PROBLEMS OF THE SCOTTISH HIGHLANDS

HL Deb 01 May 1968 vol 291 cc1089-194

2.43 p.m.

LORD LOVAT rose to call attention to the problems of unemployment, depopulation and land use in the Highlands, and to move for Papers. The noble Lord said: My Lords, I beg leave to move the Motion standing in my name on the Order Paper. This debate has, perhaps fortunately, been postponed on two occasions. It was intended originally to raise the subject in January; and later in March, but at that time we were waiting for the Annual Reports of the Forestry Commission and the Highlands and Islands Development Board. In fact, neither is available, but that does not really matter, because since March a great many things have happened in the Highlands which can have only the most devasting effect on this, as I hope your Lordships will agree, important, albeit remote, area of the British Isles. I am dealing to-day entirely with the crofter counties, seven in number, a land mass which covers approximately 9 million of the 19 million acres in Scotland.

This debate is bound to be a fairly stormy one. We in the Highlands are particularly angry with a regional policy having suddenly been cut across by a national policy. We feel that we have been betrayed, and I think this is fair comment in view of the fact that S.E.T., which has been doubled, has really no bearing on an area which has no industry. We feel hurt at the Transport Bill, which seems to be particularly doctrinaire in its approach to a remote area which relies entirely on its very limited communications and which at one time, in the days when Mr. Tom Johnston was Secretary of State for Scotland, was almost on the point of getting a tapering freight rate.

With that preamble, my Lords, may I say that we have a fairly strong batting list on this side of the House, and I see opposite the noble Lord, Lord Hughes, who I am sure will put up a pretty staunch defence. I apologise for the fact that my own remarks are fairly rusty, and I am a most unsuitable speaker to open a debate of this kind. Frankly, I did not expect to find such a very well represented number of noble Lords and Peeresses on both sides of the House. I hope that those who are speaking on my behalf, the Highland Peers, will concentrate on their own particular subject. I also hope that we shall make our points clear in a debate which is a logical follow-up to a rather similar debate on a Motion moved by the noble Duke, the Duke of Atholl, roughly a year ago. On that occasion the noble Duke's Motion was in rather wider terms; it was on land use in the Highlands and other rural areas. I think that possibly on that occasion too much was said, the erroneous impression being given that we Highland Peers were concerned only with such matters as grouse, deer, salmon and sport. Of course that is a terribly wrong impression. I hope that those three words, grouse, deer and salmon, will not be mentioned too often this afternoon. I hope that everyone will keep to their subject within the letter of the law.

My Lords, I am going to confine my remarks entirely to agriculture, of which I have a fairly good knowledge, to forestry, to a lesser extent, and to some references to the Highlands and Islands Development Board and the regional planning which we welcomed and thought was important less than two years ago, but about which we have had certain after-thoughts regarding what is getting done. With those words I will enter into the subject about which I propose to talk.

I shall have to give your Lordships a few facts, but I think that they are fairly interesting. To begin with, there is the size of the population of the crofter counties. The seven counties can now muster a total population of only 275,000, which is a very alarming state of affairs in an area which covers 9 million acres. Depopulation continues at a very alarming rate. In the County of Inverness alone, about which I know most, the number of inhabitants dropped from 56,000 in 1951 to a total at the Census in 1966 of 51,000. In other words, 5,453 people have left the area in a period of 15 years. The second half of that Census period shows a very much higher rate of depopulation than the previous 10 years. In a county of this size there are only some 17,000 ratepayers who have to find a budget of £950,000 per annum. A penny rate raises less than £4,000, and our requirements in the annual audit accounts for 1966–67 were no less than £10 million in this one county alone. I am sure that your Lordships will readily understand that we are rapidly reaching the point of no return.

The figures of unemployment are even more distressing. I know that the noble Lord, Lord Hughes, will correct me if I am wrong. At the moment the national average in the United Kingdom runs somewhere about 2.5 per cent., while Scotland's average is rather over 4 per cent.; in the crofter counties in the Highlands it is 8 per cent. This is a very gloomy situation, which cannot go on. The feeling in the North is so strong now that I think there will be the kind of mass clearances which have not been seen since the time of Culloden. That is a situation which I hope we shall not allow to continue.

Other noble Lords will no doubt give chapter and verse, because I am not going to talk in any detail to-day about the sort of problems that have hit the county as regards the Transport Bill, but the sort of situation we are up against is this. The Transport Bill and S.E.T., combined with the increased cost of petrol, will put 2½ per cent. on the cost of food in Sutherland and Caithness, the two most northern counties in the United Kingdom. The six major employing industries in the Highlands have publicly stated that the Transport Bill and 4d. per gallon on motor fuel might Tender their operations in the North no longer viable. This is a serious matter, because there are not so many major employing industries. One of the biggest and best is the wood pulp mill at Fort William, which, as every Scottish Peer knows, is of considerable benefit to the North—indeed of major importance at a time when home-grown timber is hard to sell.

There are many sad stories, and no doubt other noble Lords will illumine and illustrate my remarks, but I feel that this one is so sad that it is worth reading out. Perhaps we all live too soft nowadays, with the benefits of television, the "local" round the corner, the bus route or subway, the "fridge", the morning paper and easy access to shopping centres. But this is a letter which has the stark reality of a Border ballad or, as we are talking of the Highlands, of a lost pibroch, a lament. It was written to me in my capacity of chairman of the Inverness Planning Study and Develop- ment Group of the County Council and it goes like this: I have been occupying this croft now for seven years since I left the Army. It is situated on a part of the estate that used to belong to my mother's family but has now been sold to the Forestry Commission. This house has no access and no electricity but it is a beautiful place and it happens to be my home. We make our living by running a small agriculture and sporting company. Until the Government's recent S.E.T. measures we had employed three men and two part-time women helpers. These are the S.E.T. measures of more than a year ago. It has nothing to do with the present Budget. When we have recovered from this fiscal blow, we will employ these local people again. Now the time has come when my eldest child (5) has to start at Invergarry School. He must be rowed over one mile of open water in all weathers and then walk for half-a-mile over the hill to catch the school car. He is only five years old. I hope the noble Baroness, Lady Summerskill, appreciates my point. All our supplies for the cattle, the food for the young people staying in the Sports Hostel, the Doctor, etc., must use this route. For the right to live in the croft house, we have to pay £185 every year in rates. If the County Council were to build a drive way from the main road to a point opposite our croft at a probable cost of £2,000, it would ensure that we are able to continue to live in the home that we love. It would also do a great deal towards ensuring that our business continues to survive. I feel very strongly in sympathy with Lord Lovat's remarks on recent heavy expenditure on access roads for people to ski in the Cairngorms. Do the Government want us Highlanders to stay in our crofts or do they prefer people from the South to work in the skittle-alleys on Speyside? Clearly there is not enough money for both.

This letter came from Garrygualach, which few Ministers or Secretaries of State have ever visited, but it is typical of the desperate situation in the Highlands that appertains to-day. I will not give more than one instance of that kind, but I think that the people I have described—and I do not know them and have no sort of axe to grind this afternoon—are are sort of Highlanders we want to keep living in the Highlands. Their case speaks for itself.

Now I turn to agriculture, the subject I know most about, and I should not be wasting your Lordship's time unless I knew I had a case to make out. I learned my farming the hard way, on the hills. I was brought up by a father who knew quite a lot about agriculture and forestry. He was the first Chairman of the Forestry Commission, so I learned forestry from a man who brought the Forestry Commission into existence. He was also responsible for developing the Gezira, an area of some 700,000 acres in the Sudan between the White and Blue Niles, at a point below Khartoum. His work made it abundantly clear to me that from a desert one can always produce a garden of roses if one knows how to make use of water, irrigation and land reclamation. When I was last in this area, while serving with my regiment in 1935, the Gezira was producing a cotton crop worth £2,500,000. Perhaps the noble Lord, Lord Hughes, will allow me, with that background, to give certain opinions about the potential of hill farming in Scotland which the Government have overlooked and which the Highlands and Islands Development Board have not considered in any way their responsibility.

I also, for my sins, have been an adviser on farming overseas. I have just returned from Ethiopia from giving some sort of advice to the Ethiopian Government on their project in Eritrea and I have done similar work in Venezuela and other remote and undeveloped countries. So I am not entirely a prophet speaking in the sense of thinking that something can be done—I know that it can be done. I have also some knowledge of raising beef cattle and of producing good beef from the Highland hills, which at one time was looked upon as quite out of the question.

I have been fortified at various times by such first-class advice as can be found in the Zukerman Report on Forestry, Agriculture and Marginal Land Use in 1957, the Ellison Report of the Land Use Study Group in 1966 and the Highland Panel's Report on Land Use in the Highlands, which appeared one year before the Highlands and Islands Development Board came into existence. On the 9 million acres that I have been talking about, there have been, as your Lordships know, over the past 100 years conflicting claims. There have been claims for sport, for forestry, for roads, and also—I think very necessary ones—for hydro-electric development.

Farming perhaps has come off least well of all three, in the sense that the farmer is intensely his own individual master. He does not take orders from anybody, if he can possibly help it, and he has no organisation to keep in step with the progress of the times. Anyway, rightly or wrongly, one finds that a good many glens which could have carried cattle have been flooded, and a good many slopes have been planted with trees when they should have carried both cattle and sheep, so reducing our wintering, which is the vital problem in the North. Nevertheless, it is perfectly obvious that there is a vast amount of room at this time, when I feel we ought to be saving on imports, for restarting on a big scale. This, I think, is something which the Government continually overlook. We have been told again and again to step up our exports and cut down on our imports. But in the North of Scotland this need seems to be completely overlooked.

There are three Peers whom I should mention who would have spoken to-day with great effect on this subject but are unable to be here this afternoon. One is the noble Lord, Lord Boyd-Orr, who would have told your Lordships about the present world wheat shortage. Then there is the noble Lord, Lord Boothby, who knows all about the Buchan braes where beeves are good, and who was the champion of farming in the North-East all the time that he was a Member of another place. Lastly, there is If e noble Earl, Lord Cromartie, who wild also have talked with great effect to extol the merits of cattle-raising in Scotland, but he is at a meeting of a committee and is unavoidably detained.

There are obviously certain limiting factors. I have said that there were 9 million acres of land mass in the crofter counties. But when you break that down, you discover a very serious defect in the overall picture, and that is that only some 600,000 acres out of 9 million are classified as being grazings or arable—that is to say, only 7 per cent. of the total area about which we are talking. Of that 7 per cent., there is much more grass than arable Yet Highland history tells us that in the 1850's at the Falkirk Tryst (which is one sale of cattle brought down on the hoof from the Highland glens, and indeed from some of the Islands crossing over from the Hebridean Islands) 150,000 head of cattle were sold in that small and not particularly well known town of Falkirk, in the industrial Lowlands. This was after the civilisation of the time had salted away as much beef for their own requirements as would get them through the winter.

To-day, in Scotland, I ascertained from the Department of Agriculture that in the same area, with all the advantages of science, agricultural improvement, and what-have-you there are only 102,622 cows drawing what is called the hill cattle subsidy, which is an excellent thing in itself and provides farmers with a douceur towards the risk involved in keeping cattle on the hills, where they can get into grave trouble in a severe winter. So your Lordships see a picture of fewer cattle being bred to-day, with all the modern advantages, than there were 100 years ago. Something tells me that this must be wrong. Before this debate I took the trouble to ring up the Government of Southern Ireland, and I was told the fantastic fact that we in the United Kingdom as a whole—not in Scotland, but in the United Kingdom as a whole—have to buy in annually for our own domestic requirements no fewer than 620,000 cattle which are produced in Eire. Those figures do not include what is bred in the North of Ireland. I think this is a pretty serious reproach to our agronomy, and I feel, therefore, that a great deal more could be done.

The way I think it should be done is to make a serious effort to undertake reclamation—not land improvement, but land reclamation—from the sea. In the Zuckerman Report, 100,000 acres were considered to be suitable for reclamation. So far as I know, however, private individuals, who can no longer afford the sort of money that this job takes, are the only people who reclaim land. My own particular bailiwick around. Beauly was all reclaimed from the sea in the days of my great grandfather, when they had only a spade and a spirit level: that is all they had to work it out. And this bottom land, as the Americans call it, produces 24 tons of wheat to the acre, which is a fantastic return, and 2 or even 2½ tons of timothy hay, which is even more extraordinary.

I think in imaginative planning the proportion of hill acres to the arable acres could well be argued to be on this sort of scale. I would say that one acre of reclaimed land of the kind I have described, which is first-class bottom land, is equal to about 5 acres of ordinary arable in a hill farm, which, in Scotland at any rate is very poor indeed. Five acres of marginal hill farm arable is equal to some 50 acres of hill grazing. So your Lordships can readily understand that if one took an area of 50,000 acres and divided it into 100-acre units, a great many people could be put back in the Highlands doing something very useful—people who are now going away simply because they have not a modus vivendi. The depopulation, as I have said, is accelerating because people have been very badly let down by promises of heavy industry coming, and American chemical projects, such as the £150 million Highland fling which was announced with tremendous headlines in an inspired article in The Times less than one-and-a-half years ago. I think this is the kind of work that Highlanders particularly like.

I do not know whether the noble Lord, Lord Strathclyde, is in the House (he is not down to speak), but he could tell your Lordships of the good work done by the Hydro-Electric Board, of which he was the recent Chairman, which has obviated one of the biggest dangers to land reclamation—that is Highland flooding. It does not always happen that way. There are times in wet weather when a Highland river is a torrent, and there are times when the dams have been overfilled. Such a case happened over a year ago and resulted in wrecking floods. But, by and large, if you control the river at one end of each of these firths (and I speak particularly about the Moray Firth and the Cromarty Firth, which is the area I know best), I see no reason why, with the application of a little of the actual machinery which the Hydro-Electric Board used at the time when they were working among the hills to build dams and contain water, you could not get immensely beneficial results. Of course, as your Lordships know, the Dutch proved this a long time ago, and the greater part of Holland has been reclaimed from the sea. I suggest that the Government should think about this matter very seriously. The most recent Dutch methods can in fact reclaim 20 acres a day on which factories can be built, and this is something to which I hope the noble Lord, Lord Hughes, will give his attention.

I cannot over-emphasise the importance of agriculture in the Highlands. It is our first industry, and it has been overlooked by the regional planning which is now supposed to control our future. To say, "Farming employs fewer people, so we are not interested" is an entirely wrong concept. It is true in one sense to say that farming employs fewer people, but only when you have combines and grain driers and an established organisation with modern machinery. It is quite another story if you have to dig the land up or carve the produce out of an area which has hitherto remained underdeveloped. The coastal firths and mud flats about which I am talking are amazingly suitable for this kind of development simply because they are, obviously, at sea level, and enjoy a far more benign climate than anything you can find in the hills. In all cases, the roads run beside them, and you have every modern convenience, so to speak, at your door. Let us face the fact that one of the problems of the Highlands is that the better people—or, rather, not better, but hardier and warrior type people of whom we are justly proud—find it increasingly difficult to keep the younger generation in the hills. There is not enough to do, and it is a pretty long night—and will be even longer with this ridiculous idea of inflicting an English version of Summer Time on us.

I seem to have a great deal more to say, and I have talked too much already. I will only just glance through forestry, which seems to be of very great importance to us. The noble Earl, Lord Dundee, will do most of the talking on forestry, so I will be extremely brief. Forestry is very often considered the refuge of the planner. It is very easy to say, "Plant more trees", but nobody is in a position to say what the timber trade will be like when the time comes to cut them down. I think that this has possibly been happening rather too much in our regional planning in the last few years. What is perfectly certain is that it is getting increasingly difficult to market home-grown timber. The traditional markets for home-grown timber have unfortunately largely come to a grinding halt, and will continue to do so with increasing violence in the sense of a repercussion at the selling end when road haulage and freight rates go up one jump higher than they are at present, which is inevitable. Traditional markets for timber, as your Lordships know, have already ceased to exist, in conifers at any rate. The railway sleeper, the wagon bottom and the pit prop are no longer wanted. They have been replaced by such things as tubular scaffolding and cement sleepers. The only glimmer of hope is in pulp or possibly chipboard; and in the Highlands the pulp mill, as I have already said, is in trouble because of the provisions in the Budget and the Transport Bill, It is increasingly doubtful whether the mill will be able to take the timber which the Forestry Commission can supply, least of all what can be supplied from private woodlands. And the marketing of timber is something which leaves a great deal to be desired.

For home requirements we need no less than £550 million worth of imported wood, and less than 10 per cent. of what we grow is used in the home market. This seems to be very wrong. There is a strong feeling that imported timber seems to be infinitely better than the limber we grow at home. This is largely due to prejudice and to a certain extent to faulty marketing and faulty saw milling where waste is considerable. Sawmills should have drying kilns, and all modern facilities should be made available. The point I am making—or I hope I am—is that at a time when we are really hanging on by our shoestrings as regards imports, we cheerfully go on buying expensive timber, which is even more expensive as a result of devaluation. I think that the Forestry Commission, or all growers of trees need the equivalent of a Lord Robens to go out and do something about it, because I think the marketing is extremely bad. Speaking as a private woodland owner, I deplore the fact that the Government have withdrawn certain grants which seem to be of vital importance if woodland owners are to carry on at all. I think that that is all I can say about forestry. Other noble Lords better informed than I am are going to speak after me on this subject.

Tourism is very much in the doldrums, although I think it will be of immense long-term importance for the Highlands. The S.E.T. and the breakdown of communications are certainly going to have a very adverse effect on the smaller kind of hotel and surely it is the smaller hotel, run by Highland people, which should be encouraged and allowed to flourish. The hotel trade in Scotland has suffered from what I think again was a misapplied measure, the Catering Wages Act. It might be of immense benefit to some people, maybe waiters or girls working in Soho and perhaps working for too long, but in the Highlands one has to make one's living in a very short period of the year. There it is necessary to work extra hard, as people gladly do, during the three months of the tourist season. There is no question of going off to have a rest. Girls and boys want to work round the clock to get the tips and everything else that is going at a time when they literally make their year's living. I think there is a tendency, with which I find some fault, although we want to encourage every form of tourism possible—and do not think I am averse to tourism—and I think we should allow the smaller units to keep open and not necessarily pander to some of the bigger organisations which do not even employ local labour.

Lastly (I have spoken for half an hour so I shall have to be very quick now) I should like to turn to the Highlands and Islands Development Board. We in the Highlands are not happy about the Board. They have had two years to produce positive results. I think I was perhaps rather hard on them, and I take Lord Hughes's point when he says that I may have been unfair in the debate in April, 1967. But the Board have had a very long time to get off the ground. The noble Lord, Lord Bannerman, who is a Gaelic speaker, may appreciate the joke better than some of your Lordships, but the local name for the Board in Gaelic is the "lead balloon"—something which never leaves the ground. This is probably wrong, because they have had endless opportunities. I frankly feel that they have placed their priorities entirely the wrong way round. I would argue that the primary industry in the Highlands is agriculture and fisheries, and this should be closely followed by forestry, tourism and industry, with particular emphasis on light industry; because light industry has small communities and provides more diversification of work in different parts of the North. And surely the No. 1 object of the Highlands and Islands Development Board is to keep native Highlanders in the Highlands.

We have had a whole series of extraordinary crackpot ideas, none of which really benefit the Highlands. I do not want to denigrate anything that is being attempted, but first things come first, and when millions of pounds are spent—that is an exaggeration, but I am taking the proposed big industrial projects, such as various things that have not happened at Invergordon and have so disappointed the native indigenous Highlanders when those projects have not come off—one feels the subject is being tackled the wrong way round. One should encourage all those things which are known to be suited to Highlanders first, and the rest must come later.

With respect, I feel that while the loans and grants schemes have been excellent (providing they go to the right people) the names of the beneficiaries and the amount they have received should be published. This has been urged for two years without any success. Equally, if the building of boats for fisheries and the grants for hotels and small industries are kept going the Board will continue to do useful work, so long as they do not stick their necks out on projects which should be left to the Board of Trade.

I am talking again now about industry. I feel that nobody on the Board has experience of big business, and in addition nobody on the Board has a great deal of experience either of forestry or agriculture, which I keep urging is a subject to which greater attention should be paid. A great deal could be done in research which has not yet been done. I feel that the Highlands and Islands Development Board is rather like a fifth wheel on a coach; it is cutting across existing organisations which are doing a fine job, and I do not think it is dovetailed sufficiently well into such things as the Crofters' Commission, the National Farmers' Union, the Forestry Commission, or local government—and certainly not the Inverness County Council. I do not know about the Hydroelectric Board. It certainly has not met with strong support from the Scottish Council (Development and Industry). And what a pity that the Toothill Report, which is such an admirable document, did not include the Highlands in greater detail and left out a lot of the problems with which it coped so successfully in industrial Scotland.

I have talked with people on all these organisations up and down the Highlands, and I am not giving anything away which would boomerang, certainly not in my own area, but I think it is felt that there should be much closer liaison; that industry would be much better handled by the Board of Trade, and possibly—and I think this is the best suggestion of all—that a Minister should be in charge of the Highland area, with the Highlands and Islands Development Board directly responsible to him.

There is only one last thing I want to say. I have talked for nearly three-quarters of an hour, but this last thing is very near my heart and it is something which, to me, is infinitely sad and which will hasten depopulation. I refer to the, to my mind, quite senseless disbanding of the Territorial Army. The Highland Division needs no bush so far as I am concerned. The Territorials have always been the best young men in an area as remote as the North of Scotland. The drill hall has really been the only place where they could go in the evening—the drill hall or the shinty field—and when that goes there will be a considerable exodus from the North. It makes me infinitely sad that when it required only £2 million a year to sustain the whole Territorial forces of the United Kingdom they should be chopped off, as they were, in their pride. Thank you, my Lords, for having listened to me so patiently for rather too long. I beg to move for papers.

THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES)

My Lords, I did not wish to interrupt the noble Lord, Lord Lovat, in his speech, but I should like him to confirm two points which I did not quite catch. When he spoke of depopulation I think he referred to the population figures for the County of Inverness, and when he was reading from the letter, was the figure which he mentioned of rates payable £185?

LORD LOVAT

My Lords, those points are correct.

3.28 p.m.

LORD BANNERMAN OF KILDONAN

My Lords, I have made short speeches since I had the privilege to enter your Lordships' House, but I propose to-day to make a longer one, as to-day's debate concerns the life or death, economically, socially and culturally, of my native area of Scotland. But I hasten to assure your Lordships that my speech will not be as long as those which some of your Lordships make on less important subjects.

The noble Lord, Lord Lovat, has earned our appreciation, and indeed he received it by the attendance in the House to hear what he had to say. We are agreed, I am sure, that he deserves our thanks for initiating this debate; and in his usual manner he pulled no punches. If his speech was couched occasionally in emotive terms, he is to be congratulated, for there is no merit in making a dull speech about an important subject. The Highland problem, however, does not require just red-hot words; it requires a widespread militant action from the people left in the Highlands to show their anger at the chronic neglect of their country by London centralised Government.

The noble Lord, Lord Lovat, gave an expert and a factual résumé of what is required for a new deal for the Highlands, but I would remind him, and noble Lords sitting on the Tory Benches, that it is conscious or unconscious arrogance to decry Socialist Government efforts in the Highlands during a period of a few years, when successive Tory Governments, in power on and off for nearly a century, reduced this area—the half of Scotland, as the noble Lord, Lord Lovat said—by errors of omission and commission, to the depopulated wilderness (and I use the word advisedly in this connection) that it is to-day, where only a little over 4 per cent. of the people of Scotland new live.

It is an area where a search for peace, power and privacy attracts the only immigrant who during the last twenty years at least, has found that he can purchase in the Highlands these assets, with a few thousand acres thrown in, for the price of a town bungalow. When you add all of them together, big and small, you find in the Highlands to-day a large, selfish block of not unintelligent people who use every devious method, as unobtrusively as possible, to work against any kind of development that may disturb this peace, power and privacy purchased at bargain rates. If you run down a people and a country for over more than a century of time, the immigrant I describe is the only type that will move in; and who can blame him?

The problems of the Highlands have been discussed ad nauseam. A smokescreen of reports and pseudo-advisory bodies have for generations blanketed the whole area. Some of the reports, if acted on, would have changed the dismal picture that we see to-day in the Highlands. The best of them, in my opinion, in recent times, was the Hilleary Report of 1938. But what happened to it? It was a good Report for the comprehensive reconstruction of the Highlands. The Tory Government of the day voted for this comprehensive reconstruction of 9 million acres of Scotland £80,000, and of that sum they earmarked £30,000 to provide township roads. They failed to say that there were over 200 townships in the Highlands at the time that had no access roads to them at all. Most of these townships, sadly, have now died off for lack of a lifeline to the nearest road. How would your Lordships like it if you had to carry a creel of peats over a bog moor track to reach your house to keep it warm for the winter, a track where not even a horse and cart could go?

I remember in Skye going out at midnight with the local doctor who had been called out to a community such as this and had to leave the car some distance away. Then, by the light of a flashlamp, the doctor and I crept over a moor and arrived at a township which had originally consisted of ten houses, but only three of which were occupied, including the one where his patient was. That was a difficult operation. Can you imagine what a major operation it would be to get the old lady out of the croft and send her to a hospital? These difficulties existed throughout many hundreds of communities of the Highland area in my lifetime; and no redress came.

The picture may be dismal to-day, but at least in my opinion it has more hopeful qualities than it had. Many now say in the Highland area that it is better to live as a servant of the State than die under selfish private enterprise. That has come to be the opinion of many people who do not for a moment condone overlord-ship by the State. Strangely enough, it is a Labour Government who are concerned now with land utilisation, although they have not yet started to tackle it, as the noble Lord, Lord Lovat told us. This Government has a long way to go before it solves the land problem in the Highlands. The Highlands and Islands Development Board should be told that their basic job is first to settle people on the land and make agriculture and forestry the twin pillars of reconstruction in the Highlands.

The Highlands Board, if they wanted to give really comprehensive benefit to the Highlands, could do so in one measure, could give new hope to this area. But they must first shut the door of the Highlands to the Transport Bill, which is looming up, and to S.E.T.—even more should they shut the door than they might have done last year—and they should then proceed to taper steeply freight rates within the area of the Highlands. Tom Johnston, in his day, was prepared to see to it that this remedy for the ills, economic and social, of the Highlands was the basic remedy. If that were done on road, rail, sea and air, it would develop and give initiative to enterprise in the area.

In the winter time, let the Highlands and Islands Development Board, if they have the power, cut the charges for freight and passenger movement within the Highlands by half, so that, instead of hibernating during the winter, the Highlands people could use these service facilities, which at the present time run empty in the winter and at great loss to the operator. This would undoubtedly cost more than the £1½ million to which the Highlands Board apparently restrict their sights. But dividends to the people and to the Government would accrue immediately from this transport cost reduction. Initiative and enterprise would be boosted. Tourists would flock into our area, and agriculture and forestry would be further helped and would begin to expand as the main markets were brought nearer by lower freight costs.

No longer would the Highland area be one of the highest cost of living areas in Britain—and I am not sure that I would except even London in that regard. The loaf of bread costing 1s. 7d. on the southern mainland to-day costs 2s., and far more in the remoter areas. Petrol costs 6s. 6d. to 7s. a gallon in the remoter areas of the Highlands; and when you want to take hay to the Outer Islands you pay £6 10s. per ton. A crofter in the islands said "Corrugated iron would be corrugated gold before I could put it on my roof and pay the freight charges".

Often one can point a moral more clearly by a humorous incident than by serious words, and perhaps I may relate a true story of personal witness of the primitive transport conditions under which the Highland area has suffered for so long. I was there a few years ago in the height of the tourist season in July hove to in a MacBrayne's boat outside Arinagour Bay, in Coll. The Island of Coll used to have 22 viable farms on it but never any pier from which to get their produce away to the mainland: it all had to be brought out in a rowing boat. The day I was waiting on the MacBrayne steamer, hove to, a boat eventually came out, rowed by two men; and in the middle, tied by every rope possible, was a cow. That was the only way they could get the cow to the open market.

The belly-band gantry was swung out from the swinging boat and put under the cow. It swung her up into the air. The tourists on board this ship thought this was the most interesting thing they had seen. Those who had not been in the South Sea Islands had never seen such transport facilities in their lives. When the cow was at maximum height and tourists were photographing it with avidity, the cow protested in the only way that a cow can in that position, and the tourists scattered. It was the most effective protest made for many years in the Highland area, especially when one takes into account some of the speeches made in another place concerning the difficulties of the Highlands.

I do not see the noble Lord, Lord Mitchison, present, but he knows that when there were 40 or 50 boats in the Carradale area a pier was necessary and required by the fishermen. Sixty years after it was first asked for it was built, and finished, I think, in 1960. There were then only eight boats left in the village or in the area to use this pier.

The story of the Highlands area, and particularly transport, is the story of "too late", never doing anything that can stimulate the people and allow them to have a lifeline to the market. If your Lordships will only agree that action should be taken now, we can avoid writing "too late" on the tombstone of the Highlands. But this Government must open the purse strings. No Government in any case has done so in the past. No Government has really been in any way generous so far as the basic needs of the people in these areas are concerned. People are deprived of the ordinary services that they should have and to which they have a right as citizens of this country. They have never had these, merely because Governments here have always pleaded the shortage of money.

LORD ROBERTSON OF OAKRIDGE

My Lords, will the noble Lord allow me to intervene for just a few moments? I think, in fairness, he will have to agree that MacBrayne's shipping services have been most generously subsidised by the Government over a long period of years.

LORD BANNERMAN OF KILDONAN

Yes, my Lords, "MacBraynes for the Highlands" is what they say. But the MacBrayne financial set-up is a set-up which demands 5 per cent. on the capital investment in MacBrayne's. They go past, and have religiously through the years and in my lifetime gone past, communities that require to be served. They are diminishing communities. MacBrayne's have passed them by because they felt that a 5 per cent. return on the money invested could not be obtained in that particular port or community. They have passed that community by, and that community has eventually died, just as effectively as the other communities on the mainland died where there was no communication with the outside world.

Therefore, I hope that the Labour Government of to-day will raise their sights and that they will give honest, constructive, comprehensive legislation to the Highlands; that they will stop the patch-working that has been given to us over a century of time so that hardly any of the economic fabric is left to patch. The people of the area deserve better than this scurvy treatment. They may not be numerous, but they still have their rights as citizens of this Great Britain of ours, and they deserve better treatment than has been meted out to them for so long. Lord Lovat said that I spoke Cache, the native language of Scotland. I do as a Highlander, speak Gaelic, We have an old phrase in Gaelic, which is "Tha choir mar a chumar i", which means that to have your heritage and to hold it, you have to fight for it.

VISCOUNT MASSEREENE AND FERRARD

My Lords, before the noble Lord sits down, may I ask a question? In the early part of his speech he spoke about the great selfishness of private landlords in the Highlands. May I ask him, for instance, about Lord Leverhulme, who in the early part of this century spent millions of pounds in the Outer Hebrides? People did not take advantage of it, and he asked my grandfather, who was a Member of Parliament for Argyllshire at that time, to go out there and reason with the people. My grandfather told him that the people did not—

SEVERAL NOBLE LORDS

Order, order!

VISCOUNT MASSEREENE AND FERRARD

My Lords, I should also like to point out about Lord Trent, who spent hundreds of thousands of pounds—

SEVERAL NOBLE LORDS

Order, order!

VISCOUNT MASSEREENE AND FERRARD

But the noble Lord was extremely unfair to the noble Lords.

LORD HUGHES

The noble Viscount is down to speak later.

3.47 p.m.

LORD TAYLOR OF GRYFE

My Lords, I am sure we are all appreciative of the great knowledge and experience of Highland problems which has been given to us to-day by the noble Lord, Lord Lovat, and by the noble Lord, Lord Bannerman of Kildonan. I have been advised that in making a maiden speech I should not be controversial, but I am afraid that when Lord Lovat introduces the Motion by saying that there will be some angry speeches made, and that "we feel somewhat betrayed", it is extremely difficult to be non-controversial in such an area.

May I say, too, that I apologise perhaps for intruding in this debate as a Lowland Scot, because apparently we are to have a great deal of knowledge and experience provided to this House by noble Lords who are resident in the Highlands, or have experience of the problems there. I must confess that I have a special and personal interest in the Highlands, although I am a Lowland Scot and a non-Gaelic-speaking Scot. I am the chairman of a large organisation with considerable investments in the much-maligned distributive trades in the Highlands of Scot- land. In addition, I have been for a number of years, and am at the present time, a Forestry Commissioner, and of course have considerable interest in the expansion of forestry in the Scottish Highlands. I hope that the noble Lord, Lord Hughes, who will be replying for the Government, will not consider it an intrusion if in the course of my remarks I say something concerning forestry development.

I confess that I was somewhat surprised at the tone of the opening speech of the noble Lord, Lord Lovat, in which he appeared to indicate that the Highland problem had arisen in fairly recent times. Much was said about the Highlands and Islands Development Board, but it should be remembered that the Board was set up only two and a half years ago whereas the problem of the depopulation of the Scottish Highlands began early in the last century, when people were driven from their fertile straths to the coast and beyond, becoming the first displaced persons in the country, to make way for sheep, which were a more profitable form of investment at the time.

It is not my intention this afternoon to deal extensively with the past. If we are going to evolve the proper partnership relationship which is essential to the welfare of the Highlands, we should not dwell too much on past experience but should consider how we can evolve a rational and productive partnership between the State and private enterprise to ensure the further prosperity of this vast area. The noble Lord, Lord Lovat, reminded the House that this area comprises half of the total area of Scotland and one-fifth of the total area of the United Kingdom. In this vast area 275,000 people earn their living.

Perhaps because in my daily life I am much concerned with business operations and with balance sheets, I tend to look at the Highland problems in terms of a balance sheet. I look at the assets side of the balance sheet and see the very tangible but much under-utilised assets which we have there. We have in fact 9 million acres of land. In a period when land values are rocketing, and at a time when there is a great demand for land it is remarkable that there are to be found in the crofting counties 9 million under-utilised acres. The area contains minerals, fish, wild animals for food as well as for sport, and a landscape of infinite variety and great beauty.

When one considers this combination of assets, one must agree that they are substantially under-utilised. Any businessman looking at such a balance sheet would be very much aware of the need to make use of this tremendous capital asset. Yet despite the existence of these assets the constant stream of young Highlanders away from their native land to other areas continues, since they can find no outlets for the skills which they have now acquired in the technical colleges, no outlets for the ambitions which they naturally feel. Therefore they have to wander furth of Scotland to seek some outlet for their talents. All Scots have felt the Highland problem very much on their conscience, and little has been done in a total and comprehensive way because there are a great variety of problems involved in the development of this area. Nothing of a comprehensive character has been done until the establishment of the Highlands and Islands Development Board only two and a half years ago.

A few moments ago, the noble Lord, Lord Bannerman, said that he would welcome the Government opening the purse strings. But we should realise the extent to which aid is already being given to the Scottish Highlands. I understand that the amount of Government aid now stands at £120 per head per annum. Those of us who are much concerned with the future of the Highlands should be less anxious to go round with the begging bowl every time the Highland problem is discussed. This is not good for the Highlands, nor is it good for the people. The Highland people are a proud people. We should be concerned with evolving schemes whereby these people might participate in developments to help themselves.

I speak with some experience of international organisations involved in the giving of Government aid to underdeveloped countries. I have never found it to be good policy to proceed to these countries simply with open purse-strings, dispensing charity and aid, without making the people feel that they have an involvement in building up their own institutions and in making their country healthy and more prosperous. So that although the Highlands and Islands Development Board are concerned with investment, the encourgement to people to help themselves should be our guiding philosophy. In addition to the assistance of businessmen in the organisation, to which the noble Lord, Lord Lovat, referred, I should like to see within the organisation a place found for a community development officer specifically concerned with stimulating people to mutual aid and self-aid.

It is unfair to condemn the Highlands and Islands Development Board for not dealing with all the complex problems of the Highlands in a short period of two and a half years. We shall not assist them by making "snide" remarks about their failure to get off the ground. I apologise for using that term, but it is unfair that an organisation which is dealing with the problems left to it by generations of neglect should suddenly be condemned after only two and a half years' experience. New organisations, whether they be business or Government organisations, take a considerable time to become equipped with management skills, personnel, judgment and analysis of problems before they can really operate successfully. Within the two and a half years the Development Board have approved grants and loans of just short of £3 million.

LORD LOVAT

My Lords, it I may interrupt the noble Lord, I did not seek to condemn the Board in any way. I did not say that they were not doing excellent work, but—

LORD HILTON OF UPTON

My Lords, I would remind the noble Lord that this is a maiden speech.

LORD LOVAT

My Lords, I apologise to the House.

LORD TAYLOR OF GRYFE

My Lords, I am sorry if I misrepresented the noble Lord's comments on the Development Board. Perhaps I was thinking of Press comments which I had read recently concerning other speeches in other places in the North of Scotland. I was saying that in the last two and a half years the Development Board had approved grants and loans to the extent of almost £3 million. These will provide job opportunities for 2,400 people. To people living in a large city this may not seem to be a major accomplishment, but in terms of the population of the Highlands 2,400 new jobs—quite apart from the big industrial developments projected at Invergordon—is quite an achievement. Publicity and promotion in an attempt to bring people to the Highlands has been undertaken by the Board seriously and, I hope, effectively. Thirty-five new boats will be in the water in the next seven years. Loans have been given from Government sources as well as from the Board, and schemes for the training of crews have been undertaken and these should help the outward Isles.

Then there is help for the tourist industry. Grants and loans to the extent of £700,000 have been given by the Board, which again provides opportunities for 600 new jobs. Five new hotels are going to be built by the Board in the Western Highlands and the Western mainland. Something has been said of the Scottish tourist industry—and I regard the development of the tourist industry as of great importance to the future prosperity of the Highlands—and recent Government grants of 25 per cent. for the development areas should help that industry considerably. Also, the exemption of the hotels from the S.E.T.—albeit partial exemption in Scottish rural areas—should be of considerable help to them.

I do not get the impression which the noble Lord, Lord Lovat, gave, of an area which is dying. In going about the Highlands I find a new sense of hope in the air. I spent Easter at Aviemore, and anyone who has been in Aviemore will have had a very encouraging experience. From all the villages for miles around the young people were assembling early in the morning; sunburned, lively, healthy young people carrying their skis and making their way up to the ski slopes at Aviemore. This is a changed Highlands. This is not a Highlands that is dead and dying, with fusty, musty old hotels. This is a lively area where young people are finding a new sense of adventure in facilities provided by a combination of private enterprise and State support. So I hope that this vision of the Highlands may be the vision of the future of the Scottish Highlands. In the Forestry Commission camping site down the road at Loch Morlich there were 88,300 camper-nights spent at the foot of the Cairngorms last year. The Highlands are becoming alive, and young people who are frustrated by the big city life and are seeing all its weaknesses and its emptiness are finding new life in the open spaces of the Highlands. This is being encouraged by the State, and being taken advantage of by private enterprise.

I said that I would say a word about forestry, because I agree with the noble Lord, Lord Lovat, that forestry will play a very important part in the future development of the Scottish Highlands. The Report of the Highlands Panel indicated that while there were 9 million acres in the Highlands, about 1,650,000 acres could be planted. If we had regard for intelligent land use in the area, 650,000 acres would be put under trees. If we look at the programme which the Government have developed for forestry in the crofting counties, I am sure that the noble Lord, Lord Bannerman of Kildonan, who was also a Forestry Commissioner at one time, will appreciate that this is not at all a picture of stagnation. In fact, the programme provides that while in 1968 we are planting 17,500 acres, in 1975—and forestry is essentially a long-term project—we build up to a programme of over 28,000 acres.

All of this brings ancillary industries, such as sawmilling, pulp mills and so on, and through the projected programme of the Forestry Commission, in partnership with private planting which should run at the rate of about 2,500 acres per annum, we can build up to employment in the woodlands in felling, extraction and planting for some 6,300 people, and in factories in sawmilling and ancillary industries for about 5,800 people. We can, in fact, build up to employment for 12,000 people in forestry and ancillary industries in the Scottish Highlands. If you consider that 12,000 people are scattered over 90 towns and villages, that makes a substantial contribution to the regeneration of rural areas in the Scottish Highlands.

I have been saying a good deal about the assets side of the balance sheet, about the potential which is there for future development; and, as I say, for the first time in many years I see a picture full of hope when considering the rather special problems of this area. But I should like to mention one or two matters which still require attention. Obviously, the anxiety of the Highlands and Islands Development Board to attract capital must be tempered with strict feasibility studies and discrimination. Inevitably, in developing this area they cannot look to the market for capital which is not normally available, and consequently there will be a higher ratio of risk. But I think we shall all agree that strict feasibility studies are necessary, and I know that the Board are aware of this.

Secondly, considering what has been done in connection with tourism and improving hotels and facilities, we now have a first-class product, and I think that marketing in tourism is essential. When I look at the budget of £3,500,000 to £4,000,000 per annum of the Irish Tourist Board, and consider that the annual budget of the Scottish Tourist Board is around £120,000, I feel that the day of amateurism in tourist development is past. I know that Tom Johnston, whose name has been mentioned in this debate, had the view that the Scottish Tourist Board should be independent of Government aid and Whitehall control, but I feel that we are now in a very professional business in the promotion of holidays and tourism and that this is an area where we might look at better marketing arrangements.

I also feel that there is a case for the withdrawal of the selective employment tax from the distributive trades in the Highlands. I feel rather strongly on this matter because of my involvement in the distributive trades. Anyone who operates among these scattered communities, and seeks to provide a reasonable service with city prices for the people, finds that with the burden of transport and other costs it is extremely difficult. Particularly for the co-operative movement, with which I am associated, distribution becomes increasingly a social service and less and less a profitable undertaking. We do not mind undertaking these social services from time to time, but we are concerned about returning the surpluses of our trading to the people where we operate. That we do, but the burden of an additional 50 per cent. S.E.T. makes it extremely difficult to earn surpluses to return to the communities in the Highlands. I think there is a rather special case in this instance.

Also, we ought to create machinery for a better liaison with Government Departments. The noble Lord, Lord Lovat, has made reference to dealing with the Highlands Board and the Board of Trade, but one of the problems of industrial development in the Highlands is the fact that, frequently, so many Ministries are involved and delays occur. I take the case of Scottish Pulp, who have had two very bad years financially and who are looking for some revision of their arrangements. I would not comment on the subject of the revision, but it occurs to me that there are, problems of delay when major investments are involved. I hope there will be a further expansion of investment in Fort William, together with a new pulp mill in the North-East to supplement it and take the products of the forests for years ahead. It makes for considerable delay and frustrates potential investors when at least five Government Departments are involved with inevitable delay in decisions. I think this is a problem of mechanics rather than of politics, of which I am sure the Government are aware.

My Lords, I was told that my speech should be non-controversial and that it should also be brief. Perhaps I have offended on both scores. If so, I apologise to your Lordships. Bit may I just say this? When we talk about helping the Highlands, I think the Highlands can help us. This is a vast area. It can be important to a balanced economic and a balanced social life in this country. It am not only concerned that people should make profit and should develop this area in a profitable way. The Highlands represent a vast area where people can escape from all the complexities and frustrations, as I have called them, and all the weaknesses of living in vast cities, to gain new health and a balance in their lives from the quietness, the tranquility, which is so much missing from our lives. I hope that we shall look at the Highlands not simply as a retreat but as an area which has great potential for development, and as an area which is important to us in improving the quality of our lives as human beings.

4.11 p.m.

THE EARL OF DUNDEE

My Lords, I find myself in the delightful position of being tightly sandwiched between two maidens. I am glad to be the first to offer your Lordships' congratulation to the noble Lord, Lord Taylor of Gryfe, on his maiden speech, winch was notable, I think, both for the width of knowledge which it displayed on so many subjects and for the balance with which it was delivered. I hope we shall often enjoy the pleasure of hearing him. I also look forward in a few minutes to hearing the next maiden speech-that of my noble friend and kinsman, Lord Arbuthnott, who is to follow me.

I think your Lordships are all grateful to my noble friend Lord Lovat for raising this debate. His Motion has been on the Paper for a long time now. No one has a better right than he has to talk on this subject, and I always listen to him with particular pleasure, because it is so interesting to try to spot something of which he does not thoroughly disapprove. He did express unqualified approval of the Toothill Report, but only to add that it had nothing to do with the Highlands. There are many people in Scotland, and in the Highlands in particular, who would agree with my noble friend's complaint that regional policy is often thwarted and frustrated by the policy imposed from Whitehall; and that, indeed, is one of the reasons why Scottish nationalism has attracted so much more support in the last year or two than it ever did before. With regard to the selective employment tax, I think I am right in saying that the Highlands are one of the areas where the hotels will now be able to have this tax refunded. But it has already done a great deal or harm. As for the Transport Bill, if it reaches your Lordships' House I hope to be able to move an Amendment to the effect that the Bill should not apply to Scotland, because the damage which this Bill could do to the vulnerable economy of the Highlands might be disastrous.

I also strongly agree with what my noble friend said about the Territorial Army. I think that a year or two ago we jointly signed a letter to the Press protesting against what was then being done—the first time a blow was struck against it. Now that has been followed by another. I wish the War Office would try to appreciate that the Scottish Highlands, in proportion to their population, are about the best recruiting area we have, and that pride in local regiments is absolutely essential if that position is to continue. And, as my noble friend said, the local Territorial centres, besides providing the opportunity for training, are in many of these remote Highland villages an indispensable centre of social life.

My Lords, when my noble friend Lord Lovat was speaking of the Highland Board at the end of his speech I thought of two proverbs—at least, one proverb and one quotation, I think. The first was, "Familiarity breeds contempt". The noble Lord lives in close proximity to the Highland Board, and that proximity may often give rise to feelings which are not always charged with admiration. But the other quotation of which I thought was, "Distance lends enchantment to the view". I live at a great distance from the Highland Board, and although I cannot say that my feelings towards them are those of unqualified enchantment, I should like to modify some of the things that my noble friend said.

I am sure nobody is more conscious than the Government of the possibility that their original appointments of the Board's members may not all have been guided by infallible wisdom, but I think that the Board have done a lot of good and have had some very bad luck. It was very bad luck that the best member of the Board, in my view, should have been tragically killed in an air accident less than two years ago, just at a time when he was completing another very important job, though not in the Highlands—the construction of the Tay Bridge.

I also thought it was very hard on the Board the way they were reported, or their affairs were discussed, a year ago by the Press in a series of the most childish, idiotic and silly articles which I have ever read—and I am afraid that some of the more responsible papers were not blameless. When I read these very silly, sensationalist, reports of what was alleged to be going on, I thought, as did many other people, "If the British papers make such an unholy show of it as this, this is the very way in which to stop the petro-chemical industry from coming to Invergordon", as was then in prospect. I thought it was very unfair on the Board that they should be subjected to this damaging frivolity.

There are two other things I should like to say about the Board. One is that they were appointed as the instrument to carry on a policy which had also been the policy of the late Government, and your Lordships may remember that when the Highlands Development Bill was before this House Lord Craigton, who had been Minister of State in the late Government, told your Lordships he thought that if the late Government had continued in office the Board, or a similar Board, would probably have been appointed for the same purpose as that for which this one was being appointed by the present Government.

The other thing I should like to say is this. In the newspapers we often find ill-informed and ignorant items suggesting that landowners are hostile to the Board. I should like to make it absolutely clear to your Lordships that the Scottish Landowners' Federation has always done everything it can, actively and positively, to co-operate with the Board in their work of improving the economy and development of the Highlands, and in making the best possible use of land. Two years ago, the Federation opened a new branch office in Inverness, where it is represented by a part-time secretary who resides there, very largely for the purpose of keeping in touch with the Board and of helping them, by giving any advice which we can give to them, in all their activities, which we desire to assist and to further.

In connection with the Board, noble Lords have mentioned the possibility of the aluminium factory being built. I do not know whether the noble Lord, Lord Hughes, expects to be able to tell us very much about this factory, but we shall, of course, be glad to hear what the position is. Many of your Lordships will remember the long and difficult task which the late Government had in getting the Wiggins Teape pulp mill to Fort William. It has now been established and, as your Lordships know, it has had some teething troubles; but I am confident that it will be a success. And, as the noble Lord, Lord Taylor of Gryfe, has just said, a very large planting programme is an essential requirement in order that the money spent on this factory may be justified.

With regard to the development of Invergordon, I would only say that with its very deep harbour Invergordon is an ideal place for what is called a growth point. Nobody wants so to industrialise the Highlands as to have factories everywhere; but some growth points in the Highlands—or in any rural community—are of great benefit to the inhabitants of the area. They are of great benefit to the rural as well as the town people. I hope that the Board will not be in too much of a hurry to make plans which turn out to be ahead of present realities. I think it would be better for them to proceed empirically. First get your factory "in the bag", then build it, and then decide what further developments in the way of roads or houses you may require.

My Lords, I should like to conclude with a few words about forestry, which, of course, must be looked at from a very different viewpoint—because when you are talking of building factories you are talking about something which may happen fairly soon and which may, in a few years, offer employment to a large number of men. But when you are talking about forestry, you are talking of something terribly unspectacular and very slow. No Government will ever win a lot of votes by planting 100,000 acres in five years, because by the time the trees have grown up and have started to be of benefit most of the voters will be dead. With the best will in the world people are not always inclined to be interested in what is going to happen in 20 or 30 or 40 years' time, however fond they may be of their children.

I have always believed, as your Lordships know, in long-term forestry as the principle undertaking to be encouraged in the Highlands. I regret very much that the Report of the Forestry Commission for the last year, September, 1966, to 1967, has not yet come out. I understand that the reason is that the House of Commons Accounts Committee has insisted on some new form of accounting being adopted which has made it necessary for the Commission to do all their sums all over again from the beginning. Whether that is justified or not, I do not know; but it is very inconvenient that people who are interested in forestry from the public point of view should have to wait so long for this Report.

However, I have obtained from the Commission and from the Department of the noble Lord, Lord Hughes, the figures of planting in Scotland for the most recent year, 1966–67, to which I should like to refer. I do not think they are at all discouraging. The total Forestry Commission planting in Scotland for the year is 34,485 acres; that is 2,000 acres up on the year before. Of that total, 17,400 acres are in the five Highland counties. The figure for private planting is 19,500 acres, of which just over 7,000 acres are in the five counties.

I should like to make one or two comments on those figures. If you add the Commission's planting of 34,500 acres to the private planting of 19,500 acres, you arrive at a total of 54,000 for the year, which happens to be exactly double the English planting figure for the last year, which is 27,000 acres—13,000 acres Commission and 14,000 acres private planting. But the noble Lord, Lord Hughes, need not worry that I am going to talk about Basingstoke in this debate.

LORD HUGHES

It is your "pigeon", anyway.

THE EARL OF DUNDEE

Perhaps I will do so on another occasion. I merely wish to discuss those figures in connection with the booklet on Land Use in the Highlands which was produced by the Highlands Panel. It has been referred to by a previous speaker and we debated it three years ago. The Highlands Panel recommended that the Commission should try to plant 20,000 acres a year in the five counties. This was looked on as a rather ambitious recommendation, because the previous figure at that time was only about 13,000 or 14,000 acres. They wanted to bring it up to 20,000. With regard to private planting (which was then about 4,000 acres) they said that they thought it would come down to 3,000 acres. Their recommendation was that we should have an annual target of 3,000 acres private and 20,000 acres public planting in the five counties. The public planting figure is now 17,500 acres; and if one adds to that the private figure, which is just under 7,000 acres, it comes to over 24,000 acres—and we are already 1,000 acres ahead of the combined target that they gave.

My Lords, I said at the time that I thought that their expectation that private planting would be reduced was unnecessarily gloomy. I am glad to see that there has been such a large increase; and it is time there was such an increase because for a long time there has been far too little private planting in this part of Scotland. The Forestry Commission planting figures make it look as if the Commission were going to reach the last target but one which the Government set—although it was only two years ago—of 36,000 acres a year in Scotland. They are only 2,000 short of that target now—and it was to be reached in 1969; so I hope that they will hit the 36,000 acre figure next year. The proportion was 20,000 acres in the five Highlands counties and 16,000 acres in the rest of Scotland.

Since then, my Lords, the Government have announced for Scotland a new target of 50,000 acres a year. This was announced last October by the Prime Minister. I do not want to press the noble Lord unduly for information about that. It is obvious, I think, that the 36,000 acre target has been fairly carefully worked out and that the Commission have an idea of how it is going to be distributed, but we do not know whether the new 50,000 acre target has been worked out. We shall all be glad to have information about it; but I am satisfied that it is well within the bounds of possibility, and I hope very much that this new target will be achieved. Assuming that the proportions between the Highlands and the Lowlands are about the same, that would presumably be rather under 30,000 for the Highlands and rather over 20,000 for the Lowlands. There is always an ambiguity here. I prefer to talk about the five counties, because about half of the rest of the planting is at Perth, Aberdeen, Nairn, Stirling and other parts which are in fact the Highlands. Politically, we always divide the five counties from the rest of Scotland. My Lords, I hope that this new programme will be achieved. I hope also that there will be a large increase of private planting, particularly in the Highlands, because we want that as well.

The noble Lord, Lord Taylor of Gryfe, said something about the increase in population which could be brought about by large-scale afforestation. There again it takes a very long time, but in the few areas where the Forestry Commission really got off the mark quickly in 1920 the increase in the population in purely rural parishes has been remarkable. Excluding the urban population, the country population has been multiplied by three, and the child population has been multiplied by five, which is even more encouraging from the point of view of keeping young people in the country.

It does not sound particularly spectacular or inviting to say that at this rate we shall have solved the problem of Highland depopulation by the year 2020. But suppose that the programme upon which we are now embarking had been begun immediately after the First World War when the Commission was established, and had maintained its momentum, by this time we should be half-way towards our goal and a great deal of good would have been done. And suppose that a hundred years ago our great-grandfathers, had begun doing what we are beginning to do, there would be no problem of Highland depopulation now at all. We should have people engaged not only in forestry but in all the ancillary industries which accompany fully matured woods. Although it may not be a spectacular or vote-catching thing to do, surely there is no reason why we should not do, or try to do, for our great grandchildren what our great grandparents ought to have done for us.

I hope, my Lords, that the Government will not let up on this matter. I hope they will give equal encouragement to public and to private forestry. Public forestry is certainly a good investment, and in the view of some people the money spent on grants to private forestry are, nationally, an even better investment. I am not going to draw comparisons between them, because neither the Commission nor private planters can do everything that is needed without the help of the other. We must have both, and I hope that the Government will continue to give encouragement to both.

4.34 p.m.

THE VISCOUNT OF ARBUTHNOTT

My Lords, I do not know whether it is a convention to congratulate another maiden speaker, but I should like to congratulate the noble Lord, Lord Taylor of Gryfe, for his composure under fire. It is perhaps one of the risks that we Lowland Scots run if we speak at all on Highlands matters. Although I hope that I shall not be a controversial maiden, perhaps I may be a provocative maiden.

Before I develop the main theme of my speech I should like to consider one aspect of this matter which, in my view, needs emphasis. It is the attitude of mind we bring to this problem. Just how prejudiced are we when we consider it? Much emotion is engendered when any land use matter is discussed, and so much more is peculiar to Highland land use. I do not think it is putting it too high to say that for 200 years these problems have represented the bad conscience of central Government; that for over half of that time any major change of land use, however desirable, has also been associated with unhappy social consequences; and that few people can claim an entirely unbiased view to-day. At the same time I do not advocate that the matter is one purely for clinical and unemotional land use surveys.

I believe that the Highlands mean a lot of things to many people, but to most they represent some sort of recreation of the mind or body. They are not thought of as a place of work. To many they mean shimmering August days, or crisp October mornings, or still evenings by loch or stream in June or July. To a growing number they mean a welcome respite during a winter weekend at a ski slope or in the negotiation of a climb or a hill walk. To perhaps a greater number still they constitute a source of continuing glorious views amid constantly changing scenes as seen from the inside of a car during the course of a week or a fortnight's touring holiday. My Lords, I think that if we look at this dispassionately, we should agree that this reflects the feelings that most people have for this part of Britain; and I feel that we should admit that it must be a distorted view gained over a short period when the viewer was in holiday mood. It cannot surely be a good or a sound basis on which to judge the land use problem.

We have to remind ourselves all the time that there are 365 days in a year, even in a Highland year; that life has to be lived by the local communities through all those days and that life needs to be as full, as active and as rewarding as possible. No one who has felt the white terror of a blizzard or experienced the daily drudge of feeding stock, or the anxiety of meeting a child from school in those conditions; no one who has had to endure weeks of winter storms on a Hebridean island and the constant nag of wondering whether the steamer will call; no one who has had to face the routine of travel in all the vagaries of Highland weather, to do a daily job or carry out a round of visits, will ever be bemused into thinking of the Highlands only as a holiday retreat. But how many people, my Lords, have the advantage of that undistorted view?

Over the last fourteen years I have had an opportunity of getting to know a great variety of Highland and Island communities in all seasons and conditions. They stretch from Shetland to the Outer Isles, from Argyllshire and Sutherland to the Cairngorms and Coigach. I must confess that I grew almost to dread the first visit in the early part of the year—that is to say, in February and March—when resistance was at its lowest and men and women and their families had begun to wonder whether wet and wind and cold would ever pass. That was the time when the daily task really counted, when the 365-day interest really mattered. Indeed, it was then that the need was greatest to sustain a work pattern.

This can be done only if each community has a pattern to its life and, in my considered view, if that life is geared to a worthwhile and viable occupation. There is absolutely no point in attempting to sustain an occupation that is unrewarding in a practical sense. If the great majority of visitors to the Highlands are, as I believe they are, holiday visitors, and if they wish to continue to find the scenes that attracted them in the first place, they must recognise that life in the Highlands depends almost exclusively on a web of inter-related land use practices, each gaining its impetus from the use of the natural resources of the Highlands. Thus the need to conserve those resources is paramount. I do not know a better definition of conservation than that of wise use, and if use implies controlled and sensible exploitation it also implies a use which is understood, a traditional use.

I do not see how the Highland communities can surivive unless first priority is given to the main uses of crofting, agriculture and forestry. We have heard of these this afternoon. I would, however, add a fourth use, which it may be unfashionable to extol but which to my mind plays a vital part—that is, the land-use practice of the traditional sporting estate. I have no interest whatever as owner or occupier of any such estate. I have always counted my part of Kincardineshire as lying South of the Highland line. So I feel that I can speak quite openly on this matter.

It is all too easy to overlook the fact that a great deal of capital investment, bringing in its wake employment and often the pursuit of other land-use practices, has come to the Highlands, and is engaged there, entirely as a result of the sporting interest. If one translated that interest into the more prosaic terms of deer stock conservation and fishery management, one then sees it as I think it should be seen, as a perfectly valid form of land use in an area that needs enterprise and investment in any form. And what better than one that is making a year-round contribution to the problem of unemployment and when the other subsidiary uses are also taken into consideration?

However, I do not want your Lordships to feel that I think exclusively of agriculture, forestry or sporting interests. I emphasise these as they are understood and, where viable, are still in my view the best major land-use practices to be fostered. But I believe very strongly, too, that we must guard against any tendency to be too conventional in our choice of land use; and there must be flexibility and an awareness of the need to change the emphasis; that it is positively harmful to continue to bolster un an economy that is mainly based on a practice that is on its way out in a district.

We know that in many West Coast Highland areas it is the exception to have a lambing percentage over 60 per cent., and that anything below that figure is unrealistic in terms of agricultural use. Then there must be a change in the traditional use. Larger holdings and amalgamation are only part of the answer, because the unit must still be the right size. A unit only big enough for a man and a half is obviously no use, and, equally, part-time employment in another occupation will work only where that other employment is available. It is a process that will involve positive thinking by the land user and an ability to take difficult decisions. I think that we tend to adopt too rigid a framework in planning land use within an estate or district. I have never been taken with the concept of zoning uses too intensively. That tendency stems from the fact that each major land user, whether a private owner or a public organisation, has inevitably a dominant reason for being where he is. Each then adopts a conventional stance in defence of that interest and tends to shut his mind to the consideration of other views. That is often almost inevitable.

It is clearly the duty of every land user to run a good business and to get the return he wants from his investment. At the same time, I believe that he should be flexible enough in his approach to see the value of change. He will need to accommodate other compatible uses, even at times against the strict economic advice which does not favour diversification in the short term unless the total return is to be enhanced. This underlies the difference between what is called a single-purpose use and a multi-purpose use of land. In the latter case, multiple-use follows from the fact that the dominant interest of any landowner, under agriculture, forestry or anything else, is capable of satisfaction. Then he can and should accommodate other uses in the interests of flexibility and to keep the countryside alive all the year round.

I can give many examples of this in practice. There is the privately owned sporting estate where forestry, farming and a social need, in the form of an adventure camp or similar enterprise, are by-products of the main interests. There is the similar estate where forestry is dominant and other interests are subsidiary, but encouraged and viable. There is the National Trust of Scotland at Inver-ewe, where the main interest is centred on the gardens but where a varied community life is sustained and encouraged, and where a real attempt is made to cater for the influx of visitors who go to that coast in increasing numbers every year, whether they are directed to or not. Again, there are examples of Nature Conservancy and Forestry Commission lands being used to assist local farming, forestry and tourism, apart from the main conventional use for nature conservation and research, on the one hand, and timber production, on the other. All these private and public estates are practising skilled and integrated land management and have refrained from exclusive or single-purpose land use. All depend, too, on mutual support and co-operation with neighbours; yet all have their chief interests for being where they are.

It is sad that sometimes a land user finds that social pressures or local prejudices inhibit his desire to change or to accommodate other uses. I know of an owner who had a major interest in fishery management and the creation of a hatchery business, yet felt that he had to continue to maintain a sheep stock, at a considerable annual loss, for fear of what would be said if he gave it up. We should recognise that it is correct and good management for such a man to employ three men successfully in a hatchery, rather than to have two or three unhappily employed on an unrewarding farm business. Perhaps fiscal and grant-aiding policies are too rigid and inhibiting in this field when the broad pattern of Highland use is being considered. The best form of land use, if it is managed as a business, whether it is deer management or a fish hatchery, could, I believe, be given better recognition.

Where have I got and where am I going, some of your Lordships may well ask. I should like to sum up my views as follows. The total natural resources of the Highlands can be conserved only by a broad-minded and flexible approach. It is better to adopt the attitude of mind that change will come, and is desirable, but that the viability of the main enterprise must be sustained and thereafter other compatible but subsidiary uses can follow. Co-operation and co-ordination of land management on a district basis as between land users is as important as the need for skilled integrated management of the various interests on a single estate. I believe that diversification is a practical aim and is essential to maintain the necessary flexibility. I believe, above all, that a varied and all-year-round pattern of land-use practices beyond and throughout the holiday season is an essential prerequisite for the maintenance of an interested, an occupied and a contented local community.

Your Lordships have been very patient with me. I have been chided in the past for being too didactic in my delivery, and if I have erred again I crave your indulgence. I cannot sit down without thanking the noble Lord, Lord Lovat, for initiating this debate and for giving me my chance to speak for the first time in your Lordships' House.

4.50 p.m.

LORD TAYSIDE

My Lords, it is with great pleasure that I find myself on the list of speakers following the noble Viscount, Lord Arbuthnott. His speech has been interesting and has given us an insight into the thoughts he has on the social and economic problems affecting the Highlands and not only the county in which he lives. I hope we shall hear him on many future occasions. I should also like to congratulate the other maiden speaker, my noble friend Lord Taylor of Gryfe. I was one of his sponsors. I was most interested to hear the details about forestry which he was able to give to the House.

My Lords, in this matter of Scotland and the Highlands I intend to look a little bit back into history, to look at the problem as I saw it to be a few years ago and at the solutions which have taken place and are taking place. One hundred years ago in some parts, and 130 years ago in other parts, the maximum population of the Highlands was in being. It varied, of course, because in various parts of the Highlands the drift took place at different times. For some one hundred years now the Highlands of Scotland have presented a problem to many thoughtful and sympathetic people who wished to help the country to attain an economic stability.

Their plans and attempts were opposed, sometimes by Highlanders themselves and sometimes by a relatively few wealthy incomers whose principal desires were to enjoy for themselves and their friends the sporting interests which they had purchased. I have said that these few wealthy incomers wished to retain advantages for themselves, but they were not, of course, meaning to be harsh and selfish. Indeed, within their own limits they were convinced they were doing good work for the country and for the native population in employing men and women in their service, and, when the requirements of their pastimes permitted, in promoting some beneficial and worthwhile local schemes for those for whose welfare they felt a genuine social responsibility: and, indeed, in many cases were prepared to spend money towards this end. They reflected the times in which they lived, and generally, for their times, they were good employers.

But the clan system and the local loyalties that it engendered made the Highlanders tend to accept without much questioning the authority of those in high position in their midst. This continued in the Highlands long after local loyalties had ceased to be the governing factor in other parts of Britain. Indeed, it still operates to-day in the Highlands to an appreciable extent, and basically this can be a very good factor for the future if we can now proceed to infuse into the Highlands that economic viability that the great majority of us wish to see.

My reason for saying this is that much of the feeling of loyalty is now less for the chief or the man in high position than for the local village or township. And this, if it can be properly exploited, is excellent. It must go without saying that the most important factor in the Highlands is the people living there. They must be afforded opportunities to use their skills and services in a variety of ways so that they have a choice in deciding their future livelihood. Agriculture exists now to a large extent. My order of priorities is, first, that manufacturing industries are required, and secondly, to exploit the natural resources.

What has been done so far in the tackling of these priorities? The first step which was really effective was the setting up of the North of Scotland Hydro-Electric Board, of which to-day I am a member. We have heard many previous speakers refer to Tom Johnston. The Hydro Board arose out of the passionate desire of the late Tom Johnston, who was then Secretary of State for Scotland, to lay the foundation for a better social and industrial future in the North of Scotland. How well it has succeeded in its aim of laying that foundation!

The Highlands Board's area includes more than the Highlands, for it has Scotland North of the Tay Estuary as well. This Eastern coast was already then reasonably well supplied with electrical power, so the following figures are really the more impressive when one is considering the Highlands and Islands alone. In 1947 the Hydro Board had fewer than 190,000 consumers. To-day the figure is in the region of 450,000. The output has increased from around 425 million units to nearly 3,000 million units. About 95 per cent, of all premises in the area are now supplied with electricity. This is a tremendous achievement in 20 years, and reflects great credit on the calibre and abilities of the men and women who have carried on the work of the Board at all levels, and on the contractors' staffs who have constructed so many large projects. Work on new projects is planned, and old schemes are considered for replacement in due course. But the whole area of the Highlands, except for pockets here and there (and we have heard about two or three of them to-day) is now serviced for power and light. Since the last war, then, a great psychological boost has been given to remote rural areas merely by connecting the people to a service that other parts of the country have long taken for granted.

Industry and the skills connected with industry are now required. The Highlands and Islands Development Board was set up in 1965. This was the result of a far-sighted plan for which to-day the major Parties seem to take some credit. It has now overcome the difficulties which to some extent, in the early months, it brought upon itself through the idealism of the members generally. One can say that they gazed at the stars and their feet stumbled on the ground. When the Board started in 1965 it had the good will and, indeed, the enthusiasm of members of all Parties and of the public: for the chairman, Professor Robert Grieve, although not an industrialist, was already renowned as a planner and as a man who could get things done; and one of the members, the late Mr. William Logan, to whom reference has been made already, was a Highland industrialist of the highest integrity and wisdom—the type of man who fully justifies the setting up of bodies whose members are appointed from outside and who are not there because of the ballot box.

It is to the Highland Board that Scotland's North and West must look for a furtherance of the general level of prosperity in the greatest number of their towns and villages. Hitherto the Board's industrial activities have shown up in the encouragement of small industrial ventures, for manufacturing enterprises are scarce in the Highlands, which has three-quarters of its working population engaged in service industries. It is from manufacturing industries that the greatest contribution is sought to prevent more and more the drift from the Highlands. That the drift was severe was shown by the 1961 Census. In 1961 the population was only 67 per cent. of the, maximum figures of 100 years and more before. Have Government measures in the last three or four years been effective? I hope that my noble friend Lord Hughes will be able to tell us what has happened because of the measures that this Government have taken.

While the smaller industries have been encouraged and promoted by the Highlands and Islands Development Board, and are beneficial, the Board hoped that a giant or two would settle in. Giants are alarming and disturbing elements, and so it is not surprising that there are some who do not wish to see smelters or chemical concerns attracted. But such people are few in number. All Scotland—not just the Highlands—is deeply interested in the future of that romantic area, and there are not many people who grudge the North the opportunities of really large-scale industrial installations. Nor need we unduly worry about the amount of agricultural land involved. There will be a loss certainly, but the estimated figure is only about 3 per cent.—much the same as that expected for many other parts of Scotland in the next twenty years, and only a fraction of the size of the city of Birmingham.

Perhaps the greatest problem in having an aluminium smelter in the Moray Firth area, as I am sure there will be, will be in balancing other areas by the provision of small industries lest they in their part become completely denuded in favour of the Moray Firth area. It is for this reason that I am particularly glad to see the recent and continuing interest in the setting up of small and medium-sized industries.

I put as my second priority the exploitation of natural resources. This, of course, includes forestry, where latterly the Forestry Commission in Scotland have employed first-class planning in their approach to the fundamental problem of best land use. They are also co-operating much more closely with farming interests, to the benefit of both. Timber gives shelter and cover, as well as providing its own crop from the land. In some parts of Scotland where extensive afforestation has taken place, co-ordinated with agriculture, there has been an increase of cattle by up to 100 per cent., and of sheep by up to 25 per cent. These are perhaps extreme cases, but nevertheless they show that a change of land use from agriculture to forestry does not necessarily mean a loss to agriculture.

Tourism offers increasing scope for longer periods of the year than hitherto for the employment of people. Little things like hedges instead of fences are an attraction, as are lines of birches and other trees. Small matters must be considered. The discovery that Scotland can offer winter sports at more attractive costs than is often the case on the Continent is quite recent. The glens, the hills and mountains, the rivers and lochs and the harbours all offer sport on foot, with rod and with camera. But people have to get there easily and need somewhere to stay. To attract tourists in appreciable numbers modern hotels are required, but above all good roads—and good roads, of course, include not only improving existing roads, but the provision of new roads, and bridges, where none now exist. Much development work, much wonderful work, is being planned by the Highlands and Islands Development Board, and a start has now been made. But the main financial difficulty about tourism, as I see it, is to ensure that people continue to come to the Highlands for the greater part of the year, and that is one reason why good roads are so important.

I would sum up by saying that the North of Scotland Hydro-Electric Board has laid on the source of energy, but it is the Highlands and Islands Development Board which has the priority task to see that the power is utilised to the full. The Highland Board has funds of which it can dispose of its own volition, and has access to further funds for really large projects. It has powers for compulsory acquisition of land. I see in the Highlands and Islands Development Board the real hope for the revitalisation of the area under its jurisdiction.

I must confess that I was sad to hear the noble Lord, Lord Lovat, say that he saw such a poor prospect for the future. He lives in the Highlands, and therefore he should appreciate perhaps better than I do, living on the fringe, what the position is. But I do not think that is the case here. Scotland as a whole is looking for the action and the daring that are needed to provide work in the Highlands, and to offer men and women the means of remaining there if they so wish. I believe that the Highland Board, set up by the Labour Government in 1965, and which has not had very long to work, will be successful in this task.

5.5 p.m.

VISCOUNT STONEHAVEN

My Lords, I want first to thank the noble Lord, Lord Lovat, for putting down this Motion and enabling us to take part in this debate this afternoon. I live athwart the Highland fault, so I do not know whether I am a Highlander or not. I have one leg in the Highlands, and the other is not. However, I hope that that allows me to take part in this debate. The noble Lord, Lord Balerno, has very kindly offered to relieve me of the task of talking about S.E.T. and our hotels, which is a matter of grave concern and grave discontent, so I am not going to say anything about that subject. And, of course, he will say it very much better than I should.

I would first say that big industrial complexes have the danger that they do exactly the reverse to the people living in the country districts of what is wanted. They attract people out of the country and, if you are not very careful, you find that it is like bees going to a honeypot. These industrial complexes can do more harm than good, although no one denies that they produce prosperity where they are. But if one really wants to develop the country, and keep people in the country, this is a very great danger which I think must be kept well to the fore.

I want to talk about the natural resources in the part of Scotland where I live, which is just a fringe of the Highlands, because I think that some of the problems we face, and possible solutions, apply to other parts of the Highlands. I want to talk about the economic utilisation of forest products. We have heard a great deal—we always do and it is very illuminating to listen to debates in your Lordships' House—on the planting and growing of trees. But what are we going to do with them? This point is never gone into in detail, and it is a very difficult problem indeed. By 1970, in two years' time, the Forestry Commission alone—and they are doing excellent work and I am a thorough supporter of them—will be producing annually about one million hoppus feet of thinnings within a radius of about 30 miles of Stonehaven, the town in which I live. This is creating a problem (the forests are 100 miles from any market) and therefore I want to consider one or two basic facts.

One starts forestry, very roughly, by planting about 1,300 trees to the acre. One tends and weeds those trees for the first five to ten years, and during the 70-year life of the rotation those trees have to be thinned roughly in the twentieth, thirtieth, fourtieth, fiftieth and sixtieth years. In all, one has to thin out about 1,080 trees to arrive at a final crop of only 230 trees, out of the original 1,300. These are typical figures culled from the Forestry Commission yield tables. Of these trees, the equivalent of some 820 trees are too small to mill. For example, of the 7-inch breast-high, quarter-growth trees, only about half are big enough to saw. It is quite obvious to me, and I hope to everybody, that foresters cannot afford to waste nearly a third of the forest products. This problem is not a temporary one: it is always present. In the growing of trees one always has to go through these operations. I am not trying to tie my example down to exact figures.

Another factor in the utilisation of timber is this. A hoppus foot of green timber contains about 36 lb. of water which is of no use to anybody and has to be driven off. As transport plays an enormous part in the timber-using industry it must be considered. As for transport costs, the loading and unloading costs are the same, no matter how far the journey. But there is a ton-mile factor, the weight times distance, which must be considered. If you look at the matter this way you will find that because the weight of the manufactured product is about two-thirds lighter than the green wood, you can transport green wood from the wood to the central processing plant, about 30 miles, or transport the manufactured product nearly 100 miles, for about the same cost. This is the kind of figure that never seems to be talked about, but it is a figure which has vast significance. The logical steps would be to locate the timber-processing industry in the centre of a 30-mile ring and 100 miles (or as near as one can get to it) from the major market. These figures can all be reasonably met in one place: Stonehaven, where I live and in a moment I will say why I am interested.

If productivity means anything, it means cutting out waste, and there are two major kinds of waste which are very prevalent indeed. They are, first, using material uneconomically and therefore not realising its full potential, and, secondly, not using large portions of the available material. The sort of thing that happens is using timber that could be used for sawn logs and cutting it up for pulp and chipboard, and burning "slabs" because the market is wrong and the price is poor. This commonly happens to-day.

There are two predominantly waste product users in the timber world. One is the ground wood pulp mill, whose operations require quite a lot of water but can be done on a very small scale. I do not know enough about that to say whether it is a possibility in the Highlands. The other is the chipboard industry, which requires very little water but, of course, a supply of timber. Some chipboard mills are working economically to-day on quite small intakes of the order of 700,000 hoppus feet a year and producing something like 8,100 tons of chipboard a year. This, again, fits into the particular area about which I am speaking. The annuals output of the Forestry Commission's thinnings by 1970 would fully supply the quantities necessary in that particular district.

Considering the Government grants and loans which are available, I suggest that these facts, which I have presented roughly to your Lordships, justify the setting up of a working party to go fully into the proposition of starting up a fully integrated enterprise, tailored to fit the conditions which exist. I suggest that each unit of that enterprise could be run by a sub-contractor, and all the sub-contractors could share one office organisation, one servicing organisation, such as a laboratory, saw doctor, fitter's shop, and that type of thing. There could be tacked on to the main unit the reception area and peeling centre, and then a saw mill of a fairly simple type which would deal with smallish logs, probably a recirculating saw—and these practices are well known—and then it would be necessary to have seasoning sheds.

Although one talks about kilning, this is unnecessary in the first instance. As long as timber is put under an elementary type of roof and it can be left there for five months, properly stacked, it will dry down of its own accord to a figure of something like 20 per cent. moisture content, which is nearly as low as one has to go. It may be necessary to kiln some of it for the last five degrees or so. This is not a great difficulty, but what would be required would be a long-term contract with the Forestry Commission and co-operation with successful chipboard manufacturers who know what they are talking about and who have done this job—and there are quite a number of such manufacturers in the country. One would also require co-operation with, say, a local saw miller and with existing Forestry Commission contractors and timber merchants.

If one regards it as a sun with planets arrangement, the sun would be the central peeling depot, the saw mill and the chipboard mill, with all the waste from the saw mill going into the chipboard mill, and drying roofs for about 350,000 cubic feet of timber, which is not enormous. The integrated satellite units one might have, for example, would be a truss fabricating shop equipped with something like a Robinson's saw, a hydronail system and a monopress, all of which have been tested out at the building research station and also by the timber research people. One could have a pallet and packing shop using all this kind of timber; one could have an agricultural requisites shop making posts, gates, troughs, and that kind of thing. One could have a wood wool unit making wood wool for packing, and wood wool and cement blocks, which are simply made; and I think there should be a wood preservative plant. Possible later additions would be a sawdust treatment plant for plastics, and perhaps a plant for extracting tannin from the bark.

The advantages would be that one would have maximum transport efficiency and minimum costs; shared overheads and office and administration services with, therefore, minimum costs in that connection; minimum raw material internal prices, and maximum utilization of waste products. In this case the maximum output could be totally absorbed by the available market within the 100 mile radius. I will say a word about that in a moment. In addition, there would be utilisation of natural resources, and it would produce jobs in the country for local Scotsmen, suitable to their traditional skills, which is a big point in its favour.

It is a mistake to allow oneself to become mesmerised by enormous-scale operations, which always bring problems of their own. For example, the difference in cost per square foot of ¾-inch thick chipboard by doubling the size of the mill reduces the price by only 0.6d. That figure is mentioned on page 25 of the Forestry Commission's Board Mill Survey, so I think it is a respectable figure. It may not be completely accurate, but it is a reasonable estimate.

I should like to invite Her Majesty's Government to participate in setting up a pilot scheme at Stonehaven, financed as to one third by the Forestry Commission, one third by local investment by industrialists, and one third by direct Government grant. You could call it a nationalised industry—I do not mind; I think this is fine. I think we should get together. There are enormous problems that nobody has yet tackled. You may find them easier to tackle than you think, or a lot harder. You cannot know until you try. But unless the problems are tackled on this kind of basis we are all talking of enormous global figures, and nobody does anything; we never come anywhere near the earth at all. I feel that it is time something was done in this particular place, which is ripe. In two years' time, there will be one million hoppus feet, which will be enough. It takes a long time and a lot of work to get these things going.

I would point out that in the building trade alone, of which the noble Lord knows a great deal, we in the area that I am discussing are building over 6,000 houses a year within about a 100-mile radius. Six thousand typical small houses, and each having a ground area of 24 ft. by 20 ft. could use 2,880,000 square feet of chipboard in the floors, 3,000,000 square feet of chipboard in the roofs and half a million square feet of chipboard in the doors. That is a total of nearly 6½ million square feet. That is the full output of a mill for 217 days a year. The market is there, if one goes after it, within this distance. Transport is the tying factor. The same houses could use 72,000 trusses, and that would keep a double unit truss mill fully occupied for the entire year. And the noble Lord, of course, knows that the use of truss rafters at 24 ft. centres saves something like 60 per cent. of the man-hours in site erection—which, with the kind of weather we have, is an important point—compared with traditional methods. These figures again are from the research people.

It might be necessary to give homegrown chipboard some slight protection against dumped foreign manufactured products. After all, one has to protect a young tree from competition from weeds for a few years after it is first planted. This would be a new industry, and it might need protection in its early days. This does not go against the Treaty of Rome, for example, supposing we are European-minded, as I think we are. I should like to draw the noble Lord's attention to Article 92 in the Treaty: The following may be deemed to be compatible with the Common Market: (a) aid intended to promote the economic development of regions where the standard of living is abnormally low or where there is serious under-employment …. (c) aid intended to facilitate the development of certain activities or of certain economic regions provided that such aid does not adversely affect trading conditions to such an extent as would be contrary to the common interest. So there would be no objection on that score; there might be many others on other scores, I have no doubt.

Knowing how long it takes to get these kind of things going, I am going to make a suggestion which, if it does nothing else, might make quite a good cartoon. I am inviting the noble Lord to come alongside me and the noble Lord, Lord Bannerman, who made an excellent speech saying what was wrong, but not one single word of what he proposed to do or how anything could be done. I think that the three of us should take our coats off and do something, instead of talking. Let us have a "dummy" run.

5.25 p.m.

LORD BALERNO

My Lords, I should like to express my gratitude to the noble Lord, Lord Lovat, for initiating this debate and, as a Territorial officer who served in the war, support what he said about the importance of the Territorial Army as a social welfare agency in the Highlands of Scotland. Next, I should like to congratulate the noble Lord, Lord Taylor of Gryfe, on his maiden speech. It was meticulous, comprehensive, and just what his reputation in Scotland would have led us to expect from him, and then something more. I should also like especially to congratulate the noble Viscount, Lord Arbuthnott, on his maiden speech. He is the third of his family I have known to hold the title, and he seems to have fully inherited, as well as the title, the sincerity and praticality of his forbears; and his moving and sincere speech was all the more effective for his quiet delivery and an absence of all theatrical hyperbole.

There are two points that I wish to make to-day, and the first is the non-removal of the selective employment tax on the hotels in the North-East of Scotland. It seems to me that there has been a very invidious selection of the areas from which this tax on the hotels has been removed. I would ask the Government whether they cannot take another look at the decisions they have made in an attempt to get a more rational solution of the situation. It is difficult to understand why Banffshire and Morayshire should be included, yet, going round the corner to exactly the same type of country, a mixture of hill and lower land going down to the sea, in Aberdeenshire, you find that it does not get the benefit of the remission of tax, except for one extraordinary little area of Royal Deeside. The hotels there are exempt from S.E.T., but the poor, impoverished, hard-up land of Donside is a tongue sticking out into the plutocratic Banffshire and the plutocratic Deeside, and its hotel-keepers will get no remission from this ghastly tax. If you go slightly to the South, to the area from which the noble Lord who has just spoken comes, the area of Angus and Mearns, you might think this was outwith the scope of the Highland area, but my justification for talking about the hotels in this area is that in this area is situated what the Romans called Mons Grampius, from which the whole title of the Grampian mountains is taken; and that, therefore, justifies me, I feel, in extending the Highland area down into Mearns, and even into Angus.

Let me give your Lordships an example of the effect of the selective employment tax in the burgh of Stonehaven. It has closed a four-star hotel of outstanding excellence. That has been turned into an old folks' home—of outstanding excellence, too, we hope. Two other hotels have already been closed. One stands empty at the present moment, and the other has been turned into fiats. Four more hotels are advertised for sale and may be closed at any time. The noble Lord, Lord Taylor of Gryfe, told us about five new hotels being set up in the West. It looks as though seven hotels have closed in the one burgh of of Stonehaven to balance that number—not a very good balance.

Other burghs and towns in Angus and the Mearns that have been hardly hit by the selective employment tax are Arbroath, Brechin and Montrose. Montrose is primarily a holiday resort, with wonderful sands. Yet Stirling gets remission from the tax. The City of Perth gets remission from the tax. Last summer, Montrose lost 70 manufacturing jobs, so that the hotel employees who are thrown out of jobs through hotel closure owing to S.E.T. cannot get manufacturing jobs in the area. Therefore, the purpose of S.E.T. seems to me negative.

It may be argued that the figure for unemployment in the North-East of Scotland is low compared with that in other parts of Scotland, and that therefore people thrown out of work through S.E.T. will get other jobs. I hope that this argument will be examined a little more closely. I must confess my interest, that 1 am a Gordon Highlander and have served in the North-East and am particularly thirled to that type of person. My experience of the man from the North-East of Scotland is that when he is unemployed he does not stay put, but goes out of the North-East and looks for a job. The unemployment figures in the North-East tend to be low, but I submit that it cannot be used as an argument for the non-remission of the S.E.T. from hotels.

May I now move to another fringe area of the Highlands, down in the South-West. If your Lordships study the area covered by the Highlands and Islands Development Board (it is coloured green on their official map), you will see, lonely and neglected, two substantial islands, the islands of Arran and Bute which have not been included in the area of the Highlands and Islands Development Board. I wish to put before your Lordships, as an example, the case of the first island I mentioned—Arran. That island has a present population of some 3,500, which is about half what it used to be last century. If the present trend of depopulation in that island continues as it is going just now by 1980 there will be only some 2,000 people permanently resident in the island.

The Arran District Council have taken the initiative and have run a project which they call "Project Beacon", to find out whether people want to come and settle in Arran if they are given opportunities of finding work and housing. They have discovered 400 persons anxious to move into the island, provided that work and accommodation can be found for them. One-third of those people are under 35 years of age, and 80 per cent. of them are under 55 years of age. So it is not as a retirement place that people want to go to the island of Arran. The island has been getting some help from the Scottish Country Industries Development Trust. I understand that the Development Commissioners are visiting it later this month. But I would ask the Government to take another look at this problem and to see whether they can improve it in the Highlands and Islands Development Board area.

The finance that can be obtained is important, but even more important, I think, is the know-how that the Board can contribute to the earnest, sincere people who are doing their best to develop the island and retain the population there. We must get that island viable and able to support its own senior secondary school, which has had to be closed. No community can be a real community unless it can feed into a secondary school, without need to send its children away. In some of the smaller islands of course, this is not possible; but it is within reach of the island of Arran to achieve this, and I honestly cannot see how the Government can refuse consideration of this problem.

The Act says that the area of the Highlands and Islands Board may include—and these are the words which we debated carefully in this House: such areas in Scotland as having regard to their character and proximity to the said (seven) counties the Secretary of State may by Order make under statutory instrument designate. What I ask is that the Secretary of State should so designate these areas. The peninsula of Kintyre comes down more or less the whole of one side of Arran and continues considerably to the South. The whole of Kintyre is in the Board's area. I earnestly ask the Government to give full consideration to these two problems of geography which I have mentioned, the North-East of Scotland and Arran and Bute. For I think that at the present moment, in both cases, they are drawing a line in the wrong place.

5.37 p.m.

LORD DONALDSON OF KINGS-BRIDGE

My Lords, it is clearly an act of a most unwise and foolhardy kind for an English farmer to intervene in a debate of this nature where so many noble Lords have such close links with, and such intimate knowledge of, the Highlands. In fact, I think I can say without contradiction that noble Lords opposite own most of those places. But nevertheless, I think it is important that the question should be looked at in a broad context. It is, after all, just one instance, though a most important one, of the problem of marginal land, which is a world-wide problem which has always fascinated me. This is why I have felt unable to keep silent in regard to an area with which I am not well acquainted.

I propose, therefore, to consider for a moment or two the problem of marginal land as a whole; to ask why, and even whether, agricultural production from marginal land should receive assistance. Before doing so, I should like to say how much I enjoyed the maiden speech of my noble friend Lord Taylor of Gryfe. I should also like to thank the noble Viscount, Lord Arbuthnott, for his excellent maiden speech, and to tell him that I shall try not to be too clinical, though I hope to be more clinical than some other people who have spoken with great emotion and, to me, in a most moving way. But I think there is a period to stand back and look at the question.

I want to suggest that there is no economic case for assisting agricultural production except on the test of cost-effectiveness. On this test the case for assisting marginal land fails as against the case for further investment in Lowland farming where investment will yield higher returns. I was encouraged by the suggestion of the noble Lord, Lord Lovat, about reclaiming land from the sea, where, of course, this argument would not apply. We want to find some things which can stand up to an economic test.

There are, of course, a number of other reasons for subsidising either people or areas—strategic and social reasons, and reasons of amenity. If one accepts these kinds of reason, as I do, then one must separate them from economic reasons. Most of our difficulty in finding proper ways of aiding the hills has been because we have tried to pretend that they could compete with the Lowlands economically, which they cannot. The best way to bring back vigour to the hills and to preserve their heritage is to aim directly at these objectives and not to regard them as byproducts of agricultural or forestry policy. We can probably agree on the first proposition that the test for agricultural assistance should be that of cost-effective-ness. I hope that noble Lords accept the second proposition, that from an.agricultural economic point of view assistance to the Highlands fails the test. If your Lordships do not agree, this failure is easy to demonstrate, and I will give a few facts about it which are relevant to the whole subject. I speak here not of the Highlands, but of the hills in general.

In the first place, the gross output per acre is one-tenth of the gross output per acre from the Lowlands; and if one takes croppable land only, it is just over 50 per cent. The contribution of the hills to the national output is about 4 per cent. of the whole. Of this a small part only comes from milk production; that is to say, about 3 per cent. of the nation's output; and cattle contribute from 5 to 7 per cent. of the total slaughterings. Sheep sold off the hills account for something in the region of 40 per cent. of total slaughterings, and this is very much more significant. I will not conceal from your Lordships the fact that I have been unable to obtain absolutely up-to-date figures. The figures which I have were collected by Davidson and Wibberley for their pamphlet The Agricultural Significance of the Hills, which is still the standard work on the subject. I believe that these figures are as true to-day as when they were written some nine years ago, though I shall probably be shot down on that statement.

These gentlemen estimate that if we decided to scrap assistance to the hills, the result of removing all sheep from the uplands would be to reduce the mutton and lamb supply in this country by 60 per cent. Although nothing as extravagant as this would happen overnight—and although Lowland farms at the moment are largely under-producing, no doubt in due course it could be made up —it would be a serious item, and if we lost a section of our market to importers it might be difficult to get it back. Therefore, the hills have a real contribution to make, but from the point of view of pure agricultural economics only in regard to sheep. We can easily replace from the Lowlands the contribution of cattle and milk.

The position is quite different when one comes to forestry. As was pointed out by the noble Lord, Lord Lovat, we import over 90 per cent. of our timber at a cost of over £500 million. I think my figures are the same as the noble Lord's. Not merely is there a great opportunity for import saving in this matter, but the best people tell us that there is a world shortage of timber in sight. Therefore, it is only prudent that we should work up our forestry. But as early as 1958 it was quite clear that the Forestry Commission was failing to plant more than about half its planned programme. The reason for that failure was that it could not get the land. There was no possibility of any reasonable acreage of land being acquired in the Lowlands, so it was hoped then to acquire something like 4 million acres in the high lands of Britain—I do not mean in the Highlands, but in the hills of Britain. This failed for two reasons: first, because the Forestry Commission's terms of reference, as the Zuckerman Committee put it, were to grow trees for the single purpose of pro- ducing a reserve of standing timber. Hence its plantations had to be justified without reference to the benefits which trees might confer on adjacent agricultural land, or more generally on the local community.

It is not too much to say that the planting of large-scale blocks of conifers on land between the farms and the hilltops has been not merely of no help, but has been a considerable hindrance to the interests of farmers, and indeed landlords, and in this way has earned their hostility. In consequence, they have not been keen to sell land to the Forestry Commission. More than one Minister of Agriculture has noticed this. Speaking of the Mid-Wales Report in 1956 in the other place, the then Tory Minister said: Wherever possible planting by the Commission will be so planned as to provide the maximum benefit to agriculture. Ten years later the Labour Minister of Agriculture said: All those who have studied this problem have emphasised the need for integrating over a reasonably wide area the use of land for forestry and agriculture on the hills so that they are complementary and not antagonistic to one another. My impression from reading the Forestry Commission Reports—unfortunately not the last one, because we have not yet got it—and from speaking to friends in both Scotland and Wales is that the Commission has not changed its policy in a very material way as a result of the Ministers' statements of intention. My impression is not based on a thorough examination, and I hope that I am wrong. If my noble friend Lord Hughes can tell me so, I shall be only too pleased.

In any case, whether or not the Forestry Commission has made an energetic beginning in this policy of integration, it can be said that if the Commission is to gain the co-operation of the farmers and to induce them to sell it their land, it must be persuaded sometimes to plant uneconomically, to plant shelter belts with long fence lines, to plant small strategic blocks and to give farmers access to the sheep runs on the hilltops. It might help the Commission if it were authorised to debit to a special integration account the difference between uneconomic planting and its normal economic planting. Its members are only human and are trying to do the job as well as they can. Unless they can show that they are spending this money for a purpose which we want, they are going to look as though they are inefficient. A second, and possibly more important reason why they have not been able to get land—and this is paradoxical but true—is because the general level of agricultural prosperity, low though it is in these places, has been kept artificially high enough so as to make farmers unwilling to sell. They still think that somehow they are going to manage. This has been achieved by special subsidies. So one has the age-old picture of one Government Department spending money in order to refute the objects of the other. This is not new to any of us, but one must point it out when one sees it.

I should make it plain that, although I believe the interests of the Forestry Commission should be given full consideration, the best evidence suggests that on a long-term basis the return from investment in forestry is higher than the return from investment in hill farming. I do not suggest that the hills and uplands should be largely turned over to forestry. I do not believe that any generation has the right to immobilise land of moderate agricultural value. The value of land in the Lowlands for purposes other than agriculture is so great and is rising so fast that we may reach the day when it is commercially competitive to produce from land which costs so much less to buy and has on it so much less competing claims.

The function of the farmers, as I see it, is to preserve the hills for the nation. Landowners, tenants, and owner-occupiers, should be encouraged to remain as caretakers. At the same time, they should be helped to farm the land at the least cost to the nation and to release the less good agricultural use for the use of the Forestry Commission. It has been shown again and again that the profitability of farms on the hills, as everywhere else, is directly related to size; and in the case of sheep, which is the important item here, it is directly related to the size of flock. There are in Scotland some 60,000 holdings of 11 acres and over, while about 3,000 farms carry 75 per cent. of the hill sheep and occupy half the total area of rough grazing. It is generally agreed that nobody can make a living with a flock smaller than 600 or 700 ewes, but in Scotland one frequently has flocks of 1,000 to 2,000 and is much better off than those in Wales. Those are the farms which, with help, can be made to compete in a modest way with tie Lowland farms, and on which farmers should be encouraged to remain and preserve the countryside as it is to-day.

When I say "help" I mean with items which have been mentioned during the afternoon, such as roads, fences, drainage, fertilisers, reseeding, transport and lime but not henage payment, which is a very inefficient way of assisting and pays as much for a scrub cow as a good one. In general, what we do not want to do is to keep small farms going on the edge of failure, squandering our resources for making the larger units viable. What we do not need is any more additions to a series of ad hoc subsidies which have kept the problems of the hills in being without ever having solved them. May I remind your Lordships that in 1944 the Scottish Hill Sheep Farming Report recommended that wartime subsidies should continue, but said: Let nobody think that this is a permanent affair. This has got to be worked out very quickly indeed. The Report visualised three or four years later, but it is now twenty-four years and those subsidies will never go.

What we want is an overall plan for the full integration of the interests of agriculture and forestry, bearing in mind the generally accepted need to preserve the solitude and beauty of those areas of the hills and uplands for the benefit of the nation as a whole. That is easily said and I think we all agree with it. But in my opinion there is only one way to do it, and that is by the proper integration of forestry with agriculture. I believe we do not have it, but we could get it. I believe that the way to get it is through a rural development board, as suggested by my right honourable friend Mr. Peart in the 1965 White Paper. This is not quite the same as the scheme of the Highlands and Islands Board of which I confess I do not know the real details. But if rural development boards are looking at an area, with power, with money and, above all, with the, right people working really hard on them, I believe it will be possible to do what the noble Earl, Lord Dundee, suggested, quite rightly, we could have done years ago, which is to put this matter right for our children.

I want to thank the noble Lord, Lord Lovat, for his exposition of this problem, and I hope that my general remarks have not strayed too far from the Highlands. I feel that a debate of this kind may help us to work towards a solution of this most difficult problem.

5.53 p.m.

LORD BURTON

My Lords, in spite of what the noble Lord, Lord Bannerman of Kildonan, has said, I should feel very much happier carrying a creel of peat to-day in the Highlands than I am standing before your Lordships. Feeling as I do, I should like to congratulate the noble Lord, Lord Taylor of Gryfe, and my noble friend Lord Arbuthnott on the excellent delivery of their maiden speeches.

It has been interesting to look back since we had a similar debate about a year ago, and see what progress has been made in the Highlands. I fear that we have found what some of us tried to explain would happen. The Highlands and Islands Development Board is a largely unnecessary piece of bureaucracy. Had even a proportion of the money spent upon and by them been given to the existing agencies, such as the Forestry Commission, the Department of Agriculture, the Development Department (particularly for expenditure on roads), local authorities, the Tourist Board and such like bodies, how very much better off we should have been to-day! The noble Lord, Lord Lovat, touched on this point. We are seeing a massive waste in duplicated effort and, consequently, of taxpayers' money.

Let us take the much vaunted exercise "Counter drift", a register compiled by the Development Board of some 6,000 people who apparently wish to return to the North to a job in the Highlands. I myself have sought to employ people from this register, and I could not find a suitable applicant for any of the jobs which I had to offer. Surely this employment agency should have, and could have, been the work of the Ministry dealing with employment—I think it is now called the Ministry of Productivity and Employment, but it changes names very fre- quently. I am not clear why two Government bodies should be doing what one body could quite comfortably have done.

Take again the promotion of tourism. The Tourist Board have always said that they could do the task provided they were given the necessary funds, but what has happened? The Highlands and Islands Development Board has set up a branch duplicating the work of the Tourist Board. There is also duplication of the work of county development officers. Expensive consultants have been engaged in doing work which should be done by the Forestry Commission and the Department of Agriculture. There is a large loans and grants department doing work which was partly done previously by banks, and was very successfully done by the Highland Fund. I cannot see why this loans department should not have been an extended Highland Fund. I think that would have done the work very much more cheaply and efficiently.

We have had from the Government Benches an interesting list of investment and employment, but we have singular difficulty in securing from any Government spokesman a list of those who have received funds. We cannot get a list of the expected return from this so-called investment. Furthermore, we never received a list of the jobs which have ceased to exist since the Board was constituted. Perhaps I can help in producing that list.

The chipboard factory in Inverness has closed down not only causing a considerable loss of employment in the factory but removing an excellent and desperately needed outlet for small timber, thereby also affecting the forestry industry. My noble friend Lord Stonehaven mentioned the possibility of setting up chipboard factories, but, alas!, the one we had in Inverness has gone, under this Government. The aluminium factory at Foyers has closed down, leaving the little village of Foyers with a desperate shortage of permanent work, though I have no doubt that the noble Lord opposite will tell me that temporary work is in the offing from the new hydro-electric scheme. We are very grateful for that, but the village is going to be left without permanent work.

Some of the various ploys of the previous member of the Board, Frank Thompson, are no more. Those short-lived enterprises, such as the engineering works in Dingwall have gone bankrupt, leaving a trail of lost investments and lost jobs. The distillery at Invergordon —another Thompson ploy—has had to reduce the number of men it was employing, thereby creating employment problems in the area. The drawing office of Insulated Callender's Cables—an excellent type of employment for Inverness —has been moved South, to the dismay of most of its 25 employees. The threat to the atomic operations at Dounreay is now, I hope, not going to materialise, but there is a threat. My noble friend Lord Lovat has said that the mighty pulp mill —another Tory accomplishment—is itself threatened by the Transport Bill, and a number of small contractors who haul timber to the mill will find conditions unworkable if the Transport Bill is not amended. The dismal story above is not, of course, in the main attributable to the Development Board, but it is mostly attributable to the Government.

The noble Lord, Lord Tayside, said that manufacturing industries are scarce in the Highlands and, as I have shown by my list, they are very much scarcer now than they were two years ago. The project at Aviemore was mentioned. Fortunately, that is not yet closed. But, surely, that is another Tory achievement. The Tories started the scheme going, and I cannot understand the sniping which there has been at their achievement in the Highlands. It may be worth recording a small example of how I myself have been thwarted by Government action in an attempt to get a small enterprise under way. Between Invergarry and/or Invermoriston and the Kyle of Lochalsh, a distance of some 50 to 60 miles, there was no garage for repairing vehicles. I therefore felt that the conversion of some of my old buildings for this purpose would make a good and useful enterprise and would be a little development which would employ a few people. The Board of Trade promised a grant, and work was almost completed. Then along came selective employment tax. The whole enterprise is now completely uneconomic and I have not been able to start it. I have consulted the Development Board, and I think they are in full agreement with me. In just a small way this shows how the Government are strangling the Highlands.

Let me give one or two instances of further Government folly. There appears to be a desire to encourage tourism in the Highlands, so the worst burdens of selective employment tax are removed from hotels in certain areas. As my noble friend Lord Balerno has said, it is not in all areas but only in certain areas. But there is a crying demand for more camping and caravan sites, and selective employment tax is still retained for employees working on those sites. I cannot see why it should be removed from hotels and yet kept for caravans and camping sites. It seems to me quite contradictory. Then, again, there is the Land Commission Bill. At the present time no landowner in his right mind is going to offer any of his land willingly for sale or feu when he knows he is going to be taxed on this transaction to nearly 40 per cent. I have been faced with this dilemma on a number of occasions already. The Highlands and Islands Development Board have sought ground from me for small factories, and they know the problems well. One does not want to hold up development; nor does one want to pay an unnecessary capital levy on the transaction.

My Lords, it is sad to have to paint such a dismal picture, but one must face realities. The last two years have been very bad ones in the history of the Highlands. The noble Lord, Lord Lovat, mentioned probable Highland clearances. He was not exaggerating. Though the clearances may be more humane than those of the Whig farmers a hundred years ago—and I should remind the noble Lord, Lord Bannerman, that I think the Whigs were Liberals—

LORD BANNERMAN

A hundred years ago?

LORD BURTON

—these clearances will be none the less effective now than they were in time gone by.

My Lords, I have been highly critical, but perhaps I can now come to some constructive suggestions and advice. I noticed that after twenty minutes there was nothing particularly constructive that I could find coming from the Liberal Benches. The easiest solution is probably for the Government to resign, but as there are no signs of that perhaps we can prevail upon them to take some of the right steps. There was a discussion yesterday in your Lordships' House which amply demonstrated the unremunerative cost of subsidies and grants. Annual subsidies and grants in an attempt to make uneconomic enterprises viable are not sound propositions. What we require is public investment in such works as roads, so that the enterprises become viable and we have the right atmosphere which will encourage further investment and development from private sources. That atmosphere, I may say, has been seriously jeopardised by misrepresentation from certain sources, and the real facts have not been brought out—and some of the remarks we have heard to-day have been witness of this.

We need less unremunerative paper work, officialdom and administration, and more practical work on the ground. We need development of what I think is now called the infrastructure. I recall a discussion with a fairly influential official who advocated, first, getting industry into the Highlands, arguing that the infrastructure would follow. I fear that this seems to be official policy; and I may say that not only is it the official policy of this Government but that it was that of all recent Administrations. I am sure it is wrong. It is putting the cart before the horse. The noble Lord, Lord Hughes, will know that when a sound contractor sets out to build a housing scheme he does not put up the houses and then find that he has got no water supply. He does not lay the roads and then dig them up to put in the gas pipes. We must get our priorities right. I am sure we must put in the infrastructure before the factories, and not the factories before the infrastructure.

It cannot be repeated too often that the trunk roads of the Highlands are the first priority, and that the Perth/ Inverness road, the A.9, is top of the list. But what are the Government doing? They have reduced the Inverness trunk road expenditure for this coming year, and this at a time of rising cost, so that there will be a reduction in maintenance, let alone improvements. This is a very important road, and to my mind it is the key to all Highland development. We have lessons to learn from Fort William. We built the pulp mill and then scrambled furiously to provide houses, schools and the like. What is the result? The situation is far from satisfactory. New houses are damp and leaking. The firm which built them is now out of action, and nothing can be recovered from them. The schools will, I believe, be a problem. And, surprisingly enough, there is a crisis because for the last two years it has not been possible even to find the site for a rubbish dump. Furthermore, most of this conglomeration has been set up on the small amount of arable land which used to exist in the area.

Can we look for a moment at the possibilities of Invergordon? People in the Highlands are unable to understand the Government's delay in making any announcement on what developments are envisaged. This speculation is not good for the area. The Government can surely tell the people what they are trying to do. If not, at least they can say why there is this interminable delay. I think there has been someone down here from Invergordon trying to see the Prime Minister this week. I do not know what success he has had. The impression given is that no one in Whitehall cares about the Highlands. Now that there has been a breathing space, however, have any of the lessons of Fort William been learnt? So far as Invergordon is concerned, is any action being taken behind the scenes? Is any planning developing? Are the dredgers on their way to reclaim Nigg Bay from the Firth? Because this is the obvious site for any industrial development there.

My Lords, I should like to end with one very important plea: spare the arable land of the Highlands wherever possible. The noble Lord, Lord Tayside, said it was not important, but I shall try to emphasise in a few words why I think it is very important. My noble friend Lord Lovat has already given a number of details, but he has not told your Lordships that during the last ten years for which figures are available—that is, from 1957 to 1966–25,000 acres of arable land were lost to the Highlands, or approximately 4 per cent. of the total arable acreage in the Highlands. This is very serious and if we are going to have these linear cities and the like it is going to be very much worse.

I myself have undertaken in the Highlands reclamation of arable land from the sea. I have perhaps been rather trespassing on my noble friend's preserves, but I have restored 200 acres near the Lovat land of Beauly, and it is now galling to see public bodies destroying such land. But I would point out that in this area there are still 2,000 acres which could quite comfortably be recovered. In 1948 or 1949, when the late chief engineer of the Department of Agriculture, Alec Scott, was looking at some of these developments, we worked out some schemes, and it was going to cost only £1 million to recover those 2,000 acres and cut 7 miles off the main road from Inverness. Surely that was a well worth while project. It was going to be only one-eighth of the cost of the Moriston hydro-electric scheme. Yet it is still not done, twenty years later.

There has, of course, been the inquiry at Invergordon, which one must not prejudge; but arable land has been taken for housing at Aviemore, where rough ground could have been used. Arable land has also been taken for a school at Kingussie; there is the case at Fort William, which I have already mentioned; and almost everywhere one looks the county councils are building upon arable land because it is cheaper to develop. A fine farm on the outskirts of Inverness is now threatened—it already belongs to the Secretary of State—and one of the main reasons for this is that he has offered it first of all to the local authorities. Naturally, they are receiving it openly with both hands, and are planning to build houses on it. I should not prejudge this matter, either, because I think the objections by the agricultural executive committee are still to be sent to the Secretary of State, but it is criminal to use this land for housing—and, my Lords, golf courses, too, are to be built on this land as things are envisaged—when there is so much inferior land in the Highlands. Can no incentive be given to encourage building, and particularly house building, on rougher ground? It is different, perhaps, for a factory, which one may want to build on flat ground. It may require some subsidy to local authorities, but something should be done. I remember what was said some years ago by the brother of my noble friend Lord Lovat when he was opening a garden fete, or some such function. I hope I quote him correctly. He said that one morning we shall wake up and find that we have plenty of electricity and plenty of trees but nothing to eat. That is a very real risk. We must safeguard that scarce commodity, arable ground in the Highlands.

6.10 p.m.

VISCOUNT MASSEREENE AND FERRARD

My Lords, I should like to thank the noble Lord, Lord Lovat, for having initiated this debate and to congratulate warmly the two maiden speakers. The noble Lord, Lord Taylor of Gryfe, gave us a very clear and concise speech, and the noble Viscount, Lord Arbuthnott, a most impressive one. What he said about visiting the Highlands in the winter was, I think, very pertinent to our debate. So many people who write about the Highlands see them only in the summer when everything is beautiful. But if they went there in February or March, or even in April; if they saw the black hills without a blade of grass, the poor and acid soil, six inches of wet peat or turf on basalt rock it would cause them to tone down their writings about putting tens of thousands of people back on to the land.

I should like for a moment to allude to the speech of the noble Lord, Lord Bannerman of Kildonan. I am afraid I cannot congratulate him on the earlier part of his speech for the noble Lord said—and I hope I quote him correctly —that the trouble with the Highlands Was that the private landowners had despoiled the Highlands through selfish self-seeking.

LORD BANNERMAN OF KILDONAN

My Lords, may I have the permission of the House to answer the noble Viscount concerning the accusation he has made? I did not mention landlords from start to finish of the speech I made to-day. I merely mentioned the fact that there had been Tory Governments over the centuries that had done very little for the Highland arms. If the noble Viscount wishes to identify himself with these Tory Governments then he is culpable, so far as the Highlands are concerned.

VISCOUNT MASSEREENE AND FERRARD

My Lords, I really must disagree with the noble Lord. If he will read his own speech in Hansard tomorrow morning he will find that he said what I attributed to him. But I will wager the noble Lord in any sum he likes that he cannot produce for me any landowner in the Western Highlands or Islands who makes a profit out of the rents from his sheep hill farms.

We have heard a lot this afternoon about depopulation of the Highlands, and of course this is a fact and is a very serious matter. As I have pointed out before in your Lordships' House, the great trouble with the Highlands is that it is an agricultural area. Agriculture is the greatest industry and—though this is an unhealthy sign—it is dependent on the sheep. There is a far greater drift from the rural land in England; but it is not noticed in England because all that happens is that the agricultural worker goes to the nearest manufacturing town, some eight or ten miles away, where he finds work. He cannot do that in the Highlands. He has to leave for the South.

There is bound to be depopulation in the Highlands owing to the ever-growing efficiency of agriculture. It is true enough that the labour force employed in agriculture in the Highlands has fallen drastically in the last twenty years or so, but the productivity of Highland agriculture has greatly increased. What we have to decide is whether the land use of the Highlands' 9 million acres is to be dictated entirely by economic efficiency or whether the emphasis is to be on maximum employment, irrespective of viability. The noble Lord, Lord Donaldson of Kingsbridge, I thought, said that if you cannot have a viable agriculture—or viability in anything—you ought not to have it at all. I cannot agree with that. There are social considerations, too; and if you treated the Highlands entirely on the basis of economic efficiency you would need further to depopulate very large areas. I should hope that we could come to a compromise between viability and maximum employment; and I am sure that this is the Government's wish. But in order to have maximum employment in the Highlands it is essential to have, as we do have, help from the taxpayer in the shape of subsidies, grants, and so on.

Agriculture, as I have said, is the greatest industry in the Highlands, but in my view we cannot look with any great hope to increasing the population through agriculture. My noble friend behind me has talked about reclaiming the flats in the Beauly Firth and so on, about which I know very little. Where I live there are no flats; the shore of the Atlantic goes straight down. There is no question of reclaiming any land from the sea. Leaving aside my noble friend's suggestion, I really cannot see any increase in population coming—certainly not through sheep farming; although it might come through cattle farming.

My noble friend behind me, speaking of cattle, mentioned the Falkirk Tryst in the old days. I was interested in that because in my estate in the West we have hill drove roads through which the cattle used to go to the market. My noble friend mentioned 150,000 cattle to the market from the West; and he further pointed out that in the same area to-day there are only, I think, 102,000 cows. But there are two reasons why, in the eighteenth century, the Highlands had far more cattle. They had a completely different breed of cattle, small black cattle which were as hardy as the deer. That breed has completely died out as a result of showing, and the necessity for farmers to have quick-growing and heavier cattle for yarding. In those days, too, there were very few sheep. To-day, we have far softer cattle on the hills, and this makes it more difficult to have a heavy stock.

My Lords, I think that if a great many of the sheep could be taken off the poorer land in the Highlands, the money thereby saved on subsidies could be used for improving the lower slopes for cattle; and if that were done I am quite sure that we should have a more viable agriculture industry in the Highlands. On my hill farms I do not get a higher lambing percentage than 50 per cent., and in a bad year we have what we call a "black" loss, we have most appalling losses. I have twice lost 25 per cent. of my ewe stock, and that is not viable. The noble Viscount, Lord Arbuthnott, said that a great many landowners are frightened to take the sheep off the hills and embark on something more viable, because, if they do, they are called antisocial. And there is a great deal of truth in what the noble Viscount said.

Last year, we had an excellent Agriculture Bill which made provision for the amalgamation of farms, with the assistance of the State. I should like to see the Government compensate certain hill farmers who have poor farms and thereby enable them to take some of the sheep off the hills and concentrate more on raising cattle on the lower ground. I should like the Forestry Commission to plant some of the lower slopes. Where the Forestry Commission go wrong, as they have now probably learned, is in their inclination to plant large blocks. This may take up ground suitable for wintering for the deer and the hill sheep, and therefore make the tops completely useless in the summer, which is criminal because in the summer the high ground provides a lot of very valuable grazing.

My noble friend Lord Lovat asked us not to talk too much about stags, salmon or grouse, and so I will not refer to them, except briefly. I often wonder whether the Government yet realise the tremendous income to the Highlands from these three sources. If I had no deer or salmon on my estate, I could not support the hill farms. I should be completely out of pocket, and I hope that the point will sink in with the Government that in the wilder areas of the Highlands revenue from sport is of great importance in connection with the provision of employment.

A month or two ago I was talking to the Hungarian military attaché who is, of course, the representative of a Communist Government. He told me that his Government approved of sport in Hungary and that a great many German and other tourists came to Hungary.

LORD HUGHES

My Lords, may I ask whether the noble Viscount, Lord Massereene and Ferrard, is referring to "German tourists" or "German Tories"?

VISCOUNT MASSEREENE AND FERRARD

I refer to German tourists who, I was told, are prepared to pay £500 for shooting a really warrantable stag. I must say that that surprised me; but the Hungarian military attaché assured me that it was quite true. I should like to commend that thought to the Forestry Commission. The Commission are getting more sport conscious, but when their plantations are over twenty years old I should like them to let in the deer. Very little damage would be done to the trees, and there is a great deal of sporting revenue to be obtained thereby.

To-day, my Lords, we have heard a great deal about forestry from my noble friend Lord Dundee, who is such a great expert, and from my noble friend Lord Lovat. I have always been very pro-forestry, chiefly because with forestry you get a close-knit community. It provides employment in ancillary industries—sawmills and so on. We are told that forestry employs one man to every 120 acres. With sheep farming you have one shepherd for 800 or 1,000 ewes, which may mean one man to 5,000 acres. The great trouble about forestry in the Highlands to-day is that the price of timber, sawn logs and pulpwood, is not enough.

Take for example the Isle of Mull where the Forestry Commission send pulpwood to the pulpmill. It is all right for the Commission, because they are a State organisation. But if a private individual sent pulpwood there it would not pay, at the price obtainable, in view of the cost of handling and transportation. So we must do something about the marketing of timber. We have various private societies, like the Scottish Woodland Owners, which do great work. But the Government must make a supreme effort to get the marketing of timber on a commercial basis; otherwise, the continued planting of trees, though useful socially, will not be in the end a commercial proposition.

I should like to say a few words about the Highlands Development Board. I have been slightly critical of the Board in the past, but I suppose I am becoming used to it and I think that perhaps they are now beginning to find their feet. They had a sticky start. They have certainly helped a great many small businesses—small hoteliers and people wanting to acquire boats for tourists and fishing—on the Isle of Mull, where they have given over £80,000 in grants. Of course, that is just what the Board should do. I have always thought that the purpose of the Board was to help Highlanders to stay in the Highlands, and not to help English industrialists to carry out some vase undertaking in the Highlands. That, as the noble Lord behind me said, is the job of the Board of Trade.

The only criticism we have of the Board in my area is that we had a good company called the Crofters Supply Company, which was a great help to all local crofters and fishermen, and it failed for lack of financial support. I thought that the Board should have taken the company over but they just let it go. I cannot understand that. All the local people were surprised, because it was a good organisation. We could have many more small industries in the Western Highlands, like cheese-making and tweed-making. We could even have scents made from Highland herbs. In fact, one such industry has started in Barra. I do not know whether the Board has helped it, but I should say that from the point of view of tourism it is a worth while project.

The building of hotels by the Board in the West is a moot point. It is possible that they will be viable, although I rather doubt it because the summer season is so short and there is no ski-ing. I would not discourage the Board from building one or two hotels in the Western Highlands, but we do not want them to build a rash of hotels suddenly because, if they prove uneconomic, it would only mean a great loss of money. One thing we must be careful about in encouraging tourism is that many people who come to the Highlands come for the tranquillity and beauty they find. We now have over 100,000 amateur naturalists, and I hope that under the Scottish Countryside Bill large areas will be protected from open access to the public, so that they can be used by naturalists and geologists. We have been told that the Highlands cover 9 million acres, but when we think of the vast population of the British Isles it is a comparatively small area.

I think it was the noble Lord, Lord Taylor of Gryfe, who spoke as if the Highlands were a great fertile area, but the truth is that over 90 per cent. of it consists of only six or eight inches of waterlogged peat over rocks, and with the best will in the world it cannot be turned into a productive paradise. Many writers who write about the Highlands cannot understand this. They remind me of Lloyd George's saying, of how the deer in the Highlands graze under the oak trees with the grass up to their bellies, and all that sort of nonsense. Quite a few people still regard the Highlands as being like that.

One great difficulty is to keep the young people in the Highlands. With television and all the other forms of entertainment, the average young person is curious to go to the big cities. How we can make the countryside attractive to counteract that, I do not know. Perhaps if good communications with Glasgow and Edinburgh made it possible to go backward and forward more readily, that would help, but I believe the young people will always want to go to the cities.

I should like to mention the Transport Bill. Obviously, I am not going to argue now the pros and cons of driving freight on to the railways by heavily taxing private hauliers, but if that is done it will make things impossible in the Highlands, where large areas have no railways. It would raise the cost of everything. Though there may be some argument for this in England or in the South of Scotland, there is no argument for it in the Highlands. I only hope that before the Transport Bill becomes law the Government will make special provisions for hauliers in the Highlands, because otherwise it will be most unfair. That is all I want to say. I see that the noble Lord, Lord Bannerman, is still here, and I only hope that I have demonstrated to him that the private landowner in the Highlands is not as bad as he thinks, but is in fact a great philanthropist.

7.41 p.m.

LORD BALFOUR OF INCHRYE

My Lords, I did not put my name down on the list of those to speak because I wished to hear the line of the debate, but a few words from the noble Lord, Lord Bannerman, certainly spurred me into action. But speaking also gives me the opportunity of congratulating most sincerely the noble Lord, Lord Taylor of Gryfe, on his admirable maiden speech, and to express my apologies in that I was unable to hear the maiden speech of the noble Viscount, Lord Arbuthnott, who I am told on all sides made a splendid contribution to our debate.

I speak as a Lowlands Scot, but within the last 18 months I have acquired a property in Sutherland and therefore come to the economic and social problems quite new and, I hope, with a fresh mind. This property comprises some 110 crofts, something between 4 and 20 acres of arable land, usually allied to some outrun grazing rights, either individual or with a grazing club. As the owner, except in certain cases I am not responsible for buildings or fencing: I am merely the ground landlord.

I must say that I find these fine people resentful of the days past—and I have seen the evidence from the top of the hill of the deserted old street of cottages. But I think it is a little unfair of the noble Lord, Lord Bannerman, to talk about a hundred years of Tory Government. Social conscience grows with the passage of time, irrespective of political Party or view. One hundred years ago good Christians, God-fearing men in Scotland or in England, were accepting child labour. We have gone on since that time, and, therefore, to mirror conditions to-day in relation to what existed then leads to a wrong conclusion. But I think probably the only person with that conclusion in his mind is the noble Lord.

LORD BANNERMAN OF KILDONAN

My Lords, may I just say this? Did it not take from the time of the Napier Commission in 1886 until 1911 for the crofters' humane Acts of security of tenure to be finally promulgated? Was that a fast movement?

LORD BALFOUR OF INCHRYE

I was going to remind the noble Lord that the Government of his Party between 1906 and approximately 1916 made a fine contribution to neglect. I am sure the noble Lord is proud of those particular years. I was surprised also at what the noble Lord, Lord Bannerman, said when he told us the very pathetic and moving story of the isolated person who had to have a doctor's services. Coming to this as I do with a fresh mind, I am surprised at the tremendous achievements in road building in Sutherland, anyhow—not only main road building, but roads to remote crofts—and at the laying of water and drainage, much of which, I must say, is quite uneconomic, but is nevertheless socially desirable.

The problem that I and perhaps others have to face, including, I think, the Government, is what can be done to improve the lot of these crofters. They have security of tenure. They have assistance—and I think it was the noble Lord, Lord Taylor of Gryfe, who said it was an average of £120 a year. They have assistance for building, fencing, sheep, cattle, arable land and general improvements. I do not criticise that; I am glad of it; and I am glad when I see in nearly every case crofters with a television aerial and a motor car. That is splendid. But what can be done for a better prospect for the crofters, to prevent them from being what I would term subsidised citizens, not by their own wish, but by an economic necessity? What can the owners do? The noble Lord, Lord Bannerman, questioned whether any of these crofters would not prefer to be under State ownership rather than under private ownership. I wonder whether that is so.

Let me take a particular instance. First of all, I would say that most of the rents of my property were fixed in 1888. I found a house the other day, with a few acres of arable land, the annual rent of which was £7 18s. a year. On investigation, I found that the insurance (and it has to be insured, because I should be liable if it burned down) came to £7 3s. a year. Therefore, I am obtaining 15s. a year from that house. Now, under a new valuation which has had to be made in case the house is burned down, the insurance premium will come to £17. That is minus £10. When it was suggested to the owner that he should pay, not a higher rent, but at any rate the new insurance premium, he did not refuse—he is a good man—but he did say: "I am not getting much out of it" It is true that he is not in his life; nor am I. That is my proof that the position is basically uneconomic.

LORD BANNERMAN OF KILDONAN

My Lords, the noble Lord did not build the house. Why should he ask for the capital of the house?

LORD BALFOUR OF INCHRYE

As someone coming fresh to these problems, I am putting the question to the Government.

Recently, I believe it was last year, in Inverness, the Scottish Trades Union Congress passed a resolution condemning those who owned properties, referring to what they called, I think, the "grouse and gillie economy". If the landowner is willing to help, does not raise his rents, and tries to treat well those men in his direct employ and tries to ensure that their houses are in good condition, what more can he do? What do the Government want him to do? What do the Scottish Trades Union Congress want him to do? That land carries one sheep to 4–5 acres—nothing else. Why should the trade unions abuse those who are trying to do their best in an uneconomic climate?

My question to the noble Lord, Lord Hughes, and to the Government, is this. I have, I hope not at length, deployed the position of one who is an owner, who wishes to fulfil his obligations as an owner and, I think, does so. What can he do, but, far beyond that, what can the Government do, to alter the position in such an instance as I have outlined this afternoon? What can the Government do to alter the basic uneconomic position of those such as I have referred to?

6.52 p.m.

THE EARL OF PERTH

My Lords, I am in the same position as the noble Lord, Lord Balfour of Inchrye. I did not put my name down to speak, and I will not speak for more than six minutes. The thing that has struck me about the debate—and perhaps no one will be surprised: least of all the noble Lord, Lord Hughes—is how one after the other noble Lords have talked about S.E.T. and the damage it has done to the country, and especially to the Highlands. Even the noble Lord, Lord Taylor of Gryfe, who made his excellent maiden speech, which by tradition is not something which is provocative, felt obliged to put in at any rate a plea for the distributive trades, which is another way of criticising and being, rightly I think, provocative.

This has encouraged me to give one more example of the damage or difficulties that arise from S.E.T. I have particularly in mind the Highland Home Industries, which is a concern known to many of your Lordships. Indeed, Mrs. Stirling, aunt to Lord Lovat, who made such a good speech in opening this debate, is the founder and still active head of Highland Home Industries. The Highland Home Industries, as its name implies, gets its goods from the crofters, from the knitters and weavers, all over the Highlands. No fewer than a thousand of these people provide goods for Highland Home Industries to sell. The turnover is something over £130,000 a year. It is a difficult and "dicey" business, and it is kept going only be- cause of the determination of various of those who are active in its work.

Then comes the blow of S.E.T. Some £1,300 more has to be found; and then we get the further attack of a 50 per cent. increase. I know that this is only a matter of £2,000, but the strain on something like the Highland Home Industries, believe me, is very great. The danger that it will close up is something which has frequently been discussed. Think of the disaster of that to people in a thousand homes up and down the Highlands who get, as a result of their activities, some £100 each which helps them in all their living expenses; indeed it may make just the difference between staying where they are or going away. So much for S.E.T.

There looms ahead, as many of your Lordships have said, the same sort of trouble over the Transport Bill. The point I want to press on the Government is this. I beg them to change what appears to be a sacred principle of Government, that on all fiscal matters they have to legislate for the country as a whole. I recall very well that when S.E.T. was first announced I begged the noble Lord, Lord Hughes, to make an exception, to seek from the Government an exception, for the Highlands. At that time he scored a debating point, saying that this was a novel idea but nobody had ever suggested that a whole area should be excluded from overall taxes. He went on to say that of course if only the Conservative Government had set an example it might be a different thing, but surely it was unreasonable to expect such a happening.

What has happened since then? We all know that one exception after another has been developed and found for letting people off, or letting groups and industries off, S.E.T. This has happened owing to the pressures—I almost said "the lobbies"—of various vested interests. I am not blaming people for making the pressures. I am just saying that this is a thoroughly untidy and unsatisfactory, and to many people an unfair, way of operating S.E.T. The noble Viscount, Lord Stonehaven, gave the example of a sequel of it in an area around where he lives in relation to hotels. I see no advantage to anybody in operating it as it is operated, unless it be of course that it demands a bigger and bigger force of civil servants to operate it.

If the Government could be persuaded to make an exception by area, as well as by activity, in fiscal matters, that would be the most important advance for the whole of the Highlands that I could imagine; and I beg that when it comes to dealing with the Transport Bill this will be not only borne in mind but acted upon. The Highlands should be excluded from the start. I would go one step further, following the example of the noble Lord, Lord Bannerman, and say that not only should it be excluded from the start, but if we could go even further and have a tapering system then I believe the future outlook in the Highlands would be one which we could all feel was very bright, and many of the matters we have talked about would be unneeded.

6.58 p.m.

THE DUKE OF ATHOLL

My Lords, I should like to intervene for just a very short time to raise two points. First, I should like to ask the noble Lord, Lord Hughes, whether there is any hope that machinery used for the extraction of timber might be given investment grant. We have discussed this matter before, but since we last discussed it there has been a new President of the Board of Trade in office, and I should hope that Mr. Jay's successor might look with more favour on the idea of giving investment grants for the extraction machinery in timber, particularly in view of the great storm damage which took place on the morning of January 15 this year and which has affected all the central belt of Scotland, including parts which are definitely within the Highlands.

The second point I should like to raise is on the question of tourism. I am no longer on the Scottish Tourist Board, so I can promise your Lordships that I have no axe to grind and no personal interest in what I am going to say. But I think it is quite fantastic that the Scottish Tourist Board (and I must admit that I had great hopes when the present Government came into power that they would do something about this) has to stagger along on a free income of about £100,000. And I think I am right in saying that £25,000 of that cannot be spent as the Tourist Board thinks fit but has to be spent upon research in the Highlands.

The Irish Tourist Board this year will get £2 million for promotion, and £500,000 more for development. Ireland has much the same population as Scotland, and I think I am right in saying that when the Irish Tourist Board was set up the country had a considerably smaller tourist industry. Now it has a much greater and more profitably tourist industry, simply because the Irish Tourist Board is given by the Irish Government sufficient money to enable it to operate in a constructive and consistent way and to publicise attractions to induce people to come and stay in the country.

One only has to look at the Aviemore Centre to see what can be done if the money is there. This project was undertaken by a combination of far-sighted companies, and I hope they will find it extremely profitable, because they deserve it. There are very few places where it would be possible to do this sort of thing without Government help, so I ask the noble Lord, Lord Hughes, to persuade his Government colleagues to give the Scottish Tourist Board sufficient money so that it can do the job. The Isle of Man Tourist Board receives far more money than the Scottish Tourist Board, and the Isle of Man, Northern Ireland, and similar areas with which Scotland has to compete, are equally near to the large centres of population in both the North and the South of England. My Lords, that is all I want to say, but I do feel most strongly about those two points.

7.3 p.m.

THE MARQUESS OF LOTHIAN

My Lords, I would like first to add my thanks to my noble friend Lord Lovat for introducing this most important Motion to-day, and also to add my congratulations to the two maiden speakers, the noble Lord, Lord Taylor of Gryfe, and the noble Viscount, Lord Arbuthnott. They both made high-class contributions to your Lordships' debate, and I hope that we shall hear from both of them again very shortly.

It may seem strange—and I certainly feel rather diffident about speaking in this debate, corning, as I do, from the opposite end of Scotland to the Highlands—but we in the Borders have to some extent a similar problem area; and I think it is true to say that at least the general principles as to how the problem should be solved are to some extent similar as between the two regions. In any case, the noble Lord, Lord Hughes, has received such a welter of expert advice and suggestion to-day that there is little for me to add at this stage of the debate. Therefore, I propose to be quite brief and to confine myself to underlining one or two of the points which noble Lords have already made.

I think it is true to say that the problem of the Highlands, which was outlined so ably by my noble friend Lord Lovat and by other noble Lords, is, at any rate to some extent, by virtue of geography and climate, unique in the British Isles. And I think that the Government, by setting up the Highland Development Board, have recognised this fact. As has been said, I believe it is too early yet to judge whether the Highland Development Board is going to be the complete answer. That remains to be seen, and of course we must all hope that it will prove to be so. Certainly as noble Lords have said, in many ways, after a rather shaky start, it has settled down and is doing some fine work.

It is clear from the speeches which have been made to-day that one thing the Highlands need very greatly is an injection of suitably sited industry and, at the same time, an injection of a suitable increase in population. As with the conditions in the Border country, these two things must really come together; and this will require the most careful planning organisations, because there are obstacles to be overcome—for instance, to some extent the lack of an industrial tradition in the Highlands, and indeed of a pool of labour. Technical and managerial skills are still in fairly short supply, and therefore it seems important, as has been pointed out this afternoon, to concentrate the greater part of the smaller industrial development on those enterprises which would use local resources and local skills, such as the tweed industry, which has already been mentioned, and possibly boat-building.

Nevertheless, these small, light industries, though playing an important part, and although they may be economically viable and socially valuable, are not going to stem the population drift from the Highlands. Only some large-scale project, such as the possible aluminium smelter, will go some way to doing that and to restoring the morale of the people living in the Highlands. Although I doubt whether the noble Lord can say much to-day, he may be able to give us some hint of what is going to happen in this regard, because it seems to me to be a suitable development that there should be one fairly large giant established industrially up there.

One population problem that worries me slightly is that if a large number of people have to be imported, as it were, from outwith the Highlands, this will be, I feel, a difficult matter. Even in the South of Scotland, where overspill agreements have been made—for instance, with Glasgow, moving populations well out into the Borders and the East—there have been difficulties. People leaving the towns, and especially Glasgow, like to remain more or less in the area of that town—I was going to say in the Rangers-Celtic orbit—so that they can get back on a Saturday without too much difficulty to the place from which they came. This means that when an attempt is being made to induce people to leave, very strong financial inducements have to be offered; and it also involves the provision of more than adequate local amenities and amusements. This is a field in which the Government and the Board can be of the greatest possible assistance.

Reference has been made many times this afternoon to transport costs, and to problems of communications generally throughout the Highlands. I believe that this is one of the crucial aspects in the whole problem, because it is useless to expect firms and farms and forests to produce more, to make expensive plans and to build new houses, if the products cannot be easily and relatively cheaply got away to the market. This will mean that much more expenditure will be needed on roads; there will have to be more efficient railway services, and better air services. These will all cost money, and I hope that when the noble Lord replies he will not hide too much behind the present economic difficulties facing this country and make them an excuse for doing as little as possible.

SEVERAL NOBLE LORDS

Hear, hear!

THE MARQUESS OF LOTHIAN

Apart from the industrial possibilities, as we have heard to-day the Highlands have a tremendous potential for development in many ways. We have heard of tourism, forestry, fishing and the working of minerals. All these have been mentioned. The development of winter sports has, I think, given some parts of the Highlands something which is unique in the British Isles, and that is an all-the-year-round tourist industry. And this is something which is still, in my view, in its infancy. My noble friend Lord Dundee and others have discussed the prospects for forestry, and I agree with those who say that this is essentially a long-term matter, a most important development, because it is of great social and economic benefit and, of course, amenity value as well. The only difficulty about forestry is that, purely in terms of employment figures, it does not rate in the same class as industrial development.

I do not intend this evening to discuss all the possible ways of helping to solve the problems that noble Lords have raised this afternoon concerning the Highlands. What I think the House wants to know is how the Government view the present situation, what is their general line of approach, and how does it account for its stewardship in this part of Scotland. I think it is right that the Highlands, as in my part of the world, the Borders, should be regarded as a whole, and that some general master plan should be worked out, howevery loosely, by the Highland Development Board; and no doubt that is what they are doing. I am sure that is the only answer in the long run, for just patching up here and there will be of little value. I am wondering also, speaking entirely personally, whether there may not eventually be a case for completely revising the system of taxation for commercial undertakings in the Highlands. It is true that the Government have to some extent accepted the principle of selectivity in this matter by removing the S.E.T. tax on the hotel industry in the Highlands and other development areas, and I have often thought it inequitable that taxation generally is so very much the same, whether the firm is within five or 500 miles of its markets and regardless of local and regional differences.

I think also there is a strong case for the Highlands to be treated more generously in respect of money for the building of roads. Roads are badly needed, as noble Lords have said, especially in regard to the pulp mill at Fort. William. We all know how inadequate the road system is for getting the timber there. Roads are also badly needed to open up new ski-ing areas in the Cairngorms and I feel this is a problem which could be tackled fairly quickly. It will also be necessary, if any large-scale industrial development is to take place, to ensure that the commuter systems running to factories are adequate. What I am saying is that if, as appears to be the case, the Government have decided that the Highlands are a special area, then I hope that they will increasingly carry this philosophy into practical action and follow up some, if not all, of the advice offered to-day by noble Lords who know the situation most intimately, and far more intimately than I do, because any sort of status quo is never the answer, particularly in this sort of problem. The Government must get moving for ward in the right direction, and I suggest that the speeches this afternoon from all parts of the House have shown the right way for the Highlands.

There is one further point. I am sure, myself—and one or two other noble Lords have made this point—that any solution for the Highlands must not be imposed from outside or it will not be really effective. What must be done is to create the right conditions for the people in the Highlands to help themselves to develop their own land. It is important to encourage the natural growth of initiative and enterprise. By all means give help, as the Highland Development Board does, but do not impose artificial solutions. Perhaps most of all I think the Highlander must be given a sense of long-term security in the sense that if he stays in the Highlands and works hard and uses his skill he may get his reward as easily as if he had been living and working in the South of England, for example. I most strongly urge the noble Lord to consider these points; and as I know the House is very anxious to hear what he has to say I do not wish to stand in his way any longer.

7.17 p.m.

LORD HUGHES

My Lords, this debate has for me many advantages over the one a year ago. The first is that, notwithstanding the prediction by the noble Lord, Lord Lovat, in his opening remarks, we had no angry speeches at all. That was an advantage compared to a year ago. The second advantage is that we have had the undoubted benefit of two admirable new entrants into our debate. It was a double pleasure to hear the most excellent maiden speech by my noble friend Lord Taylor of Gryfe, a double advantage because it enables me to refer to one of the changes from a year ago. There have been four speakers in this debate from the Government side and last year there was only one. I hope the numbers will continue to grow so that we may yet reach the day where if we reach a vote on a Scottish debate the Government may win. I should like also to say how much I appreciated the maiden speech of the noble Viscount, Lord Arbuthnott. I did not so much find from him any detailed proposals, but I found a most admirable attitude to these problems which I think is going to be exceedingly helpful to us, and it makes me feel happy that your Lordships will approve of at least one of the members who form the new Scottish Countryside Commission. To take those views into that body will be helpful.

In replying to what has been a very lengthy debate, I do not propose to adopt the method of replying to what each noble Lord has said, because a theme of subjects has been running through the speeches, and if I should reply on themes without naming those who have raised the points I think it would be the most effective way of using my time. But I will from time to time refer to particular points which noble Lords have made. Your Lordships will recollect that at the end of Lord Lovat's remarks I put two questions to him, because I was not at all certain what he said in the first instance, and the figures he quoted for Inverness were so different from the ones I had that I wanted to be quite certain he was referring to Inverness. I have looked at the figures and I think the mistake is a simple one. He has probably misread his own writing or perhaps somebody else's writing, because it is only the first figure which is wrong, but that is the important one. However, I will come back to that point, because depopulation is one of the subjects.

The main points which have been raised in this debate have been with regard to the effects of the Transport Bill, the effects of selective employment tax, the importance of forestry, tourism and agriculture, and the activities of the Highlands and Islands Development Board. May I say, in passing, that I ought to congratulate the noble Lord, Lord Burton, for being the only one now to stick to his original attitude. He will remember well that the only thing I feared when we were considering the Highlands and Islands Development Bill was that his approval would have damned it in the Highlands. I am glad, therefore, that he has maintained his opposition to it. I am not at all certain that it is helpful to the Board that the noble Viscount, Lord Massereene and Ferrard, has now come round to the point of saying that he has got used to it. It may be helpful, but I am not certain. Then, finally, there is the subject of Invergordon. I think that if I touch on all of those in the time at my disposal I shall probably have met reasonably your Lordships' wishes.

May I take, first of all, the subject of the Transport Bill? There are the most extraordinary misconceptions about that Bill. If the noble Earl, Lord Dundee, carries out his threat to seek to remove Scotland from the effect of the Transport Bill, he will be depriving Scotland and the? Highlands of a number of undoubted advantages as well as the things which he considers disadvantages; and the views on some of the things which are considered by the noble Earl and by almost everybody else who has referred to the Transport Bill as "disadvantages" are based on misreading or misrepresentation of the provisions of the Bill. Those things will not have the adverse effect throughout which have been forecast by some of the critics.

First of all, the immediate effect will be to exempt more than half of the road haulage vehicles from the quantity controls of the proposed carriers' licensing system. In the interests of road safety the remaining vehicles will be subject to new safety controls; but most of them will be free to carry any goods anywhere, both on their own account and for hire and reward. That is a tremendous improvement on the situation as it presently stands, and I do not think that Scotland would wish to be exempted from that. Neither the proposed new quantity controls nor the reform in the drivers' hours provisions will be brought into effect immediately. The Government recognise that reforms on the scale proposed will call for a big effort from both management and unions to ensure that they can be carried through without major increases in operating costs; and it is for this reason that the Government have indicated that real progress towards increased productivity by both sides of the industry will be essential before the enabling powers are used to bring the new law into effect. In other words, we want it to start off working economically.

On the subject of Highland transport, in particular, both the Government and the Highlands and Islands Development Board have always recognised that an efficient system of transport is one of the key factors in Highland development. Anyone who pretends otherwise is either a complete fool or—I do not know what the alternative is. What can be worse than a complete fool? The need for special measures has already been recognised, for example—and this has been referred to—by the Exchequer grants to Highland shipping services which now amount to over half a million pounds a year. The Transport Bill will make it possible to extend this assistance—I ought not to say this because it is outside the terms of our discussion; we are talking about the Highlands, but on this occasion I accept the interpretation of the noble Lord, Lord Lovat, of the Highlands, that we are talking about what takes place in the crofting counties. I remember he took me to task a year ago for calling an Aberdonian a Highlander. In passing may I say that the Clyde services are going to be brought into this scheme of assistance. That is of importance in a wider reference to tourism. The Government have recently invited tenders for the construction of a new cargo boat for the North Isles of Orkney which will provide the first example in this area of the valuable new technique of shipping goods in containers.

There has been a great deal of misunderstanding in the Highlands about the effects of the Transport Bill. Little mention has been made of the provisions of the Bill which will be of real advantage to the Highlands; and in concentrating on things which people think are wrong they completely overlook the things which are of real advantage. After all, no other part of the United Kingdom is so dependent on rural bus and ferry services which will become eligible under the Bill for local authority and Exchequer assistance. Grants will also be available for the provision of new buses, towards duty on bus fuel, and towards capital expenditure on passenger transport facilities. A great degree of integration will be achieved by the transfer of the Scottish Bus Group, the Caledonian Steam Packet Company and MacBrayne's to the new Scottish Transport Group. That is a measure of devolution in transport which is going to be helpful to us in Scotland.

It is seven or eight years ago since I had the honour of being a member of the Inquiry into Highland transport under the Chairmanship of Lord Kilbrandon. The solution which he then recommended was that there should be an integration of transport facilities in Scotland in general and in the Highlands most certainly. That is going to be brought about as a result of the Bill. So if one takes away the understandings on the part of some on quantity licensing and so on, and then looks at the definite advantages, tilt Highlands have a great deal to gain from the Transport Bill. I should also like to say, in passing, because of its effect on forestry, that timber has been removed entirely from quantity licensing proposals. So the forestry side is not going to be affected by anything at all which may happen in quantity licensing.

May I pass on to forestry generally? This is a subject for which I think the noble Earl. Lord Dundee, and I have equal enthusiasm. My first responsibilities in government when I became an Under-Secretary at the Scottish Office was at the Department of Agriculture and Fisheries for Scotland, and forestry came very much within my remit. It was a tremendous disappointment to me then to find the extent to which forestry had been allowed to go back by our predecessors. I know that if they had been of the mind of the noble Earl, that would not have taken place. The fact was that it did.

The first thing that we as a Government did in relation to forestry was to make an increase immediately in the acreage in Scotland, taking advantage of the inability of the English and Welsh to use their quota. We did this without in any way increasing the expenditure of the Forestry Commission. Within a year or eighteen months we had increased substantially the targets of the Forestry Commission in Scotland, and, as the noble Earl said, last October the Prime Minister announced what was virtually a further increase of 50 per cent. in the figures of which we had previously spoken. I would say to my noble friend Lord Donaldson that I greatly welcome his intervention in Scottish debates. I wish our English and Welsh colleagues would remove from their minds any idea that they must have a visa in order to enter into Scottish debates. I should welcome many more of them coming in, particularly when their contributions are helpful. That is not to say that I agree with everything the noble Lord said—perish the thought!—because, after all, I have to live in Scotland; he does not. But to a certain extent he put his finger on fundamental points. He talked about the integration of forestry and agriculture. I do not like the word "integration"; I should prefer that those two industries should regard themselves as being complementary the one to the other.

In Scotland we do not have the problems which the noble Lord has experienced South of the Border. The Forestry Commission have not had difficulty in dealing with landowners, and it has been the experience of the Forestry Commission—and this will please the noble Viscount, Lord Massereene and Ferrard—in their negotiations with Scottish landowners that they have been exceedingly helpful. I do not see any expectation that there will be any change in that situation, since the Forestry Commission have never had occasion to use the compulsory powers which they possess. Only very occasionally do the Forestry Commission, in surveying land for future development, come up against a refusal to permit a survey to take place.

THE DUKE OF ATHOLL

My Lords, to give credit where credit is due, it is the experience of landowners in Scotland that the land acquisition officers of the Forestry Commission are remarkably good and very easy to deal with.

LORD HUGHES

My Lords, I hope that my reply does not develop into an exchange of compliments. I should like to make one or two comments about what is going on at present on the ques- tion of survey work. The following areas in the Highlands have either been surveyed or are in the course of being surveyed: East and Central Sutherland; the Strath of Kildonan; Central Inverness-shire; the Island of Mull; and Central Ross-shire. Before any survey is begun the landowners in the chosen area are asked if they are willing to co-operate. There have been only one or two cases where we have not been able to get complete co-operation and have not received permission to survey.

Officers of the Forestry Commission inspect each estate and mark on a map the land which they assess as plantable. Officers of the Department of Agriculture then carry out an agricultural survey and indicate on the same map the plant-able land which the Department would be prepared to clear for afforestation. After the field work has been completed, the results are discussed between the Commission and the Department, and an approach is made to each landowner to invite him to discuss the findings. While these surveys are not intended to be comprehensive, they will enable an owner to consider the forestry and agricultural potential of his land in conjunction with other possible uses of his estate. We hope that as a result of the subsequent discussions owners will make land available to the Forestry Commission for planting.

The noble Earl, Lord Dundee, referred to the figure of planting last year. I welcome an expansion of the activities of the private forester just as much as I want to see the expansion of the activities of the Forestry Commission. In this connection I am delighted to say that the co-operation is first-class. In fact, if everything in Scotland went as well as the way in which the various interests in this matter work together, many of our problems probably would have been solved.

If I may turn to tourism, I must venture on my first note of criticism. I wish to make a comparison between what was said by the noble Lord, Lord Lovat, about the tourist situation and the remarks of my noble friend Lord Taylor of Gryfe. My noble friend spoke about what is taking place in Aviemore, but I would not wish to suggest that everywhere in Scotland tourism is going as it is going in Aviemore. But Aviemore is showing a spirit of liveliness and activity which ten years ago nobody would have believed possible—and it is spreading. It cannot be the case, as I think the noble Lord, Lord Lovat, said, that tourism in the Highlands is in the doldrums. I think that it was the noble Lord (or it may have been somebody else) who said that in the last two years in the Highlands tourism had been very bad. But the facts do not bear this out. I am certain that tourism will play an increasing part in the prosperity of the Highlands. It is an industry whose activities we want to encourage, for it induces people to use their time in a first-class way. We are not paying the people in the tourist industry to do a job that does not matter. We are giving them the opportunity to carry out a job which is worth while and which adds to the wealth, not only of Scotland but of the United Kingdom.

The noble Duke intervened towards the end of the debate because of his past experience as a member of the Tourist Board and his desire to see a great deal more done. I should be misleading the House if I pretended that I was happy about the Scottish Tourist Board having £100,000 a year, but if I could get out of the Chancellor of the Exchequer all the additional money I should like to see spent in Scotland—and even if we could get out of the Chancellor all the additional money which noble Lords opposite would like to see spent in Scotland—the poor English would have a devil of a time raising the money for us!

We need a lot of money, and we have to get our priorities right. We can spend more money on some things, or we can spend a little money on everything. If we do the latter, then nobody will benefit. If we exercise our priorities properly, we can get considerable advantage. But I hope that before long our priorities will make it possible for more money to be made available for the promotion of tourism in Scotland. Frankly, I can see little direct expenditure of Government money which, in the short term, will produce for the country as a whole a greater return of income than investment in the promotion of tourism. This subject is at present being actively considered by Government Departments. I am sorry that I cannot say more than that. I should have been delighted to announce that the £100,000 had become £150,000, and even more delighted if I could have said that it was £1 million. But I am hoping that out of these deliberations tourism will get a bigger share of our resources than it has at present.

LORD LOVAT

My Lords, I am sorry but I must have said something rather misleading. I did not mean that tourism was in the doldrums, in the sense that it was neither important nor flourishing. I intended to say as an original member of the Tourist Board, under Mr. Tom Johnston, that we were not getting sufficient assistance to make tourism the success it should be. I am sorry if I gave a false impression. I have great hopes that tourism will open up. I did say that the smaller hotels have suffered.

LORD HUGHES

My Lords, in fact I wrote down the phrase as the noble Lord used it, and quite obviously it did not convey what he intended to convey. I know that the noble Duke and the noble Lord, Lord Lovat, would have been delighted if I had been able to say that we were multiplying the amount of money available to the Tourist Board. So should I. I cannot say that we are doing so, but we are living in hope.

I congratulate the noble Lord, Lord Bannerman of Kildonan, on his s Beech. It was interesting to hear those noble Lords on the Benches opposite who would normally have been venting the whole of their wrath on me using up so much time engaging in an argument with him as to who was responsible for the greatest part of the deficiencies of the last century. Well, my Lords, it was before my time—either as a Minister or as a man. But I was grateful to him for the way in which he pointed out that not everything in the Highlands before 1967 was perfection. He obviously made the noble Lord, Lord Burton, a complete opponent, because from the tenor of Lord Burton's remarks one would have thought that in the Highlands things had improved by 1964 almost to the peak of perfection, and that then the Government changed and the bottom fell out of the Highland market. Could there possibly be a more fanciful picture?

Why was the Highlands and Islands Development Board created? It was because everything which had been done by all Governments, including the 1945–51 Labour Governments, the 1929–31 Labour Government, the 1924 Labour Government, and all the Tory and Labour Governments that went before, made the mistake of thinking that it was possible, by dealing with the problem piecemeal, to find a solution. The setting up of the Highlands and Islands Board is the first attempt to draw the whole thing together, to make certain that in all the areas in which the other bodies did not have powers there were powers vested in the Highlands and Islands Board.

The results are even now speaking for themselves. It is complained that the Board has been in existence for two and a half years and has not yet solved the problem of the Highlands. But if the Board had been capable of solving in two and a half years the problem of the Highlands, we should not be worrying about whether the next Government of this country would be Conservative or Labour: all that we should need to do would be to move, and say to Professor Grieve, "Take over. Obviously, you are the man who should be running the whole country."

The Board has made very remarkable strides in a very short time. After all, it spent the greater part of the first year getting an organisation together, and it is only since then that things have really been moving. Your Lordships will remember that we were criticised for making only £150,000 available in the first financial year. Quite obviously, this was because, with the best will in the world, the Board could not have any major projects, or even any small projects, going, other than on a most elementary scale.

LORD BANNERMAN OF KILDONAN

My Lords, may I ask the noble Lord whether the idea of tapering freight rates—the basic remedy which we should like to have immediately in the Highlands—is finding any favour with the noble Lord or with his Government?

LORD HUGHES

My Lords, whether or not it finds favour is a totally different thing from whether or not it will be brought into operation. I do not expect it to be brought into operation.

But if I may come to the noble Lord's point (I diverted myself on the Highlands and Islands Board), he said that he wanted to see the purse strings loosened. I do not know where the noble Lord, Lord Bannerman of Kildonan, has been, because I know that there is no man in this House more interested in what is taking place in the Highlands. But on the question of loosening the purse strings, I think the figures which I am going to quote lay me open to the charge from the noble Lord, Lord Burton, that we have in fact taken the string off and thrown it away. I am going to be fair on this, because it is not only under the present Government that expenditure in the Highlands has increased. I am going to take four years—1960, 1961, 1964 and 1968—since I am not one of those who subscribe to the doctrine that at a given point in time progress started, and that at another point in time it will come to a stop.

In 1960, the expenditure in the crofting counties from the Secretary of State's Departments in every direction was £22,076,000. In 1964 it had risen to £30,836,000. In 1968 it has increased to £43,814,000. If the figure of 265,000 population is taken—and it is pretty nearly right—that gets a bit ahead of £120 per skull in the Highlands. That, I should say, is a very decided loosening of the purse strings, and if pouring money into the Highlands was the answer the problem would have been solved. But, of course, pouring money in is not the answer. It depends what you are putting the money into. After all, you can get rid of an awful lot of money by just pouring it down a grating, but it does not help anybody very much. So that saying that the money is increased only goes so far; it is how we are using the money which makes the result.

This brings me back to the Highlands and Islands Development Board. Everybody, I think, with the distinguished exception of the noble Lord, Lord Burton, had some good to say of the Highlands Board. I am not going to repeat what the noble Lord said, but he certainly did not go out of his way to be complimentary to them. We recognise that, if and when the aluminium plant starts operations in Scotland, it will be a major development, just as we recognised when the pulp mill was opened that it was a major development in Scotland.

I wonder how many of your Lordships realise that what the Highlands and Islands Board has accomplished in its two and a half years is to create in Scotland almost four times as many jobs as the pulp mill has brought about up to the present time. At the present time 680 people are employed at the pulp mill. It will rise to 1,000, and by the time it has reached that figure the probability is that the Highlands and Islands Board will still be running at four times its level. That is an achievement which has not been touched by any previous activity in the Highlands. If one considers the population of about 270,000, what the Board has done is the equivalent of finding 10,000 new jobs in Glasgow. Imagine, my Lords, the headlines in every Scottish paper; imagine the headlines in every English paper, if it were announced to-morrow that a new industry was being established in Glasgow to employ 10,000 people. That is the equivalent of what the Highlands Board has done.

LORD BURTON

My Lords, I wonder whether the noble Lord can tell us how many of those jobs are on the Board's own staff?

LORD HUGHES

My Lords, the noble Lord, Lord Burton, does not do credit either to himself or to me in putting forward such a frivolous question, because he knows that the employment of the Board is small. If the noble Lord is implying that anything other than a minute fraction of the 2,400 jobs I have spoken about are on the Board's own staff, then I suggest that after he has seen the latest Report of the Board, which I believe will be out in about a month, he can put down a Question. I have not had the advantage of seeing the Report, but I know that I am not sticking my neck out.

This is part of the answer to the question which the noble Marquess, Lord Lothian, quite properly put to me at the end of the debate. May I say how much I appreciated the way in which he drew the threads together and summed them up in two questions to the Government: How do you account for your stewardship, and what do you propose to do in the Highlands? It is part of the strategy which the Government laid down right away that, first of all, we were going to create a regional policy. We departed from the idea of single isolated growth points.

Again, in passing, may I say that I rather marvelled at the compliment which was paid to Sir John Toothill, when it was stated that he wrote an excellent Report, but that it would have been much better if he had brought the Highlands in and left out part of the central area of Scotland. In other words, what was being said was that if Sir John Toothill had written a Report with the sort of policy which the Government had put into operation, it would have been a good Report, because the Government have brought in the Highlands and other areas in a way never done before as part of a proper regional policy.

The Government have made in, perfectly clear during the time of the Highlands and Islands Board that they regard the Highlands as an area with problems peculiar to itself, which could be solved only by methods that would not be appropriate, or would not be permitted, in any other part of the country. I assure your Lordships that we should have liked to see the Highlands and Islands Board with powers available in other parts of Scotland. I can assure your Loardships that English Ministers would have been delighted to have these powers for some of their areas. But it is something that was reserved for the special problems of the Highlands, and it is showing results.

My Lords, as to selective employment tax, I know that this tax probably has more critics in the Highlands than it has friends. It probably has more critics in the country as a whole than it has friends. But which tax anywhere in the country has not more critics than friends? I cannot think of any tax which I pay with any enthusiasm. But the fact that people are against a tax does not make it necessarily a bad tax. On this question of selective employment tax, we lave been told that the most important industry in the Highlands is agriculture. And agriculture, of course, does not pay it. We have been told that tourism is very important to the Highlands; and, of course it is going to be exempted from this tax. If it is said to us, "Of course, you have made a mistake for a couple of years", I would reply that I used to have an old friend in local government in Dundee who probably made more mistakes than any other human being I ever knew but who occasionally did things right; and she used to say, "After all, the person who never made a mistake never made anything".

Even Governments are permitted to make mistakes, and it is a good Government who will change things which have been done wrongly. Too often in the past this country has suffered from the effect of Governments doing things wrong and then not being willing to change them. Taking S.E.T. off hotels in the Highlands will be a very great advantage to the Highlands; so except for Lord Burton's caravan and camping sites (which, incidentally, I shall be very happy to look at), tourism is to be exempt. Industry does not pay S.E.T. in the Highlands. In fact, it is the other way round: such industry as there is will get money back under our regional policies. So we come down to the fact that, from the point of view of the Highlands, the areas which suffer from selective employment tax are those which are elsewhere.

As to the distributive trades, my noble friend Lord Taylor of Gryfe put forward a plea on their behalf. After all, he is the head of the Scottish Wholesale Cooperative Society. They have many retail shops, and they pay a great deal of S.E.T. Just like anybody else who pays the tax, my noble friend does not like it. Selective employment tax has advantages, in that the money which thus becomes available helps the Government to do some of the things they want to do; and a fair amount of the money which is being poured into the Highlands could not be poured there if the Government were not raising money from taxation—and there is a great deal more money raised in taxation in other parts of the country from which the Highlands benefit than the other way round. So to a certain extent we have to take the rough with the smooth, and, in the changes which have taken place in selective employment tax, we are getting a bigger share of the smooth and a smaller share of the rough.

As to depopulation, my Lords, this is probably the crux of the problem. I dis- agree completely with what the noble Lord, Lord Lovat, said on the subject of depopulation, and with the figures which he quoted. He said—and I think I have a note of his actual words: In the county of Inverness alone, about which I know most, the number of inhabitants dropped from 56,000 in 1951 to a total, at the Census in 1966, of 51,000. In other words, 5,450 people have left the area in a period of 15 years. The second half of that Census period shows a very much higher rate of depopulation than the previous 10 years. My Lords, the figures are these. In 1951 the population of Inverness was not 56,000, but 86,191. I think the mistake is that an "8" has been misread for a "5" Otherwise, the figures agree. But it has a relevance, because of the proportions.

LORD LOVAT

This figure came from the Inverness County Council, my Lords.

LORD HUGHES

I am coming back to the Inverness County Council. The noble Lord, Lord Burton, spent the greater part of his speech drawing attention to the iniquities of the Inverness County Council. But, after all, I did not appoint them.

LORD LOVAT

What are the noble Lord's population figures?

LORD HUGHES

The population figures—and these are not my figures; they are the Registrar-General's figures—are: Inverness, 86,191 in 1951; in 1961, 82,838; and in 1964, 81,165. The figure for 1967 is 84,333. So we have gone up 3,000 since 1964, and we have gone up nearly 2,000 since the 1961 Census. If I may go from Inverness to the seven crofting counties as a whole, the population figures there are interesting; I will not take it further than that. In every Census from 1851 to 1961 the population of the seven crofting counties was less than it was in the preceding Census. In 1964 the population was 276,328. In 1967 the population was 276,303–25 less than four years before.

My Lords, the trend has been arrested, and this is the first time it has happened in more than a hundred years. This is the second part of the results of the Government's stewardship in the Highlands. I do not like making forecasts, because if they are wrong there are always plenty of people who are willing to point out the error of your ways, and if you are right nobody ever bothers to congratulate you. But I will take the risk of saying that when the next Census takes place in 1971, it is more likely than not (if I may use a phrase which commended itself to the noble Viscount, Lord Dilhome, in a previous debate) that for the first time in 120 years the population of the crofting counties will have risen.

LORD BALFOUR OF INCHRYE

My Lords, will the noble Lord allow me to ask one question? He has given the global figure of the population, but will not the creation of new jobs by the Highlands Development Board in fact depopulate the countryside, bringing those individual jobs to the urban and industrial areas?

LORD HUGHES

No, my Lords. To a certain extent the creation of large projects will do that, but the beauty of what the Highlands and Islands Board have done at the present time is that the jobs which they are creating are in small pockets all over the country. If I may use the opportunity of the noble Lord's intervention to come back to the point which he raised, this is important, because we could not achieve improvement in the Highlands if we were to destroy crofting as part of the way of life. Crofting cannot possibly give an economic livelihood to those who live on the land, either now or in the foreseeable future.

What therefore has to be done is to create jobs which can be added to the crofting economy of the country; and in considerable measure this is the task which the Highlands Board have set themselves. It is an unrewarding task, in the sense that there is nothing very glamorous which emerges from it. When I quoted figures a year ago I was taken to task by a Scottish newspaper because I had referred to half-a-dozen jobs here and twenty jobs there. But half-a-dozen jobs in one of these small communities can be the solution of the problems of that community. But, I repeat, there is nothing spectacular about it. If we were only being spectacular, we should, of course, have the effect which the noble Lord has feared: we should in fact be creating inside the Highlands another central belt. That would not be solving the problem; it would just be creating another one.

VISCOUNT STONEHAVEN

My Lords, may I ask the noble Lord what influence Dounreay has had and what bearing the increased population of Thurso has had on the very interesting and satisfactory figures which the noble Lord has given us?

LORD HUGHES

I do not know exactly the extent to which the population there has increased; but obviously it has an effect on these figures. What has taken place is that there has been an increase of the population through Dounreay, through the pulp mill, through the other projects that have taken place, and through the things the Highlands and Islands Board have set out to do; and, against that, there has been a loss of population for other reasons, such as the closure of the chipboard factory, to which the noble Lord, Lord Burton, referred. The effect of the pluses and minuses is that, for the first time, they are ironing out and there has been an arrestment of depopulation. I should be happy if I thought that we were as near that point in the Borders. My Lords, I think I have covered most of the points to which I wish to refer.

LORD LOVAT

My Lords, the noble Lord has been extraordinarily kind and disarming on the facts and figures. May I ask one question? I have detected the error in the crofter counties' population to which he referred. Our figurer, more or less, come together. The difference I had here was that the Inverness burgh was separate from the landward area. It bears out the remark of the noble Lord, Lord Balfour of Inchrye, that the burgh population has grown by 2,334 people during the period whereas population in the landward area has dropped by 5,453. But my relevant period is between 1951 to 1966. The noble Lord's figures are for a different period. This brings us closer on that particular point. I was going to ask a question on the agriculture aspect. The noble Lord has not touched upon that. What I am worried about in the Highlands and Islands Board set-up is that, with respect, they do not have a skilled agriculturist and a skilled forester. I think that is important in the economy of the Highlands. But I am not being critical. The noble Lord has been very kind.

LORD HUGHES

I thank the noble Lord. I still do not think he has reconciled the figures. He said the poppulation in the burgh has gone up by 2,000 and in the county has gone down by 5,000, a net reduction of 3,000. In fact, the 1951 figures were 86,191 and the 1966 figures were 84,471. At a quick calculation this represents a total drop of about 1,700 in that period, and not 5,000 minus 2,000, giving a net drop of 3,000. The important thing is that, taking the seven counties as a whole, we have a remarkable change in the situation in a comparatively short period of time. I think it is only the beginning of an intensive period of change. I hope that all the crofting counties, both in their burghs and in their landward areas, will participate in this regeneration of the area, because it is important that as many people as possible should find it desirable to continue living in the area where they are at present.

My Lords, among this mass of papers I have found my note about the points to which I wish to refer. Agriculture is one of them, but I cannot be very helpful on agriculture. If I were to accept the point of view about agriculture in the Highlands which my noble friend Lord Donaldson put forward, I doubt whether I should have many friends on the opposite Benches. I do not know that I have any at the moment; but if I have I should lose them if I subscribed to that doctrine entirely. Yet as it emerged, it did not appear to me that my noble friend went as far as the beginning of his speech suggested when he seemed to say that the only agriculture that should survive in the Highlands was sheep. I have a colleague who would not subscribe to that point of view. He is a former Minister of the present Government. He once said to me, "You know, we should be all right in the Highlands if it were not for these Pygmalion sheep." So there are two points of view about sheep in the Highlands.

But I would say to my noble friend that we appreciate that there is a limit beyond which one cannot go in propping up an industry, be it agriculture or anything else, which is quite uneconomical. We have not yet reached that point in this country in connection with agriculture; but I would remind your Lordships of the extent to which the Government have gone in closing uneconomic activities in the coal industry. If we had applied the same standards to agriculture as to the coal mines, a lot of the present agricultural activity would not be carried on. But my noble friend went on to say that we must consider the social aspect as well as agriculture. There is no doubt at all that in the Highlands the social aspect enters into things much more heavily than a viable agriculture.

I was disappointed in one sense in the speech of the noble Lord, Lord Lovat. I thought he was going on to put forward alternative proposals about agricultural usage in the Highlands which would enable us to get down to some more viable use of agricultural land. But, in fact, he said that if we can only add to the land of the Highlands by reclaiming some from the sea we can make good agricultural use of the reclaimed land. The noble Lord knows that this matter was discussed recently (and he was present) with officials from my Department. We are interested in this question of estuarial reclamation. I hope that it will have its place in the future development of the Highlands. But although it may help to make the Highlands more prosperous by adding to its first-class land, it does not help us solve the question of finding a way of making money out of the agricultural use of the land that is there at present.

I cannot say other than that the Government recognise the continued importance of preserving and helping agriculture in the Highlands. I think it is true to say that we have done more to help Highlands' agriculture during the last three and a half years than, perhaps, any other Government at any time in history. And no one can say that we are helping our friends, because I doubt very much whether we get a handful of votes from them. If we wanted to lay out money to get votes we should have given it to the miners rather than to the farmers. But we are doing it where it is necessary. It does not matter whether it brings in votes; we do not refrain from doing it because it does not bring in votes. I was glad to see the noble Lord, Lord Lovat, nod his head when I said the Government was helpful to agriculture.

My Lords, it remains for me only to talk about Invergordon. I wish the Prime Minister had delegated to me the task of announcing what was going to take place; but high as is his regard for me—of which I have no doubt—it does not extend quite so far as that. I cannot make the announcement that we are all waiting for. I should like to point out to the noble Lord, Lord Burton, when he criticises the Government for taking so long to make an announcement, that he knows as well as I that projects of this magnitude, which involve work with enormous private interests, as well as the expenditure of Government money, take a very great deal of time to work out. In this case there are international considerations also to be brought in. We are all aware of the interest of our EFTA partners in this. It is not just something which can be done just like that. I can assure your Lordships that the Scottish Ministers and the United Kingdom Ministers equally are well aware of the importance which is attached to the location of an industry of this kind at Invergordon. I look forward, as I am sure do all noble Lords opposite and on these Benches, to an early announcement on this subject which will be a source of gratification to us all.

My Lords, I have not touched on some of the points which have been raised. The noble Lord, Lord Balerno, was good enough to tell me that he was going to raise the matter of the selective employment tax and its lifting in respect of hotels outside the area. I have not touched on that matter because it is not within the terms of our remit. I said that I was happy on this occasion to accept the limitation which the noble Lord, Lord Lovat, placed on the debate to the seven crofting counties. Every hotel in the seven crofting counties is to be freed from the selective employment tax so that, so far as this debate is concerned, I have given 100 per cent. joy on that matter. If the noble Lord, Lord Balerno, wishes to have the matter discussed, it must take its place in some other debate, or perhaps be the subject of a Question in your Lordships' House.

I have spoken much longer than I intended. My only defence is that the debate is one which I thought merited an over-full rather than an inadequate reply. Even then I have no doubt that I have not satisfied everyone. I can say, however, that I am quite certain that time will show that the people of the Highlands have cause to be grateful for the fact that in 1964 this country got a Labour Government determined to make the Highlands a special area; and they will have no desire to go back to the Millenium of the noble Lord, Lord Burton, of pre-1964.

LORD BALERNO

My Lords, before the noble Lord, Lord Hughes completes his speech, can he tell us anything about the possible inclusion of the Islands of Arran and Bute in the definition of the seven counties by the Highland Development Board?

LORD HUGHES

My Lords, the Islands of Arran and Bute are outwith the seven crofting counties, but I think I may be justified in answering that question because as the noble Lord, Lord Balerno, said, the Act itself contemplated the extension of the area from the seven crofting counties to areas which were contiguous and similar. It is quite obvious that the Islands of Arran and Bute to which he referred come into that category: they are similar and they are contiguous. If there were any question of extending the area at the present time, I can imagine no place or places more suitable for inclusion than these two. But, given the magnitude of the task which the Board have in the area for which they were primarily set up, it is too soon to contemplate adding other territories to their responsibility.

The Secretary of State has very much in mind the fact that this is an aspect of the Board's responsibility which must be examined from time to time, but it would not be helpful if we were seeking merely to spread the jam—no matter how generous the jam may be—a little more thinly over a wider area. I think that the addition of these areas must await times which are more propitious for extending the financial resources of the Board.

8.15 p.m.

LORD LOVAT

My Lords, the night is late and I think that most of us feel rather like Lord Bannerman's cow. I shall certainly not make another speech. It would be churlish of me even to gross swords with the noble Lord, Lord Hughes. He has spoken with great charm and certainly made a lot of our arguments appear to be null and void. I am not sufficiently intelligent to react quickly to much of what he said, and in Parliamentary language I think that I should like a good deal more notice of the Transport Bill. I cannot believe that some of the bigger businesses who briefed me to speak for them can be talking entirely through their hats, but time will tell. On S.E.T. we have kept fairly clear of politics all through the evening, but I should tell the noble Lord that he is going to lose an awful lot of votes in the Highlands, and he must face that fact. Maybe, as a Christian martyr, he will meet that situation with fortitude.

LORD HUGHES

My Lords, may I interrupt the noble Lord to say that we cannot possibly lose a lot of votes in the Highlands, because so far we have not got an awful lot of votes there.

LORD LOVAT

Well, my Lords, I must say that for the first time in my life I saw an M.P. literally committing political suicide at a mass meeting at the town hall in Inverness. It was the Member for Caithness and Sutherland, who said that there were certain good things about the Transport Bill. I have still to be reassured that it is going to do a great deal of good in the Highlands.

With regard to S.E.T., I do not understand why small hotels or farmers, or any other small body of people, have to send money off and get it back in three months' time. There must be a subtlety there which I do not appreciate, but I accept what the noble Lord says. It seems to add to the vast army of non-profitable civil servants who, under this Government, have increased greatly beyond the number of the population in the crofter counties—but we take that in good part.

I think the noble Lord, Lord Hughes, made out a good case for the Highlands and Islands Development Board. I hope that the Government will bear in mind what I have said, as it was said without rancour. I think that these £50 million, rather up-in-the-air stories, like the one about Invergordon, petroleum, American finance, and—what do they call it?—Occidental Petroleum never do awfully well with companies which originate with £100 share capital. There is one company called Grampian Chemicals which has the same sort of background. I do not think that these things work too well. It is not intended as a criticism of the Development Board in any way when I suggest that big business, in which they are not really competent to operate, would be better left to the Board of Trade. That is only a suggestion, and I throw it out with all good wishes to the Board.

I think they have made a mistake in not having a really top forester or a top farmer on the Board. They have found an excellent land use officer after 18 months, although I think that he may be slightly over-loaded with other projects. As your Lordships will know, I feel—and I am probably right about this—that we could do a good deal more with cattle in the Highlands. The Board have made clear that they are not interested in agriculture, and I think that is wrong. It is bad luck having a man in charge of forestry and agriculture who is, no doubt, first-class in his own sphere which is fisheries and affairs that appertain to the sea.

The Board have done great work in building boats, and things of that kind, but I should like agriculture to be borne in mind always as the first industry in the Highlands. I am connected with an estate which has agricultural interests and forestry interests, and I can assure your Lordships (this might interest the noble Lord, Lord Donaldson, who talked about sheep, trees, cattle and other developments in a Highland glen) that a glen that I know sends out every year something like £45,000 gross in cattle and sheep, plus subsidies. It would take an awful lot of forestry to get that amount out every year. It would take fifty years, and then you would be lucky to get away with it, because the roads would not carry the heavy traffic. The Forestry Commission never show their profit and loss accounts, and that makes it rather difficult at times for the private woodland grower to know, when he is encouraged to grow trees, what the end product is going to bring in. These are sobering thoughts. The only limiting factor to cattle raising on the scale I envisage in the Highlands is the winter keep. That is why I talked of getting good land, if necessary, coming down to the sea, but that does not come within the limits of the debate.

I should like to thank every noble Lord who has spoken from all sides of the House. The speeches have been first-class. I should like to thank the noble Lord, Lord Hughes, for keeping the heat off; perhaps only he could have done it. There have been a good many odd characters in the Highlands during the course of centuries. It is not without significance perhaps that the Earl of Atholl and Sir Simon Fraser were both hung, drawn and quartered in 1307 for trying to reform what might have been the House of Lords in those days. But tonight we did not come to blows, and I should like to thank the Government Benches and beg leave to withdraw my Motion.

Motion for Papers, by leave withdrawn.

House adjourned at twenty Minutes past eight o'clock.