on the care and patience which they are showing, although sometimes the decision which is finally arrived at is not necessarily the one which preservationists feel ought to have been taken.

THE EARL OF PERTH

My Lords, the last thing I should wish is to have it thought that I was criticising Edinburgh Corporation. I was not. The point I am making is that there is a bigger problem than merely that of preservation. The new pilot scheme of which the noble Lord, Lord Hughes, has spoken is fine as far as it goes, and I welcome the action taken by the Edinburgh Corporation. This is a bigger thing. I hope the noble Lord will lock again at the Report and see what is involved.

LORD HUGHES

My Lords, I agree completely that what the noble Earl is asking for is bigger than I am talking about, but this is our first step. We think this is the way in which we can get really useful results on particular schemes, which will clear the way to deal with the big problem and make it much easier to arrive at the scheme which is the equivalent to what is being done this side of the Border. I assure the noble Earl that the Scottish Office are intensely interested in this problem. We realise that time must be spent in considering what is the right decision, because far too frequently it has been recognised, after a building has been torn down and the harm has therefore become irreversible, that a little more thought might have enabled the problem to be dealt with in a different way.

Of course, we cannot use this as a reason for deferring essential things for ever. For instance, it would have been a great help to us in relation to finding arguments against the second runway at Turnhouse if there had been an historic building in the way. It would have been a wonderful excuse. I could have set the noble Earl, Lord Perth, against the noble Lord, Lord Ferrier, and it would have kept the argument going for a year or two, during which the building would have stayed up. It means that decisions are delayed, but sometimes a final decision is forced, since we cannot delay everything indefinitely and so many things may be hanging on the one decision. But I can assure the noble Earl, Lord Perth, that his points are very much in our minds, and no doubt at the end of the day we shall not disagree very much on what is being accomplished in Edinburgh. Incidentally, I wish to acquit him of any thoughts of attacking the Corporation of Edinburgh. The noble Earl, however, is not the only one who has been talking about the New Town recently, and not everyone has been as generous towards the Edinburgh New Town Corporation as he and I are prepared to be to-day in your Lordships' House.

The noble Lord, Lord Ferrier, raised a number of points in relation to broadcasting which really are not in any way the responsibility of the Scottish Office. That does not make it improper of him to have raised them, because they are very much the concern of Scotland. I have notes on the subject which go part of the way towards meeting what he said, but I do not propose to read those notes. Basically, we have to get round the difficulty of our geography. In a land with perhaps more than its share of high ground, the television and radio waves do not seem to take so kindly to getting round these places as to going through open air; and at the end of the day it all comes back to a question of expenditure.

If we had nothing else calling on our resources we could give more money to the British Broadcasting Corporation, and we could give them subventions to enable them to provide the special services, which would be completely uneconomic in that they would be out of proportion to the number of people using them. But at times when the demands are infinitely greater than our resources we can proceed only at a pace which must inevitably leave us open to the criticism that we are not doing nearly enough.

However, there are certain points which the noble Lord made which I shall feel obliged to see are transmitted to the appropriate department, and that I will undertake to do. I must admit that my sense of logic perhaps overcomes my sense of Ministerial responsibility in regard to his suggestion that the licence fee should not go up to £6 from £5 until our standards go up to the £6 mark. That is an argument which appeals to me. Whether it will appeal equally to my colleague, I do not know, and I have a strong feeling that I ought not to have said even that. But I will certainly pass on his suggestion.

I think I have dealt with most of the points, except that in regard to Turnhouse and the Edinburgh By-pass. I have referred to Turnhouse obliquely. The noble Lord asked whether it was too late to complete that for the Commonwealth Games. I do not suppose it is, from a physical point of view. He went on to compare what was being done at Glasgow with what was being done at Edinburgh, but, of course, the circumstances there are somewhat better. It is not the same people who are spending the money. Glasgow Corporation have taken on a considerable responsibility, and if I may perhaps appear to fall into the trap of appearing to criticise the Corporation of Edinburgh (which I am not doing) I would say that if they had felt it was the proper thing for them to do, there was nothing to stop the same rate of progress being made in Edinburgh. But Edinburgh Corporation and Glasgow Corporation looked at these matters in different ways. Only time will tell which was right in its decision. But since Edinburgh Corporation elected not to take the financial responsibility at this time, Turnhouse has to compete with other projects for Government expenditure. For instance, if I were asked to divert a certain amount of money from roads to providing the airport at Turnhouse I am very much afraid that my answer would be, "No".

LORD FERRIER

My Lords, I hesitate to interrupt the noble Lord, although I nearly did earlier on, when he said that too many people have wanted the expenditure of more money. I should like to make the point that I spoke in general terms in regard to airport policy, and said that the money would have been better spent at Turnhouse. Similarly, in regard to broadcasting, I did not ask for more money: I said that some of the money spent on colour research could have been better spent on other things.

LORD HUGHES

Yes, my Lords, but trying to sell that idea to the people who now enjoy watching colour television down here would be somewhat difficult. I do not think they would be very enthusiastic. It is all very well for us to talk, because we have not yet got colour television; we are only just starting. Incidentally, in regard to what is being spent at Turnhouse and Glasgow Airport, I thought the noble Lord, in his desire to say as much as possible in the minimum amount of time, could not have appeared to criticise Edinburgh to an extent which would have commended itself more to a Glasgow man than when he committed himself to the statement, "Edinburgh is a bottleneck". I am sure that every Glasgow man would agree and say, "Hear, Hear". However, I appreciate that the noble Lord was talking in the context of the Edinburgh by-pass.

The noble Lord is completely right. One of the great difficulties we have in creating our motorways and dual carriageways is that we enable traffic to proceed much more rapidly from one urban conurbation to another, and until the by-passing of these communities is properly accomplished we shall not expedite our journeys very much. It is just that we have a little more waiting time at certain points, such as Edinburgh. These waits have almost taken the place of the connections on the railways; you wait in your car instead of at a railway station. I hope it will be possible to do something about it speedily. I appreciate that in relation to the B.B.C. and the contents of programmes, the noble Lord was talking about things which did not need the expenditure of any more money. This was the sort of thing I had in mind when I said that this was not my pigeon and that I would pass it on to those involved.

I know that on the first occasion I spoke for 40 minutes, but the way my thoughts are going now I have a feeling that on the second occasion I have spoken for an hour and 40 minutes. I hope I have not spoken for too long and discouraged noble Lords from raising these debates. One of my colleagues asked, "How often do you have these Scottish debates?", and I replied, "I think about once a year". My colleague said, "It seems to me to be about every other month". With the two additional recruits to the Scottish Benches, one on the Labour Benches and one on the Liberal Benches, we can expect to have more rather than less Scottish debates. I, for my part, welcome them. I am exceedingly grateful for the completely constructive way in which this debate has been participated in by everybody from the noble Earl who initiated it to the lag speaker, the noble Lord, Lord Belhaven and Stenton. With the sentiments expressed in the debate I find it exceedingly difficult to disagree at all.

7.51 p.m.

THE EARL OF DUNDEE

My Lords, I shall make no reply to the debate except to thank those of your Lordships who have taken part in it. One difficulty we have in arranging Scottish debates to suit everybody is, of course, the question of distance: it is difficult to find a day on which everybody who ought to be here is able to come. And at this end the usual channels sometimes make changes in the business.

It was agreed that our debate to-day should be, as it has been, mainly about Scottish industry, and it is hoped that we shall be able to have another Scottish debate more devoted to forestry, agriculture and the countryside, perhaps soon after the Christmas Recess or in the early spring. I would also congratulate the two noble Lords who have made maiden speeches, to both of which I listened with great delight. When I was in the House of Commons I was always told that the really great advantage of being in the Lords is that speakers are not subject to all the tiresome rules about order: that in the Lords "you can say what you dam' well like". I am very glad that the noble Lord, Lord Bannerman of Kildonan, discovered this on the very day he got here. It was a most enjoyable speech, and, like the noble Lord, Lord Hughes, I look forward to the day when he feels that circumstances will allow him to be a little more sharp and controversial in what he says.

The noble Lord, Lord Tayside, comes from my own part of Scotland. Not only did I greatly admire the way he made his speech, but I was encouraged that it contained so much that I have always agreed with, particularly what he said about jute. There have been three Presidents of the Board of Trade in the last ten or twelve years who have all done their best to abolish the Jute Board and do away with the mark up, and they are all now Members of your Lordships' House. It is wonderful how we have kept this thing going. I have always argued that it is a special case, because it is exactly the right size for an efficient organisation in bulk purchase and I think it is the right solution. It goes on, a complete anomaly; but so far as I can see it is likely to survive. We have all done our best to see that it does.

I would also like to thank the noble Lord, Lord Hughes, for his two speeches. When the noble Lord told us in his second speech that his colleagues envied him because he got such an easy and friendly reception in this House, I think it must have occurred to most of your Lordships who heard him that the reason for that is his own courtesy and the immense trouble which he takes to reply to all the points that your Lordships put. Not only that: he undertakes to consider them seriously, and, when he can do so, to meet them, which he often takes the greatest trouble to do. That is, I think, very much appreciated.

I did not, of course, expect the noble Lord to meet or express agreement with my main contentions about separate fiscal and monetary policies for Scotland. He has clearly not been able to do that, and I will say no more except that I believe we shall have to do some serious re-thinking on these lines if Scotland's economy is to flourish and if our partnership with England is to be a fruitful one. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.