ECONOMIC PROBLEMS OF SCOTLAND

HL Deb 25 June 1969 vol 303 cc151-70

2.48 p.m.

THE EARL OF SELKIRK rose to call attention to economic problems in Scotland; and to move for Papers. The noble Earl said: My Lords, before moving my Motion. may I say how much I regret that Lord Bannerman of Kildonan is no longer with us. Many of us will remember him for his work on the football field, others for his fine interpretation of highland music; but I think that all will agree about his devoted interest in the welfare of his fellow countrymen.

I pitched the terms of this debate rather wide to enable noble Lords, if they so wish, to raise a wide number of questions. This may add to the difficulties of the noble Lord who has to wind up, but at least it will give the Government an opportunity of stating fully and broadly their views on the economy of Scotland at the present time. May I take this opportunity of welcoming Lord Wilson of Langside to our discussions? The high office of Lord Advocate has played a very big part in Scottish administration. Indeed, during the 18th and 19th centuries Scottish government was something of a mystery. The Prime Minister, Sir Henry Pelham, did not even know who was his Scottish Minister. But when one comes to analyse it, the principal Officer of State was practically always the Lord Advocate. It recalls great names like Forbes of Culloden, Henry Dundas and, of course, later on, Lord Dunedin.

I have not attempted, and I will not attempt, to extend the examination to the political and administrative structure in Scotland. It would be idle to pretend that we do not recognise that there is a Committee under Lord Crowther examining the Constitution. The Conservatives have a Committee under the chairmanship of Sir Alec Douglas-Home, and the Socialist Party thought it sufficiently important to devote a complete Party political broadcast to the subject of regional government, in which I think the main recommendation was firmly against any political devolution but in favour of a massive public investment. It is true that the Chancellor of the Exchequer's Budget Speech two days later did not exactly reflect that particular proposal.

There are two problems, I think, which the Government have to face in regard to the economy of Scotland. The first is that the restrictions on the economy which are imposed are primarily directed to maintaining a balance in the problems of London and the Midlands; and no one would think of imposing restrictions of this type to meet the particular conditions which exist in Scotland at present. We have no over-employment; we have no excessive development; and there is, in fact, a bigger percentage of Scottish manufactures devoted to export than to the United Kingdom. We are given a medicine for a disease which we do not have. The Government recognise this fully—I give them full credit for that; and they are providing antidotes, or, shall I say, antitoxins, in order to overcome the defects which otherwise would be apparent.

The second problem which exists for Scotland arises, I think, from the fact that very big changes are taking place. But they are slow; they cannot be measured in months or years, but rather in decades. For instance, there are many developments of importance, such as petro-chemicals and, if I may specially mention them, electronics—an industry which has grown up in the last 15 years and in which the number of employees now nearly equals the number in the coalmining industry and will shortly probably be considerably greater. There are besides, of course, some 100 American firms, most of which have brought in new processes of one kind or another.

The policies which have led up to this situation have changed and evolved. The first was essentially one of mopping up areas of unemployment, and this in time changed to altering the structure of the economy itself so that it would be strong. It was represented by the development of the great trading estates like Hillington, Teme Valley in the North East and Treforest in the South West. The second emerged from the Toothill Report on Growth Areas, with the accompanying need for research and development establishments to provide new ideas (it was emphasised by the Hunt Report about which we are to hear presently) and to strengthen the infrastructure of the economy itself.

How successful have these policies been? I do not attach much importance to migration, because I think that Scotsmen have always done well when they have travelled abroad and I would not seek to inhibit that in any way. But there are two points which one cannot ignore. The first is that the natural increase of population now no longer compensates for the migration; that is to say, there has been a net decrease in population in the last four or five years or so.

The second point is that more than half of those who leave Scotland do not go to England, but go overseas. The policy which the Government pursue here is to try to replace the industries which are declining by the expanding industries. The declining ones are mining, agriculture and transport, in particular, and the rising ones are general engineering, electrical engineering, construction and what are called professional and scientific services. I recognise that these two parameters are varied and it is not easy to see at any one point what are the differences between the two; that is to say, whether the expanding industries are fully compensating for the declining industries. But I am bound to say that I feel disturbed by a figure in the April Digest of Scottish Statistics, Table 39, which indicates that the number of "employees in employment" between 1966 and 1968 has fallen by between 50 per cent. and 60 per cent. I know it is difficult to calculate these figures, and there may be some explanation for it; but it seems that the number of new jobs which are being created is nothing like keeping up with the jobs lost in the declining industries. I should like to know what the Government have to say on this point.

I referred to two factors in the development of Scotland; first, the concept of trading estates and second, growth centres. I come now to a third factor which is causing a great deal of anxiety at present and which may well affect the future strength of the Scottish economy. It is the growing realisation that decisions on economic matters are now ever-increasingly being made outside Scotland and, of course, particularly in London. I am glad that the Government are sensitive about this; indeed, the noble and learned Lord, the Lord Chancellor, referred to it last week and defended the Government against charges of centralisation. I did not find his arguments very convincing. He said that the Government had shed certain powers, and instanced the Post Office. My Lords, the Post Office remains exactly where it was; the bulk of the personnel running it is precisely the same; there may be some changes at the top, but it remains essentially a centralised organisation in London. So I cannot say that I felt that this was much of a contribution to what I think is the important matter of decentralisation of the control of essential economic matters.

I am not going to pretend that this is a new problem, but I say that it has been referred to in many places with concern. It has been referred to in the General Assembly of the Church of Scotland, which in turn gave rise to a letter in The Times. It has been referred to in Fabian Tracts, in particular Tract No. 392, and it was well written up by the Scottish Council in their paper on centralisation which they called Scotland's 20th Century Nine of Diamonds. I am sorry that the Hunt Committee did not deal with this in much detail. I hesitate to say anything about what the Government will have to say on the Report. but the nearest that the Hunt Committee got to this matter was a minority suggestion of a tax on congestion.

The factors which have caused this in the past and which, it appears, will cause it increasingly in the future, are certainly varied, but there are a large number which are not outside the direct responsibility of Government. In any case, the immense power of Government to-day makes them in some measure responsible for almost anything that happens. The first thing I would mention is the high level of taxation. At the present time, the Government are spending about 50 per cent. of all investment expenditure. They are also spending nearly 50 per cent. of the gross national product. The decisions regarding this money are inevitably made a few hundred yards from where we are now; and anyone who has sought Government contracts knows that there is a marginal advantage to be gained if you are within easy motoring distance of those who make the decisions; and the same thing applies with regard to the siting of research and development establishments.

The next element which plays a part in this question is the further extension of nationalisation, which to-day is very much less a matter between private and public ownership and much more a matter of centralised control against devolved control. We do not know yet exactly how the steel industry is going to work. It appears that there is to be no regional organisation on a geographical basis. It appears that the subordinate organisations are to be on a product division level and none of the product divisions will in fact be in Scotland; which in turn means that those Scotsmen with ability in this line of business will not be able to find their work in Scotland. The noble Lord, Lord Balerno, who is not present to-day, has frequently spoken about the number of competent and able graduates who have had to leave their own country to find work.

Take another example, my Lords: that of ports and harbours. The Government have apparently decided, contrary to the Rochdale Report (and, indeed, contrary to the powerful speech made by the noble Viscount, Lord Rochdale, in your Lordships' House some weeks back) that the ports of the Forth and the Clyde, and other ports in Scotland, will be under the direct executive control of London. I think it is no secret that in Scotland this decision is regarded as disastrous. Is there really going to be no one in Scotland who can be responsible for the development of our ports, which is a vital element in the economy of the country? If I may take one other example, some study has been started and is going on in depth with a view to establishing an ore terminal on the Lower Clyde near Hunterston on the Ayrshire coast. It is claimed that there is sufficient water there to berth a ship of 250,000 tons without dredging. I am not going into details on this subject, but I hope that other noble Lords may develop it further. But is this a matter to be entirely decided by a committee in London? Is this a question to be dealt with simply by a little note at the bottom saying, "The special interests of Scotland will be considered"?

A further element is the astonishing development of amalgamations, mergers and take-overs. If anyone looks at the recent report of the Monopolies Commission, he will see that over the last four years there have been 4.000 amalgamations, involving £4,000 million altogether. That is an astonishing proportion, which some people might well regard as alarming. I do not want to say that many amalgamations are not desirable and essential for the well-being of this country. What I am saying is that the proportion to which amalgamation has developed is something which cannot be regarded except with concern.

That is the view of the Monopolies Commission themselves. I should like to read to your Lordships what they say. Having become aware of a controversy on this matter they say: The existence of this controversy suggested to us that new or insufficiently appreciated aspects of mergers might be coming to light which would need to be borne in mind in examining particular merger proposals.

That means that we do not know the social effects which may flow from them. The Report continues: This merger activity … is however leading to the continued absorption of an independent decision-making unit in the economy by absorption into a larger framework.

So there is no natural advantage in bigness for its own sake, and wide repercussions may take place. Indeed, I find something of the same sort in the I.R.C. Report, where they say: Size in itself is no solution.

The Monopolies Commission further say: The first and immediate effect of any acquisition is the elimination of an independent decision-making unit in the economy by absorption into a larger framework.

That means that there are fewer centres of decision and fewer people will make more decisions.

This is a matter which is certainly of concern in Scotland, though many of the things I have said have a much wider concern in other parts of the country. From the three examples I have given, it will be seen that many of the decisions affecting deeply the people of Scotland will be made at long-range. I would ask the Government what is their attitude and what they propose to do about this? In fact, they are encouraging mergers. It is naturally the work of the I.R.C. to do that. Only on Sunday another merger was announced, of the machine tool industry. This means inevitably that the advanced machine tool industry in Scotland will be amalgamated at some place suitable to the I.R.C. I am not saying that they are not doing a valuable job of work, but the momentum of this is going a long way, indeed.

I do not doubt that the Government will tell us that they regret that this should be happening, just as they "regret" moving the naval station at Arbroath to concentrate it in Portsmouth and as they "regret" the failure of the World Health Organisation to establish itself at Edinburgh, for reasons which the noble Lord, Lord Ritchie-Calder, sup- ported by my noble friend Lord Balerno, said amounted to "a conspiracy of interests in the South". On the other hand, the Government may say that the proportion of amalgamations reached is not yet dangerous. Maybe not yet, but if the momentum continues, it may become extremely dangerous.

Finally the Government may well say: what can we do? I do not think that the establishment of the Scottish Economic Council has constituted any real answer to this problem at all—at least, not up to the present. Of course, many small things could be done, particularly in the realm of communications. The telephone service might he improved so that we do not hear so often the Girl with the Golden Voice saying, "All lines are now engaged". We might improve the landing system at Turnhouse. Is there a proper instrument landing system? Or do the contours of the ground prevent it from working as efficiently as it should? Cannot we further encourage air services between Edinburgh and the Continent, which would be of considerable importance if we go into the E.E.C.? At present, for example, there is a B.E.A. map of the European services which does not even mention Edinburgh or give any indication of how one can get there.

Are the Government considering the recommendation of the Franks Committee that there should be business schools set up in London, Manchester and Scotland? Schools have been set up in London and Manchester. Is the one in Scotland going to come next, as soon as money is available? May I also suggest that there should be less effort to force the Scottish universities to conform with their younger brothers in England.

There are two things which I think are important. The first is concentration on growth centres—that is, centres of economic growth which will be self-generating and which will include research and development establishments. Secondly, do the Government recognise that the economic prosperity of Scotland will never be achieved if the centres of economic decisions are moved out of the country? If the Government do not want that to happen, they will find many ways and means to enable them to say how that policy can be carried out. I believe that that movement is bad not only for Scotland but also for the whole of the United Kingdom. In other words, the essential recommendations of Montague Barlow are right, even though the details of the Barlow Report could not all be carried out.

Why am I making so strongly this point about the danger of taking decision-making out of Scotland? First, if the men of ability, with initiative and ideas, leave the country, we cannot expect economic development to keep up to date. Besides that, there is a whole range of voluntary social activities—local government, hospital boards, youth organisations and so on—on which we as a community so largely depend. Secondly, when Ministers get into difficulties in Scotland, they often say, as indeed the Minister of Technology himself said a week or so back, "These are matters which Scotland must settle for herself". That will not wash, if all decisions are made outside the country. If this pressure goes on and the people of Scotland are increasingly expected to dance like marionettes on strings moved from London, to become "hewers of wood and drawers of water", there will be only one reaction. If they lose economic control, the people of Scotland will demand political control. It will be a demand which cannot be resisted. I believe strongly in the unity of the economy of this country and it would be a great setback if this happens. I do not think there are many examples in history where economic pressures have persuaded people to give up the control of their own affairs.

To summarise, I would say this. Changes are taking place, and I hope the Government will keep the pressure up to see that the restrictions in the economy elsewhere do not prevent those changes from taking place. I ask them to pursue with greater force the policies of growth areas, along with research and scientific development, as necessary. Finally, I ask them to use their power to check the transfer of centres of economic decision outside Scotland. The Government have great powers, and I believe they can do this if they want to. I beg to move for Papers.

3.10 p.m.

LORD WILSON OF LANGSIDE

My Lords, we must all be grateful to the noble Earl, Lord Selkirk, for the thought-provoking opening which he has pro- vided to us Scotsmen, and it may contribute to the harmony of the debate if I say at once that I do not by any means find myself in complete disagreement with everything that he has said. I shall not immediately follow him down all the paths which he trod, but he spoke thought-provokingly indeed about the matter of centralised control. This is of course a matter which has exercised Scotsmen ever since the Treaty of Union was entered into; and there has always been scope for the examination in relation to Scotland of the possibilities of a wider and greater devolution of power—political and economic decision-making power.

We have always been conscious of this in Scotland, and it is not because I do not regard it as a serious matter that I remind your Lordships of what it was of the old lady in The Heart of Midlothian said about it. Do you remember her? She was standing up at the corner of the Cannongate, in old Edinburgh, listening to the men arguing about the reprieve of Captain Porteous, and whether it stood good in old Scots law. Impatiently, she broke in and said, "I dinna ken muckle about the law, but this I do ken: that when we had a King, a Parliament and a Chancellor of oor ain, we could aye pelt them with staves if they were na' good bairns. but naebody's nails can reach the length of Lunnon." To-day, happily, London is more accessible.

On Saturday last I stood close by the Field of Bannockburn. Scotland had gathered there—if not her beauty, and her chivalry—a not insignificant number of politically excited people. For there, some 655 years ago, a Scottish King of Anglo-Norman ancestry had "seen off" from the field English Edward and his army. And if on Saturday your Lordships had listened to what was being said there. and to the responses which it evoked, you might have forgotten that nearby motor cars were hurtling down the tarmac through radar-controlled police trans into the modern bustling town of Stirling. One might have thought rather of a rough track, leading perhaps to a rickety old bridge, not long rebuilt, for, as you remember, it had been pulled down, not so many years before, by William Wallace and his men—with half the English army on one side and half on the other, and some on the bridge in between, who were swept to a watery grave, which no doubt they richly deserved. You might have thought, if you had listened there at Bannockburn on Saturday, that time had stood still these six and a half centuries; and if you did think that, you would indeed have stumbled upon the beginnings of a clue to much of what is wrong in some of the controversy that there has been inside Scotland about her economy and her future over these last few years. Of course it is fair to say (and perhaps I had better say it before someone else does) that there are other occasions and places in which one feels that time is standing still.

But we must be grateful to the noble Earl for raising this subject to-day, particularly because it enables us to discuss the economic state of our country as it really is. It is stripping away the many misconceptions and fallacies both inside and outside the country. It is a highly urbanised and industrialised country, economically rich and advanced after 262 years in partnership with our former enemy. But as the noble Earl has quite properly pointed out, even advanced countries have their problems. Of those facing Scotland the present Government have all along been fully aware, and any belief—indeed it is often said—that the special needs of Scotland have been neglected by this Government are wholly without foundation. Not only has study been intensified, but the problems themselves have been tackled by the Government, and with a measure of success of which we can be proud, without being complacent or self-satisfied.

Your Lordships will forgive me, I hope, if in passing I spare a glance—a somewhat elementary glance, it may be—at the economic history from which most of our problems spring. We had the heavy concentration of capital and skills in an industry based largely on coal and iron, shipbuilding and heavy engineering, and on jute and woollen textiles. Think, too, of the job losses in our labour industries, on which for so long the strength of our economy depended. Between 1946 and 1968 the men employed in coal-mining were reduced in number from 90,000 to 43,000; in shipbuilding and ship-repairing over the same period they fell from 50,000 to 33,000; in marine engineering from 21,000 to under 10,000. In coal, too, the pace of the decline recently accelerated. Further job losses must be expected in our established manufacturing industries, while contraction continues in the numbers of our people employed in agriculture and rail transport.

What it all comes to, of course, is that we are living in a period of change. 'That is not a very original thing to say but what, in this context, it involves is the need (and the noble Earl recognised this in what he said) for nothing less than a fundamental re-structuring of our Scottish economy. It is that with which we are presently engaged, because of course it is the structure of our economy that has been, and still is, the crux.

One talks of re-structuring. What does it mean? It means a lot of upset for a lot of people. The lawyers have always plenty to say when anyone dares to talk about re-structuring their particular activities. So we should not be surprised if there are difficulties here. It involves a change of role, and in some cases a reduced one for our older major industries. It involves the need for new types of industry; the needs of the infrastructure—that hideous word, but I cannot think of a better one. The task not only makes vast demands—and this is what the people of Scotland recognise—right across the whole field of local and national government but demands, from all with any responsibility, forethought and study in depth. It is things like this which, when one says them, tend to make the listener cry, "Action, not words is what the country needs." How very true, my Lords!

Let me take a quick look—I hope a brief one—at some of the action in which this Government have been involved, under three principal heads. First, regional policies. The need here, as we saw it, was for something with impact, and it was to devising policies of this character that the Government from the outset have set their mind. Time, and your Lordships' patience, would not permit that I elaborate upon these matters in detail, but it may be useful if I restate their general outline and their purpose.

First there is the move greatly to strengthen the industrial development certificate policy, under which industrial development is under the control of my right honourable friend the President of the Board of Trade. The Government's view is that this industrial development certificate control is an essential element in their overall regional policy. They did not, therefore, accept the Hunt Committee's proposals that the general exemption limit from industrial development certificate control should be increased to 10,000 square feet. This was an important decision, in the Government's view, for Scotland and for the continuing growth of the Scottish economy.

Again, soon after the Government came to power, important changes were made in the method of assisting industrial investment. These measures gave a clearly identifiable advantage to Scotland by making the investment grants available to these areas at twice the rate at which they were available elsewhere. Simultaneously, the old development districts were extended and transferred into new and wider development areas. Thus the higher rates of investment grant and other development area assistance became available to virtually the whole of Scotland. This was important to Scotland, for many parts of the country which had previously been excluded were now able to benefit from the various measures of industrial assistance. It secured the wider spread throughout the country of the benefits of our regional policies. We have paid attention, too, to the needs of the new and expanding projects for an adequate supply of skilled labour. Men and women, as the character of their work changes, need to acquire new skills. In 1964 there were four Government training centres in Scotland with a throughput of about 650 trainees each year. There are now nine centres with a throughput of about 2,300 trainees. More are required, and in late 1970 a tenth centre at Dundee will bring the throughput up to about 2,500. Over the past three years, training capacity in these centres in Scotland has more than trebled, while in Britain as a whole it has doubled, reflecting the Government's recognition of the special case of Scotland. In this context a major contribution is made by industry itself through the industrial training boards, and there are now 26 of these in existence operating in Scotland.

The second head upon which I would touch is the Government's advance fac- tory programme. With this, too, the Government have pressed on. We need a skilled and adaptable labour force; we need a good communication system, we need housing and other facilities and so on. We must press on with this programme, because we recognise the need for available factory space, so that incoming industrialists can see the opportunity to begin production as quickly as they may wish. Since 1964, some 54 advance factories have been authorised in Scotland—1¼ million square feet of factory space. This is more than twice the number of factories and area authorised over the period 1960–64. Of these 54, 41 are already completed and 31 allocated. Since the beginning of 1968 no fewer than 21 factories have been allocated in Scotland. What this programme illustrates is the Government's recognition of the desirability of spreading assistance to industry beyond the central industrial belt, and out to other parts of the country. It is all part of a necessary and continuing effort to use and develop resources everywhere in the country. In the result, the areas outside the central industrial belt have enjoyed a better and a good share of new industrial development in the last three or four years.

I pass over the work of our local consultative groups, of which your Lordships have heard much, but I would mention the evidence which they also provide of the Government's recognition of the need for the economic development elsewhere than in the central industrial belt. I pass over, too, the setting up and the progress of the Highlands and Islands Development Board, with which your Lordships have also been much concerned from time to time. I pass it over only to observe that by setting up this Board, with its Consultative Council, we gave to the Highlands and Islands a new type of organisation which has been the envy of other areas in the United Kingdom.

I would next say a word about recent new industrial development. Not surprisingly, a number of the major projects, which will strengthen the Scottish economy, have come to the central belt. There are the £20 million expansion at Linwood by Rootes, the £6 million computer factory at Glenrothes, Fife, by Burroughs, Limited. There is the Imperial Chemical Industries' new nylon plant at Ardeer, which is now in production, and the £5 million expansion at their pigments plant at Grangemouth. In Lanarkshire, Honeywells have continued to expand, and recent announcements have concerned Motorola's decision to set up a new electronics project at East Kilbride, employing 2,000 people, and British Leyland's decisions to expand at Bathgate and at Glasgow. The British Leyland expansion in the old Harland and Wolff premises at Scotstoun, of which your Lordships will have heard, surely epitomises the way in which the newer and expanding industries can offset the rundown in our older traditional industries. The picture is this. In the four years between 1965 and 1968, 41.1 million square feet of factory space was approved in Scotland, representing in employment terms potential additional employment of 84,000. This compared with 19.4 million square feet of factory space approved in Scotland in the previous four years, with potential additional employment of 54,000. While the vast majority of this new industry naturally comes to the central belt, the Government's policy, as I have said before, of wider development areas has resulted in the other parts of Scotland reaping considerable benefits as well.

My Lords, have we had success? What are the indicators of success? One of them, surely, is in recent trends in unemployment in Scotland. These indicate that there has been a steady improvement in our country's relative unemployment position. The Scottish unemployment rate was for many years twice that for Great Britain, but since 1966 it has fallen significantly and the ratio is currently approximately 1½ to I rather than 2 to 1—not all it should be, but better than it was. The noble Earl spoke of migration—a complex matter. I would beware of reading too much into short-term changes, but the figures suggest an improvement. Figures for the year to June, 1969, are not yet available, but those up to June, 1968, indicated that net migration was below that of any year since 1962. Net migration to the rest of the United Kingdom was below that of any year since 1958–59, and the upward trend of migration overseas which began in 1961–62 had been reversed.

The signs are encouraging also in terms of earnings. In 1964, average earnings in manufacturing industries in Scotland were running at about 25s. below those of the United Kingdom as a whole. The most recent figures suggest a narrowing of the gap. The gap has narrowed to 13s. 6d., from 6.4 per cent. to 2.7 per cent.—not good, perhaps, but better. In 26 individual manufacturing industries Scottish earnings now in fact equal or exceed the comparable United Kingdom averages. Fourteen of these 26 industries had average weekly earnings exceeding by 20s. or more the United Kingdom national averages.

My Lords, before I sit down let me add this. For it all, the Government claim no more than this: that we for our part have tackled the real problems of Scotland with vigour and with a significant success. Of course, politicians must not promise "pie in the sky", or suggest that political cookery can produce such a dish. In the last resort, the solution to these problems with which your Lordships are to-day concerned depends (does it not?) upon the qualities of the Scottish people: their spirit, their determination, their vigour, initiative and ability. It is there that we shall find the key to success. All I claim, speaking on behalf of Her Majesty's Government, is that by continuing to pursue the kind of policies that I have at least endeavoured to outline to your Lordships our country's economic health may reasonably be regarded as being likely to go from strength to greater strength.

3.36 p.m.

THE MARQUESS OF LOTHIAN

My Lords, I should like to join with the noble Lord the Lord Advocate, Lord Wilson of Langside, in thanking the noble Earl, Lord Selkirk, for giving the House this opportunity to-day to discuss these very important matters concerning Scotland. I do not think we have had a general debate on Scottish affairs for about at any rate a year, and this is reflected in the number of speakers who are on the list to speak to-day. For this reason, I certainly do not intend to take up any great length of your Lordships' time. I notice that my noble friend Lord Elgin and Kincardine is about to make his maiden speech when I have finished speaking, and I have no doubt that he is as anxious to get that over as your Lordships are to listen to him, so I shall not stand in his way for too long.

I am glad that so far in this debate we have not preoccupied ourselves too much with the general statistics of the Scottish economy, because I think that to-day what your Lordships are trying to do and are hoping to do is to look at the general economic position of Scotland and to try to see where things have gone wrong and where progress is satisfactory. All your Lordships will have been interested in the survey that we have just heard from the noble Lord the Lord Advocate, but, from a brief look at the figures that are available, it is clear that certain imbalances still exist in our economic structure. For example, the construction industry and to some extent the utility industry as well have succeeded pretty well in hitting the target which was set out for them in the Government's White Paper, The Scottish Economy 1965–70; at the same time, we cannot deny that the performance of the manufacturing industries, upon which so much of the wellbeing of Scotland is dependent, has sadly declined. That is having its effect on both the standard of living and the level of employment in Scotland.

I was glad to hear from the Lord Advocate that the most recent figures of unemployment show signs of improvement. Nevertheless, since 1964 there has been a net loss of something like 35,000 jobs in Scotland, and that is something which the Government, and indeed the House generally, should ponder over and worry about considerably. I realise, of course, that more children are staying on at school and there has been emigration from the country, and this has not only helped to contribute to a labour shortage in some areas but had its effect on unemployment levels. I do not want to make Party points in this debate, but it is fair to point out that the previous Government were achieving a net increase in the number of jobs available, and I am sure the House will want to know, as I think the noble Earl has already asked, how the present Government intend to reverse the downward trend.

For instance, take the question of regional development. Can we not push on more quickly with it? It seems to me there is no overall plan, for instance, for Glasgow or the West of Scotland. We have had regional plans for the Lothians and the North East and for the Borders: can these not now be coordinated more quickly? It seems to me that things are still proceeding in a rather piecemeal and haphazard way. I am not one to decry the virtues of private enterprise or initiative, but in dealing with economic problems of the size we are considering to-day it seems to me to be essential to have a strong and positive economic policy for Scotland as a whole, and in my view that is what we are still lacking.

The noble Earl mentioned the Scottish Economic Planning Council. It was hoped that this body would provide the answer to many of these problems, but it seems to me it has not yet succeeded in doing so. One of the troubles is probably that the members of the Council, all of whom we know to be able men, are inevitably part-time. They cannot meet together frequently enough to be able properly to assess the long-term requirements of Scotland, or to take emergency decisions if those are called for. Also I am not certain whether it is a good thing that the Secretary of State should be chairman of this Council. After all, it is an advisory body which is meant to give him the advice that he is looking for, and it might be easier and less inhibiting for the work of the Council if he were not the chairman of it. I should like to know the views of the Government on the progress and practical value of the Economic Planning Council, because it seems to me that it needs looking at and possibly strengthening.

It is perfectly true, as has been said, that a great many of Scotland's economic difficulties are founded in the rundown of the older heavy industries—shipbuilding and mining—and the switch to the much more diverse pattern of lighter industries, such as car production and electronics. There have been, and still are, great problems in regard to retraining and rehousing as a result of this switchover. It is much to be welcomed that this change is occurring, but I should like to know, and I am sure the House would also, a little more about how the Government regard the progress of this development.

If I may revert to the regional studies, I think it is true to say that these have, to some extent stimulated local industrial development. I know that in my own area of the Borders, although the plan has rather fallen by the wayside, I think partly because it was not sufficiently understood or appreciated by the public generally, it has had the effect on several of the smaller Border towns of encouraging them to go out and find industry and bring it in, and I think we should all he glad about that. I believe that to-day we are not mentioning the agricultural side of the Scottish economy, or forestry, but I do not think your Lordships would want the debate to go by without remembering that these industries play a vital part in the economy of Scotland.

I think a brief mention can be made of the tourist trade, because on the whole the Government, and probably the country at large, still do not recognise the full potential of this industry. As we all know, it has enormous possibilities, but despite the assistance given by the Government, it is still hamstrung by such things as the selective employment tax, the lack of flexibility in working hours and the lack of capital for new building projects. I should like to know from Her Majesty's Government how they view the position of the tourist trade at the moment, because I believe a great deal more could be done to enable the people working in this trade to develop its full potential.

This is such a vast subject that one can only touch on the fringe of it. My own chief concern has been that although the noble and learned Lord, the Lord Advocate, has said that the Scottish work-people are among the best in the world to-day, there are still areas of the economy in Scotland where there seems to be something of a sense of inertia. I know that no Government can transform a bad management into a good one, or a slow worker into a quick one, but it can do a lot to make life more attractive for everybody employed in industry by spending wisely, not only on vital things such as roads, schools, housing and so on—what we have come to refer to as the "infrastructure", which I agree is a horrible word—hut also by spending more on amenities and the arts. One might think these things are not very important in an industrial society, but I believe they are vital to the well-being of people living in urban areas. Also in my view it is essential that the Government should continue to spend money on improving the road, rail and air links, not only with- in Scotland but between Scotland and England and the outside world.

So I feel that, despite what I am quite sure the Government wish, to some extent the Scottish economy has been allowed to drift. I have tried to he fair about this and to indicate in general terms where it appears that matters need to be improved. I am sure the noble Lord, Lord Hughes, will not try to convince the House that everything is all right. I am sure he is no more a believer in "pie in the sky" than is his noble and learned colleague sitting next to him. We all recognise that no Government's policies can ever have 100 per cent. success. I hope also that the noble Lord will not say that action depends on the publication of the Wheatley Report, although that Report will be of the utmost importance to Scotland, especially to the administration of Scotland and its social side, and to some extent it will have a bearing on the economy. I do not know what has happened to the Wheatley Report. I should like to know whether the noble Lord, Lord Hughes, can enlighten us as to when it is likely to be published. But apart from that, I do not think that action in the economic field in Scotland should await either the publication of the Report or its implementation, which may be a good deal later on, in the dim future. We want to know to-day how the Government intend increasingly to recreate the conditions of dynamism that so much of Scotland's industry still needs, to enable it to do its job properly and to bring increasing prosperity to our people. I would end by thanking the noble Earl for giving the House this opportunity of debating this essential matter.