ECONOMIC PROBLEMS OF SCOTLAND

HL Deb 25 June 1969 vol 303 cc177-262

4.5 p.m.

Debate resumed.

THE EARL OF ELGIN AND KINCARDINE

My Lords, as I rise for the first time in your Lordships' House I would ask for your indulgence, and would straight away like to thank my noble friend Lord Lothian for his most kind words to me. Even more surprising, perhaps, was the kind reference made by the noble and learned Lord the Lord Advocate who on the field of Bannockburn, as I am given to understand, last Saturday referred to my ancestor as an Anglo-Norman. I should like to assure the noble and learned Lord that after that battle was over he was none other than the King of Scots. As this is the 655th anniversary of the day after that particular battle, when no doubt many of our forbears were sitting down and examining the massive injection of foreign capital which lay on the field, I believe that it is not a bad thing that we should again here, at some distance, be considering the massive injection of foreign capital that the noble Lord the Leader of the House has just said is to come to Scotland as a result of the Statement which he has so kindly made.

My noble friend Lord Selkirk dealt with the question of our centre of decision being outwith Scotland. He was followed by the noble and learned Lord the Lord Advocate speaking of the Treaty of Union as being the moment when perhaps the centre of decision moved away from Scotland. I cannot really allow that to pass without saying that I discovered in my family archives a letter, dated in Whitehall on June 8, 1670, which rather led one to believe that even then the King, though he was distant from Scotland, was interested in the welfare of the country. This letter contained three statements written to my forbear the Second Earl of Kincardine. on the economy of Scotland. It referred, first, to the fishing industry and to the fact that the King was giving special interest to raising funds in London in order to help in the building of new ports around the North of Scotland. It then turned to the question of the salt industry in Scotland. This was an enormously important industry because coal was the method by which sea water was evaporated to produce the salt, and from this industry a great deal of money was then coming to bolster Scotland's economy. Then the letter turned to the third, and probably the thorniest question, which was: was it not time that Edinburgh as a capital ceased, and that a new City, away from the rather dismal surroundings of Edinburgh, be crewed, perhaps near Stirling.

Here, at this particular moment in this one letter, was the whole outline of the economy of Scotland at that time, very much in the same way as noble Lords have been discussing the economy at this moment. I feel that there are certain ingredients which perhaps could be taken up from our historic past which can help us in the future. Undoubtedly, one of these is the integrity and the forcefulness of the smaller businesses in Scotland which, throughout all this period, have helped enormously to improve the value, the efficiency and economy of our country.

My noble friend Lord Selkirk referred to the way in which industry had developed in Scotland over the past few years and to statistics on the building of factories. My noble friend Lord Lothian also referred to this. It is absolutely true that these factories have been built as a result of the effort, the ingenuity and skill of the construction industry in Scotland: and over the past years there has been no doubt of this whatever, as shown by the number of successful issues which have come forward of private companies going public. Here undoubtedly Scotland is helping herself enormously to achieve the advantages which may be offered through Government grants.

It is really of the smaller company, its requirements and its value to the community, that I venture to speak. I believe that the fullness of our economic wellbeing lies in the fortunes of many small to medium private companies employing between 50 and 500 men, and usually companies which are identified by swift ability to make decisions, by prudence in borrowing and in the use of capital. This is particularly noteworthy in the export field, where you see a high return on the capital invested. There are, I believe, important and close links between these businesses and their employees with their own localities, and above all they engender a great pride of achievement which helps to assist the welfare and wellbeing of the localities in which they are situated.

It is perhaps unfortunate that certain recent figures appear to show that there was misunderstanding between men and management in Scotland through the loss of working hours. I do not believe that this happens nearly so often in the smaller industries. There is one particular example which comes to mind. Only recently in the brick-making industry, which is one of the most difficult of all, there has been agreement in a small company which has had very much wider repercussions. This company is determined to improve its conditions by modernisation, and it was able quite swiftly to create an understanding between the men as to what was involved in the modernisation of the plant; how much capital was required to be invested; what the margin would be to be shared in paying for that capital, and in a greater return for the men through productivity. In this very difficult industry this result was achieved in about two weeks. The agreement was considered so important and far-reaching that it was one of our exports to this country; and I hope very much that it will improve the standards and conditions in this industry all over Great Britain.

If you were to examine a typical firm of the type I am trying to describe, you would certainly find at the top a man who has invested his moneys and his energies irrevocably; and because of the way management and shareholders alike are identified with the business, so you will find willingness on the part of the Scottish banks and finance houses to provide finance for their developing enterprise—albeit, I suppose, these have to be subject to certain restrictions and restraint which seem to be as much an element of present life as our other troubles in the historic past. But this close link between bank and customer is fully justified by the excellent record of the vast majority of their customers, and believe this record is not solely confined to the Midland belt, as you might call it, of Scotland.

It is noteworthy that a feature of the past ten years has been the expansion of a number of solid firms in the Highlands quite capable, as a result of their efficiency, of borrowing what finance was needed for their steady growth, and all this at the ordinary rates prevailing in the rest of the country. The concerns in question are widely diverse and include the construction industry, animal feeding and the laundry industry. I am certain that this existing hard core will help to set a standard for the Highlands and Islands Board and be in every way complementary to their efforts. Here. I would respectfully pose this question to the noble Lord who is to reply. Is it an essential ingredient of the Board's policy to insist, as a condition of the granting of a loan to a private company, that there should be a share option which can be exercised in the favour of the Board at, say, five years' time but at par and not at the value of the share in five years' time? Because when this question has been put to a potential borrower in the Board's area it is causing a certain amount of concern.

I believe it is essential for Scotland that there should be a widespread and profitable industry in the small and medium-range, for only so can there be proper balance, a balance which will help to ease the reliance on any one of a few very large firms who might, as has so sadly happened in the past, become embarrassed and in serious difficulties. A small company may appear slow to build up and may appear to produce less dramatic results, but steady production is often more desirable, and certainly the collective strength of such companies together is a highly desirable feature of our economy, particularly in the local community, just as much as it is to the whole of our nation. One would like to be assured that every bit as much attention is paid to this collective strength of our existing small companies as is given to an incoming, specially sponsored new industry. I venture to suggest that the growth of our indigenous small companies ought not to be hindered by financial stringencies formulated to curb a quite different situation in another country. It would be good, I feel, that the integrity and the prudence of the many small businesses in Scotland be well known to be priceless assets in the recreation of our country, and that they be given the fullest possible chance to do the utmost they can.

4.17 p.m.

VISCOUNT MUIRSHIEL

My Lords, I am indeed grateful that I have the privilege of being the first to congratulate my noble friend on a quite remarkable maiden speech. I was not quite certain, as he developed his speech, whether I was going to have to congratulate him on his historical research or whether I should have to congratulate him on his knowledge of modern Scotland. Obviously it is on both, and we are extremely fortunate that we have somebody joining our counsels in this House with this kind of knowledge stretching over the years. My noble friend, of course, inherits, as we noticed this afternon, a great tradition of service to the whole nation, running right through the centuries. I can only say from personal knowledge—and there must be a fair number of others of us who realise this—that already in other spheres my noble friend is playing a great part in the life of Scotland, and it is a great comfort that we shall have his counsels in this House.

My noble friend Lord Selkirk, in opening the debate, dealt with an extraordinarily interesting aspect of the future economic life of Scotland, and I am very glad indeed that so much thought and time has been given to that aspect of the whole economic life that is going to be with us in the years to come. I would ask your indulgence—in fact, you may give me your blessing—if I do not range over the wide economic scene in Scotland but confine myself to the immediate problems, and, I would emphasise, the immediate opportunities which are emerging in the Clyde area, both Upper and Lower reaches in the estuary, and in the neighbouring counties. Of course what happens in that part of Scotland can be of critical importance to Scotland as a whole and, I would say, to Britain as a whole. In my so doing, obviously it is extremely difficult to avoid mentioning the agonising story of Upper Clyde Shipbuilders; but this is not the time to delve into the past or to attempt to analyse the reasons for this prolonged struggle for survival of a group composed of world famous yards, two of which certainly were highly efficient and viable when the group was formed and I am sure are still efficient and viable as units. One can only hope, and hope profoundly, that out of all this period of travail there will emerge something strong and something which will last.

Perhaps I should at this stage declare such rather indirect personal interest as I have in what I am discussing, since I gather that this has become something about which one must be more than ever careful. I am in fact a part-time member—still rather to my own surprise—of the board of the Scottish and North-West Group of the Steel Corporation which supplies steel to the yards in question. I am also a non-executive director of a shipping firm that forms part of a consortium which has a ship under construction in the upper river. But I have no personal interest in any shipbuilding firm. My remarks are based on a very real interest in the reputation of the whole Clyde area as a builder of ships—an area which for a great many years led the world and, I believe, can still do so.

If there is a moral on which one can touch at this anxious period, it is surely that, while size may be of great importance in this modern world, size through amalgamation can be dangerous unless that amalgamation is based on solid foundations—technical, financial and labour relations. Amalgamations which are not so based should certainly not be hurried, and possibly should never take place. Otherwise there must be a risk that in seeking to preserve for a period what may be of marginal viability we shall bring down what is sound along with what is not so sound.

But all is not gloom in shipbuilding in Scotland. One of the pities of modern publicity—and it may have been so through the ages—is that while difficul- ties, problems and crises make headlines on the front page, quiet efficiency and success get a small paragraph, probably in the business supplement; and if it is a Saturday, and there is no business supplement, that piece of news has "had it". It is worth emphasising that while a great many people know of the problems of Upper Clyde Shipbuilders, not many may have noticed the group down the river. There is no harm in mentioning the name of that group, which is the Scott Lithgow group—we have heard enough of all the other names. They have recently received, in world wide competition, an order for a tanker of around 250,000 tons, and they have announced that they are actively negotiating for a further ship of the same size. Their yards are clearly competent, competitive in a world context, and certainly they are showing all the signs of viability.

My reason for emphasising this is that there has been far too much heard lately of the difficulties of the area, instead of what is happening over the area as a whole. What is more, these down-river yards have stated in public that they are actively continuing a process of modernising and enlarging their activities, so that if circumstances require they can build ships of any size that can be conceived. That is possible in their part of the river, because of the existing facilities, the way they lie in relation to the river, and because of the history and initiative of those yards. We must not be in any doubt about that. Tankers have already moved up in size at a pace which a few years ago was inconceivable. There have been some profound statements made over the last six years, which within 18 months were proved to be completely wrong. The same thing has been happening with ore carriers. Where this process will stop no one can be certain at the moment, although there are bound to be periods when an optimum size may seem to have been reached. So far, everybody's guess as to these optima has proved to be absolutely wrong, and it would be rash to make any forward planning on any firm assumption that ships will never grow bigger than a certain size.

What of the future of shipbuilding in the West of Scotland in a changing world?—and it is not only shipbuilding which is involved in the process of change in the West of Scotland. Something really fascinating is happening, which must prove to be of historic importance in more than merely the economic life of the West of Scotland, and it is largely, of course, a consequence of the sudden appearance of the huge ship about which I have been talking. Our forefathers, in their wisdom and skill, dredged the Clyde. In so doing they brought great ships virtually into the heart of Glasgow. They made possible the building of great ships in the upper reaches of the river, and this will, of course, go on. But in so doing they exercised a profound influence—in fact, a determining influence—on the location of all those industries which emerged during the Industrial Revolution and right up to the present day. Had the pattern of ship movements been different in the river a hundred years ago, I doubt whether the pattern of heavy industry in Scotland would have been what it is to-day.

That process is now moving into reverse. Obviously, huge tankers must discharge in deep water, and the same goes for ore carriers. Tanker discharge points spawn refineries. Refineries spawn petro-chemicals. Petro-chemicals spawn who knows what?—I do not know. Ore discharge berths call for steel mills close to the point of discharge. That is certainly what has happened in the industries of our major and most effective competitors overseas. It is worth realising that Japan imports all her ore and, I believe, all her coal for steel purposes. She imports all her oil. She is probably the cheapest steel producer in the world to-day. She has seen the advantage of deep water at the right place, and the siting of industry in relation to it.

At this moment one planning decision for a refinery in the West of Scotland is awaiting decision and another application for a refinery is known to be pending. An ore discharge berth will come sooner or later, somewhere. Hunterston B, an extension of the existing nuclear power station and a very big extension at that, is under way, and planning permission is being sought for a major conventional power station right down the river. A completely new phase in the economic development of the West of Scotland is emerging in front of our eyes, and emerging very fast indeed. I do not suggest for one moment that this is the end of Glasgow, or that all shipbuilding must end up down the river. Of course, that is absolute nonsense. What I would emphasise is that we are in a period of very rapid change—and I do not apologise for using that phrase—and change cannot avoid being painful, to some extent, at any rate.

But a period of change is also a period of immense constructive opportunity. May I ask this question? Where is the labour, skilled and part-skilled, to come from to carry out even a couple of the projects which I have mentioned, if they are ready to go ahead simultaneously? At the moment—I am not sure how well known it is—the down-river yards are short of men, and as their facilities develop there will be a need for still more men. Is retraining really taking place in the context of what is happening so fast? Are the logistics—I tried to avoid using the word "infrastructure", as the noble Lord, Lord Wilson of Langside, did, although I am not sure that "logistics" is any better—of the whole problem really being tackled? Because this is a big movement of influence which is going on. Would it be all that tragic in human terms if some further concentration of work into fewer berths in the upper reaches of the river were balanced by an expansion down the river, where that expansion can only take place?

I believe that, probably too rapidly for us to handle, an opportunity for economic statesmanship has emerged to ease this inevitable transition—but not, please, artificially to hold it back—to seize on the inevitability of change and to use it to move into a completely new phase of expansion. I profoundly hope that the fullest implications of what is actually happening are being studied.

My Lords, one last word—and here I must declare yet another interest, as Chairman of the Scottish Civic Trust and as a member of the Clyde Estuary Amenity Council. In the light of what I have just been saying, these other functions may seem a little odd, but in these capacities I must make it clear that I have still to meet a responsible person who would argue that there should be no further industrial development in the Firth of Clyde. The inevitability of industrial development is recognised, and it is recognised that development cannot take place without seriously affecting the beauty of some part or parts of the loveliest area of its kind, probably in the world.

We know that development must hurt somewhere. We are anxious, above all, that the case for specific sites should be publicly and openly established in a way in which everyone likely to be affected can participate and can understand. Public inquiries are all very well—and they are an essential safeguard—but the earliest possible information and facilities for discussion are what really matter if we are to get the right answers. We are concerned that development should not be sporadic, but that some understandable concept should lie behind the siting of new developments.

We are concerned that amenity should not be looked on as an irrelevant nuisance, worried about by cranks or those who happen to be immediately affected by a new undertaking. We are concerned that amenity should be a major part of all thinking by the central Government, by planning authorities—and by developers, too. I believe—and I say this willingly—that the Scottish Office Ministers are sympathetic to this kind of approach, and a meeting that I had only yesterday afternoon in Glasgow, with the Minister of State, gave me much encouragement. I am sure we all mean well, but the real question is whether we can implement our good intentions in this respect. I would emphasise that, in my view, this cannot be done by planners alone; it can be done only by a process of frankness as to intention and by full discussion at the earliest practicable stage in planning between developers, authorities and those whose lives are going to be critically affected by the ultimate decisions.

4.32 p.m.

LORD TAYLOR OF GRYFE

My Lords, I am happy to add my congratulations to those expressed to the noble Earl who has made his maiden speech this afternoon. I am delighted to see in this House someone who is so conscious of the traditions of his family and of our country, and who is also deeply concerned about securing a balance in our country and to ensure that it is not entirely dominated by large organisations. I subscribe completely to his desire that there should be some balance, particularly in the Highlands. Indeed, I spend most of my working days being concerned with retaining economic organisations in the Highlands, despite the inhibitions of S.E.T. and other things which make it extremely difficult.

May I say, too, how pleased I am—as I am sure we all are—to see an occasional appearance by the noble Viscount, Lord Muirshiel, my distinguished friend and neighbour. He combines a great deal of experience of Scottish affairs with a continued interest in Scottish industry, yet is not oblivious to the need for preserving the quality of life (as I believe it is called) in Scotland—or, at least, preserving an amenity alongside industrial development, so that people can live more fully and adequately in that happy environment.

I am sure that all of us here this afternoon, discussing Scottish affairs, regret the absence of the late Lord Bannerman of Kildonan. I am quite sure, as Lord Selkirk mentioned, that we miss John Bannerman's original thought, and also the music of his Highland accent. It is perhaps because of the absence of so distinguished a Scot that we have not heard much about Scottish devolution and Scottish separation. But it is perhaps one of the virtues of this debate that we are able to examine cannily just what would be the effects of the separation of Scotland from the United Kingdom; because while the Scottish Nationalists have made a great superficial appeal to the patriotism of Scotland, it is only now being realised that their economic policies are in fact a prescription for poverty in Scotland.

Two figures come to mind in this connection—though I will not pursue this matter further. It is the fact that last year Scotland's share of identifiable central Government spending was £188 per head, compared with £151 per head in the rest of the United Kingdom. The other figure that interests me, in connection with Scotland's position in the national economy, is the fact that, of the £250 million spent by the Government last year on regional development, covering the whole of the United Kingdom, no less than £100 million was spent in Scotland. It is quite obvious, therefore, that any economic separation from the United Kingdom such as is advocated by the Scottish Nationalists could have very serious consequences for the Scottish economy.

It is agreed—indeed, there has been complete unanimity in this debate so far—that the major problem facing Scotland is the run-down of traditional industries and the rapid transfer of people, plant and investment into the newly developing industries. While this is generally agreed, I find in the thinking of people in Scotland, both industrialists and workers, a reluctance to appreciate the need for rapid change. It is perhaps the fact that, pre-war, the unemployment figure in Scotland was rarely below 12 per cent., and that in the 1930s 25 per cent. of our fellow countrymen were out of employment. The shadow of unemployment makes people reluctant to change. They are inclined to hang on to jobs longer than is justified, and to hang on to attitudes which are not in keeping with the need for change.

Since the war, unemployment has been between 2½ and 4½ per cent.; and anyone who is concerned with running industry in Scotland, as I am, will appreciate that to-day the problem in Scotland is not unemployment but getting labour for factories. I know that my own business is in process of closing down a first-class, modern factory, with substantial export orders on hand, simply because it cannot get female labour; and this state of affairs is common to many industries throughout Scotland. In the light of our experience, the picture of Scotland as a nation with a vast reserve army of unemployed is no longer tenable, and it is a matter for congratulation that the Government have banished this spectre. Indeed, it is a matter for congratulation to the Government that they have effected a very substantial change in the pattern of Scottish industry. The fact that, in the period from 1964 to 1967, 200,000 people left traditional industries and were absorbed in other industries is in its way a revolution, and I think is a tribute to the policies which have been pursued by the present Government.

I think that in regional planning we should from time to time examine the incentives that are provided. The incentives to move to Scotland and the development areas are very generous. The regional employment premium amounts to £1 17s. 6d. per adult male and to £1 2s. 6d. per adult male employed part-time. The investment grants are now running at 40 per cent. for plant and 25 per cent. for new buildings; and in some cases the Board of Trade provide factories where the occupants can remain rent-free for a period of five years according to the circumstances of the industry. Apart from these direct incentives, the Government have assisted very substantially with loans and grants to big industrial projects North of the Border. In the pulp mills at Fort William a Government loan of, I believe, between £8 million and £10 million is involved. In the case of Upper Clyde Shipbuilders, mentioned by the noble Viscount, Lord Muirshiel, the Government commitment now is in the region of £17 million, and it may easily go to £20 million. There are other private arrangements with the steel strip mills, with Rootes and B.M.C., though these figures are not published. But at least there is an indication that very substantial sums of Government money are involved in all these developments. I think it would be wise if from time to time, apart from any political considerations, we reviewed the efficacy of these measures.

So far as the regional employment premium is concerned, I must say that I am not in love with this particular project. I have always thought it desirable to induce industry to modernise, and the inducement to modernisation is to put people off the payroll rather than to retain them on it. When premiums such as R.E.P. are paid to industry to keep people on the payroll it is not an incentive to higher mechanisation and modernisation. Many of the older industries in Scotland are holding on to too much labour. I know that the regional employment premium is designed only for a period of seven years and may be subject to review, but I think it would be interesting to examine the effect of R.E.P. I know that it helps pay for training new workers, and so on, and perhaps in these terms it is justified, but in the long term it does not appear to me to be good economics.

It is estimated by the Economic Research Council that in the country as a whole there is over-manning of industry by about 15 to 20 per cent. This represents a loss to the economy of between £6,000 million and £9,000 million per annum. If we agree that overmanning is a problem, then I think we should revise our incentives to counter over-manning rather than to assist it. May I say, in connection with Government grants—the very substantial grants given to the Upper Clyde Shipbuilders, the steel strip mills and Wiggins Teape—that I think the Government should take a very close look at these industries in which they have such a substantial involvement. Their involvement is not equity involvement; it is in terms of loan capital. But if we look at these industries—Rootes at Linwood; the pulp mills at Fort William, and, I believe, the steel strip mills (although I am not an authority on the steel industry)—we see that over the past few years all of them have shown a very poor return.

In the case of Rootes, productivity has increased since the Americans moved in. In the case of Wiggins Teape, after two had years at Fort William there have been changes in management, and the situation seems to have improved. The steel strip mill, I believe, suffers from the fact that it is only half the steel strip mills—the other half is in Wales. I believe that the extent to which Government money is now involved in Scottish industry behoves the Government to look at the kind of management which is given these very substantial, low-interest-bearing Government loans. In the cases that I have mentioned, management has not, I think, been particularly distinguished. Such high investment grants are being given nowadays (40 per cent. in plant and 25 per cent. on buildings) that we should be trying to get industry to use plant to the maximum. If the Government are paying for 45 per cent. of a company's plant there is to some extent almost a disincentive to have the plant running at full tilt. I believe that we should examine just what is the effect of such substantial grants and ensure that industry is taking full advantage of the generous assistance which is being given.

My Lords, in looking at the problem of the development of Scottish industry, I was interested in the Scottish Economic Review published this month by The Scottish Council (Development and Industry)—and I would here pay tribute to the Council for the excellent material they turn out on Scottish problems and for the energy they show in attracting industry to Scotland. The Scottish Economic Review asked the firms who moved to Scotland (and this is the first survey of this kind that I have seen) what were the factors that attracted them there. Availability of trainable manpower was factor number one; local authority co-operation—presumably on housing—was number two; number three was Government grant. What attracts industry to Scotland is the availability of trainable manpower.

Similiarly, a question was asked of the firms new to Scotland: What were the factors restricting growth? Again, availability of trained manpower was number one; availability of trainable manpower was number two. Similarly, when the type of factors restricting the growth of existing Scottish firms was examined, availability of trained manpower was at the top of the league; availability of trainable manpower was second in the list. To me this leads to the real crux of the problem, of how to get dynamic growth in Scottish economy; namely, the release of manpower from those traditional industries which have over-manned so that people can become trainable for the new and developing industries. This is a very critical area so far as the future of Scottish economy is concerned.

My Lords, I was glad to hear the emphasis placed by the Government on training. I think that the training that we are aiming at has to be of an entirely different type. In the past, in Scottish industry a man served his apprenticeship and acquired a skill. In the new atmosphere of changing techniques in industry, a man may have to be retrained three times in the course of his working life. So the training should not be so craft-based; it should be more a training in capacity to learn new skills. I am encouraged by the fact that the Government are not only looking at this problem but taking action. But what they are doing is not enough. When I see the investment in some of the traditional industries that have a limited future, it occurs to me that it might be wiser to spend more money on training manpower for the new industries.

I come now to my final point. It is in relation to the quality of management. I made some reference to the quality of management in connection with certain Government-assisted industries. Anyone who is in industry to-day, in Scotland or elsewhere, realises that the scarcest commodity in industry is good management. Firms can spend a long time in looking for good management material. They can employ expensive consultants. There are here in London a large number of firms of professional "head-hunters" who go round looking for people who would make good management material and "stealing" them on behalf of their clients. I was glad to hear the noble Earl, Lord Selkirk, refer to the fact that while management schools have been developed in London and in Manchester, in Scotland, where there is a higher proportion of university graduates per head of population than in any other part of the United Kingdom, we have not paid attention to post-graduate management training in the concentrated form that I should like to see. It is true that Strathclyde, Glasgow, Heriot Watt and the other universities have tackled some aspects of management training, but I believe that this fragmentary approach to the subject cannot serve the needs of Scotland. Some attention should be given to the establishment of, or at least, to the preparation of the ground for, a school for management studies at a very high level. I believe that a Scottish Harvard, M.I.T. or Stamford would be a magnet to attract industry to Scotland so as to take advantage of skilled and well-trained management.

My Lords, I believe that the impact on Scottish industry of well-trained management could be very substantial, and I conclude by making these points. The first priority I regard as being training; the second I would put as training management; and, finally, I subscribe to what has been said by several noble Lords, that we must not think of the Scottish economy and its future purely in economic terms. Here again I pay tribute to the fact that next year the Scottish Council is staging an exhibition called "Opportunity Scotland" in which it will show not only that Scotland is a good place in which to have industry but also that it provides amenities for good, happy and full living; housing of a reasonable standard, and first-class education for children. All these things are important. I must say that when I travel throughout Scotland and look at the new towns—Glenrothes, East Kilbride and the others—I see before me a picture of the new Scotland, quite different from the Scotland with which the noble Lord, Lord Strathclyde, was familiar, with the Glasgow slums and the spectre of unemployment and depression. A new Scotland is being built in our midst, but we still have many things to do.

4.53 p.m.

THE EARL OF PERTH

My Lords, in the main I am going to speak about Edinburgh. Your Lordships may wonder what Edinburgh has to do with the economic problems of Scotland, the subject so ably introduced by the noble Earl, Lord Selkirk. My answer is that it provides another aspect of the centralisation, or danger of centralisation, about which he spoke. Before I speak about Edinburgh I should like to add my congratulations to the noble Earl, Lord Elgin and Kincardine, on his admirable maiden speech. I can only say that I know his father would have been proud of him.

A lot of effort has gone into the building of new factories to provide new jobs, and I think it right to say that over these last years successive Governments have done well in that respect and we have been pretty fortunate in our ability to switch from heavy industry and the old traditional industries to the modern ones of to-day. It is also true that the unemployment figures appear to be relatively better—I emphasise the word "appear". That point was made by the noble Lord, the Lord Advocate. I think we are in danger of being misled by these figures and that we should recall that this has happened only because no fewer than 300,000 of our people left Scotland in the last ten years. These 300,000 were, generally speaking, just the type that we need for our own work as the noble Lord, Lord Taylor of Gryfe, said. They are the young, the skilled and the enterprising, and we must try to keep people of that sort.

I believe that what workers want is the opportunity to enjoy themselves during their leisure hours, both out of doors and indoors. I do not think that there is any problem in Scotland about outdoor enjoyment; we are perhaps the best placed of any country in that respect. We have, for example, cheap golf courses, winter sports, water sports, fishing and so on. But when it comes to indoor recreation we lack facilities, and that, I think, is where Edinburgh may properly become the focal point and where we should see what more we can do to encourage the provision of the right sort of amenities. Two hundred years ago Edinburgh provided much of what Scotland wanted in that respect, but over the last century or so things have changed, and London is now the great magnet.

That, of course, is due partly to the fact that London is the centre of Government, of power and of patronage. But also it is due partly to the fact that the whole of our railway system was built with the idea that London should be the hub, with spokes radiating out to the periphery of the country. After the railways came the motor car age and the roads followed slavishly the pattern of the railways. Now, in a remarkable way, exactly the same thing is happening with aeroplanes; and that, my Lords, must be wrong. If we are not careful we shall find the same sort of thing will happen in what is the most important of our modern developments; namely, electronic communication. I have heard it said that this highly organised system of computers and communication will stop somewhere in the Midlands. It is essential, my Lords, that we in Scotland and in the North of England should be included in any such development.

Having mentioned aeroplanes, I cannot resist referring to Turnhouse and the cross runway, but I will not develop that in any detail. We talk about a third airport for London; about Heath-row and the countless flyovers and the M-roads and so forth which are provided to enable people to get there quickly. I have even heard talk about an extension of the Underground which would cost £20 million. Very shortly, in 1970, we are to have the Commonwealth Games at Edinburgh. I recall that last year I asked a Question in your Lordships' House about what was the experience in Edinburgh regarding wind and its effect on aircraft flights over ten days. It was fortunate that I asked that Question. The Answer was that 25 per cent. of the flights had been cancelled. My Lords, can you imagine the chaos with which we should be faced if the same sort of thing happened at the time of the Commonwealth Games?

I think that we have gone on long enough about the problem at Turnhouse. I know that people say, "Well, is it economic? Will it pay for itself?". I do not know, my Lords; but what I do know is that Londoners seem to get away with it every time. I wonder how many of your Lordships read the debate which took place on December 17 on the Second Reading of the Transport (London) Bill. The Minister of Transport made what I think was an extraordinary speech and little attention has been paid to it. He said that the Government were going to give to the Greater London Council no less than £244 million to help to subsidise London Transport. He went on to say that in terms of annual interest payments, this should amount to a Government contribution of about million a year. I think that the interest rate is nearly 10 per cent., and I would calculate this as a subsidy of £25 million a year.

That is not all. The Minister added that this was over and above the assistance which the London Transport Board is going to get in the meantime, which would amount to another £40 million. And we in Scotland are having pressure put upon us from the Government—or the Treasury, if you like—to increase the toll on the Tay Bridge from half-a-crown to three shillings. There is no proportion in this. If we could only get our proportion of this £250 million plus, then all the troubles of Edinburgh would vanish. We should not need to worry about Turnhouse—we should have a new airport. The ring road round Edinburgh would be easy. And there would be much left over for the rehabilitation of Edinburgh and its modernisation.

In October, 1967, the Royal Fine Art Commission of Scotland issued a White Paper, in paragraph 29 of which they say: In our judgment the greatest task of urban conservation and preservation in Great Britain is to be found in Edinburgh, in its planned New Town, which constitutes a national asset of world significance. I suppose in a sense one could say that the people who wrote that are somewhat prejudiced. Never mind. They went on to suggest the appointment of a committee equivalent to the Gowers Committee which reported on the Nash Terraces in London, or of a special study group similar to those set up by the Minister of Housing and Local Government for the four historic towns of York, Chester, Chichester and Bath. It is open to the Secretary of State to ask for a similar study for Edinburgh, but so far as I know he has not done so. In the meantime, the Corporation are doing piecemeal what is necessary in the way of conservation, particularly in the New Town.

I come to something which is of immediate importance: the development of tourism, which was touched upon by my noble friend Lord Lothian. What is the position of Edinburgh in relation to tourism? Do your Lordships know that not one new hotel has been built in Edinburgh since the war, that the total number of beds available is less than it was at the end of the war and that the total number of rooms with baths is only about 900—less than one big hotel in London? In the last few days I saw a circular of May of this year from the British Travel and Holidays Association. arguing that it is no use trying to expand the tourist industry by including Edinburgh as a centre for package tours because there are not enough hotel rooms. Three or four years ago a special study group estimated that overseas tourism in Scotland and in Edinburgh in particular could be increased fourfold; but how can that be done when there are insufficient hotel rooms?

I have a specific suggestion to make to the noble Lord who is going to wind up to-day: it is to designate Edinburgh as a development area. It alone has been left out of the picture. The reason I suggest this is that it would mean that the grant for hotels would be 25 per cent., instead of 20 per cent., and that 5 per cent. might make all the difference. It may be argued that if we make Edinburgh into a development area we should get all sorts of industries coming there. There is a perfectly easy way out of that. New factories cannot be set up without the approval of the Board of Trade, and the Board of Trade can just say "No". But this move could ensure that we should get a good grant for hotels.

It may be said that this would be rather a "fast one", but look at what the Londoners get away with. They know, in some way, how to get all the benefits they want. They have the National Theatre, the ballet and Covent Garden. I am not against these things; I welcome them. The Arts Council gives us much help, but what we are getting is not enough. Because the Commonwealth Games are to be held in Edinburgh, there is to be set up a fine sports complex, a very important amenity, but I think I am right in saying that as a result the Opera House will have to wait. That would not happen in London. I am talking about Edinburgh, but we all know how important the amenities are elsewhere in Scotland—in Pitlochry, Stirling and Glasgow. I am glad to hear of the exhibition "Opportunity Scotland 1970", which is to be held in Glasgow to show the amenities and possibilities of Scotland.

I must touch on the question of the Clyde as an area of deep water, because it is of such importance. I am worried that the port authorities, who are no longer in Scotland which is entirely on its own, may work out plans in conjunction with the British Steel Corporation in a way which will make a real use of the deep water on the Clyde a much more difficult and long-term prospect. Port Talbot has been developed at a cost of £20 million, but Port Talbot can take ships up to about only 100,000 tons, and then only with constant dredging. Now they are talking about building a port on Tees-side. Maybe the ships there can be a little larger, but there again there will have to be constant dredging. Ships of up to half-a-million tons can be berthed in the Clyde and no dredging at all is necessary. In the coming century the area around Hunterston will be about the most important area in the whole of this country. Apart from the various things about which we have already heard in this House, I would remind your Lordships that nearby is Prestwick, an airport unique in Europe with a better fog record than that of any other in Europe. Let us not have development put off because of what may be worked out by the Ports Authority and the Steel Corporation together. I ask the noble Lord who is to reply whether he can give us some undertaking that decisions will not be reached piecemeal and without our having an opportunity to debate them fully. So often the Government say: "This is a matter for the nationalised industry; it is their affair, and we must not interfere". I do not believe that that is good enough.

Now I come back to my main theme, which has been of the need to develop our recreational centres, both from an intellectual point of view—that is, the arts in the widest angle—and also on the physical side. In that regard Edinburgh is a key point. The Government must help the Edinburgh City Corporation. I have thrown out the idea as to how the Government can help at the present time without, I believe, breaking the rules. What is the purpose behind all this? It is to stop the annual drain of these 30,000 people, the youngest and the best, who to-day are so apt the leave the country. To conclude, I believe that our aim must be to have people wanting to come to Scotland because it is an exciting place and because the way of life is good.

5.12 p.m.

THE EARL OF DUNDEE

My Lords. may I first congratulate my noble friend Lord Elgin on his maiden speech? All those of us who remember his father had a great affection for him, and especially those who were his near neighbours in Scotland. It is delightful now to see and to hear my noble friend in this House combining his hereditary interest in the spoils of Bannockburn with so much wisdom, wit and good sense.

I was glad that this Motion was introduced by my noble friend, Lord Selkirk, for I was Under-Secretary of State at the Scottish Office when he was appointed to be Commissioner for the Special Areas in Scotland by Walter Elliot, who was then Secretary of State (my noble friend was the first Commissioner, as it was then a new appointment) at the time when the Hillingdon Industrial Estate was being begun. My noble friend's work in starting the development of State-aided and State-planned industry, and the greater diversification of industry in Scotland. is not the least of the many public services which he has performed for the country.

The last full debate on Scotland which we had in this House was more than eighteen months ago, and it was I who opened that debate because we could not find anybody else who was willing to do it. I am glad to-day that so many of your Lordships are pining for self-expression, and I shall therefore try to be extremely short. When I spoke eighteen months ago I gave some reasons—which I think were good reasons, and were based on researches of the Scottish Council for Development in Industry—for believing that the Scottish economy, unlike the whole of the United Kingdom economy, was in balance; that is to say, that Scottish exports exceeded in value the value of Scottish imports, and the value of Scottish production was greater than the value of our consumption. I then suggested that a different economic policy, reflationary and not deflationary, should therefore be applied to Scotland. The Government's answer, although it did not satisfy me, was a perfectly legitimate one, so far as it went: that the Government were attempting to undo with their left hand the harm inflicted by their right hand, and to counteract the deflationary policy applied to the United Kingdom by means of such measures as regional employment premiums in development areas, the whole of Scotland being now a development area.

I was very glad and interested to hear the noble Lord the Lord Advocate to-day give his account of certain examples of industrial progress that have taken place lately in Lanarkshire, in the Central belt of Scotland, in Glenrothies and in Dundee, which is welcome to us all. The Government's objectives are the same objectives as our own, although we may not agree about the effectiveness of methods. There are some of us who think that growth points were a more effective method than an extensive development area. That, I think, is an arguable question; and some of us who remember the tremendously immediate and rather spectacular results which proceeded from the 1963 Budget, with its 100 per cent, depreciation allowance, regret that it should have been replaced by the investment grant. We appreciate that the reason for this was that depreciation allowance does not benefit small owners of industry, who do not earn enough to pay income tax at all. But I am afraid that there are not many of them who, even with the aid of an investment grant, can carry out a great deal of expansion when the bank rate is at 8 per cent. I think, on the whole, that the new investment grants have probably not done so much general good to the economy as the depreciation allowances did. But the Government's objectives are the same.

I think that all these palliatives, in present circumstances, do something, but only a little, to lighten the very severe burden of credit restriction, the massive increases in taxation and this crippling bank rate of 8 per cent., which I am afraid is likely to put quite a number of smaller men out of business, all designed to reduce excessive consumption expenditure, which in Scotland is not taking place and has not been taking place. It may be difficult to apply reflation to one part of Britain and deflation to another, unless you have political changes.

I should like to say how glad I was to hear my noble friend Lord Selkirk refer to the fact that the growth of the public sector of our economy has meant that far too many executive decisions have been taken away from Scotland. I think my noble friend will agree that what we need is not only, as he said, greater industrial decentralisation, but also greater local autonomy throughout the United Kingdom and, I would add, greater national autonomy in Scotland. On this side of the House, most of us certainly do not want more public ownership; some indeed may hope that we may see a little de-nationalisation, although this can be done only very slowly. But the growth of the public sector of our economy, accompanied by the growing complexity in every branch of civil administration, has meant that too much executive authority, and too much decision making has been taken away from Scotland. I think it is for the good of both countries that we should try to find, if we can—and I personally think we can—some way of combining the advantages of union with decentralisation of authority, both industrial and political. I do not ask the Government to give us to-day their views on political devolution, but I should like to ask them when they are expecting the Wheatley Report to be in their hands. Some time ago, many of us were given to understand that it would be out by this summer. We have been expecting it for a long time. It seems to many of us that it has been unreasonably protracted, and the English are certainly one up on us with their regional report.

We want the Wheatley Report as quickly as we can, for two reasons: first, for the sake of people who are engaged in local government. They naturally want to know what their future is going to be, and how soon regional planning schemes can be put into effect with new regional authorities in being. The other reason is that to know what is proposed and decided upon as a result of the Wheatley Report may be helpful—and perhaps essential—to a plan for Parliamentary evolution in Scotland. In England the Government have made the Maud Report an excuse for postponing the recommendations of the Boundary Commission. We think that is quite inexcusable; we think it is a piece of gerrymandering. But there really would be some excuse if the whole construction of a new Parliament instead of the alteration of some boundaries were in question. It is obviously going to be very much easier to form a plan for Parliamentary devolution in Scotland when we know what is going to happen about regional divisions and authorities in Scotland. As I said in our last debate a year and a half ago, I should like to preserve the Act of Union, as most of us would, because it has great advantages for Scotland. But I believe we can only succeed in preserving the Act of Union if we can work out a plan for an auxiliary legislature in Edinburgh, with enough agreement to carry it through during the next Parliament, perhaps in 1971 or 1972.

Many people in Scotland have a great many different ideas on this subject, different ideas about what powers the assembly should have, and different ideas about what the composition of the Assembly should be. Some of them change their ideas quite often. Certainly I have ideas of my own, but I hope none of us, so long as we can speak only for ourselves, will be egotistical enough or stupid enough to proclaim in public our individual ideas for a Scottish constitution in too much of a hurry. If we all did that at once, the only result would probably be to create a Babel of discordant criticism, especially in a country like Scotland, where argument has always been more highly valued than acquiescence.

The method which I hope we will all prefer is to find out how much common ground there is, or can be, on which a substantial number of Scotsmen can agree, being ready ourselves to abandon some of our own excellent and wonderful ideas for the sake of getting the widest practical measure of agreement. We cannot expect to get universal agreement. I think we may hope to get enough to justify a constitutional change within the next Parliament whose purpose would be to establish a new elected Assembly in Scotland which would be able to speak with authority on Scottish matters of every kind, which could relieve the Imperial Parliament of some part of the excessive burden of work which is at present diminishing its usefulness, and degrading its authority. But, at the same time, it should be an Assembly whose own burden of work should not be so heavy as to deter Scotsmen who are taking a leading part in local government, commerce and industry, from offering their services to the Assembly, and from attending it with regularity if they are elected.

5.26 p.m.

LORD LOVAT

My Lords, it used to be said that Scotland was divided into five groups of people who could be readily distinguished. They consisted as follows: gentlemen from the North; men of the South; people of the West; folks from Fife; and Paisley bodies. The debate to-day, while very welcome, covers such a large field that no less than 25 speakers are involved, so one has to be brief.

The excellent speeches may have been slightly spoiled by the fact that too many generalisations have been made, and perhaps we have not sufficiently got down to urgent matters of the greatest importance. I think I am right in saying that the noble Viscount, Lord Muirshiel, followed by the noble Earl, Lord Perth, were the first speakers who actually mentioned specific problems, such as Edinburgh and the Clyde. In fact, although this is a Scottish debate, two noble Lords from South of the Border were quick to get on their feet and raise problems dealing with Yorkshire and the Staffordshire coalfields before anybody raised a problem so vital to me as certain things which I am now shamelessly going to raise as a Highlander regarding Highland affairs.

I do not think that this debate need necessarily be a controversial one. We are all Jock Tamson's bairns, and the Government will appreciate some of the problems of the Highlands which, up until now, they have done very little to rectify. I am going to refer principally to an unfortunate situation with regard to communications. Everybody appreciates the need to improve communications—that surely must be accepted by all. But is it ever acted upon? We have had the Cairncross Report and the Toothill Report. They have been emphasising this need for years. For the Highlands, I would say that the Highland economy cannot exist, let alone survive, unless such things as fares and freights are put on a viable basis with the South. In other words, we have to pay much more for everything we buy, and we have to sell, when in the market, for far less. Your Lordships can readily appreciate that this results in a road to nowhere. The roads to the North of Perth are extremely bad. The road bridge at Dunkeld has been down-graded. The communications at Moy, which is a point 100 miles North of Perth and 12 miles from Inverness, is so bad that the road is only 7 feet wide. I feel that in this day and age, if the Highlands are going to play their part—and surely they can—we really must pay more attention to our communications, which are sadly overlooked.

In Mallaig, which is another important point in Inverness-shire—with probably the biggest fish-handling industry in the Highlands to-day, certainly on the West coast—we have a position of 48 miles of road which for 12 miles of its distance is only 18 feet wide. Fish lorries cannot pass each other when they try to make the long haul back to civilisation. No fish is passed along the railway line which runs parallel to that road. Yet the fish catches from the important harbour will this year run into something like £2 million worth of fish, or an expected 100,000 tons taken out by lorry. Surely these are matters which the Government should rectify. The Government have made an attempt to do something about Scottish roads, because they have published a White Paper on the subject called, Scottish Roads in the 1970s. In paragraph 2, on page 1, they have clearly stated: Roads are provided for their users, and no plan could be regarded as satisfactory if it did not pay heed to their assessment of an effective road pattern…. We have been asking for a very long time for improved roads in the Inverness area. and we are told that either we accept roads as directed or we lose grant on them. Not long ago, when a meeting was held between our county and a neighbour, we were told, far from being given praise and credit for trying to find cheaper ways and shorter distances, that we as a county would actually have to pay for an examination, or for (I think this is the correct term) a feasibility study to shorten roads to the North, which are surely very important. I refer particularly to the Black Isle area and North to the Smelda, at Invergordon, and all the things that go with more rapid communications.

I feel sure that the Chancellor of the Exchequer, as well as St. Andrew's House, feel certainly a qualm on how badly the Highland economy has been affected by the last Budget. The Transport Bill on top of that Budget. followed by a second dose of S.E.T. in an area for which it was entirely undeserved, has had a crippling effect on small industries. More and more people are leaving the North. It is no good appointing Highlands and Islands Development Boards and Advisory Panels if one cannot get first things first.

I do not wish unduly to take the noble Lord, Lord Hughes, to task, but not long ago he opened a bridge in the area of Inverness, and said that this was a big break for the Highlands. It was a big break, in the sense that the road had carried one-way traffic for 12 years and we now have a road which is 24 feet wide; but it is still wholly inadequate. It is not only inadequate but completely out of date. I say this with some feeling because I see to-day that in my own village of Beauty a big business was closed down, involving 155 people in a quarry and gravel. Local people have been making a useful living from it for years. But with the Transport Bill, with S.E.T. and with rises in costs, more and more small industries are going out of business, and it is no exaggeration to-day to say that it is hard for an outlying hill farmer to get a lorry to take his stock to market or to get a heavy truck to take fertiliser to an outlying farm. This is wrong and I hope that the Government will make every effort to rectify it.

I feel that I should not be my father's son, in this 50th anniversary year of the founding of the Forestry Commission, if I did not draw attention to the fact that in the Highlands we have vast timber resources which we are hardly able to use because of road difficulties. The pulp mill at Fort William has a capacity of 260,000 tons of pulp per annum, and it is importing 60,000 tons per annum from Canada. This is a ridiculous state of affairs. Quite clearly, if the Government thought along the right lines we should make much greater use of Inverness, which is a centre of things, where labour is available and there are port facilities, and it should have roads leading into it from all directions. I hope that Inverness and the importance of the North will not be forgotten, because at the present time we feel that we have been left out in the cold.

5.36 p.m.

THE EARL OF LAUDERDALE

My Lords, following the noble Lord, Lord Lovat, I hope that I shall satisfy him by being specific as well as constructive. First, may I join with others in expressing immense admiration for the maiden speech we have heard from the noble Earl, Lord Elgin and Kincardine, with its easeful flow of faultless prose—to say nothing of the substance of his speech on the centres of decision and on smaller businesses, to both of which matters I hope to return. I wish that I could share the note of optimism—I might even call it "facile optimism"—that one occasionally hears from the other side. I was interested to read a survey published by the Confederation of British Industry last week which referred to a "general downward trend in business optimism" in Scotland. I believe that there are many theories to account for it. My own is that in place of a geography of opportunity, which ought to sum up our aims in Scotland, there is in fact a deep sense of opportunities lost, of fumbling bumbledom in providing the structure proper to a modern industrial society.

We heard the noble Lord, Lord Taylor of Gryfe, speak with enthusiasm about the New Towns. The noble Earl. Lord Dundee, has referred to the effect on Scotland of high interest rates. The Scottish New Towns are now compelled to borrow from the Government at 91 per cent. When are the Government going to authorise the Scottish New Towns, like the English ones, to enter into lease-hack arrangements with private enterprise sources such as the Norwich Union and others to get their money probably nearer 8 per cent., and stop the virtual blockage of development which now afflicts them in their endeavour, for example, to provide advance factories?

The noble Earl, Lord Elgin and Kincardine, referred also to decision-makers. I believe that our problem in Scotland is less a question now of attracting manufacturing industry. We have about one in ten of the manufacturing capacity of Britain, which would accord with our population ratio, but we do not have one in ten—it is more like one in fifty—of the decision-makers. In recent weeks we have seen famous names cross the pages of the Press: Bruce Peebles; James Howden; Pringle of Scotland; Clyde Rubber—either absorbed in mergers or at any rate merging. Some of these mergers are doing us real damage. Again, names flick across the pages referring to redundancies or closures: Phillips Electrical of Hamilton. McCrae &; Drew of Paisley, H. B. Livingstone of Bridgeton, Catrine Cotton Mill, Pullars of Perth, Babcock and Wilcox, Dalmuir—those are all cases either of redundancies or of closures following mergers. The decision-makers are siphoned South; Scots interests are blurred or forgotten; and there we are!

Moreover, this is not necessary. The noble Viscount, Lord Muirshiel, referred to mergers as being not always for the best. Surely the first thing we need in Scotland is a Scottish I.R.C.—Industrial Reconstruction Corporation—to make sure that those mergers that take place are in the national interest, and to watch for opportunities suitable and constructive for Scotland and Britain together.

But, my Lords, we need something else if we are to pursue a geography of opportunity. I refer now to the weapon of management, known as telecommunications. We all know the tragic business of trying to make a telephone call—hut never mind about that: the fact is that there are now in existence in the United Kingdom data links which will take up to 300 or 400 characters or figures a second, in such a fashion that management can control a group of factories or sales outlets as well from Edinburgh as from Epsom; as well from Crieff as from Camberley. But this requires a proper network of telecommunications. In the United States of America Burroughs and Ford are at Detroit; Beckmann are in Los Angeles. If the necessary telecommunications are provided, there is nothing essential in the nature of the world which requires that industries and their headquarters must be centred on London.

The fact is that the G.P.O. is following, instead of creating, demand. So it is that out of some 4,000 or so moderns (which I understand is the technical word for a data-link terminal) there are not more than 200 in Scotland, of which there are not more than 50 in commercial use. What we need now is to have concentrator facilities in Glasgow, Edinburgh, Dundee and Aberdeen. And until these are provided at least let us have proper out-of-area facilities. This is the technical term used by the G.P.O., which they will readily understand. May I go a stage further, and say that the G.P.O. plans what is called a 48 kilobit service, which will be capable of transmitting 6,000 figures or characters a second. Believe it or not, this link will stop at Manchester. Let us skip Scotland for a moment. What about Cardiff? What about Newcastle? What about all the regions of Britain? They must matter to this Government, if indeed they mean what they say in the regional paragraphs of The Task Ahead. Scotland is not even considered. If a national network of motorways can be started with the Preston bypass, surely the 48 kilobit service and others can embrace Glasgow and Edinburgh as well as Manchester and Birmingham.

Just before I came into the Chamber to-day my attention was drawn to an article in the current issue of New Scientist headed "Computer Grid Plans", and I ask leave to quote: … hard decisions are needed now on the shape of the network and its time scale. At the moment we are seeing the beginnings of a proliferation of private networks. Rather than wait, people are effectively connecting up their own network on lines they have hired from the G.P.O. The danger is that we might well end up in a few years with a number of networks so organised that hardly any are compatible with any other". This is the comment of a serious scientific journal: that we might well end up with hardly any networks that are compatible with each other. The article then goes on to say: What has to be decided"— by the G.P.O.— is where the market will lie … I should like to add that it is surely for the G.P.O. to go out, like a business concern, and create a market where it wants to sell; and surely there is opportunity enough in Scotland.

To take communications in another sense—what about the roads? The Scottish White Paper, Scottish Roads in the 1970s, states (in paragraph 10(i) and (ii)) that the furtherance of planning and economic strategy will be considered when cost-benefit studies are worked out on projected road improvements. May we know more? Down South a cost-benefit analysis must show a 15 per cent. return over the first year's operation for a major trunk or motorway scheme to get into the preparation pool. What is the figure in Scotland? How far are we taking account of economic strategy and the needs of development? How far do we modify that 15 per cent. figure in the light of strategic development needs, and say that a scheme that will earn, perhaps, 10 per cent. will still be acceptable on that account? Sometimes I wonder whether this cost-benefit analysis ever works at all.

Take the Borders. Has there ever been a cost-benefit study of the possibility of upgrading to trunk status the A.72 route which would connect the Borders with Glasgow, Kilmarnock and the Lower Clyde? If that has been done, at what rate of return did it fall short of success?

Or take the Highlands. What about the A.9 from Tain to Golspie? How on earth was it that that road, with the requirement by the local authorities for a bridge over the Dornoch Firth, did not qualify even for a feasibility study? May we know what was the estimated cost-benefit return on the basis of which that was turned down? And may we also know whether the cost-benefit analysis took account of the economic dis-strategy of downgrading Dornoch Academy, which was extended only six years ago, so that it is now only half full and something like £800,000 worth of new school building is planned for Golspie—this when we are told that £1 million of causeway is not to be considered? We understand well enough that the Kylesku high-level bridge, on the West of Sutherland, would hardly qualify for help on the grounds of tourism alone. But what about combining it with a barrage for tidal pumped storage hydro? Has a cost-benefit study of that been done; and, if so, what is the return at which it has failed to be considered further?

Let us now consider Glasgow. Perhaps when the noble Lord replies he will tell us whether my figure is anywhere near right. I understand that something like £374 million is to be spent on a motorway programme over ten years while only a mere £37 million or so is to be spent on the public transport system. By the time the Glaswegians have clogged up their motorway city in the way that everybody down here has clogged up the M.1, people will be too committed to motor cars and will not come back to the public transport system unless a better system is provided in the meantime. Is it a fact that the delay is due to the Government's endeavour to force on to a reluctant Glasgow City Corporation a passenger transport authority which it does not want? I am happy to see the noble Lord Lord Hughes, nodding his head negatively.

LORD HUGHES

My Lords, I am shaking it.

THE EARL OF LAUDERDALE

It was a negative shake.

Finally, with regard to the Lower Clyde, there has been a reference already to the need for a West of Scotland study. We have had the others, but has there yet been formed any study group or committee to look at the future of public transport requirements of the Lower Clyde area, and at a rapid transit system on a loop between Glasgow, Kilmarnock, Prestwick, Irvine and round the coast to Greenock and back? I appreciate that it would mean fresh wayleaves and construction between Largs and Wemyss Bay.

Speaking of the Lower Clyde have we got the right set-up? Of course we know that social economics must be brought into the matter, but the Metra-Weddell Report was a mistake. All it has done has been to fuel the fires of amenity objection while on its economic side it has been something of a laughing stock to industry. If that is not "Insanity Fair" I do not know what is. It raises the question as to whether the Clyde Estuary Development Group is the right body to carry forward this great conception of the West of Scotland development. In the first place, the group excludes Glasgow; it also excludes Prestwick and Irvine—Prestwick aiming to attract jumbo-jet flyers by the thousand before very long, and Irvine planning to provide for their entertainment—but, of course, frustrated in their plans by the fact that the South of Scotland Electricity Board has a lien on a site for a power station, and that may well be needed if the application for Inverkip does not succeed.

We have had the impression from certain things that have been said that the Secretary of State would like to see the Clyde Valley Planning Advisory Committee take over. I believe we need something much tougher and tighter to seize and develop this opportunity, something on the lines of a development corporation embracing both Forth and Clyde together, with powers of developing an integrated plan for this whole industrial corridor. It would need powers, as I see it, to buy land, to obtain prior planning permission, to campaign for development and to undertake development in collaboration with private enterprise, in much the same way that the Port of London Authority has joined up with the Thames Estuary Development Company.

I am very much afraid that if we go on bumbling about the Lower Clyde in the way that has happened recently we shall sit back and see opportunities go elsewhere. It is true that there is flat land beside the deep water inshore, 90 feet at three-quarters of a mile off Hunterston, more than 70 feet at 600 yards from Portencross and the same again at three-quarters of a mile off Ardrossan. It is true that these are joined by a land bridge to the Forth ports, which gives us an opportunity of a two-tier port system facing Europe and facing the Atlantic, with deep and shallow facilities together. It is true also that this gives us the chance of developing sophisticated transshipment possibilities in the coming years.

But if we dawdle and wait, we blunder. There are rivals in the field. By the mid-1970s the M.62 will give the Humber a hinterland back to Liverpool, and off Liverpool already there are plans for a deep-water terminal offshore. As for Maplin Sands, two private enterprise consortia are competing to advertise the project of raising £1,800 million from private sources to develop a deep-water site in the mouth of the Thames Estuary, and they speak of dredging it to 70 feet of water at low tide. On the Tees, you have only to read the British Steel Corporation's publications, some glossy and some not, to see that they have a very glossy idea of the prospects of Teesside, where, in any case, there is 60 feet of water at three-quarters of a mile offshore, and the channel is meantime dredged to 40 feet in any case. Then finally there is Port Talbot, with immense capital investment with which the British Steel Corporation are saddled, and it is easy enough to understand the vested interest that is pressing there.

I believe that the case for the Lower Clyde must be made, and only made, in terms of the need and service to Britain. To present it simply as a new Scottish scheme for benefiting Scotsmen is unworthy and irrelevant. Either it is wanted for Britain as a whole or it should be looked at in a very different context. The British Steel Corporation are under pressure to upgrade the standard of their products. The oxygen steelmaking process demands ore of a steady low-phosphorus content and of constant quality. But to have these things, to discharge them from the ships, you need about 1,000 acres of flat land, with space for large-scale stocking, grading, blending and even sintering. Thence, if you have these things, you can send the ore properly blended by the new-style pusher barges of shallow draft away as far South as the Mersey and even Manchester and thereby to the Midlands.

Hunterston is the one site near a major market with sufficient flat land where the half-million tonners can get in and unload, and that would mean to the steel industry a saving of something like 45s. per ton of ore brought from Australia, the high-grade ore. It would also mean, if Mr. Craig of the Scottish end of the British Steel Corporation is to believed, a saving of something like 20 per cent. on price. It is interesting to learn that the big ships find that insurance, when they are fully laden, is more than half their running cost. Insurance rates in the English Channel and the North Sea are rising. Both on that account and because the Channel Tunnel, once built lying on the sea bed, will limit the depth, which is limited enough already to present significant hazards, the inducement will be more and more for the big ships to go North about if they are heading for Europe. That means passing Scotland's front door.

There are other possibilities at Hunterston which are worth mentioning. Dr. Alvin Weinberg of the National Laboratory at Oak Ridge in the United States has pointed out that where you have deep water, plenty of power and the proper discharge facilities you can bring in bulk phosphate rock and bauxite and convert it to aluminium, ammonia, phosphorus, chlorine, and magnesium and then ship away all over the world at a relatively low cost. One thing that the Government should consider—and I know the noble Lord, Lord Hughes, will appreciate that I am seeking to be constructive, even if I am also emphatic—is engaging a major firm of international economic consultants to look at the whole Lower Clyde project and set out its pros and cons in relation to all the other competing projects and possibilities in other parts of Britain.

That raises one other point before I leave the Lower Clyde—the Scottish Economic Planning Council. It was a great compliment to Scotland that the Secretary of State chose to take the Chair, and I am sure everybody appreciates it, but it has had the effect of inhibiting discussion. So far as the public is aware, it has had the effect of inhibiting the Council's capacity to campaign. The Northern Regional Economic Planning Council is campaigning overtly and hard for the Teesside project. What is the Scottish Economic Council doing about it? Can it do anything at all? I wish to echo what was said by the noble Earl, Lord Perth, that before irrevocable decisions are taken in this whole Lower Clyde context we shall have an opportunity properly to debate it and not see it determined by bodies such as the British Steel Corporation or others, without full exposure and examination.

Others wish to speak, and therefore I would rather jettison for another occasion certain other aspects of the possible geography of opportunity on which I had hoped to speak. But may I say one final thing about the Highlands? We oil rejoiced that Professor Grieves's notable service has been rewarded with a place in the Honours List, but is the Highlands and Islands Board quite good enough for the job yet? First of all, in days gone by the Board of Trade used to regard schools as qualifying for grants as industrial enterprises in development areas if they created jobs. Why in the name of goodness has the Dun-robin Castle School, created by private enterprise to bring 25 new jobs to an area neglected for years, not had a ha'p'orth of help from the H.I.D.B.?

I sometimes wonder what happened to a list of some fifty ideas for particular development projects in the Highlands on which I had worked freelance and which I sent to the Board in November, 1955; I just wonder what happened to those fifty. Now and again I read of one which is trotted out from some other quarter, with of course other sponsorship. I do not complain, but I believe the rest of my fifty projects have been forgotten, and perhaps the H.I.D.B. will look up these points. In conclusion, I can say this. The climate of difference between the Scottish and the English performance in the economy is a climate of opportunities lost, of planning bungled, of effort confused where it is not frustrated. We are a long, long way from the enterprising approach to a geography of opportunity which should be our programme. The Scottish economy to my mind recalls the words of Oscar Wilde: All men but the liveliest are two drinks under par".

6.0 p.m.

LORD TODD

My Lords, I should first of all like to join with other noble Lords in offering my congratulations to the noble Earl, Lord Elgin and Kincardine, on a most interesting and informative speech this afternoon. I believe the last occasion on which I had the temerity to intervene in a debate on the Scottish economy was back in 1963. At that time I stressed the need for diversification and innovation in Scottish industry and the part which universities could, and should, play in such matters. Since then, quite a lot has happened in Scotland. Among other things there has been the creation of several new universities, although I rather doubt whether the creation of these universities was a direct result of the plea which the noble Lord, Lord Amulree, made in that debate. But they are certainly there, and I myself have the honour to be Chancellor of one of them, the University of Strathclyde. In that capacity, I have been somewhat closer than I was previously to developments in Scotland in recent years.

In the debate in 1963 I stressed, and I now stress again, that for the long-term wellbeing of the economy it is not enough simply to set up in Scotland branch factories of companies whose centres of research and development are located elsewhere. The future of our industries depends on continuing technological innovation, and for that an indigenous research and development base is essential. Without such a base, new factories established in Scotland as outliers of English or foreign firms will in the short term be the first to suffer should the economic winds blow cold, and the pressure on young Scots of vigour and technical ability to emigrate will remain: and without these young men and women of vigour Scotland has no future as a recognisable entity.

Since 1963, I believe there have been clear signs of improvement in Scotland, despite all the economic difficulties that beset this country. In particular—and it is on this point that I wish to speak to-day—I would draw your Lordships' attention to the developments that have been occurring in the Scottish universities in their relations with industry, and to moves which have been made which I believe could greatly affect the long-term development of industry in Scotland. I must say that I was astounded to hear so little reference made to-day to the universities of Scotland. The noble and learned Lord, Lord Wilson of Langside, spoke about the developments occurring during the period of the present Government. He talked about new factories, and so on. He talked about what I would call short-term improvements in employment. But, surprisingly enough, he said practically nothing about the longer term future and, what seemed to me rather amazing in this technological age, he made no mention of education. and especially of the universities and technical schools which are vital for our future.

Nowadays, and especially in the science-based industries, which are indeed the growing points of the economy and are likely to remain so, research, development and production are intimately linked with one another. Indeed, the weakness of the link between research (that is the production of new ideas) and the development of these new ideas to commercial production has been a major defect in many sectors of British industry. If that link is to be made and is to be strong, the environment is critically important, and in that environment I believe that educational facilities, both in technical colleges and universities, are a key element. From this point of view, I should say that the central belt of Scotland has outstanding advantages; and to me it is most gratifying that these are at least being recognised in a practical manner. To take one example, Glasgow has two large universities, one the University of Strathclyde, the technological university, and the other the ancient University of Glasgow, which is also strong in science and engineering. Together, they form one of the strongest combinations in Britain.

There has been a great deal of talk in recent years about the deplorable lack of contact between universities and industry, and there has been a tendency to say that where this exists it is due largely to an "ivory tower" attitude on the part of the universities. Such an attitude, I think I can safely say, does not exist, at least not in Glasgow. To take one example with which, naturally I am most familiar, the University of Strathclyde has had a long-standing and comprehensive experience of collaboration with industry. Your Lordships may remember that although its history under the title of "University of Strathclyde" may be short, it is an institution which stretches back over 170 years and has always been closely associated with industrial development in the West of Scotland. At the present time in the university there are about 300 joint university-industry projects, and I suppose numerically its contacts must be at least as large as in any other centre in Britain.

I should like this evening particularly to draw attention to the recently opened Centre for Industrial Innovation in that university. This centre, which is quite new, is, I believe, unique in British universities, and is an expression of the determination of Strathclyde firmly to link the university with industrial development. This centre is under the control of a steering board comprising representatives both of industry and of the university, and it is staffed by men who have been chosen for their special interest in, and enthusiasm for, industrial development. It offers to men and to firms having ideas both facilities to develop and access to the knowledge and experience of the total staff, including research staff, of the university, which amounts to about 1,200 in all.

It is true that this centre is new; it is only some six months old, and it still has some teething troubles. But I believe that these will be overcome, and we in the university are all confident of its success. I should add that its future for at least five years has been guaranteed by money supplied as to two-thirds by the Ministry of Technology, and as to the other one-third from the limited private resources of the university itself. At present, the centre occupies, of necessity, a rather limited site right in the centre of Glasgow; and it is clear that for proper development of this idea, where you have a university co-operating with industries in new innovations, more space will be needed, and one will have to go outside the City for that. Mc University of Strathclyde has already something like 270 acres of land at Stepps, which is about five or six miles from the centre of Glasgow. Part of that is used for sporting and recreational facilities, and no doubt more land will be needed. But, given the money, there is available adjacent land which could be brought in. And by increasing the space available we hope to be able to expand the industrial innovational activities, and lease space to industrial firms for research and development. I would point out that within 10 miles of Stepps there is the new town of Cumbernauld. That town is now well established and can provide a proper setting for both industrial research and development laboratories and perhaps also manufacturing facilities for the firms involved or who are coming in. Cumbernauld is a New Town to which there is very ready access. It is not very far to Glasgow, Stirling, and Edinburgh, and I would remind your Lordships that there is ready access to five universities where a great deal of the necessary expertise for development work is to be found.

The kind of development I have mentioned is of course in some ways analogous to, but I think in its concept rather more advanced than, what we find in California at Stanford University, Stanford Industrial Park Development, or in the much vaunted M.I.T. Route 128 development in Massachusetts. In these cases, of course, the development of these projects owed a great deal to financial support provided through the United States Government defence contracts. We do not have that type of support in this country, but from what I have seen I believe that the kind of support that has been provided for the Strathclyde Centre for Industrial Innovation through the Ministry of Technology can provide a workable alternative, and I hope that this will be followed up by more efforts by the Ministry of Technology in this direction.

I mention this matter of the development of a centre of industrial innovation bringing the universities and the industries closer together because I believe that if you develop that type of activity it offers a way forward; and it is a way forward to a situation in which I would hope that the young Scot, the entrepreneur, scientist, technician or technologist, could find the opportunity to exercise his talents to the full in his own country, and at the same time help ensure that country's industrial future. For frankly, what I want to see is a Scotland which is not described as a "development area", but as a "developing area", and I believe it can be done if we have the will to do it.

6.13 p.m.

VISCOUNT STONEHAVEN

My Lords, I want first, if I may, to thank and congratulate the noble Earl, Lord Selkirk, on bringing this subject before you to-day and giving all the "Jocks" a field day. It is interesting to note that among the speakers from Scotland there are, I think, 15 hereditary Peers—a much greater number than we usually find in our debates. I should like also to join in the congratulations to the noble Earl, Lord Elgin and Kincardine, on his very fine, very amusing, and extremely well delivered and interesting maiden speech. I hope we shall hear many more speeches of the same type.

I want to get down to a small area of Scotland—it is the third largest planning region, but it is comparatively small—covered by the Gaskin Report. Here I find myself in a little quandary: I am not quite sure what interests I should declare. Playing safe, I will declare six activities that might be construed as coming within that heading. I am a member of the North East Economic Consultative Group; I am vice-convenor of the Kincardineshire County Council; Vice-Lieutenant of the County (no "vice" that I do not dabble in!); I am a landowner, forester and farmer, from which I derive a certain amount of my income, and I am a member of the East of Scotland Water Board and the North Eastern Counties Police Board. I hope that has covered the lot.

What I should really like to ask Her Majesty's Government is whether they agree with the summary and conclusions of the Gaskin Report on the North East as set out in Chapter 4 of the Report. I want to draw attention to paragraph 4(9) which says: The immediate objective should be to stabilise the total population of the region by 1975. I would draw the attention of your Lordships to the fact that this is well past the middle—three days past—of 1969, so that does not give one very long to "get cracking". Paragraph 4(10) goes on to say: A minimum condition for achieving this will be the provision of about SAO new jobs over and above those likely to be created by foreseeable trends. Six thousand to 7,000 must be imported into the region. Then the whole Report envisages two zones of development and concentration; one centred on Aberdeen, and including selected centres of the Lower Don Valley and on the trunk roads and rail leading into Aberdeen from the South and West; the other centred on Elgin, taking in Forres, Buckle, Fochahers and Keith. Later it is stated: To implement these proposals detailed consideration will have to be given to the infrastructure"— and I must use that word, because it is in the Report— and, in this direction. communication improvements, water supply, and major recreation facilities require attention. We have heard a good deal about that to-day in relation to all parts of Scotland; the same applies to us. The Report gives examples of the trunk road between Aberdeen and Elgin; the links between Dyce and Aberdeen; the bypass road, Anderson Drive, round Aberdeen; the provision and maintenance of adequate local bus services (we have heard already about that), and the maintenance and improvement of rail services.

The Report draws attention to what it terms the "crucial importance" providing adequately serviced industrial sites, particularly at Inverurie, Dyce, Elgin and Buckie, and implies that the Board of Trade should be "jacked up" into greater activity—that is not the Committee's word; it is mine. They point out that the "thresholds of expansion" are largely those of water supply and drainage in this particular area. They make recommendations on the phasing of the planning proposals and they suggest that a start should be made in Inverurie and Elgin. There are other sections of the Report which suggest definite Government action. What are Her Majesty's Government going to do about these proposals? It is also suggested in the Report that the G.P.O. should be encouraged to start manufacturing G.P.O. equipment, which it could well do in Aberdeen or district: and the Committee say that postal communications "leave much to be desired"—a statement which I can fully endorse. Certain Government offices could well be sited within the area. This has been pointed out before, but it is stated in the Report and I want to point it out again.

Under the heading "Primary Industries", the Report says that agriculture is expected to continue to decline. In this regard, I should like to point out that, while the returns from agriculture are so meagre that one cannot pay farm servants what they are worth, this situation is certainly likely to continue. Fishing is in the same position, but both of those industries should benefit from an increase in the food-processing industries that are being set up there.

The third primary industry is forestry. Much more could be done here, but it requires enterprise and an adequate reward for that enterprise. Any additional planting, which is generally held to be the cure for all evils, could not have any effect for 15 or 20 years, even with pulp wood, which is a long way off. The operation of planting is only seasonal and gives only a few temporary jobs, so that there is not much to be gained from that.

If a ground wood pulp mill was to be set up in the area, it should be sited close to the existing paper works, so that one could pipe the pulp wet into the works; but that limits the available sites. The difficulty is that we are already short of water, and a ground wood pulp mill requires a great deal of water.

Sawing small logs down to a 6-inch diameter would increase the use of homegrown sawn timber by 75 per cent. over the smallest size at present used in most normal mills, of 8-inch diameter. The development of suitable saws and techniques, such as a stepped pulley multiple band saw is technically possible, and a scaled-down frame saw, which is commonly used on a large scale in Europe, should be developed. So I think that the Forestry Commission and other interested bodies should get together, and produce something which could tackle the problem of small round wood, which is universal over the whole of Scotland. Big wood is no problem at all: it is the small round wood that is the problem. But for under £100 a standard one can buy from Portugal sawn shooks for making boxes, and all the boxmaking people will not buy home-grown timber because they can get just what they want by lifting a telephone—assuming that they can get an answer from it.

I want to make a few more detailed remarks. First, I should like to know the position in regard to the Inverurie loco works. I am not anti-nationalised industries, and I am not trying to make a political point: but a nationalised industry has a social obligation. If private enterprise suddenly walked out on 600 workers and left them high and dry, there would be trouble—and quite rightly. But a nationalised industry can do that without very much being said. So I suggest that the works at Inverurie. which I believe are a wholly-owned subsidiary of British Rail, should not be closed down until a buyer has been found for them. Why should the works not manufacture parts which can be utilised in other works? They have the best record for costs of anywhere in Scotland, and there is a first-rate collection of trained skilled men. The young chaps will go—and who can blame them?—because they cannot be expected to sit around drawing the dole for a year while people fiddle about with advance factories. That is not the answer, because it is not quick enough.

British Rail made some effort, but it is rather disappointing to find that someone (I do not know who was responsible) issued a brochure which, believe it or not, my Lords, marked Inverurie as being on the banks of the Dee. If the elementary geography cannot be got right or checked, one cannot have confidence in British Rail management. It is slipshod, to say the least of it. Things of that kind seem to show that they are not really caring. Management appears to be quite inflexible and unimaginative, which is a very great pity, and in the Scottish Region they do not properly back up their really excellent staff. I should like to illustrate that.

There is a great "song and dance" about inter-City trains, which are excellent and high-speed in England. But if you look at Scotland, you find that you can go from Aberdeen to Edinburgh, or from Aberdeen to Dundee, and that is all. British Rail speeded up these trains, and they then thought it would be a good idea not to stop the train at Stonehaven. They thereby saved two minutes on the trip between Stonehaven and Dundee but annoyed all the people in Stonehaven, and the people going from Aberdeen to Dundee do not realise that they are arriving two minutes earlier than they would otherwise have done. This is an example of the unimaginative action about which I complain. If you complain about these points you get nowhere. They say, "We run the railways. You go and run your estate."

There is one big point that I should like to make about the Gaskin Report. It is an excellent Report, very well argued and very well documented, but it leaves out any question of cost. The critical question is: who is going to pay? Taking the Aberdeen area alone, a very wild estimate of the six-year cost is £3 million for schools, £24 million for houses, £41 million for roads and £500,000, or thereabouts, for factories, making a total of £32 million. That is "chicken-feed" compared to the figures which we have been talking about, but, remembering that local authorities were told that they must not increase their expenditure by more than I per cent. over the last year, I should like to ask where the money is to come from.

As a suggestion to help these things along, I want to put forward the claims of Kincardineshire and Stonehaven, and to give the reasons. There remain only 6½ miles of trunk road, A.92, to be dualled to take it from Stonehaven to the Aberdeen city boundary; and the estimated cost of doing that (all the plans have been prepared by our roads department and are ready) is £1,317,361, or about £211,000 a mile. Furthermore, one gets a bonus, because we have not been asleep in these past years; we have been pushing ahead. In the case of the other road, to Inverurie, there are 14 miles remaining. They are playing about straightening a corner, but this is a shocking road from the point of view of alignment and narrowness. In the last three years, Stonehaven Burgh have built 106 local authority houses and 123 private enterprise houses, and the county have built 81 local authority houses and 167 private enterprise houses. So we have a bonus, or a start, anyway, of 477 houses.

We also have a serviced industrial site; we have plenty of treated water, surplus to requirements; and over and above that we have 400,000 gallons a day of raw water piped to the site which is surplus to requirements and is not being used; we have a new sewage works and adequate drainage for all the envisaged expansion; and we have a brand-new academy with everything that opens and shuts, two gymnasiums, a heated swimming pool and acres of playing fields. The important point here is that we have available 200 to 250 places which are not required immediately. Furthermore, we have two empty primary schools now surplus to requirements because we are moving those schools into the old Mackie Academy; and we even have a welcoming committee for any unwary industrialist we can entice into one of the most favoured towns in Scotland.

In conclusion, I should just like to say that here is an excellent Report which squarely reviews the problems of the district. It proposes measures for overcoming these problems, and it makes clear planning proposals. We local authorities will certainly play our part. Are Her Majesty's Government going to play their part, or are they just going to file the Report?

6.34 p.m.

LORD TAYSIDE

My Lords, I should like to add my congratulations to those expressed to the noble Earl, Lord Elgin and Kincardine, on his excellent maiden speech: not only for its content, which was solid and worthwhile, but also for the wit which sparkled throughout the speech. I hope that he will come and address your Lordships' House frequently. My thanks are due, too, with those of others, to the noble Earl, Lord Selkirk, for introducing this debate. I must confess that I am rather sorry at the scant respect which has been paid to the Scottish Economic Planning Council and to the consultative groups, if only because I am myself a member of the Scottish Economic Planning Council and am Chairman of the Tayside Consultative Group. I thought, therefore, that I might speak on those points.

The Secretary of State for Scotland has increasingly become involved in all matters of economic development for Scotland within the Government's overall strategy for the United Kingdom. To assist him, he set up the Regional Development Division of the Scottish Office and, in 1965, the Scottish Economic Planning Board. This is a co-ordinating committee of senior officials of the Scottish Office and of other Departments involved in the economic development of Scotland. The Board's main duty is to co-ordinate the economic planning and development of both Scotland and the regions, to assess and report on the economic potential in Scotland, and to ensure that the Scottish Economic Planning Council is given all the information that it requires. It is thus possible for the Scottish Economic Planning Council to be a part-time body of lay opinion, which I think was one of the criticisms made against it by a noble Lord opposite.

The Economic Planning Council, then, is a body of lay opinion, composed of people with special outside skills and knowledge and chosen by the Secretary of State so as to cover as wide a range as possible of local authority, trade union, industrial, commercial, financial and university interests in Scotland. There are about two dozen members and, as has been said, the Secretary of State is Chairman. The main terms of reference of the Scottish Economic Planning Council are to assist in the formulation of plans for the development of the Scottish economy; to advise on the steps necessary for implementing those plans; and also to advise on the regional aspects and implications of the country's national economic policies.

The Economic Planning Council meets in private. Perhaps that is one reason why criticism has been levelled against it, because people do not really know what it is doing. It considers, however, both the immediate and the long-term problems, and it considers, too, the regional and sub-regional reports and the work of the various consultative groups. With the exception of the Highlands and Islands Development Board, the Economic Planning Council and the consultative groups have no executive powers at all, but the fact that the Secretary of State is Chairman of the Scottish Economic Planning Council ensures at least that he takes to the Cabinet, and to his discussions with other Ministers, the thinking and planning of both official and lay bodies. In my opinion, this must be of great value to Scotland, and I should be very sorry indeed if any change were made in the chairmanship.

Criticism was made of the groups' not being able to "push on" (that is the phrase I took down) with matters that we have been discussing. Of course, they have to depend upon local authorities for that. In the same sentence, I believe, in which that criticism was made, it was also said that local authorities on the Borders had been able to increase their industry because of what had been said in the Report. It therefore seems to me that the group has done at least part of its job, and done it well, if it has been able to have some effect upon the area in this way.

My principal interest in the groups, of course, must be that of Tayside. It is worth remembering that when the Government decided upon three growth areas, one was in Scotland, and that was the Tayside area. In a way, this continues the previous Government's thoughts about the central belt being the growth area, because Tayside could well be taken to be just an eastern extension of the central belt. The extent to which Tayside can be used and will be useful in the plan for the year 2,000, which is the year to which this study is designed to go, will depend to a large extent not only upon itself but upon the prosperity of Scotland as a whole. Tayside can certainly readily accommodate the 300,000 population which is being planned—that is to say, roughly double its present population—with Dundee as the principal city. For many years now Dundee has been a city having a fast-growing basis of new industry, and it is physically well adapted to expansion. It is therefore felt that the area should have this city as its main port, with other towns around it possibly themselves doubling or with additional population being accommodated by means of new towns.

To examine the possibilities, the Government set up the Tayside Study. It is one of the major studies which are being undertaken perhaps I could say that in Scotland it is the major study at the present time. The team consists of economists of Dundee University, led by Professor Campbell, and planners from the Scottish Development Department, led by Mr. Derek Lvddon, the Department's chief planning officer. The study is expected to be completed and in the hands of the Secretary of State by the end of this year, but the printing of a major document of this kind will take some time and it is unlikely that it will be published before the Spring or early Summer of next year.

The region is a large one. It includes the cities of Perth and Dundee, the whole of the county of Angus, eight of the small burghs of Eastern Perthshire together with the Central, Eastern Highlands and Perth districts, and thirteen of the small burghs of Fife, together with the district of Cupar and St. Andrews. The group was set up in order to help the Government evolve their more detailed strategy for Tayside and to bring out the widest possible co-operation and support from all sides of economic life in the region. There is thus a two-way flow: local people have direct access to central Government at the formative stage of policy, while the Government get the benefit of firsthand advice from a wide range of prominent people with an intimate knowledge of the area. Normally, there is extensive local newspaper coverage of the group's activities and there is every reason to think that the existence of the group helps to stimulate much better public discussion of the economic future of Tayside.

It started in December, 1966. The Chairman then was Lord Provost Maurice McManus, now Councillor McManus of Dundee. It is felt that the group has been successful in bringing some influence to bear on a number of the policies which have affected the economic well-being of the area. For example, I remember asking my noble friend Lord Hughes in your Lordships' House eighteen months ago whether he could tell us anything about the sugar beet factory at Cupar. He invited me to put down a Question at a later date; but luckily this has turned out to be unnecessary, because while eighteen months ago there was a great danger of Cupar shutting down, I find from the 1968 Report, Agriculture in Scotland, that the increase in the acreage over the period has been quite remarkable. I also learn from the Scottish agricultural Press that the expectation for this year is 13,500 acres (which is double what it was two years ago) and that by next year or the year after the full acreage quota of 16,000 should be reached. That was one of the matters which were taken up very actively at the start by the Tayside group, and I feel that some degree of congratulation to them may be in order. Undoubtedly the most important of the group's forthcoming activities will be to consider the Tayside Study when it is published. It will have the double task of making people in the region fully aware of the widening opportunities which such expansion will make possible and of making sure that the fullest use is made of existing services and facilities to support growth.

Tayside is therefore seen as being in the mainstream of Scottish economic advance. The Government are committed to giving it an important role in the new Scotland. They believe that with its combination of traditional industry, industrial skills, the introduction of new and modern industries, an inflow of population and an environment second to none, it will prove an important asset to Scotland and to the United Kingdom. I think that the Government's interest in Scotland as in other development areas is readily shown by their immediate reaction to the Hunt Report recommendation on the intermediate areas, that the industrial development certificate controls in the South and Midlands of England be removed, or at least reduced. The effect on Scotland and on other development areas would have been serious. This was seen, and the recommendation rejected by the Government. Therefore, in my view, there is great awareness of the need for help for these areas in Scotland. I feel certain that the present method is going to bear fruit reasonably quickly.

6.47 p.m.

LORD BURTON

My Lords, may I join in the congratulations to my noble kinsman, Lord Elgin and Kincardine, upon his excellent speech, and endorse the hope that we may hear more from him in the future. I am sorry that we shall not hear the maiden speech which was to have been made by the noble Lord. Lord Rankeillour. He has unfortunately had to withdraw from the debate because the Parliamentary Committee on which he is sitting has chosen to-day to go to the North of England. Many of us know of the substantial good work which the noble Earl, Lord Elgin, is doing in Scotland, and in the Kingdom of Fife, in particular. I know that one interest he has, as a sideline, is to partake in car rallies. I hope that he will forgive me if I press for some of the roads North of Fife to be upgraded from rally routes to modern roads.

It has been said many times before—though the message still does not seem to have percolated through to the powers-that-be that the root cause of financial difficulties in the Highlands is transport. The noble Lord, Lord Taylor of Gryfe, mentioned the difficulties of finding labour. One large enterprise has to hire buses and to send them 30 miles away to collect labour for the factory when it is working at peak periods. Firms working on the roads in Western Ross are transporting their men daily 40 to 50 miles to work; so that these men are making a round journey every day of 100 miles. I hope that this will give some emphasis to the need for good transport facilities in the north. Apparently the present criterion for expenditure on roads is the traffic density for a particular road. I maintain that this is neither a good nor a sound basis to work on when one is trying to stem depopulation from an area as large as this. Surely it is no use bolstering up or attempting to bolster up non-viable enterprises with grants of vari- ous sorts, such as those for remote areas, when the need is for an infrastructure. Transport facilities should be put in order first.

Firms have been collapsing at an alarming rate in the Highlands since the present Government came to power. In our last debate on this subject I gave details of a number of firms which had closed down. Now, with increased transport costs brought about by the Transport Bill, selective employment tax, increased national insurance and many other rising costs, the rate of closures has in no way diminished—in fact I think it is fair to say that the rate has accelerated in recent months. My noble friend Lord Lovat mentioned a firm employing 150 men which has closed down in the last few days. I have given notice to the Minister that I should be asking how many enterprises or organisations which had received financial aid from the Highlands and Islands Development Board have had to close down. How much public money has been lost in this way? I know that it is not a small sum. I know of one or two firms which have had substantial grants. Unfortunately I was a creditor of one of them—I see that the noble Lord shakes his head, but I have seen the accounts of this firm. This point is particularly relevant in view of the growing tendency to give personal credit to people for the amount of public money which they can spend, whether this is spent well or badly.

To return to the overall picture, what is the use of giving a blood transfusion to a patient whose jugular vein is constricted? This is what is happening in the Highlands. Money is spent on enterprises which cannot show their economic potential because of transport costs. The noble Earl, Lord Perth. referred to Turn-house and compared the situation there with the position in and around London. I therefore make no excuse for returning once more to the A.9 Perth—Inverness trunk road, which I consider one of the most important items. I think that I am probably the third speaker to-day to mention this road, and I hope that if we constantly hammer this matter home something will eventually be done. This road is the jugular vein of the Highlands, and there is scarcely an Inverness County Council road committee meeting where there is not a criticism of this road and its administration.

A short time ago £6,000 was spent on putting a footpath alongside a short section of this road. Since that operation there is now one point which my noble friend Lord Lovat said is only 7 foot wide. But, whatever the width, it is not possible for two buses or two lorries proceeding in opposite directions to pass each other at that point. This appalling example of modern engineering has produced a new major danger spot on our main trunk road to the Highlands. Operations are proceeding at the present time between the Perth county boundary and Dalwhinnie, at a cost of £33,000, so it is not a question of shortage of money. This was the best section of the road between Inverness and Perth, and one of the very few sections where it was possible to proceed at the permitted speed of 70 m.p.h. I wonder why this section has been selected for improvement when there are so many other bad sections. The answer may be that it was done to facilitate snow clearance, but that is obviously no excuse, because snow could be prevented from drifting at a cost which would be a great deal less than £33,000.

My Lords, let us look at the White Paper, which has been mentioned before in the debate and which was produced recently by the Government, entitled Scottish Roads in the 1970's. I should like to make one more quotation from that White Paper: Instead of about 60 per cent. of the road programme being devoted to trunk roads, which is the 1965/70 pattern, it is expected that about 60 per cent. will be devoted to principal roads in the 1970's … the need for improvement of principal (mainly urban) roads may lay claim to an even larger portion. We have been suffering in the past in respect of our trunk roads and there seems little hope now for the A.9, when an even larger proportion of the national budget earmarked for roads is to be diverted from the trunk roads. It seems a strange procedure that North of Inverness we should have a dual carriage way planned and no-one seems to know where this road is supposed to be going. One or two people may know, but the public at large do not. It is feared that this road may be proposed as set out in the Jack Holmes Report which, unlike the Report from the North-East, is not a good one. One description I have heard of this Report is that it is a theoretical solution to what local inhabitants consider a purely hypothetical problem. This was a shocking Report and I hope that it will be buried deep in the archives at St. Andrew's House. If we are to have a dual carriageway, surely it should follow the shortest route and should not be surveyed, as is happening at the moment, so that it meanders around the countryside.

Perhaps what is most frightening is that this dual-carriageway has been planned by officials without consultation with the local authority. The Inverness County Council has been unanimous in asking that possible routes which have not been examined should be surveyed. As my noble friend Lord Lovat said, when this matter was raised recently at a meeting, one of the Development Board members stated that if Inverness County Council wanted this road they should be required to pay for it. Surely, my Lords, if a trunk road of this dimension is to be planned it must be placed on the most satisfactory route for all concerned. It appears that no one at all has consulted Caithness or Sutherland. Can anyone conceive that the people there would wish to go ten or fifteen miles further than is necessary every time they make the journey to Inverness?

There have already been two expensive public inquiries in Ross-shire, and it seems that there is now bound to be a third, entirely because officials are not taking anyone, let alone the local authority, into their confidence. Great credit must go to the Inverness Town Council which held a public meeting the other night when possible road communications within the borough were discussed. I believe that it was a most helpful and interesting meeting and the kind of meeting which should be repeated throughout the country when there are major developments like this on foot.

Let me turn again to the White Paper. A simple calculation will show that this proposed dual-carriageway north of Inverness is likely to cost £20 million. I maintain that with £20 million we could do a good deal more than is proposed in the Jack Holmes Report. I suggest that it is advisable to have proper planning before embarking on this sort of expenditure. For some reason trunk roads are exempted from the local authority planning and are a law unto themselves.

From bitter experience I am convinced that it is time that changes were made in this procedure, and I wonder whether the Minister can give an assurance that the widest consideration will be given to this very important matter and that the local authorities will be consulted at a very early stage.

My Lords, let us have our roads properly planned, efficiently engineered and given the highest priority in relation to expenditure. Money spent on such roads could improve the general economy in respect of almost everything in the Highlands, and probably throughout Scotland, too. I would go so far as to say, though I know that it is contentious and that probably most noble Lords opposite will disagree with me, that money spent on and by the Highlands and Islands Development Board could have produced a far better return had it been spent on road works alone. I hope that what has been said to-day about roads will bring home to the Government the great need for substantial major road improvements in Scotland. I had intended to end my speech at this point, but one remark was made by the noble Viscount, Lord Stonehaven, on the question of the Inverurie locomotive works. The engine of the "Royal Highlander", our best train from Inverness, seems frequently to catch fire, apparently due to a lack of maintenance. This would seem a little inconsistent with closing the most northern of the engineering works.

6.58 p.m.

THE EARL OF CROMARTIE

My Lords, I count it a privilege to add my congratulations to those extended to my noble friend Lord Elgin and Kincardine on his most amusing and excellent speech. We are grateful to my noble friend Lord Selkirk for initiating this debate, especially as it is high time that this matter was given an airing in your Lordships' House. Like many of our debates, this one has covered a very wide field, much of which has been dealt with by other speakers, and I shall therefore confine myself in the main to the Highland areas of Scotland which, together with the Borders and the rural areas, have sometimes been adversely affected by some Government policies. Before I go further, I apologise for my voice which returned only about theree days ago after a week's absence.

Had it been the intention of Her Majesty's Government to align themselves with the evicters of the 19th century they could not have done more toward achieving their object than by instituting that ill-conceived tax, S.E.T. I am sure this was not intended, yet that is exactly the effect of the tax. Great efforts are being made to introduce industry into the North, and we wish them every success; but industry can never supersede the basic Highland rural economy of agriculture, forestry, fishing and tourism—the latter being an industry of ever-growing potential. Admittedly not all these industries are subject to the full S.E.T. tax, though the greatest, agriculture, has to lend this money free of interest to the Government and await repayment—a stupid, wasteful process, if ever there was one. These Highlands rural areas provide employment through service industry and if they lose this employment, as indeed they are doing, men and women will either go on the dole or leave the country of their birth and go either South of the Border or to the congested industrial belt of Scotland.

We must now consider briefly some of the damaging actions which are contemplated by the Government. It is the old story of forcing centralisation where decentralisation should be the target. The Ministry of Social Security North of Inverness is to be run down and centralised in the town of Inverness, so that for a start the county town of Ross and Cromarty will lose an appreciable number of jobs. Our Member of Parliament, the county council and even the local advisory council have pointed out the absurdity of this, from the point of view of both employment and efficiency. To anyone who knows the area, one would imagine that this was self-evident.

Next we must turn to the North of Scotland Hydro-Electric Board, which proposes establishing a computer centre in Aberdeen. This will be carried out in stages, each stage involving an increase of staff at the accounting centre—that is, Aberdeen—and a gradual run down of staff in areas extending over the Highlands, so that in four or five years' time the security of employment of area administrative and clerical staffs will be in jeopardy. The Hydro-Electric (Development) (Scotland) Act 1943 gave a great measure of autonomy to the Board for the express purpose of meeting the problems of the Highlands, and one of its basic objectives was to create employment for the people of the Highlands. Here I must declare an interest, though not a financial one. In 1902 my late father was the first man to start a hydro-electric supply of electricity in Strathpeffer to the crofts and farms in the area, gradually spreading to the county town, then to the North and South to Inverness, when it was taken over by others.

The setting up of a computer centre in Aberdeen, outwith the Highlands, is a contradiction of the purposes of the 1943 Act and, what is more, the selection of this centre was carried out before any opportunity for consultation was given to those most affected. This is likely to unsettle staff and they may well look for posts not only away from the Board but outwith the Highlands. It has been suggested that all work associated with the day-to-day running of the accountancy sections could be carried out at area level, and the computer centre should only take over the processing of taped information, punched at each of the five areas. Indeed, I find it difficult to understand why the computer itself could not be located within the Highland area. Here is another instance where the Government could well take another look.

Turning to another Government-controlled industry, the Post Office proposes, for reasons which to most of us are obscure, further to reduce employment in the Highland rural areas by downgrading the main post office at Dingwall. One is tempted to imagine some faceless bureaucrat in some city office, drawing on a bit of foolscap how he thinks the Post Office can be made a tidy and neat paper exercise. Perhaps his only experience of the postal service is in some concentrated suburb: one doubts whether he has any conception of the huge area and scattered population which this office serves. His knowledge of the winter climate and road conditions is probably equally vague. Nor does it seem to occur to this imaginary, or other, planner that with the advent of industry in Easter Ross, the work of this key post office is likely to be even more vital to the area. I, and more important, the local authority to which I belong and who, after all, know this area intimately, find it hard to believe that this woolly idea would increase efficiency.

To sum up every one of these proposals has as its basis the concentration of local services into larger units, not located in the areas which they serve. The services provided by the Hydro-Electric Board, the Ministry of Social Security and the Post Office are all local and should be administered locally. Unless this is done, it will mean that the public who, after all, are served by these three organisations, will have no contact with senior staff and the proposals will lead to a considerable loss of employment in an area which already has an unemployment rate far in excess of the national average. These ideas can be appreciated if one is dealing with built-up industrial areas, but in the Highlands, the Borders and rural areas, there are problems which are peculiar to these areas and I suggest that special treatment is needed to deal with these. The solution should be not centralisation but decentralisation.

I would remind the Government that effective "future planning" of the Highlands and other areas is difficult, due to the non-appearance of the Wheatley Report on the Reform of Local Government. Even if no one agreed with the whole of it for years to come, its publication could give a sense of direction, and this is badly needed.

Before ending, I would refer to the important suggestion raised by my noble friend Lord Lovat; namely, the route to be followed by the main road leading North from Inverness to Invergordon and beyond. The Holmes Group suggested that the new route, broadly speaking, should follow the existing A.9, and I do not propose to argue the merits of this as opposed to the shorter Black Isle route, which would require bridging and causeway over two Firths. What I wish to stress, whatever plan is decided upon, is the desperate urgency of, first, bypassing Dingwall and, secondly, leaving aside the possibility of a very expensive dual carriageway, of a major improvement of the existing A.9. For 16 years we have waited for the replacement of a bridge on this road, because of its needless destruction by an abnormal load going to Dounreay. These loads, both to the Atomic Energy Authority and to the Easter Ross development, increase, causing further delays and damage, and to this must be added the build-up of tourist traffic. I would ask the Government to give their immediate consideration to these vital problems.

7.7 p.m.

THE EARL OF GLASGOW

My Lords, may I first jointly congratulate my noble friend Lord Selkirk for initiating this debate and my noble kinsman, Lord Elgin and Kincardine, upon a magnificent maiden speech. This seems to be a happy combination of circumstances. I am no economist, and this evening I want to confine what I have to say to one aspect of the Scottish economy and largely to one area—my own.

There is no question that Scotland needs industry, both light and heavy, but it is equally important, if we are not to repeat some of the more hideous errors of the last century, that this industry should be sited in the right places. An effective national planning authority, with teeth, and representing all interests, is essential to avoid piecemeal development and so that the problems of planning industry in Scotland are looked at from the point of view of Scotland as a whole. Moreover, the people whose lives are to be seriously affected should have an early opportunity of participating in the planning process. This does not happen to-day. More often than not, the first indication that anything is afoot is the appearance of strange men, and stranger implements, on fields and beaches. When questioned, these men produce valid permits but are extremely reticent about what their activities involve.

A decision is then taken by the promoters of the enterprise and the period of high-level lobbying begins. Reports are written, with extremely limited circulation, promising miracles. It is only when the local Press gets hold of something factual that people living in the area, following months of rumour and counter-rumour, get some idea of what is going to happen to them. Shortly after this, planning permission is sought, and usually approved; and a feeling that the issue has already been decided tends to turn the subsequent public inquiry into little more than an expensive charade. Moreover, few communities, however strongly they may feel, are able to muster sufficient funds to enable them to fight effectively.

My Lords, industry was made for man, and not man for industry. Local and regional authorities, which should be looking after the interests of those who elected them, are too apt, for political and other reasons, to accept without question the introduction of industry into their areas on the terms of the promoters. A good businessman will, very properly, select for his enterprise a site that will involve him in the minimum capital expenditure and maintenance costs, and give him easier access to markets, labour and such like. The effect on the inhabitants or the area is not his business. By taking a stronger line, particularly with foreign firms, and making them spend a little more money, a site can normally be chosen which will be nearly as good as the original one they wanted but will cause minimum disturbance and bring greater prosperity to all concerned.

If your Lordships will bear with me for a few moments, I should like to describe briefly the situation at present obtaining in the Clyde Estuary, because it bears out nearly all the points that I am trying to make. In the Clyde Estuary the Western coast has in the North the highly industrialised area around Greenock and Port Glasgow, and in the South the new town of Irvine, which is building up into a vast centre of industry, incorporating the towns of Kilwinning and Dreghorn. This is an area where industry is badly needed to compensate for the closing down of the pits in the Irvine Valley and other parts of central Ayrshire.

Between Greenock and Irvine—or perhaps, more strictly, between the Cloch Lighthouse and a point somewhere South of the Hunterston peninsula, lies one of the most beautiful stretches of coastline in Scotland, or perhaps even in Western Europe. Moreover, this is an area which has been zoned as residential and recreational, and which has for decades been the most easily accessible recreational area for Glasgow and the industrial belt of Central Scotland. It has clean air, its fair share of sunny weather, and easy access to the Islands. It is also a very popular yachting centre. There is virtually no unemployment, and it has a considerable attraction for tourists. It is on this stretch of coast that industry has pounced. Here I should perhaps declare an interest because, although my own land is not affected, and I have no financial interests in the various projects, my old family house is situated in the area and, like my noble friend Lord Muirshiel, I am a member of the Clyde Estuary Amenity Council.

The attraction of this coast for industry seems to be threefold. First (this point has been mentioned many times to-day, and is important) there is the fact that it is possible to build, at low cost and with the minimum of dredging, deep-water ports to take the largest ships; secondly, it has good communications; and thirdly, there is only a limited amount of flat land. This land, being alluvial, is probably the best farming land in the West of Scotland. After the preliminaries which I have just described had been gone through, the Clyde Port Authority, in conjunction with the local authorities in the adjacent counties, commissioned a firm of consultants to prepare a report, to which my noble friend Lord Lauderdale has referred, on the suitability of this area for industrialisation. The terms of reference were heavily biased and my views on this Report and its usefulness correspond very closely to those of my noble friend. But a professor from Sheffield was also commissioned to keep a watching brief on the effects on amenity and social life in the area. The professor made a number of recommendations designed to preserve the area from the worst of the effects of power stations and heavy industry, but his recommendations seem to have been ignored completely by the authorities who commissioned him.

The first company to request planning permission was the American firm of Murco, which wanted a deep-water oil port and tank farm at Wemyss Bay, to the North of the area, with an oil refinery over the hills at Longhaugh Point, adjacent to a large hospital for war disabled. The public inquiry on this project has only just finished. It lasted seven weeks, and is, I believe, a record for Scotland, which gives some indication of local feeling.

A request has now been received from the South of Scotland Electricity Board to build an oil-fired power station at Inverkip, almost alongside the oil port. Inverkip is an unspoilt village, situated in delightful surroundings, ideally suited to a yacht marina, plans for which are already well advanced. Both these sites are in the County of Renfrew. To the South, Chevron, a subsidiary of Standard Oil of California, have requested permission to build another deep-water oil port and tank farm at Portencross, and to take over half the Hunterston peninsula to build an oil refinery, expanding later to a petrochemical complex behind it. The other half of the Hunterston peninsula, and the land between it and the equally unspoilt village of Fairlie, is proposed as a site to extend the existing nuclear power station, to build a deep-water iron ore port, and possibly later a steel mill.

This, my Lords, is surely the most hideous example of piecemeal development. Would it not be possible, with careful planning, to have one deep-water port to serve all clients? Nor am I convinced that the Hunterston Peninsula is the most suitable place for development even though it might be cheaper in terms of capital outlay. I and others with a seafaring background have considerable doubts about the safety of the port. These very large ships, I am told, are unaffected by wind and sea, but vulnerable to tide and swell. They would have no shelter at all from the South-West—the direction of the prevailing wind—and after a three-day sou'westerly gale there would be considerable swell. The channel is narrow, and the tides, though not strong, are unpredictable, with a sideflow coming through between the Cumbraes. Nor is it known accurately what the effect would be when the land between Hunterston Point and Fairlie is reclaimed. A failure of judgment with one 250,000 tanker would cause such devastating oil pollution on all the shores of the estuary as would make the pollution from the "Torrey Canyon" seem as nothing.

The second disadvantage is the proximity of all this activity to the old-fashioned Hunterston A nuclear power station. The strongest point made in the local inquiry which preceded its creation was that it was essential that it should be sited away from a populated area. It is known locally that plans exist for the evacuation at very short notice of everybody within a considerable radius. I have been unable to establish what has happened to alter this requirement.

Perhaps the noble Lord, Lord Hughes, when he replies, could comment on this point.

If the Chevron application is approved, pollution of the whole coast is inevitable, due to the prevailing wind. With the iron ore port and steel works added, the whole countryside will be covered with red dust. The area required for the oil refinery alone would virtually eliminate three farms, one of which has a reputation throughout Scotland for high production and good husbandry. It would also demolish 14 smallholdings, and four other farms would be seriously affected. This involves some 30 families and, incidentally, affects the livelihood of up to 200 local casual labourers who are employed annually for lifting the early potatoes. At a time when farmers are being asked to produce to the maximum to reduce imports, this must be wrong, when there is so much useless land that could be used instead.

Chevron, an American concern, are "on the pig's back". They receive large grants from the British Government; they avoid United States tax by setting up business in Europe, and they obtain cheaper labour. They may indirectly put something between £1 and £3 million annually into the British economy, but all their profits go back to America. When the refinery is completed they will employ about 200 men. Few of these can be recruited locally, as there is little unemployment in the area, and the requirement will be for highly skilled men, the majority of whom will probably come from England. These are hardheaded businessmen looking for profits, who cannot be expected to consider the social upheaval that their presence will create.

The local reaction to the Chevron application was immediate. Two thousand six hundred individual objectors wrote in with reasons to the local authority. Despite this, the planning committee of the Ayrshire County Council voted by 15 to 3 to apply to the Secretary of State for the re-zoning of the area to allow permission to be granted. The three who voted against, and raised an Amendment which was out-voted, were those members who represented the unhappy inhabitants of the areas affected.

My Lords, if these plans are allowed to go through, what was once a smiling, prosperous, residential community with a growing tourist trade, may well become a depressed area and one of the economic problems of Scotland. The tourists, the holidaymakers and the yachtsmen will go elsewhere; the farms will deteriorate through pollution of the soil and the atmosphere. One of the most beautiful parts of our island will be defaced beyond repair. What are the alternatives? A few miles South of Hunterston, and that much closer to Irvine New Town, is the old port of Ardrossan, which has fallen on somewhat evil times and would welcome industrial development. The construction of a deep water port here would be more costly, but slightly more sheltered than Hunterston without narrow passages between the islands. There is a larger expanse of flat land around it, much of it useless for agriculture. Communications are better with easier access to the Garnock and Irvine valleys. On the North bank of the Clyde Estuary is the area stretching eastward from Ardmore Point, where the Clyde Port Authority had proposed reclaiming some 6,000 acres. This site was the early favourite for heavy industry in the estuary. Here again the construction of a deep water port might be more costly and involve dredging, but the reclaimed land could take all the heavy industry that was offered, close to Dumbarton and the already industrialised Vale of Leven. Here communications are infinitely better. There is considerable unemployment in the Greenock area and on the Upper Clyde, which is likely to increase with the redundancies recently announced from the Upper Clyde shipyards. This is an area crying out for alternative heavy industry, where the disturbance to the local inhabitants will be minimal.

But, my Lords, deep water—that priceless asset—is not confined to the Clyde Estuary. I have just returned from a fortnight in the Western Highlands, and a number of possible sites for deep water ports caught the eye—most notably, Loch Ewe, where the convoys used to assemble during the last war and, in the very far North, Loch Erriboll. If it is really the Government's intention to try to open up the Western Highlands, and reverse the trend towards a rapidly dwindling population, these areas must be considered, and suitable communication provided. The provision of a port in the North of Scotland would bestow tremendous benefits on that part of the country. I should be most grateful if the noble Lord, Lord Hughes, when he comes to reply, would comment on the Government's thinking in relation to deep water ports and the proposals for the development of the Clyde Estuary.

I know that the pressures, both political and industrial, on the Secretary of State to accede to the wishes of industry, and the local authorities, will be heavy. I always fear that he hears too little of the other side of the picture—the destruction of small local industries; the social consequences, and the despoiling of the countryside. I felt it proper that this aspect should be aired in your Lordships' House. Not everybody on this stretch of the Clyde coast is opposed to heavy industry, and probably a majority would be in favour of selected light industries suitably sited. But at the back of people's minds is the fear that the deep water ports may not work—that a limit may soon be reached to the economic size of ships—that in 15 or 20 years oil and steel may not have the importance to the economy that they have to-day and, on top of the social upheaval, a beautiful part of our national heritage may have been ruined for all time and to no purpose.

7.25 p.m.

LORD FERRIER

My Lords, I should like to add my congratulations to the noble Earl, Lord Elgin and Kincardine, for his attractive, audible, interesting and constructive speech, and also my thanks to the noble Earl, Lord Selkirk, for introducing this debate. However, I have a complaint to make; namely, that I feel that too long has gone by since we last had such a debate. The noble Earl said so himself, and the noble Earl, Lord Dundee, repeated the suggestion. I believe that with greater energy of the powers that be, we could have a Scottish debate more often, and thus avoid the great length to which this debate has gone, and its widespread nature. I do not envy the task of the noble Lord, Lord Hughes, who will have to wind up.

Another complaint which I would make about the debate is that agriculture, this major industry, has not received its due attention. I do not propose to deal with this matter now, but the problems of Scottish agriculture are so great that they deserve almost a debate to themselves.

LORD HUGHES

My Lords, I have not intervened in any of the speeches so far, but I must do so now. It has been agreed by the Scottish Peers generally that a debate of this kind is so wide-ranging that to include agriculture and forestry would frustrate the whole object; and agriculture and forestry, by tradition, are now the subjects of a separate debate.

LORD FERRIER

My Lords, I thank the noble Lord for those remarks. Nevertheless, it seems to me a long time since I have heard in this place a word about Scottish agriculture.

One advantage of speaking so late in a debate of this nature is that one can pick up threads which seem to require to be drawn together. I would refer to the speech of the noble Lord, Lord Taylor of Gryfe, in which he referred to overmanning, and linked that with the problems of retraining. That brings to my mind a thought which I am sure has occurred to others, but is worth mentioning in this context, and that is the use of the premises of "H.M.S. Condor" at Arbroath. Here, ready to hand, seems more than a skeleton of a potential establishment for industrial retraining purposes. The other point I feel worth mentioning is the one made by the noble Lord, Lord Todd, when he said that we had not paid enough attention to the universities. I think that is possibly so, in that my recollection goes back a good many years, to the time when Professor Hunt of Edinburgh University opened and developed his excellent department, which has concentrated on the problems of management. Admittedly this is not post-graduate, which was the point to which the noble Lord, Lord Taylor, referred. But nevertheless it has made a really marked contribution to the study of management in Edinburgh and its surroundings.

Another advantage of speaking late in a debate is that one can "scrub" great parts of a prepared speech. In this case I have one matter to which I was going to make reference, and that is the problem of the Scottish civil airports. There is to be a debate on July 9 in which this problem will be dealt with from the Scottish angle. I need not say very much about it, except to repeat what the noble Lords, Lord Selkirk and Lord Perth, said about the inadequacies of the civil airport accommodation in Scotland, and the overlapping that exists, the extravagance and the uneconomic operations which follow from the mistakes which have been made in the past. I would only say that the outcome of the very recent dialogue about a rail link between Prestwick and Glasgow is another indication of the mistakes that can be made. There should have been a fast rail service between Prestwick Airport and St. Enochs in Glasgow years ago, but now the station is closed. Had there been such a link existing, uneconomical use of airport investment would have been avoided. One must remember that as aircraft fly faster and faster the development of speedy links between airfield and city centre become more and more important.

Indeed, lack of foresight and procrastination have resulted in the present ineffectiveness of Turnhouse Airport, to which the noble Earl, Lord Perth, referred, on the eve of the Commonwealth Games. May I say what I have said before (and no doubt it will be said again), that when the day comes, and I hope it will not be far away, that a new runway is taken in hand, the development of this runway should not be in any way delayed by the need for a new terminal building. The terminal building can come later. It is the runway that is required for regular air passengers who have been diverted over and over again to Glasgow because of cross-winds. It is the South-West/North-East runway which is needed.

While on the subject of Edinburgh's communications, and not entirely dissociated with the airport, I would say that surely the time has come to bring the bypass road out of the pigeonhole where at the moment it is doomed to lie for close on twenty years. I must say that my heart gave a bound when I saw in the White Paper on Scottish Roads, in page 6, paragraph 10(3), that: The objects of the trunk road programme will include urban bypasses and relief roads. If I may pick up a remark of the noble Earl, Lord Perth, he referred to a "ring road". I feel it very important in the context of Edinburgh to keep in mind the bypass road. There is a ring route and an inner ring road, over which an inquiry has already been held, but the bypass road, which was part of the Abercrombie Plan in the 'thirties, still stands on paper. The traffic situation in Edinburgh, greatly accentuated by the absence of a bypass system, is injuring the economics of the city as a whole. It is also endangering the value of this unique city as a tourist attraction, as Lord Perth has said. But indeed it is reducing valuable residential areas into through routes for industrial traffic, not only in the centre of the town but in such peripheral areas as Colinton and other suburbs, on the Water of Leith valley and elsewhere.

Before leaving the subject of transport, I would join my voice to those who deplore the railway situation. What I regard as lack of vision, such as the Prestwick problem to which I have already referred, is really rather frightening. The brushing aside of the Scottish Railways Board seems quite unreasonable to me in the context of the present upsurge of national feeling. The closure of the Waverley line just as the Forestry Commission's vast plantations in the area are coming to maturity is to me another imponderable. And this closure of the Waverley Line coincides with a decision in Scandinavia to take timber off the roads and put it on the railway. The closure of the railway workshop in Inverurie has already been mentioned by the noble Viscount, Lord Stonehaven, and so I will make only a brief reference to that, to urge upon the noble Lord the points made by Lord Stonehaven and that very careful consideration should be given to the problems here.

It happens that I have personal knowledge of one of the employees who recently purchased a house in the neighbourhood for himself and his family. It is all very well to say that these men will find jobs elsewhere. They may. But, unless something is done to replace that undertaking by something similar, the investment that thrifty men have put into the neighbourhood will be eroded. I would support the suggestion that the workshop there should be maintained, perhaps at some little cost to the State (the point was made by Lord Stonehaven), until such time as someone else is there to go into it. Let it not become a shadow town.

So, my Lords, I turn to the last and the most difficult part of the task which I have set myself. I do not share the—I will not say complacency, but the satisfaction, which has been expressed on the other side with the situation to-day. Indeed, I prefer to share the alarm, if not despondency, which was expressed by the noble Earl, Lord Lauderdale. I think we must bear in mind that the situation in Scotland, as in other parts of the world, is a very dangerous one. I wish to refer constructively to the shadow of the crisis which hangs over Glasgow: a crisis caused by a basic spiritual malaise. This malaise is not confined to Glasgow or indeed to Scotland—but it is about Scotland that we are talking. This crisis in Scotland has been brought to the notice of the whole nation by a small hard-core of moral delinquents, whether it is the hooligans among football supporters, a small minority; whether it is thieves and cheats among the working people of all classes, again a minority—all this indiscipline stems from the old sin of moderate men who remain silent: thus freedom perishes.

The primary elections for New York's mayor showed that all over the world the great bulk of people who stand for social discipline, for law and order, for probity in civic affairs; they are stirring in their wrath. The time for change, I believe, in Scotland is here and now. It must come, indeed, if Glasgow is to be saved from the crisis which may easily loom ahead. The terrible story of absenteeism, of scrimshanking, of monstrous pilferage, of wilful damage, which surrounds the Q.E.2—the story may not differ much from the situation in other parts of the United Kingdom. Not only in the shipyards are there vandals. Vandals are at work in many industries, and not only vandals but people who no longer develop the Scottish pride in the job and the anxiety to see that they give good service for their wages. I am not trying to "knock Scotland"; I am trying to say that Scotland should show the world that these things can be rooted out, or otherwise her economy will perish.

The popular Press—I except such media as Glasgow's own paper—must bear a heavy share of blame. Their concentration on the sensational, the trivial, the sexy, the scandalous, the wrongdoer, the "hippy", the drug pedlar, violence, indiscipline—need these be the headlines, my Lords? This was a point which the noble Viscount, Lord Muirshiel, made, and I believe it is one that cannot be made too often, lest it goes by default. Believe me, my Lords, the good turn, hard work, honest endeavour, sobriety, marital fidelity—surely these can be news. The story that they are not news is one put out by the media themselves.

Let us no longer blink the fact that subsidised housing in the form in which it exists in Glasgow is, in my view, a basic evil. In simple terms it amounts to subsidising voters—what I would call the corruption of democracy. I see from to-day's Glasgow Herald that the housing burden on the rates is 5s. 4d. in the pound—£8 million. Of course, in financial terms this has placed such a burden on the rates that trade and industrial undertakings, despite derating, are being borne down. These factors are militating, directly and indirectly, against the efforts being made to bring industry to Scotland.

The noble Lord, Lord Taylor of Gryfe, very properly referred to various indications in one report. I have in my hand a cutting from a newspaper which says that the article is written "by our shipping correspondent", and it says: An Englishman who wants to set up business in Scotland offering employment to about 1,000 persons said yesterday that a main stumbling block was the existing bad labour relations in Scottish plants. The article then goes on: One of the major items against our going to Scotland, I must say frankly, is the state of the labour relations there, particularly in Scottish yards. That is too wide a generalisation and it goes further than I would go. But, let us face it, it should and must be said that this problem, which goes through and through industry, of poor workmanship by a small minority who seem to be dedicated to vandalism, is something of which note must be taken. Whatever panacea can be developed by the good work of the Scottish Council (Development of Industry)—and I add my share of praise for what they have done—no panacea can bring about a cure for Scotland's present malaise without a return to the "Pith o' sense and pride o' worth".

7.43 p.m.

LORD TWEEDSMUIR

My Lords, I think I am the last speaker from this side of the House and I will detain your Lordships for only a very short time. I promise the noble Lord, Lord Hughes, that I will not speak about either agriculture or forestry; but I shall speak about something else which is just as much a question of land use. It is a new industry and one in which we are only at the threshold, and it will take me only a short time to do so.

Before embarking on that I should like to add my congratulations to the noble Earl, Lord Elgin and Kincardine, and say that he must be well aware that the reception his speech has received goes far beyond that of mere convention, and I hope that, before the memory of that remarkable speech has a chance to fade, we shall hear him again in his next speech.

We have heard of old industries to-day, but I am going to speak about an absolutely new one. This is the application of modern techniques to hard-rock mining exploration and the search for minerals. If that does not sound exciting you only have to look across the Irish Channel to Eire, which is not very far. There, in the last few years they have invited mineral prospectors from all over the world. Most of them come from Canada. They have put £20 million into setting up three principal mines—mostly in dollars. They have spent £5 million a year in running them, and when all charges have been met they have about £20 million per year coming in. That is a not-unimportant thing.

I know that the geology of Scotland and of Eire are not quite the same thing, but it is not far away that this is happening, and for the first time in our long history we are now harnessing modern techniques to searching in Scotland for these same minerals. My own parish in Aberdeenshire is being sedulously prospected by one of the biggest mining companies in the world, and I must now declare an interest because I am part of a Canadian mining syndicate formed several years ago to do this very thing; namely, prospecting in Scotland, mostly in the Highlands. It is not inappropriate, when one remembers how much Scotland has developed the wilder parts of Northern Canada, that the Canadians should come back and help us to open up Scotland.

If I may give a definition of what I am talking about, I am not speaking of coal or sand or gravel, or of the uranium which is under the umbrella of the Atomic Energy Act, but of metals like lead, zinc, silver and molybdenum—that kind of group of metals—which are discovered by an enormous expenditure on diamond drilling: tens of thousands of feet of it, at about £2 a foot. To most people in Scotland the meaning of mining is the old Industrial Revolution areas: mining tips and soot and smoke and blackened land; whereas the hard-rock mining enterprise can in fact be perfectly clean, without smell and without sound and, of course, in certain minerals incomparably more valuable. We have had in Scotland over the centuries quite a lot of hard-rock mining. Leadhills, in the Borders, has been worked, some say, right back to the days of the Romans. Strontian, with which I am myself concerned at the moment, in Argyll, produced all the lead which was fired by our side at the Battle of Waterloo. It must have been a nice low-cost project, because it was worked by French prisoners from the Napoleonic War. Scotland is peppered with old. worked-out pockets of gold mines, lead mines and silver mines—indeed, I think my noble friend Lord Dundee once told me that he possessed one.

People are very excited when they find that you are looking for minerals in Scotland. It is rather like hydro-electric power: they do not quite understand the things that "make it tick". They always imagine that you are looking for gold. They imagine, much more strangely, that you know it is there; otherwise you would not look. But unlike a shopkeeper, who, if he goes out of business, can sell the rest of his lease and the rest of the goods that are on his shelves. But if you have spent a large sum of money on several thousand feet of diamond drilling at £2 a foot, and find nothing at all, you have spent a vast sum of money to prove that what you have acquired a title to is worth absolutely nothing to anybody. There is a high degree of risk in it, as I need hardly tell your Lordships, and you get down to cold, pragmatic calculations, rather than exciting Klondyke ones. There is a place, in particular, with which I am concerned in Scotland. We reckon we have to see 15 years' working to make a mine. Fifteen years' working represents about 5 million tons of high-grade ore, which means that 4½ million tons is not enough and you do not start. It is full of heartbreaks.

I always think that hydro-electrics are rather ill-understood in Scotland, too. You find many great declamatory questionings when people see a waterfall and they ask, "Why is that not harnessed to hydro-electric power?" They do not realise that to harness hydro-electric power requires a special lie of land above the waterfall, and that if that is not there, and you just harness a waterfall, you hang round your neck the most awkward economic albatross you can find—which is expensive hydro-electric power that can ruin the economy. So it is necessary to get down to rather cold calculations.

My Lords, minerals and mining are not found by regional councils; they are not found by planning boards; they are not found by geological surveys, though such valuable people, who can usefully coordinate their results, will find things that are useful for the teaching of students in the universities. Minerals are found by the use of the diamond drill; and there are two questions in every mining project: When, and where? "When", means, "When you find it what is the price of the metal at the time? What is the price of the metal likely to go on being in the next few years"? "Where", of course, is a question that arises much more in the mining countries like Canada and Australia, where distance really matters.

Seven years ago I found a complete mountain of magnetite iron ore about 400 miles inside the Arctic Circle. It turned the compass round on my little aeroplane about 180°. I got very excited, and then I reflected that I was about 100 miles from a sea that was frozen for 11 months in the year, and about 70 miles and another two ranges of mountains from another sea that was frozen for nine months of the year; and that in about 100 years—or perhaps 50—the world might want it, but not at that time. "When" comes into Scottish prospecting; and so does "where", because I can imagine circumstances in which rich deposits might be found in a part where no one would welcome their development.

Just in case I have not underlined the importance of mineral research, if exports are important the corollary is that import substitution is just as important. Two years ago—my figures are for 1967—we imported into this country, with scarce foreign currency, about £7 million sterling worth of molybdenum, over £20 million worth of lead and £20 million worth of zinc, over £30 million worth of silver and £120 million worth of copper. It is worth going to very considerable lengths to find them in Scotland—indeed in Britain—so that we do not have to buy them all from abroad. If you have a dependence on a supply line of the distance from which these come, it has heavy strategic implications.

Hard-rock mining is the ideal thing to develop an area which has no other economic basis. For every one man under ground, they say, there are five men on top—butchers, bakers, candlestick makers, and so on, who live on and around and by that mine. There is one stimulus to this, and it is a stimulus which is given by every mining country—fiscal incentives. In South Africa, until you get every penny of your capital back you do not pay a penny of tax. In Canada and Australia you have enormous opportunities of writing off, which amounts to the same thing, so you have written off almost all expenditure before you pay tax. In Eire, where they have been so noticeably successful, they started with a four-year tax holiday and quickly expanded it to a 20-year one with the most enormous results. But whereas mines in Canada and Australia are sometimes found on settled land they are more often found in the wilderness. In Scotland, it is very much otherwise, just as Scotland is generally very much "otherwise" from every country in the world.

There are two parties who must be partners. One is the miner and the other the man who owns the land. They must have incentives. The miner has incentives; there are various concessions by which development expenditure, or part of it, can be repaid. But at the present moment the owner of the land has no incentive whatever to make a deal with the miner, because if the value of that deal is aggregated with his estate it will greatly prejudice his position. That is the first suggestion: that when a capital deal is made between the mining company and the owner it should not be aggregated with the estate. Secondly, it should be regarded as a form of land use and, with agriculture, industry and forestry, be eligible for the 45 per cent. relief for estate duty.

The next point is that if it is a bargain which is based on receiving a royalty—and, remember, a royalty on a wasting asset is not the same thing as a gilt-edged investment—and if it is producing £20,000 a year, with income tax, surtax and betterment levy the owner would be receiving royalties out of which he would get something like 1s. Id. in the pound. In that particular case, you should either do away with the whole levy or greatly ameliorate it. I promised to speak shortly, but I thought that in a debate on the Scottish economy the case for this new industry, of which we are only now on the threshold, was well worth raising. It must be seen as a partnership between the man who owns the land and the man who will work it.

7.55 p.m.

LORD HUGHES

My Lords, I wish to start, as other noble Lords have done, by extending thanks to the noble Earl, Lord Selkirk, for having introduced this debate to-day. I rather agree with those who say that the intervals between such debates have been too long, but this is one case where the initiative is firmly in the hands of noble Lords opposite. Having ventilated this point of view, I would leave it with them, but if there is a complaint on that score again it will still rest with them.

LORD FERRIER

My Lords, if I may intervene, why does it rest with noble Lords on this side? Is it not a matter concerning the whole House?

LORD HUGHES

Yes, my Lords, but nobe Lords on the opposite Benches have a day a week on which they can choose any subject they like—or, at any rate, very nearly that; not a day a week perhaps, because the Government have some of this time. But naturally noble Lords opposite choose the subjects which they think are of greatest interest to them. It may be that the Scots have been unduly modest in this respect and have preferred to leave the choice of subjects to those South of the Border. It will not have escaped their notice that the Government have many subjects from which to choose: after all, we have been legislating from time to time. I would also thank the noble Earl for the way in which he spoke in the debate. Unlike the noble Lord, Lord Lovat, I have no quarrel with the way in which he did so.

I have noted the number of subjects of a major nature that have been raised during the debate, and there are 21 different themes. If I were to aim at something like half an hour, and I gave them all equal importance, I should be able to devote something less than one and a half minutes to each subject, which would he a complete waste of time. I must therefore follow the noble Earl's example and tend to be general, selecting those subjects which are of greatest general importance. I hope that it is not just Scottish bias that makes me feel that the Scottish debates are much better than any we get on any other subjects, because there is a minimum of Party political points brought in; we have had a few—and that is natural—but they have been the exception rather than the rule. Therefore I am entitled, I think, to work on the basis that some of the speeches made are made not from the point of view of eliciting a reply from the Minister answering the debate, but to bring points forward for consideration by the Government and for implementation in due course. I think I can say, without being unduly complacent, that out of the Scottish debates in the past I have so treated some of the speeches made, and they have not been without result in due course. Some of what we have done in the Scottish Office is a direct result of things said by Scottish Peers in your Lordships' House, and I hope that that will long continue to be so.

Among those speeches which I think are for later consideration and digestion I would most emphatically place the last one to which I had the pleasure of listening. I was absolutely fascinated by what the noble Lord, Lord Tweedsmuir, said, and I shall make a point of seeing that it is given fullest possible consideration in the Scottish Office or in other Government Departments where it can properly be considered. I would place in the same category the speech by the noble Lord, Lord Todd, with regard to the extent to which university research can be applied to the benefit of industry.

Thirdly, I would most diffidently place in that category the greater part of the speech of the noble Earl, Lord Lauderdale. I am afraid that he succeeded almost 100 per cent. in blinding me with science. A very great deal of what he said I did not understand at all, but I am consoled by the fact that we have on our staffs in the various Government Departments experts who will be able to reduce it to layman's terms for the benefit of people like myself. My main consolation came from the fact that I had the benefit of looking at noble Lords opposite sitting around and in front of the noble Earl, and I detected in them, if the expressions on their faces meant anything at all, the same note of complete incomprehension. But certainly I believe that what the noble Earl said included a great deal which we can with advantage to Scotland examine in detail. It may well be that I shall have an opportunity of returning to this point at a future date. The noble Earl has shown that he is prepared to make full use of our limited Question Time in your Lordships' House. It will surprise me if in due course he does not return to some of those subjects.

May I start off with the theme which the noble Earl put into his opening speech: the idea that the developments, both in the public sector and in the private sector, are leading to an over-centralisation of decision-making and that that over-centralisation is taking place not in Scotland but elsewhere? It would be difficult for me to quarrel with the statement of view which he has put forward, and I do not know that I like it any more than he does. But I think I should find myself in the same position as lie probably is: that in the state of society in which we live it is becoming increasingly difficult to avoid it.

I agree with the remark that size is not necessarily important in itself. But a multiplicity of decision-making bodies is not a merit itself. The important thing is that decisions which may be vital for the economic health of a community, whether it is the nation as a whole or even a particular parish, should be made by people who are competent to take the right decisions. That may well be a family firm employing 50 people or it may be one of those, as I think the term is, "conglomerates" which may own 20, 30, 40 or 50 companies in a great variety of industries; and that decision may be made in London. One cannot say that right necessarily lies always with the one or always with the other. The great difficulty is that the bulk of these amalgamations now is not taking place in the public sector but in the private sector, and while it is perhaps refreshing from the Government Benches to hear this request—because that is what it amounts to—from the Benches opposite for more Government intervention in these affairs (because that is really what we are being asked to do) I must at the same time remember that every time we seek to do so we shall be criticised for interfering with private enterprise.

What has been said about railways for instance, is a case in point. The Government are constantly exhorted to see that the railways are worked in a commercial fashion. Then, when they save two minutes by not picking up Lord Stonehaven at Stonehaven, that is a neglect of their social responsibility. There are no bodies in this country which are more aware of their social responsibilities than are the nationalised industries. If the whole of private enterprise had to devote as much of its resources to recognising that aspect of its responsibility, private enterprise would cost a great deal more to run than it does at present. But there must be a limit to it. What is being done as a social responsibility and what is being done as a commercial responsibility must be reasonably balanced, and I think that on the whole this is being done at the present time.

THE EARL OF SELKIRK

My Lords, may I ask one question? The point I was making was that the Government are actively engaged, through the I.R.C. and elsewhere, in encouraging mergers to take place. I am asking that they should modify or carefully examine this attitude.

LORD HUGHES

Yes, my Lords, it is true that the Government are actively engaged, but in a limited field. The Government are seeking to get organisation of industry on a size which will enable us to compete in fields where size is important, and that is internationally. We cannot get the little village workshop competing effectively, in international markets, with concerns in the United States which have such an enormous market on their doorstep. But it does not follow that because the Government want this done in selected industries of this kind they want it done in everything up and down the country.

Sometimes amalgamations take place which have beneficial effects in particular industries; they do not always result in something being closed down. I am told that a recent take-over or merger in the paper-making industry had the direct result of safeguarding the production of paper in particular mills in Scotland which might not in fact have continued had the merger not taken place. So we must not assume that everything is being done just for the sake of size, or that every time this is done it results in something being closed down. After all, in regard to one of the big mergers, that of G.E.C. and A.E.I., we must remember that the closures which took place were in England, and that it is in Glenrothes and Kirkcaldy where the direct benefit is going to take place. So it is not a one-way street, and I think that the Government and the I.R.C., their agency, are well concerned with and seized of the need to distinguish between those cases where an amalgamation or take-over is in the national interest and those where they may not be so.

A good number of noble Lords spoke in this national context—because that is how it arises—of what may take place on the Clyde. I think I should be right in saying that there was a tremendous difference between the approach which was made by the noble Viscount, Lord Muirshiel, and that which was made by the noble Earl, Lord Glasgow. It is not the fact that one of those noble Lords held a high place as the Secretary of State for Scotland that makes me prefer the ideas of the noble Viscount to those of the noble Earl. Both touched on the point that amenity, the quality of life in a particular area, is something which cannot be totally ignored. We in Scotland get too much of two totally conflicting points of view, both of which I think are wrong. One is that industry, the creation of jobs, is the only thing that matters, and it does not matter at the end of the day whether you have completely destroyed an area. That I think is quite wrong. But equally wrong are those who say: "Here is this wonderful countryside. Here is something which is enjoyed either by a lot of people or by a few people, and you cannot allow this to be destroyed merely for the mundane purpose of creating jobs."

The real answer lies in between those two things. We must do as much as we can to strengthen our economy, but not at the expense of destroying our countryside. I think we could not do better than agree with the way in which the noble Viscount, Lord Muirshiel, put it, because that is what the Government are trying to do in this area. There have been meetings. The noble Viscount referred to the meeting which he had yesterday. Other meetings are taking place. What I can say is that the Government will do everything that is possible through the wide-ranging consultations which are taking place and which will continue to take place, to see that we do not lose for Scotland any industry which will be of vital importance to our survival as a nation; but that we shall seek at the same time not to turn ourselves into a country where we should not want to live but for the fact that we were earning good wages in it.

It is easy in a wide debate of this kind for noble Lords to select particular points which they think are wrong. For instance, the noble Marquess, Lord Lothian, said that we should look at what the Government were doing to see, first of all, what was wrong and what was right. I have never quarrelled with the noble Marquess, and I do not intend to do so now, particularly as he is no longer here, but I think that is a wrong attitude. Surely the first thing we ought to say, as Scots, is what is being done right and how we can get it even better, and only secondly look at what is wrong. We ought not first to be looking at faults and then praising. After all, if we do that we are simply doing what the noble Lord, Lord Ferrier, has criticised the Press for doing—making headlines out of the things that are bad. I do not disagree with the noble Lord at all, but I say, "Don't let us do it ourselves. Don't let us make our headlines the faults".

If I could give an example of that, the noble Lord, Lord Burton, in a reference to what is being done by the Highlands and Islands Development Board, spoke of the amount of money which was being invested by this Board in projects which were not viable and which had subsequently failed. He gave me prior notice of the fact that he was going to raise this point, so giving me the opportunity of looking into it. You will be able to read it very soon for yourselves, because this debate is just a day early, so far as the Report of the Highlands and Islands Development Board is concerned. It was placed before the House to-day and will be published to-morrow.

One paragraph of this Report says this: By 31st December, 1968, we had approved grants and loans totalling over £4½ million to 893 industrial, commercial and other ventures. When the contribution made by developers is added the total investment is over £8.2 million. It is estimated that this assistance will provide 3,400 extra jobs, a significant contribution in relation to the total working population of the Highlands and Islands which is around 100,000". A point worth mentioning is that three-quarters of the £4½ million is by way of loan, and out of the total of 893 grants made up to the end of 1968 there had been five failures. Since then there have been another three, but in the case of one of them it is expected that the whole of the Board's loan will be repaid. If all has to be written off (and that is not yet determined, because there will be some recoveries), the total amount involved in these eight cases will be less than £40,000.

The Board go on in the Report to say: If we are to do our job effectively we must take reasonable risks and back projects which commercial sources of credit and finance would be unlikely to sponsor. The nature of our investments—mostly to small firms located far from their markets, often with management difficulties and little tangible security—carries the risk of a higher than normal bad debt loss. To counteract this we operate an 'after care' service for borrowers who may be in danger of running into difficulties. If the Highlands and Islands Board were merely to say "No" to all the projects to which other people had already said "No", there would have been no purpose in setting it up in the first instance, and there would not be these 3,400 jobs in the Highlands. The noble Lord, Lord Burton, did not perhaps know all of the figures; but instead of saying that it was a matter for congratulation that over 800 projects were successful, he queries the wisdom of what turns out to be eight failures.

I had the unfortunate experience of being present at a dinner in Glasgow at Christmas, 1964—one of the dinners which the late Lord Fraser used to give to many people coming from Scotland. I think that at every one of those dinners until that one I had listened to a Minister speaking, and because of the complexion of the Government it was always a Conservative Minister who spoke. I never had any cause to be critical of what was said because it was taken almost as a non-political occasion. But in 1964 there was a departure from that tradition. The speaker was the present Leader of the Opposition, and the then Shadow Secretary of State for Scotland, Mr. Michael Noble, was so carried away by the political content of that speech that he finished up by saying, "And I hope you will remember that we must build up the strength of the Party. What we need is more members." There were some Scottish Ministers, some Scottish Members of Parliament, some Scottish civil servants there, and I do not know whether I was then being invited to join the Conservative Party. That is by the way.

In the course of that speech Mr. Heath, who had spent some time criticising what the Government had done—this was December, 1964, and we had been only 45 days in office—said: Why should a foreigner now come and invest here in Scotland when he finds his own country is being affronted on so many occasions by the attitude of the present Government? And he went on, I think Scots may ask themselves why these things should encourage an investor to come from overseas, and why should they encourage young Scots to show greater enterprise and initiative. Here, my Lords, are the figures. Between 1960 and 1964, 25 firms from overseas had come into Scotland with an expected employment of 4,430. Since the beginning of 1965 to the end of April, 1969, 39 firms from overseas have come into Scotland with an expected total employment of 5,650.

My only point in reminding your Lordships of what was then said, and how it has proved to be false, is that we do not do ourselves any service by assuming that what our Government—whether it is a Conservative Government or a Labour Government—is doing is wrong. We ought to be looking for the things which will benefit Scotland and not the things which will benefit one Party or another. That is why I welcome this debate, the general tenor of which has been to search for the things which will help Scotland.

I do not intend to say much more because my time has already gone, but I should like to say just a few words. It is interesting to note the extent to which the word "infrastructure" has entered into our debates. Until five or six years ago no one really thought that this was an important aspect at all, or if they did they never felt it necessary to talk about it much in public. Now it is accepted that what the State may do in providing these services is an essential part of the job. No one knows better than Members of this House that the State's resources are not completely unlimited, that there must be rationing of what is done between one essential service and another. But one would have thought from some of the remarks which were made about roads, and particularly the need for expenditure in the Highlands, that little or nothing was being done. In 1963–64 the total public expenditure on roads in Scotland was £34.1 million. In the current financial year it is £63.1 million. Even allowing for the change in the value of money during that time, and therefore the correspondingly increased costs per mile of any given type of road, this represents a very considerable expansion. When we look at the housing side we have the same figures. I have had the pleasure of producing for two years in succession housing figures for Scotland which created new records, and notwithstanding some of the statements which have been made recently I have not given up hope that this year will be an even greater figure. It certainly will not be very far away from last year's figure, whether up or down. These things are now accepted as being a vital part in the production of a prosperous Scottish economy.

May I close by reiterating that what has been said will be examined first of all by me and I will then pass to my colleagues all items which I think are of especial interest. I had intended to start off by saying that speeches in the debate fell into three categories: those which raised purely local issues, to which therefore, I would not reply, but which I might take up with noble Lords individually; those which raised subjects of general and national interest, to which I must reply; and those which were so irrelevant and unimportant that I could afford to ignore them. It is a matter of intense satisfaction to me that I found it necessary to place not one single speech in the last category, although some speeches had a little irrelevant matter in them—or so it seemed to me. I am grateful for the debate, and I hope that in due course I shall be able to make some of your Lordships feel that it has at least served its purpose.

It would be wrong if I were to close without adding still further to the embarrassment of the noble Earl, Lord Elgin and Kincardine. Like all of those who have already congratulated him, I was very much impressed by the quality of his maiden speech. I toyed with the idea of not congratulating him, because I feel that to a certain extent that would be self-congratulation, since it was I who suggested to him that this was the most appropriate occasion for him to make his maiden speech. I therefore feel that if I had not said that, he might have felt that he should wait a little longer. Of course, not having his knowledge of Scottish history, I did not know that to-day had such a particular relevance, because of its being the anniversary of the day after Bannockburn when his predecessor was counting his share of the loot. I hope that at the end of the day the noble Earl will feel, as will other noble Lords who have participated, that he, as a representative of Scotland, has some loot to count as a result of to-day's battle.

THE EARL OF SELKIRK

My Lords, may I ask the noble Lord two questions which I mentioned in a letter to him? First, can he tell us anything about the possibility of a business school in Scotland? Secondly, can he say anything about the quality and nature of the Instrument Landing System at Turn-house? If he cannot answer those questions, or if it is inconvenient, I can very easily put them down as separate Questions. But I did let him know, and if he has the answers I shall be grateful.

LORD HUGHES

My Lords, I have the answer about the business school, in the mass of papers which have descended on me at various times. In the university field—I think I might go back to the point made by the noble Lord, Lord Todd—management education is concentrated in three universities, Glasgow, Edinburgh and Strathclyde. In the further education field, any proposal to run a course must be approved by the Scottish Education Department, which will consider it in the light of local and national demand, taking into account what is being offered by the universities. In this way, unnecessary duplication can be avoided. Overall, I think we can say that there is co-ordination in this field, rather than fragmentation.

It has been urged that the time has come for Scotland to have a business school similar to those at Manchester and London. The Manchester and London business schools, which are designed to serve the whole of Great Britain, were established on the basis of a study made in 1963 by the noble Lord, Lord Franks, whose Report suggested not that there should be three such schools, but that there should be not more than two such schools set up in the first instance, because of limitations of qualified staff and finance. There seemed no sufficient ground then for questioning this recommendation and the choice of location. I would say, however, that if it can be clearly established that the setting up of a third business school would he appropriate, the claims of a Scottish location would certainly be fully considered. If I may add a few words which are not in the brief, the claims of Scotland for the third one would rank very high indeed.

On the subject of the Edinburgh Airport and the facilities, I understand that an Instrument Landing System, covering the approach to the runway at Turnhouse from the North-West, has been in use for some time and has performed satisfactorily even in the worst operating weather conditions. A similar system is now being installed for South-East approaches and should be in operation shortly. Plans are also in hand to equip the airport with surveillance radar to assist traffic control by expediting the handling of aircraft. This is a control and not a blind approach system, and should be available in 1970. I must apologise to the noble Earl for not having covered that point. I put it under the heading of "Turnhouse" and the question of the additional runway, to which I have deliberately not given an answer to-day because there is a Question on the Order Paper for next week from the noble Lord, Lord Kilmany. I hope that what I have to say then will be of interest to noble Lords.

8.26 p.m.

THE EARL OF SELKIRK

My Lords, I should like to make only a few points, if I may. First, I would say to the noble Earl, Lord Elgin and Kincardine, that I shall remember his words, "the integrity of small firms". They are important words. We have had a very interesting debate, and I have been most interested in listening to the speeches that have been made. One is always indebted to the noble Lord, Lord Hughes, for the trouble he takes in answering questions. He has said that we should have debates more frequently, and I shall be delighted to oblige in so far as it lies within my power to assist. As he has said, we have now been speaking for over five hours, and we have had hardly any Party references during that period. There was one moment when the noble Lord was speaking when I honestly did not understand what he was talking about, although it appeared to have something to do with Party. But I shall forget about that as soon as I can.

I think we have to recognise that the English simply are not all interested in our questions. Therefore we have to say frankly to the noble Lord, Lord Hughes, that he is our only communication with the centres of decision. Perhaps we may also include the noble Lord, Lord Wilson of Langside, in that. The noble Lord, Lord Hughes, has very willingly taken up this position, and because he is so helpful our debates are worth while. With that thought, I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.