Sitting of 7 February 1972

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  TRADE AND INDUSTRY

    Electricity Supply Industry
    Mr. Thomas Coxasked the Secretary of State for Trade and Industry what plans he has to meet representatives of the Electricity Council and trade union representatives in the electricity supply industry.
    The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): I have no such plans at present.
    Mr. Cox: I suggest that the right hon. Gentleman should try to make some plans because he is surely aware that, despite the efforts of trade unions, there could well be a ban on overtime in the electricity industry tomorrow. Against this background, in view of the effect which that will have, plus the bitterness that the men within the industry feel over the present wage negotiations, surely it is the right hon. Gentleman's duty to become involved in this dispute as quickly as possible in the hope that a satisfactory settlement can be arrived at.
    Mr. Davies: I understand that the parties are meeting today. I think it is much better to leave the matter in their capable hands.
    Mr. J. H. Osborn: Is my right hon. Friend aware that if there are to be cuts this week, particularly in the Sheffield area where there are steelworks, it is most important that the steelworks should be notified of all likely cuts as it would be very costly and inconvenient if steel were
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    to grow cold and solid in, for instance, electric arc furnaces?
    Mr. Davies: Yes. I assure my hon. Friend that the electricity supply industry has the problems of industries of that kind generally very much in mind and will do all that it possibly can to mitigate any difficulty which might arise.
    Mr. Palmer: Does the right hon. Gentleman appreciate just how serious is the public electricity supply system at this moment? It is balanced on a knife-edge. Does he not think that the Government bear some responsibility for the situation by their foolhardy policy of discrimination against the nationalised industries in the matter of pay setlements?
    Mr. Davies: No, I do not agree with that remark at all. The Government keep the matter under very careful consideration and attention to ensure that the maximum is done to limit any damage which may occur.
    Mr. Kenneth Lewis: Is my right hon. Friend aware—I am sure he is—that under the Act the electricity supply industry has a special obligation to serve the public and not to take extreme action? Will he make it clear to all the parties concerned that they ought not to take action which will cause disruption of supplies to the general public?
    Mr. Davies: Yes. I am sure that all the parties will be aware of what my hon. Friend has said. It is true that the electricity supply industry has not only a moral but a statutory commitment in this respect.
    Mr. Benn: In view of the gravity of the crisis, to which reference has been made, does the right hon. Gentleman recognise that the Government cannot stand aside from this matter, particularly as they are known to be a major factor in the background of all the negotiations? Will the Minister tell the House whether the response which he has given today is merely in reference to the present situation or whether he intends to maintain it if the dispute develops?
    Mr. Davies: The Government are keeping the whole issue under careful and continuous attention and will take any action which they deem necessary in the light of any development.

    English Channel (Hazardous Cargoes)
    Mr. Pardoeasked the Secretary of State for Trade and Industry what representations he has made to the Inter-Governmental Maritime Consultative Organisation with a view to setting up an early warning system for any ship carrying hazardous cargoes through the English Channel.
    The Minister for Trade (Mr. Michael Noble): I do not think this would be the right approach. However, as was announced by my right hon. Friend the Secretary of State for the Environment on 24th January, the United Kingdom is proposing urgently to the Inter-Governmental Maritime Consultative Organisation a system of reporting incidents to ships involving the loss or possible loss of hazardous cargoes immediately such losses are known.
    Mr. Pardoe: Is the right hon. Gentleman aware that hon. Members on both sides of the House will welcome the announcement which he has made and that made by his right hon. Friend earlier of a belated reference to I.M.C.O., a belated reference which he himself turned down when I suggested it nine months ago? Does he recognise that it is not just a question of an early warning system of ships which sink but that it is extremely important that the Governments of the maritime Powers along the English Channel should know what is going up in the context of dangerous cargoes, and that this was a specific recommendation of the Select Committee which reported in 1968?
    Mr. Noble: I accept that. I do not accept that I turned down the hon. Gentleman's suggestion. I have my answer to the hon. Gentleman on the file. The practicalities of the situation are quite simply that there are many thousands of movements per day through the English Channel, a very tiny percentage of which cause these problems. The chance of getting international agreement on the hon. Gentleman's suggestion is therefore practically nil. I think that this which I have suggested as being practical and sensible is the best thing to do at the moment.
    Mr. Mason: Concerning hazardous cargoes and the danger of the very large super oil tankers coming through the Channel, may I ask the right hon. Gentleman, first, to reconsider extending the pilotage areas so that United Kingdom pilots can go on board these ships entering the Channel much earlier, and secondly, what progress is being made on getting rid of dangerous wrecks in the English Channel?
    Mr. Noble: The right hon. Gentleman will agree that those are two rather separate questions, but they are important. The question in regard to pilots in particular would require international agreement and this is being considered.

    Bolton
    Mr. Laurance Reedasked the Secretary of State for Trade and Industry whether, in view of the fact that the level of unemployment in Bolton is now above the average for the North-West Region as a whole, he will grant intermediate area status to the town.
    Mr. John Davies: Assisted area boundaries are kept under continuing review, but I have no statement to make at present.
    Mr. Reed: My right hon. Friend knows that unemployment in Bolton has risen by 172 per cent. in the last 12 months—the highest percentage increase of all travel-to-work areas in the North-West Region—and that our unemployment is now way above that existing in the intermediate areas. Yet we are denied all assistance under the Government's regional policy and we are actively discriminated against when seeking to stand on our own feet. This is not only arrant nonsense but is monstrously unjust. In view of the wholly unsatisfactory nature of the reply I have received, I shall seek an early opportunity of raising this matter on the Adjournment.

    Pyramid Selling
    Mr. Raphael Tuckasked the Secretary of State for Trade and Industry what further action he intends to take against persons and companies who indulge in the practice of pyramid selling.
    The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): In the case of one company a petition has

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    been presented for its winding-up. I am also considering whether some more general action is needed to deal with the practice of pyramid selling.
    Mr. Tuck: Is the hon. Gentleman aware that many of these companies spring up like mushrooms, bleed thousands of unsuspecting people of their life savings by filling them up with stories of making £80,000 a week and then, when the going gets too hot, disappear like smoke? I have had many complaints about one of the companies which the hon. Gentleman's Department has investigated and decided not to prosecute. Will the hon. Gentleman take it from me that it is no good making investigations under the Companies Act in these cases? The right thing to do is to make this vile practice illegal.
    Mr. Ridley: Even if legislation were to be introduced it would take a very long time before it could become effective. In the meantime we have, I believe, investigated four companies and petitioned for the winding up of a fifth.
    Mr. Jay: It is now many weeks since I sent the Minister a good deal of information about this practice. Has he yet made up his mind what he intends to do?
    Mr. Ridley: As I said in answer to the hon. Member for Watford (Mr. Raphael Tuck), we are actively considering what would be the proper action, if any, to take. I should have said that we have investigated two companies and that a further two are about to be investigated.

    Tourism
    Mr. Hicksasked the Secretary of State for Trade and Industry if he will introduce legislation to extend to intermediate areas the forms of financial assistance for approved tourist projects that at present apply only to development areas.
    Mr. Noble: No, Sir. We judge it right to concentrate the limited funds available on the development areas where the need is greatest.
    Mr. Hicks: Is my right hon. Friend aware that the present position can give rise to regional inconsistencies? Would he be prepared to review the situation of
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    the South-West intermediate area and, in particular, the Tamar Valley, as we are of the opinion locally that the best way of alleviating unemployment there is by the development of tourism?
    Mr. Noble: Yes; I entirely accept that any arrangements of this sort are apt to lead to regional inconsistencies. We will certainly keep the matter under review for the future.
    Mr. Emery: Will my right hon. Friend think again about areas or towns where unemployment is massively above any regional or national level? I think of Exmouth, where the unemployment level is about 13 per cent. and which is entirely a tourist area. It is strange that in the West Country some areas without such employment problems can get aid whereas other areas with employment problems can get nothing.
    Mr. Noble: Such an argument is fair, but administratively it would be very difficult to arrange in the way that would suit my hon. Friend and, indeed, myself.
    Mr. Sydney Chapmanasked the Secretary of State for Trade and Industry how many visitors came to Great Britain on holiday in each of the years 1967 to 1971 inclusive.
    Mr. Noble: Holiday visits to the United Kingdom numbered 2·1 million, 2·2 million, 2·6 million and 3·0 million in 1967 to 1970, respectively; there were 2·7 million visits in the first three quarters of 1971, an increase of 4 per cent. over the same period of 1970.
    Mr. Chapman: I welcome and recognise the dramatic increase that there has been in the number of overseas visitors to this country, but is my right hon. Friend satisfied with the liaison between his Department and other Departments, particularly the Department of the Environment, about the very real problems? At present too many people want to visit too few places on too few occasions. Does not my right hon. Friend think that as much money as is expended on encouraging people to come to this country should extol the virtues of bases outside the obvious meeting grounds of London, Stratford, Edinburgh Castle and Coventry Cathedral?
    Mr. Noble: My hon. Friend has raised a point which most of us who live in

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    places outside the immediate tourist areas are keen to develop. I would recommend to him a talk with the British Tourist Authority because that is the body responsible for spreading the advertising money, not only in this country but all over the world.
    Mr. Maclennan: Does the right hon. Gentleman consider that in the light of these clearly increasing figures the time is appropriate for the Government to end the hotel development scheme? Does he not think that we will face a crisis of lack of bedroom accommodation for these ever-increasing numbers of visitors?
    Mr. Noble: All hon. Members who have studied this scheme will realise that it has been a much greater success than was originally thought when it was brought in by the previous Government. A large number of extra beds have been provided in the most desired areas—if "desired" is taken to mean those areas to which the tourists are going. At the moment, however, a considerable expansion is going on in the Highlands under the Highlands and Islands Development Board.
    Mr. Adleyasked the Secretary of State for Trade and Industry how many people, in departments for which he is responsible, are working solely and exclusively on the development of tourism.
    Mr. Noble: Including the tourist boards responsible to my right hon. Friend, 555.
    Mr. Adley: I am grateful for that answer. Does my right hon. Friend believe that that is enough in view of the importance of the tourist industry to employment? Is he aware that 93,000 jobs are available in the tourist industry, which is now the largest dollar-earning industry in the country? Is he satisfied that his Department is giving sufficient priority to the part which tourism could play in the country's increasing prosperity?
    Mr. Noble: I am exceedingly pleased to see the great success which the tourist industry has had, but I do not believe that that success is necessarily related to the number of civil servants who may be looking after it. Apart from those in the Department of Trade and Industry
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    and the tourist boards, there are others in other Ministries who are directly concerned with tourism. Without making them complacent, I should like to congratulate them all on how well they are doing.
    Mr. Palmer: Does not the right hon. Gentleman feel that some of those people could be usefully diverted to raising the level of industrial activity in North-East Bristol, where unemployment is now at record heights?
    Mr. Noble: I am not certain whether people from the tourist boards would be very successful in that respect. They have their own job to do and they are doing it extremely well.

    Coal Industry (Closed Workshops)
    Mr. Edwin Wainwrightasked the Secretary of State for Trade and Industry if he will issue a general direction to the National Coal Board to reopen closed workshops.
    Mr. Ridley: No, Sir. This is a matter for the National Coal Board.
    Mr. Wainwright: Does the Under-Secretary realise that that is a most disappointing reply? Is he aware that in the Dearne Valley over the past few years several factories have closed? The Aldon Engineering Works, Priestley's clothing factory and the Manvers Main workshop are the latest. When will the Government stop closing factories in Dearne Valley? Is it not time the Government declared Dearne Valley a development district rather than an intermediate area?
    Mr. Ridley: The Question asks the Government to give
    "a general direction to the National Coal Board to reopen closed workshops".
    That would not be appropriate. Indeed, it would be wrong for the Government to tell the Coal Board how to run its commercial activities.

    Companies (Prosecutions and Reports)
    Mr. Bruce-Gardyneasked the Secretary of State for Trade and Industry on how many occasions during the past 10 years the reports of inspectors from his Department appointed to investigate the affairs of individual companies under

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    the terms of Section 165 of the Companies Act have been followed by legal prosecutions; and in how many of these instances the reports of the inspectors were withheld from publication.
    Mr. John Davies: Prosecutions resulted from inspectors' reports in 26 cases during the 10 years to 31st December, 1971. In nine of those cases it has been decided not to be in the public interest to publish the reports.
    Mr. Bruce-Gardyne: I am grateful to my right hon. Friend for that information. Nevertheless, does he agree that there is no post-war precedent for a company with such a very wide shareholding as Rolls-Royce being the object of such an inspection? In view of that, are there not exceptional reasons in this case which favour the publication of the inspectors' report?
    Mr. Davies: I will take note of my hon. Friend's remarks. The decision to publish in a particular case must be geared to the question whether publication could have a prejudicial effect on any subsequent trial proceedings.
    Mr. Arthur Lewis: Can the Secretary of State do something to expedite action against the many companies which continually and persistently break the law? Details of dozens of such companies are in his possession but the Under-Secretary refuses to carry out the law until such time as the investing public loses all its money. I could quote dozens of cases, but I see that the Under-Secretary is now giving the Secretary of State the information.
    Mr. Davies: In the 26 cases to which the Question refers it has been decided in only nine cases not to publish, in the public interest.
    Mr. Arthur Lewis: Get cracking on it.

    Glaxo (Merger)
    Mr. Jayasked the Secretary of State for Trade and Industry whether he will now refer to the Monopolies Commission the proposed mergers between Beecham's and Glaxo, and Boots and Glaxo, in view of the latest bids made.
    Mr. Milneasked the Secretary of State for Trade and Industry what discussions have taken place with his Department following recent develop-
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    ments in regard to the proposed merger between Glaxo Group Limited and Boots Limited and the take-over bid by Beecham's for Glaxo Group Limited.
    Mr. John Davies: After consideration of all the circumstances, I have decided to refer to the Monopolies Commission the proposed mergers between Beecham Group Ltd. and Glaxo Group Ltd. and between the Boots Company Ltd. and Glaxo Group Ltd.
    Mr. Jay: Is the Secretary of State aware that in this case he has shown great good sense in adopting the suggestion I made to him three weeks ago?
    Mr. Davies: I am always grateful to the right hon. Gentleman for any suggestion he makes. I do not guarantee to follow it always.
    Mr. Milne: Is the Secretary of State aware that his indecision in regard to this matter has created great uncertainty in the pharmaceutical industry? Is it not a matter for concern to his Department that when there was a blatant takeover bid by Beecham's he refused to refer this matter to the Monopolies Commission? Does he not understand that people consider that he is more concerned about his City interests than he is about those employed in this industry?
    Mr. Davies: I should have thought that that was entirely inconsistent with the decision I have reached.
    Mr. Tom Boardman: In my right hon. Friend's current review of monopoly policy will he consider whether it is necessary to retain the present powers over mergers? Might it not be better in the case of a proposed merger to say that if it would result in too great a monopoly situation he will exercise his powers to prevent it, in the public interest?
    Mr. Davies: I will take that into consideration. There will continue to be cases where perhaps the anticipatory effect of a merger reference will have an advantage.
    Mr. Molloy: Is the Secretary of State aware that his lamentable failure to refer to the Monopolies Commission the blatant takeover bid by Beecham's was a dereliction of duty? Is he further aware that all members of Glaxo's staff and workers regard this as an insult to their

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    endeavours on behalf of the nation? Will he give an assurance that he will not treat the Glaxo firm in such a cavalier manner in future?
    Mr. Davies: No, I do not think I am aware of any of these points.
    Mr. Hall-Davis: Is my right hon. Friend aware that many people, including the shareholders, are very anxious about the consequences for employment and the prosperity of communities in a merger situation like this? Will he encourage companies making a bid to publish in their offer documents full details of the likely consequences for employment and plant location?
    Mr. Davies: I will certainly bear that in mind. It is of interest in one of these cases that the Chairman of Beecham's gave such an assurance in making his proposals.
    Mr. Molloy: Is he your pal?
    Mr. Pardoe: Would the right hon. Gentleman bear in mind that there is deep public disquiet about the criteria by which he refers these matters to the Monopolies Commission and that in many people's minds the only major difference—although the decision that he has taken now is the right one—between these two companies wishing to take over Glaxo is that, in the first case, Beecham's had contributed very heavily to the Conservative Party's funds and that Boots had not contributed at all? Was the earlier decision a case of payment for services rendered?
    Mr. Davies: I consider that to be an impudent suggestion.
    Mr. Molloy: But is it true?

    Special Development Areas
    Mr. Lawsonasked the Secretary of State for Trade and Industry what representations he has received for giving to companies within special development areas the same inducements to increase employment as are offered to companies considered to be incoming to those areas.
    Mr. Tom McMillanasked the Secretary of State for Trade and Industry if he will consider applying operational grants to firms already in the areas of need who wish to expand.
    Mr. John Davies: A number of representations have been received and replies have been sent explaining the grounds for providing a margin of extra assistance to new incoming industry.
    Mr. Lawson: The right hon. Gentleman may recall that the Prime Minister, as far back as the debate on the Queen's Speech, undertook to look at this matter specially. Surely it is now time that he had some specific answers to whether or not the measures are to be applied to the established industries as well as the incoming industries. Does he recall that I have put a specific case to him and have had no reply except a mere statement of the rules, which I found very unsatisfactory?
    Mr. Davies: My right hon. Friend undertook to look into any submissions which might be made on this subject, and several have been. The nature of those submissions is not such, at this stage at least, as to guide one towards a change in the rules which currently apply. The requirement to maintain a very real and contrasting advantage for incoming industry still represents an important element of regional policy.
    Mr. McMillan: Is the right hon. Gentleman aware that in the West of Scotland we are fighting a desperate, losing battle to maintain the established industry and manpower and that if the operational grant were given to those established firms which wanted to extend a little good could be done in that direction? Incoming industries which compete with the established industries get an advantage over them which is quite unfair. The West of Scotland is fast becoming an industrial desert as a result of the inactivity of the present Government.
    Mr. Davies: I am deeply concerned about the situation in West Central Scotland, as the hon. Member knows. I am certainly open to any proposals which seem to me to have a real contribution to make. On this one, I am afraid, I have not yet been persuaded that it would make any real contribution.
    Mr. McCartney: On a point of order, Mr. Speaker. What is the difference between Question No. 82 and the two Questions which the right hon. Gentleman has just answered?
    Mr. Speaker: That is not a matter for me.
    Dame Irene Ward: On a point of order.
    Mr. Speaker: I would prefer points of order about Questions to come at the end of Question Time, because they all take up time.
    Mr. Brewis: Is it not a fact that the last Socialist Government always set their face against extending S.D.A. status except for colliery closures and that this is a procedure which could be transferred to other areas of West Central Scotland with great advantage?
    Mr. Davies: Yes, I believe that the extension of S.D.A. status, notably in West Central Scotland, has been and will prove to be a great contribution to overcoming some of the great problems there.
    Dame Irene Ward: On a point of order, Mr. Speaker. May I ask whether my right hon. Friend will remain in his place until I have raised my point of order at the end of Questions, because I want him to hear it?
    Mr. Speaker: I would have called the hon. Member for Dunbartonshire East (Mr. McCartney) to ask a supplementary question if he had wanted to. Does he want to?
    Mr. McCartney: Thank you Mr. Speaker. Is the right hon. Gentleman aware that I am deeply dissatisfied with the way in which he answered the other two Questions which are directly related to Question No. 82? Is he not aware that a town development scheme, into which was introduced several new industries, is collapsing because this special measure which is being asked for is not being agreed to by himself and his Government? Is he not further aware that in the new town of Cumbernauld we are losing industries which were introduced into the area under the Labour Government?
    Mr. Davies: Yes, but surely the hon. Member will realise that the expansion of such arrangements spreads still more thinly any efforts which one can make in these ways. I am sure he will realise of what enormous importance it is to the area in question to try to have the maximum of facilities and incentives available for incoming industry.
    Mr. Speaker: Now, if the hon. Member for Tynemouth (Dame Irene Ward), wishes to ask a supplementary question, I will allow it.
    Dame Irene Ward: I am very grateful, Mr. Speaker—[HON. MEMBERS: "You ought to be."] I always am. Could I ask my right hon. Friend whether, on a matter of principle relating to these Questions which are being discussed, he is aware that the Prime Minister told me only last Thursday that a decision would not be very long delayed? I am rather at a loss to understand why my right hon. Friend replied in the way he did to these Questions.
    Mr. Davies: I hope that a decision on these matters will not be long delayed. It is, however, not ready yet, so I cannot answer my hon. Friend's question.

    Rolls-Royce
    Mr. Dykesasked the Secretary of State for Trade and Industry whether his Department has now assembled all the data and figures necessary to establish the final valuation for Rolls-Royce (1971) Limited.
    The Minister for Aerospace (Mr. Frederick Corfield): Both sides have now largely completed their preparatory work, and detailed negotiations are about to begin.
    Mr. Dykes: In view of that reply, may I ask whether my right hon. Friend and his colleague the Secretary of State will be prepared to make a definitive and detailed statement to the House in the near future about the final results?
    Mr. Corfield: As I have explained previously in the House this is a very complex business, and I should hesitate to name a date on which it will be possible to announce any final solution.
    Mr. Kenneth Bakerasked the Secretary of State for Trade and Industry what parts of Rolls-Royce Limited have already been returned to private ownership; what parts he expects will be sold in 1972; and whether he will make a statement.
    Mr. Corfield: Disposal of the assets of Rolls-Royce Ltd. is a matter for the receiver and joint liquidators of that company. The Government-owned company, Rolls-Royce (1971) Ltd., bought

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    from the receiver the greater part of Rolls-Royce Ltd's. gas turbine divisions. The remainder of the Rolls-Royce assets is being sold to private enterprise, including Rolls-Royce Motors which, I understand, the receiver intends to float publicly during 1972.
    Mr. Baker: Do I take it from that reply that after the Rolls-Royce motor division has been sold, and if the carbon fibre division can be sold, the only part of the old Rolls-Royce company which will remain in public ownership later this year is the original aero-engine division?
    Mr. Corfield: Yes, Sir, subject to the qualification that I cannot control the timing of the receiver's activities.
    Miss Quennell: What will be the position of shareholders in the former Rolls-Royce company if the receiver floats the motor-car division from the publicly-owned company?
    Mr. Corfield: It is the receiver's function to endeavour to dispose of the assets to the best possible advantage to the creditors and shareholders, but until all the assets are sold and the prices are agreed for the Rolls-Royce (1971) assets it will not be possible for him to indicate how much money is available.
    Mr. Millan: Is not the present situation unsatisfactory for the creditors of the old Rolls-Royce company and for the shareholders, including the worker shareholders? Would the right hon. Gentleman indicate when the assets of Rolls-Royce (1971) Ltd. in particular will be valued so that steps can be taken to pay sums to the creditors, many of whom are still in quite serious financial difficulties because of the collapse of Rolls-Royce?
    Mr. Corfield: I cannot go further than I have already except to remind the House, as I have done many time before, that this is a complex operation. All I can guarantee is that there will be no unnecessary delay on the part of the Government or Rolls-Royce.

    Service Industries (Special Development Areas)
    Mr. Hordernasked the Secretary of State for Trade and Industry whether he will now take steps to allow the same reliefs, concessions, and arrangements to
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    be made for service industries setting up in the special development areas as are now available for manufacturing industries.
    Mr. Ridley: My hon. Friend will know that service industry investment in plant and machinery in development areas now qualifies for free depreciation and that Local Employment Act assistance can be made available to major service industry projects which bring substantial employment to assisted areas.
    Mr. Hordern: While I recognise that there are some distinctions as between service industries, manufacturing industries and other industries and that it is difficult to see why these distinctions should exist, surely the case for the development areas must be that their employment should be much more broadly based, and there does not appear to be a good reason for this rather selective approach. Will my hon. Friend agree to look at the matter again?
    Mr. Ridley: We have taken very large steps, including the halving of S.E.T., in reducing the discrimination against the service industries which the last Government brought in, and I think my hon. Friend can feel that sufficient progress has been made in the time so far available.
    Mr. Bruce-Gardyne: I recognise the force of the argument advanced by my hon. Friend the Member for Horsham (Mr. Hordern), but will not my hon. Friend the Under-Secretary reflect that this Question and a number of Questions which other hon. Members have had on the Order Paper today tend to suggest that the whole gamut of special development areas, development areas and intermediate areas is more effective in encouraging jealousy and resentment in areas which do not enjoy these incentives than in encouraging satisfaction in those areas that do?
    Mr. Ridley: I note what my hon. Friend says. Perhaps he will discuss this important matter with my hon. Friend the Minister for Industry.

    North-East (Investment)
    Mr. David Watkinsasked the Secretary of State for Trade and Industry what plans he has for encouraging publicly-owned investment in the North-East of England.
    Mr. Ridley: The North-East will benefit from the accelerated investment by nationalised industries and the Government's other extensive measures to stimulate output, investment and employment.
    Mr. Watkins: In view of the seeming unattractiveness of the North-East for private investment, ought there not to be a very much stepped-up programme to encourage public investment, especially in the manufacturing and other wealth-producing industries?
    Mr. Ridley: I, of course, of all people, would not agree about the unattractiveness of the North-East—
    Dame Irene Ward: Hear, hear.
    Mr. Ridley: —and I would say to the hon. Gentleman that I thought the bulk of the problem was the reduction of employment provided by the publicly-owned industries at present as much as by the private sector.
    Mr. Wilkinson: Will the Minister bear in mind that public investment per head in Yorkshire and Humberside is about the lowest in the country, and as Yorkshire and the Humberside region have only two intermediate areas and no development areas at all the Government should do all they can at least to attract public investment to Yorkshire and Humberside?
    Mr. Ridley: The Government have done a great deal to increase public sector investment in both industry and infrastructure, and I feel sure my hon. Friend will agree that there has been a very large acceleration of a large number of projects, with considerable benefit to the areas concerned.
    Mr. Bob Brown: I am sure that the Under-Secretary does not need me to tell him that the North-East is one of the most attractive areas of our country, but does he realise that the problem referred to by my hon. Friend the Member for Consett (Mr. David Watkins) lies in the fact that private industry is not coming in as it did before 1970, because of the stopping of the investment grant? Will the hon. Gentleman try to persuade his right hon. Friend to reconsider this action in view of the damaging effect it is having on regional policies?
    Mr. Ridley: I would not accept the basis of the hon. Gentleman's supplementary question, but I can say that there are encouraging signs of an upturn —[HON. MEMBERS: "Where?"]—in the economy generally which will benefit the hon. Gentleman's area as much as all the others.

    Companies (Police Investigation)
    Mr. Arthur Lewisasked the Secretary of State for Trade and Industry on what date his Department first took action to call in the police to investigate the affairs of Mesco Laboratories Limited of Old Broad Street, the Stanley Weston Group, Renclore Limited, Mesco Consolidated Industries Finances Limited, Hestmore Limited, Mesco Properties Limited, and Corton Beach (Holdings) Limited; and with what results.
    Mr. Ridley: Inspectors were appointed under Section 165(b) of the Companies Act, 1948, to investigate the affairs of Corton Beach Holdings Ltd., on 28th April, 1970, following the receipt of information from the Metropolitan and City Police, Company Fraud Department, and from other sources. The same inspectors were appointed to investigate Mesco Consolidated Industries Finance Ltd., on 8th September, 1970, and Renclore Ltd., on 30th June, 1971. A compulsory winding-up order was made in the High Court against Mesco Laboratories Ltd. on 15th December, 1970, and a similar order was made on 21st December against Mesco Properties Ltd.
    I expect to receive a report from the inspectors on Corton Beach Holdings Ltd. during the course of the next two months.
    Mr. Lewis: I congratulate the Minister on taking action in these cases but is he not aware that, generally speaking, it takes years for his Department to take action when Members of Parliament, directors, auditors, accountants and solicitors ask him to take action? Will he look at yesterday's Observer, in which evidence is given that 200,000 out of 500,000 limited liability companies are consistently and persistently breaking the law and his Department is doing nothing at all about it? Will he not get cracking and get action going on this matter before these companies rob the investors of their money?
    Mr. Ridley: I am delighted to know that at last the hon. Gentleman has recognised the sterling achievements of the Companies Branch of my Department. There is, however, one litle difficulty to be overcome before taking a firm to court, which is that one must have a case which can be sustained in court. Some of the cases which the hon. Gentleman has put forward cannot be said to comply with that condition.
    Mr. Harold Lever: On the question of breach of the law in terms of returning accounts, I know that in most cases this is not a very serious offence but behind a great deal of mass negligence lies a good deal of deliberate fraud. Why cannot the Department make sure that this law is obeyed, as most of our laws are obeyed, by starting to prosecute people who fail to make returns in accordance with the Act?
    Mr. Ridley: The right hon. Gentleman's supplementary question is about a separate aspect of company law from that referred to in the Question but I can say that we prosecute in a large number of cases and that the sentence sometimes is inadequate to deter offenders. This is a problem which the Government are looking into.
    Mr. Lewis: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply on the general issue, I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Industrial Development Certificates
    Mrs. Sally Oppenheimasked the Secretary of State for Trade and Industry if he will now review the system of granting industrial development certificates.
    Mr. John Davies: The I.D.C. control is kept constantly under review.
    Mrs. Oppenheim: Will not my right hon. Friend accept that in order to create jobs and encourage industrial investment it is urgently necessary to review I.D.C. policy; and that it is highly probable that this will be recommended by the C.B.I., especially in relation to small firms which, once an I.D.C. has lapsed, do not go to development areas but abandon any projects they may have, with the result that jobs are lost altogether? Will my right hon. Friend con-
    966
    firm that although the last Government were particularly inflexible in this respect the present Government intend to be more sensible?
    Mr. Davies: I have some recommendations from the C.B.I. which I am carefully considering. On the second point of the supplementary question, it is perhaps worth saying that in the West Midlands generally in the three years up to the end of last year less than 10 per cent. of all I.D.C. applications were refused. It is easy to get the matter out of proportion. This Government certainly operate the I.D.C. control system —which they realise involves great problems for many industries—with the utmost flexibility.
    Mrs. Renée Short: Is the right hon. Gentleman aware that since his Government came to power the whole country has become a development area? I do not know about the issue of I.D.C.s in the West Midlands but I know that unemployment there is rising towards 10 per cent., whereas until the present Government came to office the figure was about 2 per cent. What does the Secretary of State intend to do to see that this amazing situation in one of the richest industrial areas in the country is remedied and the area made able to stand where it was before?
    Mr. Davies: I feel confident that the West Midlands will re-expand with the expansion of the economy. Meanwhile I am operating the I.D.C. control, to which the Question refers, with flexibility.
    Mr. Redmond: Does not my right hon. Friend agree that all these questions suggesting various measures for development areas, and so on, result from the inflexible attitude of the last Government, and particularly their failure to adopt the recommendation in the Hunt Report? Would not a negative I.D.C. policy be of great help to the grey areas?
    Mr. Davies: Certainly the recommendations of the Hunt Report are also very much under consideration in my review of regional policy.
    Mr. Benn: I am sure the House would agree with the Secretary of State that I.D.C. controls ought to be exercised carefully. Would the right hon. Gentleman also recognise that, to be effective.

    967
    there has to be some sense of Government commitment to the idea of I.D.C.s? The right hon. Gentleman said that the whole policy was constantly under review. Would he at any rate reassure the House that he is not contemplating the ending of I.D.C. control, which has played a part in stimulating employment in the development areas?
    Mr. Davies: I have made the Government's position on this very clear recently in emphasising that the I.D.C. control represents an essential and continuing part of regional policy.

    Statistical Inquiries
    Mr. Robert Taylorasked the Secretary of State for Trade and Industry whether he will arrange to state on every statistical inquiry whether or not its completion is obligatory.
    Mr. Ridley: When inquiries are made under statutory powers, it is an invariable practice for forms to refer to the relevant legislation, usually the Statistics of Trade Act, 1947. As to other inquiries I am considering whether this information could be given more clearly.
    Mr. Taylor: Is my hon. Friend aware of the extreme urgency of this matter? The Census of Distribution for 1971 form, which is now being sent to all retail establishments with a turnover in excess of £200 per week—which is a fairly modest sum—asks for a tremendous amount of information, in particular the space immediately behind counters used by shop assistants. Much of the information requested seems to be totally irrelevant. The Bolton Report suggests that the completion of such forms is an unnecessary imposition on small businesses. Will my hon. Friend take action as soon as possible?
    Mr. Ridley: We are reviewing this particular recommendation of the Bolton Committee. Forms which are not statutorily required to be completed do not carry any suggestion that that is the case.
    Mr. Emery: Regarding the completion of forms, would my hon. Friend consider raising the cut-off level for smaller concerns? Parliament has never wanted the promotion of statistics to be an imposition on small businesses. There are a number of examples where that is the
    968
    case. An investigation into the level of cut-off would be very much appreciated by small businesses.
    Mr. Ridley: What we are doing, and have done with considerable success already, is to develop sampling techniques whereby a lot of information can be discovered by consulting only 10 per cent. of the persons concerned.

    Aircraft Noise (Rate Reduction Compensation)
    Mr. Hugh Jenkinsasked the Secretary of State for Trade and Industry what consideration he has given to the proposal of the Local Authorities Aircraft Noise Council that Her Majesty's Government shall provide local authorities with moneys to compensate them for reductions in rates to be given to householders affected by aircraft noise out of the revenues of the British Airports Authority.
    Mr. Noble: I have not yet received any such proposal from the council.
    Mr. Jenkins: Is the right hon. Gentleman aware that a proposal of this sort and several other proposals are in the post addressed to him? I should have thought he would have received them by today but certainly he should receive them tomorrow. When he receives them, will he give them careful consideration? Will he consider not only this proposal but the series of proposals which will be contained in the document he will be receiving?
    Mr. Noble: I assure the hon. Gentleman that the whole problem of aircraft noise occupies a great deal of my thought and time. I will do anything I can to try to help.
    Mr. Jessel: Would my right hon. Friend be prepared to consider a scheme by which the noisiest types of aircraft, when taking off and landing, would pay higher charges than quieter aircraft and that the proceeds of these charges on the noisier aircraft should be used to relieve the rates in residential areas close to airports?
    Mr. Noble: I have already indicated that this is one possible scheme, but it may have particularly deleterious effects on the British aviation industry.
    Mr. Molloy: When the right hon. Gentleman receives the proposal, will he be prepared to consider calling a conference of all the local authorities involved to see whether something can be done to resolve their difficulties and the pressures which they are under from ordinary people who are suffering from this environmental abuse?
    Mr. Noble: As I have said, I am always prepared to consider almost anything that might help. But the mind boggles a little at the hon. Gentleman's suggestion, because the key to this problem is that anything one does to help one area generally has repercussions on another area. If one were to get all the local authorities into a room, I do not believe that there would be any hope of agreement on anything.

    Assisted Areas (Incentives)
    Mr. Dormandasked the Secretary of State for Trade and Industry whether, in view of the latest unemployment figures, he will now give consideration to changing the incentives available to firms in assisted areas.
    Mr. John Davies: I would refer the hon. Member to the answer given to my hon. Friend the Member for St. Maryle-bone (Mr. Kenneth Baker) on 17th January.— [Vol. 829, c. 3.]
    Mr. Dormand: Would not the Secretary of State agree, as over 1 million are unemployed, and in spite of what he has said to my hon. Friends this afternoon, that now is a most opportune time to abolish the differentiation relating to incentives between firms already established in assisted areas and those which wish to establish there? Surely the only criterion should be whether additional jobs will be created. The firms which are already there have proved their loyalty and are the better bet. Would the right hon. Gentleman also examine the present inflexibility of the loans procedure so that firms in assisted areas can obtain maximum benefit from it?
    Mr. Davies: There is a great tendency, in spite of the points made this afternoon, to ignore the very considerable advantages which are already available to the indigenous concerns within special development areas and development areas. The issues raised repeatedly this
    970
    afternoon revolve around the operational grant, the rent-free characteristics and the higher building grants characteristics payable to incoming industry. I am sure that the House recognises that the movement of new industry into the development areas is a fundamental necessity, which must be encouraged. There must certainly be contrasts in the advantages which are given to new industry to persuade it to move. There will be few hon. Members who do not believe that something of this kind is necessary. If on every occasion there is pressure to raise the level for existing firms, discrimination will not be maintained.
    Mr. Wilkinson: May I remind my right hon. Friend of the representations made today by my hon. Friends from Bolton—I also add mine—that areas such as the textile districts of Lancashire and Yorkshire, which suffer from being adjacent to intermediate development areas, should be looked at again, as my right hon. Friend himself indicated in an earlier reply on the subject of industrial development certificates?
    Mr. Davies: Yes. I shall certainly take note of all those points, which are clearly very much in one's mind in looking anew at regional policy, as has been referred to by my right hon. Friend the Prime Minister and myself.
    Mr. Urwin: Would the right hon. Gentleman agree that he has received many representations from different bodies about the necessity of equalising in the way suggested by my hon. Friend the Member for Easington (Mr. Dormand) and other hon. Members during Question Time today? Whilst I entirely accept that the major requirement is to encourage more and more new firms into the development areas, the right hon. Gentleman will agree that with this hiatus the efforts being made are by no means reaching the fruition required to improve the employment situation. In the present situation would it not be better for development areas if the right hon. Gentleman paid more serious and earnest attention, on only a short-term basis, to raising grants available for indigenous industry to the level of those given to incoming firms?
    Mr. Davies: This is exactly the same point. The question I have constantly in mind is whether the raising of these levels

    971
    to the equivalent of those for incoming industry would have an effective result in terms of new investment and employment. To date the evidence for this is very thin despite the very numerous representations made to me.
    Mr. Kenneth Baker: May I press my right hon. Friend to go a little further and say whether the review of regional policy, which the Government have in hand and which will no doubt be published fairly soon, will be more specific?
    Mr. Davies: I prefer not to anticipate publication, which will be within a reasonable time.
    Mr. Varley: Is the right hon. Gentleman aware that the reason for these Questions and the interest in the subject is the uncertainty created by the Government themselves? In a rather cosy interview with the Sunday Telegraph a week ago, the Secretary of State said that we were not likely to have the report for six months. If that is so, will not uncertainty continue in the development areas and the other weaker areas of Britain, so that mobile industry will continue to sit back and wait until the review is complete? Why does not the right hon. Gentleman put some urgency into the matter?
    Mr. Davies: The hon. Gentleman is mistaken. It was said in that article that it would be within six months.

    Birmingham
    Mr. Carterasked the Secretary of State for Trade and Industry if he is satisfied with the level of industrial activity in Birmingham; and if he will make a statement.
    Mr. Ridley: No, but I am confident that industry in Birmingham as elsewhere will see the benefit of the measures taken by the Government to expand the economy.
    Mr. Carter: In spite of his confident reply, is not the hon. Gentleman aware that unemployment in Birmingham continues to rise and is now at its highest level for 35 years? Apart from the many suggestions which have been made today about the West Midlands, will the hon. Gentleman seriously consider expanding the ordering programme of the public sector for capital goods which could rapidly stimulate the economy of the
    972
    engineering industry in the West Midlands?
    Mr. Ridley: I share the hon. Gentleman's concern about the figures for the West Midlands, but I point out that they include nearly 8,000 temporarily stopped, of whom half are on strike, which is rather a different matter. The Government have already brought forward a considerable amount of nationalised industry investment which, I hope, will have the desired effect.
    Mr. Kinsey: I appreciate what my hon. Friend has said, but does he not recognise that part of the argument about Government interference in industry is that moving industry into other areas only depresses Birmingham? Would he consider improving the position of small businesses, which are Birmingham's backbone? When will he move in that direction?
    Mr. Ridley: I agree that there is a great potential in the small business sector, and we have already announced many measures which are helping to allow small firms to expand. We are considering the remaining recommendations of the Bolton Committee to that end.
    Sir G. Nabarro: Is my hon. Friend aware that notwithstanding the 45 per cent. increase in sales of motor cars—and the motor industry is based fundamentally on Birmingham—since the July measures by the Chancellor of the Exchequer unemployment has gone up? How does my hon. Friend explain this extraordinary paradox?
    Mr. Ridley: There are many factors at work. I draw my hon. Friend's attention to the fact that the recession in the engineering industry is not confined to Birmingham, or even to the country as a whole.

    Coal Industry Dispute (Fuel Supplies)
    Mr. Laneasked the Secretary of State for Trade and Industry if he will make a further statement on the steps taken to maintain essential fuel supplies, particularly to the elderly and to invalids, during the coal mining dispute.
    Mr. John Davies: As announced on the first day of the strike, we have enlisted the help of coal merchants and the National Coal Board, in association with

    973
    local authorities and the medical profession, to ensure that priority is given to essential services and to households with special claims including those of the elderly and sick, subject, of course, to the co-operation of the mineworkers.
    Skilful management by the electricity generating boards and public response to the appeal for economy have made it possible to maintain electricity supplies at reduced voltage but the C.E.G.B. has had to give warning of possible power cuts.
    Mr. Lane: I welcome that reply. would my right hon. Friend confirm that if the situation worsens the Government will continue to ensure the necessary priority for pensioners, who depend so much on solid fuel supplies?
    Mr. Davies: The Government will pay careful regard to the needs of pensioners and others who for various reasons rely greatly on these supplies.
    Mr. Concannon: Would the Secretary of State now like publicly to say "Thank you" to those much maligned miners' pickets who are working full time for nothing to ensure that these supplies get out? Little reference has been made to those striking miners who are working for nothing in their own time to make sure that supplies get to these people.
    Mr. Davies: I have no hesitation in going on record as expressing my appreciation of the help which the mineworkers have given in this respect. That does not alter the fact that in other respects, as the hon. Gentleman knows, quite the reverse has been the case.
    Mr. Eadie: May we assist the right hon. Gentleman? He is concerned to safeguard essential supplies. Has he seen the headlines in the Evening Standard this afternoon saying that there will be no power supplies? May we assist him by asking him to influence his Cabinet colleagues to make a settlement with the miners and give them more cash?
    Mr. Davies: As I said in my original reply, there is a possibility of cuts in power supplies.

    Gas Leakage Explosions
    Mr. Hastingsasked the Secretary of State for Trade and Industry whether
    974
    he will list the number of explosions caused by gas leakage over the last six months throughout the United Kingdom; what estimate he has made of the damage caused; and what compensation has been paid to the sufferers.
    Mr. Ridley: In the second half of 1971 there were six explosions causing damage over £100 in which an external escape of gas was involved. It is as yet too soon to say in which of these cases the gas industry will pay compensation.
    Mr. Hastings: I am grateful to my hon. Friend for that reply. Does he recall a particularly serious accident at Westoning in my constituency in November last which might well have proved fatal? Is he aware that people are becoming increasingly alarmed by the incidence of natural gas leakage, which is difficult to detect and which has proved a serious problem in other countries? Will he now consider instituting an inquiry into the extent of this risk and the methods which should be adopted to meet it? Finally, will he ensure that the Gas Council is suitably generous when it comes to compensation?
    Mr. Ridley: Professor Morton has recently done an investigation into the safety of natural gas, and his figures show a reduction in explosions from the time when town gas was in common use. I understand that the gas board concerned does not admit negligence in the incident in my hon. Friend's constituency and, of course, it would not be called upon to pay co pensation unless it had liability.
    Mr. John Hall: Is my hon. Friend aware that many old people living on limited means are becoming increasingly reluctant to call in the gas board if they believe that there is a gas leak in their homes, for the simple reason that they are expected to pay a fixed charge for inspection? What plans has my hon. Friend for gas boards to make it clear that such people may claim back that cost through the social services?
    Mr. Ridley: I am grateful to my hon. Friend for publicising that. It is a matter for the gas industry to fix its own scale of charges, but what my hon. Friend has said will help to make the position widely known among old people.
    Mrs. Sally Oppenheim: Is my hon. Friend aware that extreme and prolonged inconvenience, often over a period of days, has resulted in a disturbing number of cases following gas conversion and that over 16,000 complaints were received by the Gas Council in the past few years? Will he kindly institute an inquiry into the adequacy of the training of the gas engineers who do these conversions?
    Mr. Ridley: That is a matter which concerns not safety, but the convenience of customers. The performance of gas boards has improved greatly since the start of conversion and my hon. Friend may rest assured that the present converters are thoroughly trained and doing a good job.

HON. MEMBER FOR BERWICK-UPON-TWEED
Mr. Speaker: I have a short statement to make to the House. I have received a request from the hon. Member for Berwick-upon-Tweed that he should be called in the House and described in parliamentary papers as Lord Lambton. In my view the practice of the House is that hon. Members should be called and described as they wish, and as they are known in their constituencies. I have therefore decided to accede to this request.
Mr. C. Pannell: On a point of order, Mr. Speaker. We all appreciate that we must bow to your Ruling and that the only way I can dissent from it is to put down a Motion on the Order Paper. Before I do that I should be grateful if you would tell the House what degree of precedence this gives to the hon. Member for Berwick-upon-Tweed. What other evidence have you had in addition to that which Mr. Speaker King had when he gave a completely contrary Ruling? Are hon. Members in future expected to address the hon. Member for Berwick-upon-Tweed as "the noble Lord", or treat him as Lord George Sanger was treated in his day?
Mr. Speaker: As to the point about my predecessor, the question was put to him in rather different terms. I do not think courtesy titles or whether hon. Members should be called "noble" have anything to do with me. I have simply to decide whether I preserve the right of
976
hon. Members to be called in this House as they wish to be called and as they are called in their constituencies. At the last General Election the hon. Member for Berwick-upon-Tweed was elected and this was on his ballot paper:
"Lambton, Antony Claud Frederick, commonly called Lord Lambton."
He was elected as such. There are several hon. Members in this House who are called by names which are not their own —[Laughter.]—and until I am directed otherwise, without pronouncing on these other matters I feel that I must conform to the practice.
Mr. Hastings: Further to that point of order, Mr. Speaker. May I ask whether you agree with the statement of Lord Jellicoe in another place on 25th November last that courtesy titles were not a matter for the Government because they were not titles in law? If this is the case, surely my hon. Friend the Member for Berwick-upon-Tweed has no less a right to the use of a courtesy title now than he had in the lifetime of his father?
Mr. Speaker: I am being very careful in this. I am not pronouncing on courtesy titles. All I am saying is that the hon. Member is entitled in this House to be called by the description which he is known by in his constituency.
Mr. Pannell: Further to that point of order, Mr. Speaker. You made the point that on his nomination paper the hon. Member referred to himself as "commonly known as Lord Lambton", but the clerk when returning the Writ did not put that upon the Writ returned to the House. The hon. Member had to renounce that title, and when one drowns a title one drowns everything that comes through it. Are you aware that the Leader of the House at the time, the late Mr. Iain Macleod, made it perfectly clear when I tackled him on this point that we cannot legislate for nonsense? He said that courtesy titles were a nonsense and that was implicit in the 1963 Act.
Sir D. Walker-Smith: Surely the right hon. Member for Leeds, West (Mr. C. Pannell) is in error of fact when he says that the hon. Member for Berwick-upon-Tweed renounced his courtesy title as Lord Lambton? What he renounced was the Earldom of Durham. He could not

977
renounce the courtesy title under the provisions by which he actually renounced the Earldom of Durham.
Mr. Speaker: Order. I do not think that there can be any further points of order on this—
Mr. William Hamilton: Oh yes there can be—a dozen at least.
Mr. Speaker: This is a matter for debate. I have made my Ruling, and it would be better to discuss it in some other way.
Mr. William Hamilton: On a point of order, Mr. Speaker. May I ask whether your Ruling is subject to debate? Is this a matter for the Leader of the House or would it be the subject of a substantive Motion in the name of my right hon. Friend the Member for Leeds, West (Mr. C. Pannell)? This is part of the irrelevant nonsense that takes place in this House far too often. The hon. Member for Berwick-upon-Tweed is seeking to have his cake and eat it. He simply cannot have it. If he is to be known in that way I want to be called Lord Fife from now on.
Mr. Speaker: As soon as the hon. Member is known as Lord Fife in his constituency and puts in a proper application to me I will consider the matter dispassionately.
Dame Irene Ward: I do not raise a point of order, Mr. Speaker. I just want to say how delighted we are in Northumberland that Lord Lambton has reverted to his courtesy title. We in Northumberland love him and we are jolly glad that he is using the title.
Mr. Heffer: On a point of order, Mr. Speaker. My point of order has nothing to do with Lord Lambton, Mr. Lambton or any other Lambton. You have given a Ruling that hon. Members of this House should be addressed by the title they wish to use, and I suggest that it is about time that all hon. Members in this House who served in the Armed Forces, who were not officers but members of the lower ranks, like myself, should from now on
978
be called "gallant" in this House. [HON. MEMBERS: "Hear, hear."] It is about time we got away from this snobbery in this House. "Gallant" gentlemen who were officers were no more gallant than the chap who was a private and who got shot at in just the same way as the so-called "gallant" gentlemen. From now on, Mr. Speaker, when I am addressed in this House I want hon. Gentlemen on both sides of the House to refer to me as the "gallant Gentleman from Walton".
Mr. Speaker: I am grateful to the hon. and gallant Gentleman for his point.
Mr. Wilkinson: On a point of order, Mr. Speaker. While in no way disputing the courtesy title aspect of your Ruling, may I refer to the point in your statement when you said that the noble Lord is referred to as Lord Lambton in his constituency. Surely this is irrelevant because another parliamentary candidate was Screaming Lord Sutch. If returned to this House he would have had the title of Lord Sutch, which would have been ridiculous. Could you make clear that the nomenclature, the familiar name, has no relevance to your Ruling?
Mr. Speaker: I will deal with the problem of Lord Sutch when it arises.
Mr. David Steel: Further to the point raised by the "hon. and gallant Member" for Liverpool, Walton (Mr. Heffer). Why should the epithet "learned" be confined to members of the legal profession? Are not those who consider themselves to be learned entitled to be so called.
Mr. Speaker: This has been a very constructive discussion. The points which have arisen today could be considered by some other body but they cannot be considered by me now.

MAINTENANCE ORDERS (RECIPROCAL ENFORCEMENT) BILL [Lords]
Ordered,
That the Maintenance Orders (Reciprocal Enforcement) Bill [Lords] be referred to a Second Reading Committee.—[Mr. John Stradling Thomas.]

SCOTLAND (ECONOMIC SITUATION)
3.40 p.m.
Mr. Richard Buchanan: I beg to move,
That this House, noting with concern the thousands of families in Scotland suffering the indignity of unemployment and the increasing poverty caused by rocketing prices, calls on Her Majesty's Government to initiate massive new expenditure on the Scottish social and economic infrastructure and to stimulate a very rapid rise in investment in new and existing industry.
One always looks forward to being successful in the Ballot for private Members' Motions. It gives all to few of us the opportunity of raising matters which would not otherwise be raised in debate.
I am doubly fortunate because this is the second time that I have been successful in the Ballot. On the first occasion, in 1965, I had the privilege of raising the question of the University of the Air. Today's is a different story. There are many subjects which I should have liked to raise—the protection of the environment, tunnel motorways as opposed to motorways, nursery schools, the chronic sick and disabled, and so on. The list is endless, and it is a criticism of the Government that whichever of my hon. Friends had been lucky in the Ballot would inevitably have had to choose a subject for debate such as the one I have chosen today.
I intend, not to weary the House with an excess of statistical data or quotations, but to confine myself to the two or three necessary to identify the problem. I do not intend to approach the debate in a polemical spirit. I am concerned with the future and not with the past. I am sure that all hon. Members deplore the excessively high and unacceptable level of unemployment and are concerned to secure the best package of policies which will bring national and regional prosperity. I hope that hon. Members will forgive me if I spend some time in discussing the problems in my constituency.
Identifying the problem, there are 154,356 people out of work in Scotland. My hon. Friends the Members for Glasgow, Bridgeton (Mr. James Bennett) and Glasgow, Scotstoun (Mr. Small) asked a Question of the Department of Employ-
980
ment about employment in the Glasgow area. The reply was:
"The Government has introduced a wide range of measures to reduce unemployment, many of which are directed at the special development areas of which Glasgow forms a part, and it will take such further measures as are necessary to achieve this aim."—[OFFICIAL REPORT, 3rd February, 1972; Vol. 830, c. 163.]
When does it become necessary to try to reduce the terrible level of unemployment? If there are 154,000 families involved, it means that anything up to half a million people are living on social security; they are living on the bread line and no more.
This is an intensely human problem, not an abstract problem. Nearly 17,000 young people under the age of 18 are out of work in Scotland. Of those, 3,641 are school leavers and many of the balance have been out of work since they left school. Among this figure are the vandals, the mischief-makers, the unwanted and the rejected. The stigma of rejection stays with people for very many years, as I know from experience. When my father died, I had to leave school regardless. I was lucky enough to get an apprenticeship, but when it was finished I was out of work. I know what the stigma of rejection means, and I know how long it took me to get over it. Young people today, having passed their O levels and higher examinations—and passing examinations does not get any easier—and leaving school full of ambition and ready to start earning their living, are met with a blanket "No, no, no".
In my constituency 559 school leavers are out of work. There are 7,000 people out of work in the Springburn travel-to-work area, an increase of nearly 2,000 since last year. Unemployment continues to spell despair for many thousands of people. It is the most corroding malady which can afflict any community or individual. When unemployment is accompanied by rising prices, as it is under the present Government, it spells disaster as well as despair for thousands of families.
The unemployment goes right across the board. On Saturday a young man came to my "surgery" who had graduated from Glasgow University with a B.Sc. with honours and had gone on to take a Ph.D. in chemistry. He has written to all the big firms which employ scientists and has had acknowledgements from all of them but no employment. He

981
now does private tuition and has applied for entry in the autumn to a teachers' training college. One of the things which worry me about secondary education is that so many qualified young people are going to teacher training colleges but if industry picks up the secondary schools will be in the same bother of teacher shortage as they have been for many years. This young man has no immediate prospect of employment.
There are young tradesmen who, having served their apprenticeship, are filled with hope, but that hope is wearing very thin. There are semi-skilled and unskilled people who have given up hope because they have been unemployed for so long.
The older part of my constituency was in the vanguard of Britain when Britain was the workshop of the world. All the old industries have gone—the North British Locomotive Company, which sent locomotives all over the world, the North-Eastern Railway repair shops, Frederick Braby, Callander Cables and I.C.I., part of which is in the constituency of my hon. Friend the Member for Glasgow, Central (Mr. Tom McMillan). In the depression of the 1930s at least the factories and the workshops remained. While they remained there was hope. But they remain no longer; they have gone.
Old Springburn is now rather tired, run down and dilapidated, as are many other parts of Glasgow. Those of us who travel to and from Glasgow either by air or by rail cannot fail to see that the older part of the city has a rundown, neglected look. This is an area where immediate Government action could have an immediate effect. I am sure that Glasgow Corporation could employ at least 5,000 people on demolishing empty, derelict buildings, clearing sites and giving a lift to the "Operation Facelift" which is proceeding. The problem in Glasgow must be the same in many other towns and cities throughout Scotland, this allied to the proposals of urban conservation put forward by the National Trust and ably presented in the House by my hon. Friend the Member for West Lothian (Mr. Dalyell)—and our sympathy goes out to my hon. Friend in his recent sad bereavement—for cleaning up our towns and cities during this calamitous
982
period in our industrial history could, if the Government were serious, be put to good use. But there is no point in agreeing to this or in simply saying to the cities, "Go ahead". There is no sense in asking the corporations and town councils to solve the problem and heaping the cost on the backs of the ratepayers. If this job is to be done, it must be done at Government expense, and a 100 per cent. grant is necessary. If it is not done now, we shall have an enormous backlog of derelict land and buildings to clear which will hinder us no end if the economy starts to reflate and grow. Dilapidation does nothing to encourage industry. It is essential that we have a continuing policy for the controlling and preventing of decay of older buildings. The dereliction in some of our major towns and cities is quite disgraceful and, as I have said, plays no part at all in attracting industry.
In contrast to the old Springburn the new Springburn has high hopes. With co-operation between the Government, Glasgow University and Glasgow Corporation the whole area was surveyed. At that time it was the biggest area of survey in Glasgow that there had been. The plans were prepared; the plans were amended; they are now in the hands of the Secretary of State. I hope that he will do something to speed the inquiry which is about to take place. The new Springburn has plenty to offer—new houses, excellent private houses in the hinterland, industrial estates owned by the corporation, industrial estates owned by Scottish Industrial Estates. The communications are excellent, and there is a first-class railhead in the middle of the constituency at Sighthill.
Yet I am hearing at the weekend that British Railways are contemplating the closing of the marshalling yards in Glasgow. It seems to me strange that British Railways always make their forward plans for closures in a period of recession. They seem to take no cognisance of the possibility that industry will be picking up. It seems to me short-sighted that British Railways should contemplate the closing down of the marshalling yards and closing down railway lines at this moment when they should be looking ahead and preserving railway lines, because the environment is suffering considerably from the motor car.

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There are good road communications in Springburn. The educational facilities are excellent, and we have the Spring-burn College of Engineering in the middle of the constituency. The local traders have such confidence in the Springburn of the future that they have formed their own development company to develop the commercial centre.
As I say, the Springburn plan is before the Secretary of State, and I ask him to speed it up, for, as with most planning inquiries, we shall inevitably be faced with procedural delays.
It is not in the least surprising that we have difficulty in attracting industry, and one can point to what happened with Murco and Chevron. It took the authorities at least two years to say "No". It should be possible in this day and age of zoning to zone areas for industry, for residential, educational and recreational purposes, and then to say to industrialists, "Here are sites which we can give you". Then an industrialist could go ahead without having to find a site and submit himself to all the paraphernalia of planning procedures, without finding himself, after a delay of two years, told that he must find another site. It is time we had a long look at these planning procedures to streamline them more than somewhat.
I have always felt that it was just as wrong to discriminate against people in the regions as it is to discriminate on grounds of race, colour or creed. When the United Kingdom was the workshop of the world we had a balance between regions. The same cannot be said today. We saw the United Kingdom's economy, north, south, east and west, booming in those days, and Scotland had its share. Scotland was unfortunate in as much as it had more than its share of heavy industry, which is difficult to replace in a time of recession.
Again, at a time when we are hard pressed we have a situation in which the nationalised industries in Scotland are transferring staffs from Scotland to England. We need to be constantly vigilant to overcome the southern pull of Government, Civil Service and industry to England.
The British Steel Corporation is transferring 400 employees from its tubes sales division at its base in Oswald Street, Glasgow, to Corby. This seems to me
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paradoxical at a time when oil and gas have been discovered in the North Sea and there is bound to be a tremendous market for equipment to service such industries. I would imagine that tubes would play a particularly prominent part in those operations, and yet here we are transferring the tubes sales department of British Steel from Glasgow to Corby. British Railways are transferring their computer payroll from Glasgow to Crewe. The payroll work is being done very efficiently at Glasgow. The trade union concerned—a national union—is behind the employees in their fight to keep the computer payroll staff in Glasgow.
British Railways are closing their works at Barassie when we have the proposed development at Hunterston. If Hunterston starts and other things get going from Hunterston obviously we shall need oil tankers, gas tankers, wagons of every description, and yet British Railways, at this moment, are proposing to close their railway wagons workshop at Barassie. It may be necessary, I admit freely, occasionally in a period of rationalisation to transfer some part of a nationalised industry's staff, but surely there ought to be compensatory transfers. Why has the policy of the Government not been implemented in transferring some of the Civil Service offices from the South to the North?
Most, though not all, of what I have been saying has been about first-aid matters, but there is still one other point I want to make. particularly to the Secretary of State. About a month ago there was a paragraph in The Glasgow Herald which pointed out that a very famous hospital in Scotland had ceased recruiting nurses because it was in trouble through over-spending on the nursing account. That seems to me ridiculous in a period when the people have been conned about the payment and employment of nurses because there are so many trainees in wards where there should be trained staff; and if any hospital has been over-spending in obtaining trained nurses it really has over-spent in a very good cause.
As I say, I have spoken so far of mostly first-aid measures. What we need in the long term are not simply measures to alleviate local patches of unemployment but measures for the

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regeneration of wide areas where the structural decline of Victorian industries has created untold problems, as I have been instancing in my own constituency of Springburn.
All of us were delighted to hear the right hon. Gentleman's announcement last Monday that Clydeport and the British Steel Corporation were talking about the establishment of the ore terminal at Hunterston. I hope that today he will dot the i's and cross the t's because there is a little doubt whether, though they were talking, the talking will come to anything. I am not talking of development at Hunterston purely from a Scottish viewpoint. I am speaking—it hardly needs to be stressed—of the importance of Hunterston for the economy of the United Kingdom. This is potentially the greatest port in the United Kingdom. It is potentially a port which will rival any of the other ports in Europe —or America, for that matter. It is essential for the benefit of the United Kingdom that it should be developed.
We were glad to hear, at last, that we were to take advantage of the unrivalled facilities at Hunterston. But too often when something is done it is done half-heartedly. I well remember the battle of my hon. Friends and the Scottish T.U.C. to get the Colville strip mill at Ravenscraig. It was imagined that this would bring to Scotland the consumer durable industries which use strip steel. In the event, it was found that the strip mill alone was not a powerful enough magnet to attract, so B.M.C. and Rootes were persuaded to open up in Scotland. We are very grateful, too, that they did. This done, the half-planners were confident that the industries ancillary to motor car manufacture would follow. Again they were wrong. They ignored the commercial fact that two factories together do not comprise a large enough market to make a move worth while for the component firms. One more factory might have done the trick.
Our bankers and businessmen have a long tradition of caution. The present Government, it is said, are a businessman's Government. But this is not the time and Hunterston is not the place for caution. An ore terminal on this site will meet the demands of the existing Scottish steel industry. It would make
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even more sense if alongside were provided the new integrated steel plant, the oil refinery and the deep-water jetty.
If the British Steel Corporation intends to increase steel production in Britain from 24 million tons to 42 million tons, with current plans for production of 30 million tons, there is a shortfall of 12 million tons. A fully integrated steel plant at Hunterston could meet this requirement, and with a thriving steel industry the chances of developing steel-using enterprises are unlimited and of a kind which would promote and sustain real growth.
The development of Hunterston as a port gives an impetus to the imaginative concept of the Ocean Span, Landbridge. When this idea was first mooted it was received rather coldly, but the prospect of growth which Ocean Span denotes and the jobs which it could create in petrochemicals, plastics, oil derivatives, light and heavy engineering and electronics mean high investment, but also a loss of amenity. There will be objections on that basis, but unless we increase our wealth we cannot improve the environment and the social services as we should like to. Productivity is the key.
One of the main causes of inflation is the paying out of unemployment benefit. We should get the men working to create wealth. This is where the investment in Hunterston and Ocean Span and all that it means will pay dividends for the United Kingdom.
As there is discrimination against regions, so also within a region there is discrimination against parts of it. We have discovered oil and gas in the North Sea. Aberdeen is at the centre of things, and I hope it will become the boom town it deserves to be. But there is great danger of the boom generated by the discovery of North Sea oil and gas sucking from the hinterland much of the labour needed in the Highlands and Islands.
I have a stake in Tiree. The transport services to the Western Islands should be experienced by all hon. Members. They would then have something to say to the Highlands and Islands Development Board and to MacBrayne's and Western Ferries. The transport system isolates the people in these islands for long periods. I tried to get the Postmaster-General to do something to improve television reception in the Isles at a cost of

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something like £4,000, but this was far too expensive! With all that is happening in Scotland and with all that can be happening, never has it been more necessary to have an overall plan of economic government—
Sir Myer Galpern: I have been following with great interest my hon. Friend's contribution. Does he not feel that he is being rather unfair on the Secretary of State for Employment and that the unemployed should wait just a few years longer? I refer to the speech which the Secretary of State made at the weekend to the national Young Conservative conference, when he said that the Government are pinning all their hopes now on joining the Common Market. Evidently, the Government have abandoned any concern for the unemployed, and everything will now flow from the day when we join the E.E.C. I should like to hear my hon. Friend's observations on that point.
Mr. Buchanan: For many years I have been a colleague of my hon. Friend the Member for Glasgow, Shettleston (Sir Myer Galpern) on Glasgow Corporation. During those years I have found that he never listens to the beginning of anyone's speech and always takes every opportunity to air his prejudices.
I said in the earlier part of my speech that I had suggestions for first-aid measures to deal with the sucking up of the present unemployment. I then went on to deal with other parts of national policy, Hunterston and Ocean Span, which are not entirely Scottish but more United Kingdom measures, although they greatly benefit Scotland. The potential is always there in Scotland. What we need is overall economic Government.
When the Secretary of State for Scotland appointed an Under-Secretary of State for Development I thought this was an excellent idea and I applauded the initiative of the visit to Germany to try to get German investment over here. Our interests should be much wider than Germany; they should be world wide. The Under-Secretary of State for Development should be concentrating on development. He should be the head of a development authority. Instead, the Minister at the Scottish Office in charge of development is imprisoned in Committee Room 14 in charge of a punitive,
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doctrinaire housing Bill which has nothing to do with development.
Mr. William Ross: The Under-Secretary is not imprisoned; he can go away any time he likes.
Mr. Buchanan: The hon. Gentleman is there in charge of a housing Bill which will contribute nothing to development.
Help should be given to existing industry. Job provision should be the criterion whether an industry or an industrialist will be helped.
Mr. T. G. D. Galbraith: That is a valid point. The hon. Gentleman said that help should depend on the number of jobs created. He earlier said that the Government should help Ocean Span, Hunterston and the petro-chemical industries. Is it possible to do both? I understand that the petro-chemical industries will not produce many jobs, although the hon. Gentleman is saying that the number of jobs created should be the criterion. I should be grateful if he will answer that.
Mr. Buchanan: The Chancellor of the Exchequer spends much of his time boasting about our gold reserves and our overall surplus, and I think it is not beyond the bounds of possibility for the Government to help in many ways to boost the economy. There is also a weekly payment of £4 million in unemployment benefit. Existing industry needs a boost.
A man in my constituency has taken over an old printing warehouse in which he has built up a business making ladies' and children's clothes. He has now come to the point where he must expand, but he does not have the collateral. He has sought aid from the Government and from the local council, but it is not forthcoming. This means that to get all the aid they require companies will be forced to move to one of the new towns. Local authorities provide home mortgages. The Secretary of State should encourage them to look at the question of industrial mortgages to attract industries to their various areas.
We were pleased to learn from the Department of Employment about the expansion of training facilities, which will become more and more necessary in the future. This is a matter on which

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the Government and the trade unions should be getting together.
I was a time-serving apprentice and received my training as an engineering toolmaker. I believe that young people should be trained in multi-skills since training in single skills tends to lead to lines of demarcation. The Minister and the trade unions should be getting together to draw up a new system of apprentice time-serving so that the youngsters who go into industry may put their hands to most, if not all, tasks.
We live at the moment in a period of political and economic uncertainty. I recall a similar period in our history in the 1930s when a party of Scots got together and formed the Scottish Industrial Estates. The first estate was put down at Hillington. There are now 20,000 people employed there. That estate was opened in 1937. The organisation then ran the Empire Exhibition, which opened in Glasgow in 1938. That was confidence. What is lacking in Scotland among industrialists and people dealing in commerce is confidence in the future of Scotland. This feeling of confidence must be given to the Scots. The Glasgow Herald has already flown the kite of an exhibition, and is supporting it enthusiastically. This plea should be taken up by the Government to let the Scots see that they are still an industrial force in the world. Many since June, 1970, have ceased to believe in themselves.
To conclude, I have been talking about nothing new. I have been talking about giving a face-lift to our society in cleaning derelict buildings and sites. I have asked the Government to stop transfers from nationalised industries and have also asked the Government to implement their declared policy of transferring Government offices from the South. I have asked them to provide the wherewithal to staff the public services. I mentioned nurses but the same thing applies to the police, firemen and so on.
I have also asked the Government to review the investment needs of the Scottish economy, to restore investment grants and to bring forward appropriate proposals. I have spoken of the need for streamlining planning proposals. In regard to Hunterston I have asked the Government to go the whole hog with further
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proposals in relation to oil, steel and the deep-water jetty. I have asked them to push ahead with Ocean Span, to expand the development areas and to consider each case on its merits.
I hope that my hon. Friend the Member for Dundee, West (Mr. Doig) has an opportunity to take part in this debate since he has spoken to me of a case that demands investigation. I have asked the Government to postpone the abolition of the regional employment premium, and have also mentioned the important matters of training and retraining and the holding of an exhibition. I have put forward the proposal that there should be an overall plan for economic government. As I said earlier, we should be finding markets for our products at home and abroad, and I hope that the Under-Secretary of State for Development will be put in charge of this Department with no distractions.
There is nothing new in any of these ideas, and the fact that they have been going the rounds for such a long time is a further condemnation of Her Majesty's Government. The prime responsibility for location, relocation and expansion of industry lie fairly and squarely on Her Majesty's Government, which have the power, the resources and the persuasion —to put it no higher—to use to the utmost if they so desire. Scotland expects no less.
Mrs. Judith Hart: On a point of order, Mr. Speaker. May I bring to your attention—I will explain why I think this is a matter for you, Sir—the fact that, although on the Government Front Bench there are representatives from the Scottish Office and on this side of the House our shadow Scottish Ministers as well as my right hon. Friend the Leader of the Opposition, we do not have present any Minister from the Department of Trade and Industry. Many hon. Members on this side of the House, including myself, wish to raise matters concerning that Department. I raise this matter with you, Mr. Speaker, because, although I appreciate that this is a private Members' debate, I feel that we should have a representative here from the Department of Trade and Industry. I regard it as a great disservice to the House that there is none present now.
Mr. Speaker: I am afraid that, however persuasive the point of order may

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be, this is not a question for me. I have no control over the content of the Front Benches.
4.16 p.m.
Mr. John Brewis: We have recently had more than one debate on unemployment, and next week many of us will be attending a conference organised by the Scottish T.U.C. However, I should like to congratulate the hon. Member for Glasgow, Springburn (Mr. Buchanan) first on his luck in the Ballot, and secondly on the tone and content of his speech, which we all enjoyed.
We all agree about the wastage and misery of unemployment. Many of us will share his annoyance about nationalised industries and Departments of Government transferring work from the development areas to the South and to the Midlands of England. I remember a similar case which occurred at Inverurie during the period of office of his Government. Transfers do take place the other way, such as the Savings Bank headquarters which came to Glasgow secured by my right hon. Friend the Member for Argyll (Mr. Noble). Rapid wage increases, plus the redundancy payments scheme introduced by the Labour Government, have made many industries reduce their manpower. We are at present securing nationally the same production with something like 4½ per cent. less labour. But we cannot expect this increase in productivity to continue, and if the economy expands at the rate of 5 per cent. as is confidently predicted, there will be considerable scope for taking on more labour.
The hon. Member made several criticisms of the present Government. It was no part of his case to mention the industries where things are going very well. The first industry I will mention is one which is not greatly represented in Springburn. I refer to the agricultural industry. I cannot remember a time when there was more confidence in the agricultural industry as a result of the injection of cash in the October special review and last year's price review. I know that there are many views about entry into the European Economic Community. What we need at present is a continuation of this policy so that we can secure import savings for British agriculture on entry into the Community.
Mr. Harry Ewing: Since this debate is primarily about people and jobs, would the hon. Gentleman agree with me that there are now very many fewer people employed in agriculture? The hon. Gentleman says that there is confidence, but this does not detract from the fact that mechanisation in itself has led to far fewer people being employed in agriculture. Is this not what this debate is all about—people in jobs?
Mr. Brewis: I am quite ready to agree with the hon. Gentleman about that. However, I think that he will agree that that is the case in many other industries. In mining, for example, we have seen a rapid run down in employment in the last few years.
The second industry which I wish to refer to as being of importance to Scotland is forestry. There are more than a million acres in Scotland under trees. Once again, we see increased confidence resulting from higher timber prices, and general satisfaction with the Government for securing the removal of the headquarters of the Forestry Commission to Edinburgh. When will the results of the present review of forestry be announced? This may also help bring more employment to Scotland.
Mr. Robert Maclennan: The hon. Gentleman seems to have overlooked the declining work force engaged in forestry, just as he did in regard to agriculture. Does not the hon. Gentleman agree that in rural areas where there has been traditionally a number of jobs in forestry, this tendency is exacerbating the difficulties?
Mr. Brewis: I am not sure that I agree with the hon. Gentleman, especially as it affects his own constituency, where a great many people are now employed in forestry. If I may say so, some of the planting there is hardly likely to be profitable when it is harvested, owing to the extreme conditions under which it is planted.
I turn to tourism, which is another industry of great potential to Scotland. Here, there are jobs available. Sometimes I think that it is a pity that more Scots do not enter the industry. So often one finds that key jobs in the tourist industry are occupied by foreigners.

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The last industry that I wish to mention is fishing. In general, the inshore fishermen are satisfied with the agreement that my hon. Friend the Under-Secretary for Agriculture at the Scottish Office brought back from Brussels—
Mr. Ewing: Rubbish.
Mr. Brewis: There is still considerable anxiety in the Solway ports. I have in mind such ports as Annan, Kirkcud-bright and Garlieston. The main catch is Queen escallops, and 90 per cent. of them are taken from outside six-mile limit. In case any hon. Member thinks that this is a small industry, let me point out that the value of landings in the Solway ports last year was £637,000. It is an important industry to my part of the world. Recently, a factory has been set up at Kirkcudbright for freezing and processing the escalops for the French and Belgian markets. If the waters where they are caught are to be open to their own fishermen, why should they buy from us rather than scoop up the catch from this area of the North Irish Sea? It is a serious matter when the livelihood of 70 or more men in a rural area is put in jeopardy. I have asked my right hon. Friend the Minister of Agriculture, Fisheries and Food to look urgently into the possibility of conservation and protection measures. I hope that a 12-mile limit can still be obtained round the Isle of Man. Is my right hon. Friend the Secretary of State for Scotland in a position to give me any reassurance on this subject?
I turn now to a few more general points. Entry into the E.E.C. will give Scotland the opportunity to attract industry from several industrial countries where at present there is a labour shortage. The hon. Member for Springburn mentioned Germany where, at present, there are over 2 million foreign workers employed from countries like Greece and Turkey. I know that both the Scottish Council for Development and Industry and my hon. Friend the Under-Secretary of State for Development, Scottish Office, have paid visits there. Has anything concrete transpired?
I have heard it said, and I believe it to be true, that a great disincentive to attracting European industry is the reputation that Scottish industrial workers
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have for being strike prone. In fact, there are tens of thousands of workers in Scotland who have excellent industrial relations with their employers and hardly ever, if at all, go on strike. But it is the few who make the headlines. Last week, for example, workers were on strike at Yarrow's shipyard, at Chryslers at Linwood, and at British Leyland at Bathgate. There was the miners' strike as well, and certainly Scottish miners have the reputation of being a militant section of their union. I am surprised to have heard no mention of this so far from hon. Gentlemen opposite. Nor is any reference to it included in the memorandum from the S.T.U.C. to the conference which is to be held next week. Here is something positive that the S.T.U.C. could do.
Like the hon. Member for Springburn, I welcome the announcement of the ore terminal at Hunterston. I hope that it presages further development. Is the Scottish Council's concept of "Eurospan" receiving urgent attention? The possibility of giant ships using the deep water of the Clyde and the central belt of Scotland as a land bridge to Europe is an exciting one. Time is important. The French are well on with a similar development at Fos, near Marseilles. Experience obtained there could well let them get ahead with a similar project using the deep waters off the Brittany coast.
The hon. Member for Springburn also mentioned the Murco inquiry, which was very long drawn-out. Eventually, planning permission was refused for the site that the company wanted. Surely we can improve our planning procedures so that it does not happen again. I agree that amenities and tourism are most important. Equally there must be a place in Scotland for modern technological industries like oil refineries, especially in view of the oil finds in the North Sea.
Ideally, it seems to me that sites should be zoned, with the objection procedure overcome so that, when a company like Murco or Chevron comes on the scene, it is possible to tell it that it may go to site A or site B and start its work right away but that it may not go to site X or site Y. Do we need to go on waiting until after local government has been reorganised for the Town and Planning (Scotland) Act, 1969, to be implemented?

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Are not we in danger of falling behind England in getting on with our structure plans?
Over the next few months, we have to face the fact that unemployment in the Midlands and the South of England will make it harder to refuse industrial development certificates. I have never been a great believer in the effectiveness of the I.D.C. system, which is generally not part of the regional policy of any other industrialised country—
Mr. Edward Taylor: There are two affecting tiny areas of France.
Mr. Brewis: I am obliged to my hon. Friend. However, I think that it is fair to say that, generally speaking, it is not part of the regional policy of other industrialised countries. Even in times of high employment, 90 per cent. of applications for I.D.C.s were granted. We have to look carefully at the attractiveness of inducements not only for industrialists to go to development areas, but also for those already there to expand.
We must encourage further employment in the service industries. In my view, the selective employment tax was a half-baked tax in terms of its effect on Scotland. I think though that it is quite possible that a pay roll tax or congestion tax could be worked out which would be of great benefit to development areas. I welcome the Government's decision to halve S.E.T. and to abolish it as soon as possible.
I want to make reference to regional employment premiums, which were introduced by the last Government and which are due to expire in 1974. We are getting rather close to 1974. Investment decisions are made at least two years ahead. My hon. Friend the Under-Secretary of State for Development, Scottish Office, will probably recall the evidence before the Select Committee on Scottish Affairs of Sir Robert Maclean, who is head of Scottish Industrial Estates. He said that what was attractive was the whole package of inducements. He compared the package to a three-legged stool: one leg was the grants system, another leg was the factories available for incoming industry, and the third leg was the R.E.P. When it was introduced in 1967, R.E.P. was as powerful an inducement as investment
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grants, but since then it has remained a set sum. By 1969 its value had been reduced to an edge of 6 per cent., because if wage rates rise and R.E.P. is maintained at the same level, its value must be proportionately so much less, and it will certainly be less today than in 1969.
The R.E.P. is worth a lot of money to Scotland—£40 million. If my right hon. Friend has decided to continue it, or perhaps to increase it, he should announce it as soon as possible. If not, I should like to know how £40 million can be injected into the Scottish economy with the same or better effect.
No one can fail to be impressed by the measures which the Government have taken to reinvigorate the economy, and the seriousness with which they are tackling unemployment. During the coming year, I confidently look forward to a considerable upsurge in the Scottish economy.
4.32 p.m.
Mrs. Judith Hart: I am glad that the hon. Member for Galloway (Mr. Brewis) has appreciated the problems of R.E.P. and he has raised this matter with his hon. Friend, who, I hope, will give a clear answer.
At the outset of what will be brief remarks, because many hon. Members wish to take part in the debate, I want to stress the significance of some of the statistics about employment in Scotland. The broad outlines are well known to us. However, I am not sure that the refinements of those figures are equally well appreciated, certainly by some parts of the Press in Scotland, by some people, and perhaps by the Secretary of State himself.
We know that the overall figure of unemployment in Scotland is 9¼ per cent. I should like to indicate that in my constituency—I shall return to this towards the end of my remarks—there is one town, Lesmahagow, with an unemployment rate of 30 per cent., Stornaway has an unemployment rate of 33 per cent., the highest in Scotland, and Lesmahagow's is 30 per cent.
I want to draw attention to the acutely enlarged disparities even within the general national situation of growing unemployment between London and the South-East and Scotland. On the whole,

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we tend to think that since the national figure has gone up to over 1 million unemployed the special Scottish figures are less important rather than more important. But, looking at the figures and at the disparities and inequalities, we find that in this generalised situation of depression and spiralling unemployment the Scottish situation is becoming significantly worse.
For example, we know that for every available job in Britain as a whole there are seven people looking for work. In Scotland for every available job there are 31 people looking for work.
Breaking the figures down into detailed industries, whereas in Britain as a whole eight trained engineering craftsmen are looking for each available engineering job, in Scotland the figure is 28.
The figures are absolutely devastating when we come to the less skilled jobs. Looking at general heavy labourers, for every available job in Scotland at the moment 540 people are seeking jobs.
Next, light labouring. We must remember that in the category of light labouring there are many people who used to be in the mining industry who cannot now take up heavy labouring work because they are suitable only for light work and, therefore, must join the queue for that at the labour exchanges. For every light labouring job available in Scotland, there are 2,850 men seeking work. That is a totally devastating figure.
I turn now to the other end of the scale. It was always assumed, until this Government came to power, that the two groups of people fairly immune from the unemployment problem were white collar workers in office and administrative jobs. Let us consider the figures for those groups. For every available job in clerical trades in Scotland there are 31 people looking for work. For every available administrative job in Scotland there are eight people looking for work. Included in "administrative" are professional and technical workers, the middle class of Scotland, who never thought that they would be embraced in this problem of unemployment. The Scottish position regarding professional and administrative workers is twice as bad as in Britain as a whole, the position of clerical workers is rather worse than
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twice as bad as in Britain as a whole, and the position of labourers is about eight time worse than in Britain as a whole. It is clear that within the generally deteriorating economic situation which has arisen in the last year and a half, Scotland's position has become infinitely more acute.
We are talking about people and jobs, as my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) emphasised. I congratulate my hon. Friend on introducing the debate in those terms. In talking about people we are also talking about the effect of unemployment upon them. The effect of unemployment on people largely depends on how long they have been out of work.
The Labour Government introduced an earnings-related unemployment benefit and redundancy payments. If unemployment becomes so acute and persistent that it outlasts the period for which these benefits are paid, the effect on people is as devastating as the statistics themselves.
Looking at the overall picture, 34 per cent. of the unemployed in Scotland have been out of work for more than six months. That means that they have exhausted their earnings-related unemployment benefit. Of those over 40 years of age, 51 per cent. have been out of work for longer than six months.
Looking at those who have been out of work for more than a year, it means that they have not only exhausted their earnings-related unemployment benefit. but their flat-rate unemployment benefit. so they are now dependent on the Supplementary Benefits Commission. They are dependent upon the whole means-tested apparatus. We find among the unemployed as a whole in Scotland 18 per cent. have been unemployed for more than 12 months and amongst those over 40 the figure is almost a third—32 per cent.
In terms of the effect on people, these are highly significant figures. For example—let us put it in human terms—it means that a third of our unemployed who are over 40, many of whom are likely to have children still of school age, are dependent upon the whole panoply of rent rebate schemes, free school meals and school milk, and all the means-tested benefits which must be

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applied for, exposed to the whole apparatus which we know to be so unsatisfactory, in order that they can keep themselves and their families going
I want to draw three points to the attention of the Government. The first is a general one which has been made in every unemployment debate which has touched upon Scotland's problem. The economic policies of the Government which have produced the present terrible situation in Scotland cannot be separated from the Government's general economic strategy.
Therefore, if we are asking the Government to do something about unemployment in Scotland, we are also asking them to do something about their whole economic strategy. The Secretary of State for Scotland is a member of the Cabinet. He takes part in Government discussions on the overall strategy. I wonder how often he raises his voice to criticise that strategy, as distinct from its effects upon Scotland.
Even those of my hon. Friends who totally favour entry into the Common Market will agree that the policy of entry has to a considerable extent determined aspects of the Government's policy that now bear upon the unemployment position, in that the Government have regarded entry into the Community as being a first priority.
The Government having regarded entry as a first priority, two things have occurred. The first was not only tolerated but encouraged by the Government. I refer to the rise in consumer prices. Even the Secretary of State for Scotland must agree that this was not in any way blocked by any Government action. That was reasonable enough, because if the Government's first priority is entry into the Common Market, and if they see the need to adjust the price levels of food and other essentials to accord with Common Market prices, it is wise from the Government's point of view, if not from ours, to allow this process to occur before entry.
This is what has happened. There has been an adjustment of prices to prepare for the value-added tax, and so on. From what we hear of the discussion of the Common Market Ministers on the common agricultural policy at the moment, it seems that we must probably prepare
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ourselves for another increase in food prices of about 6 per cent. over the next year. Very well; this is inevitable, given the Government's concentration on their priority of entry to Europe, and it does not raise the fundamental issue of principle on the Common Market to say so.
Mr. Maclennan: Is it not highly perverse of the Government, in pursuance of this aim, to follow a policy of regional development which is specifically ruled out by the European Economic Community; namely, the policy of investment allowances as opposed to investment grants? These benefits are ruled out on the ground of their being not calculable.
Mrs. Hart: Indeed. I hasten to assure those of my hon. Friends who disagree with me on the question of the Common Market that I am not essentially making a Common Market point. I am pointing out the inevitability of the effect of the Government's policy on the situation in Scotland.
A second consequence has been what we are only now beginning to hear talked about as "shake-outs". We are now beginning to hear about the differences between structural unemployment and economic unemployment. We are now beginning to hear about the shake-out effects which have taken place in industry over the last year and a half as a result of policies which the Government consider to be highly commendable. In different circumstances they might be highly ccommendable, but not in circumstances when the whole of the rest of the Government's economic strategy has brought about a decrease in investment and, following that, an increase in unemployment.
The devastating rise in unemployment since this Government came to power is not accidental; it is not a misfortune about which they must merely raise their hands and say, "How terrible. We hope for better things." It is a deliberate and inevitable consequence of policies and priorities that the Government have pursued.
It is as a result of this that there is the uncertainty in investment and that there has been the intolerable reduction in the standard of living for people all over Britain, apart from just those in Scotland. The Government have been permitting,

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and in many cases actively encouraging, prices to increase. For example, the Government have deliberately encouraged prices to increase in the public sector when they could have resisted the increases. I refer to the increases in fares, the price of electricity and gas, and Post Office rates. The increase in those prices is a deliberate consequence of the Government's unwillingness and lack of desire to intervene.
There is at the same time the increase in social service charges—school meals, milk, the prospective rent increases, and so on. There is the fact that company profits, side by, side with the price increases, are estimated to have risen by 81½ per cent. over the last year.
Is it any wonder that we have a miners' strike which is consuming Scotland's main political interest at the moment? Is it any wonder that workers are saying, "This far, and no further. The Government are reducing our standard of living. We are exposed to increasing unemployment. We cannot tolerate a deliberate and successful attempt by the Government to reduce our standard of living."
Mr. Galbraith: The right hon. Lady. in her most interesting speech, has seemed to indicate that she did not approve of company profits. Will she explain how without company profits it is possible to invest in industry and how, without investment, we can get the greater growth which everyone wants?
Mrs. Hart: The best thing I can do in reply is to quote something that William Davis wrote in The Guardian on Saturday:
"When Harold Wilson was Prime Minister he once told me, with some bitterness, that the average company report reads something like this: 'The Government has got the country into a terrible mess, industry is fed up and depressed, there is no incentive to do anything, prospects are bleak—and our profits this year are 40 per cent. up.'"
My second point concerns a grave matter for Scotland, particularly for labour movement in Scotland. It must be made clear at this stage that as a result of what has happened in the last 18 months structural unemployment in Scotland is a problem which is likely to take years to cure. No one in Scotland can expect that any overnight miracle
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policies will be produced to cure the degree of structural unemployment, as distinct from economic unemployment, in Scotland. All of us on this side and all those whom we represent must realise that it will be a long and steady haul before the forces which the Government have unleashed to damage Scotland's economy are overtaken.
Even if the growth rates in Britain as a whole were to pick up considerably —not this year, I fear, despite the confident speeches being made by some Ministers, but perhaps next year or the year after that—Scotland would remain very far behind; our employment would not pick up to meet the situation of even two or three years' ago. To solve the problem, there will need to be massive injections of public finance and public enterprise. It will need the kind of thing which this Government are incapable of contemplating, but it will take a long time.
The Under-Secretary of State for Development, Scottish Office (Mr. George Younger): The right hon. Lady has been making a very interesting speech about structural unemployment as opposed to economic unemployment. Since unemployment doubled between 1966 and 1970 under the previous Government. could she tell us whether that was structural or economic unemployment?
Mrs. Hart: In the first place the hon. Member's figures are quite wrong, and in the second place structural unemployment is endemic to the Scottish economy simply because it depends on old heavy industries. If they begin to decline, new ones must come in. During the period of the Labour Government we were keeping up with this; the injection of new industry was preventing an increase in structural unemployment. During the year and a half of this Government, they have totally failed to keep up, by means of injecting public capital, public finance and new industry, with the continuing decline in the heavy industries—shipbuilding, U.C.S. and so on.
Therefore, in this problem, one goes one step forward and two steps back, but if one does not take the one step forward, one's position is hopeless. The position in which this Government will leave Scotland in perhaps three or four years will take a long time to correct,

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however forcibly a Labour Government inject public capital and public enterprise.
Mr. John Rankin: I am particularly interested in my right hon. Friend's speech because of my local circumstances. My right hon. Friend is talking as if there were a Scottish economy operating in Scotland and an English economy operating in England, and as if the English one was doing well, was rich, while the Scottish one was not. If my inference is correct, should we not be trying to achieve a United Kingdom economy in order to help the Scottish part of the United Kingdom?
Mrs. Hart: I am sure that what my hon. Friend means is that in order to resolve the structural employment problems of Scotland one must have as a base a high growth rate in the United Kingdom as a whole. I entirely agree. But even within that context the position of Scotland, in particular in relation to the rest of Great Britain, has been worsening and is still worsening.
I raised my point of order and have complained very strongly because we do not have a Minister from the Department of Trade and Industry on the Front Bench—although I understand from the Secretary of State for Scotland that there are Department of Trade and Industry officials listening to the debate. I regret the fact that no Ministers are present. There are, of course, even within the present economic context, certain policies which may be pursued or rejected by the Government. They largely relate to the Local Employment Acts, apart from the question of investment grants as against allowances. It is to aspects of these Acts that I want to devote two or three minutes.
The Secretary of State for Scotland (Mr. Gordon Campbell): I want to make it clear that there is no discourtesy at all by my right hon. and hon. Friends from other Departments. This debate covers the fields of a large number of other Departments—for example, the Department of Employment, and also the Department of the Environment for ports and railways, as well as the Treasury and the Department of Trade and Industry. I have taken it upon myself as a member of the Cabinet to listen and to reply to all the points raised, but they
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will be referred to the Departments concerned.
Mrs. Hart: I am grateful for the right hon. Gentleman's assurance, but I believe that he made a mistake of judgment in not understanding that a Minister from the Department of Trade and Industry was the very least that was required in addition to himself on the Front Bench.
I refer back to Lesmahagow, the town in my constituency with 30 per cent. unemployment. Over the last five or six months, I have had no fewer than three individual meetings with the Under-Secretary of State for Trade and Industry and one meeting together with my colleagues from Lanarkshire County and my hon. Friend the Member for Motherwell (Mr. Lawson) on the question, either generalised or particular, of grants to firms seeking to open up in this town. The barriers which were put in their way have successfully prevented two firms and almost prevented one from proceeding.
I have found it totally incomprehensible that a Government which claim to be concerned about bringing industry into the worst affected unemployment areas of Scotland should persist in policies which deter industry from moving there.
I will not quote the names of firms, but I want to quote the three cases involved. The first was that of a firm in Glasgow engaged in the textile industry, which sought to expand, leaving its factory in Glasgow employing the same number of people but going into Lesmahagow, which then had 25 per cent. unemployment.
The Government's handbook, "Incentives for Industry in the Assisted Areas ", says:
"Broadly speaking, only new manufacturing projects being brought into a special development area qualify for these incentives. Expansion by firms already located in a special development area do not qualify."
Lesmahagow was one of the two original special development areas in the West of Scotland. Because of the pit closure problem in the area, it and Sanquhar were two special development areas three years before this Government declared a larger area in the West a special development area.
During the time of the Labour Government the local colliery at Lesmahagow was kept open for a year and a half by

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two injections of the social subsidy that the Labour Government were providing to keep pits open because of special social circumstances. Therefore, when Lesmahagow as a special development area was absorbed in the wider area the acute problem of the town tended to get lost in the more general problem. The Government might have taken account of that fact, as might the D.T.I. in interpretation of its rules. But it is the rules themselves that I am talking about.
This question has been raised for six months by various bodies in Scotland, ranging from the Glasgow Chamber of Commerce and, to my knowledge, by the Lanarkshire County Council, and even by the Scottish Conservative Association. For six months the Government have had this under consideration and for six months nothing has been done. I wonder how many more jobs have been lost to the special development areas of the West of Scotland because of the Government's refusal to change their policy here.
I can only quote the case that I am quoting—this factory which did not come to Lesmahagow, which did not expand. The expansion has not taken place at all—it has not happened anywhere else. About 200 jobs have not been created because the grants were not available simply because the firm was already manufacturing within a special development area.
Mr. Tom McMillan: Is it not equally true that the system prevailing at the moment, with the standard grant and the operational grant, means that the local people cannot make a decision? A matter is recommended or otherwise and sent to London, where it goes into the deep freeze, before the company knows where it is going.
Mrs. Hart: I entirely agree. This is why I had three meetings with the Under-Secretary, because the matter got up to his level.
The second case was that of a London company which had some marginal interest in textiles. It wanted to move into Lesmahagow so as to be able to employ highly skilled personnel there. That company was not permitted to do so, this time not because of any difficulty about its already operating in a special
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development area but because it was a company with some marginal interest in the same trade. There, again, about 200 jobs were lost because the Department of Trade and Industry would not give the grants that are normally applicable in the special development areas.
The third case was that of a large United Kingdom combine which was not eligible for the special operational grant and for a long period of rent-free tenancy of a factory because, again, it had a marginal interest in the industry concerned. On that basis, I do not think that we would have had Linwood or Bathgate, because there are very few very large British companies which do not have marginal interests in most of the industrial sectors of our economy.
It will, therefore, be no good at the end of this debate for the Secretary of State for Scotland to say how much he regrets unemployment in Scotland and how much the Government are determined to increase investment, and do this and that, because it is within the power of the Government to make a minor amendment to the Local Employment Acts which this side of the House would guarantee to have through in a week. The right hon. Gentleman could then make sure that there was the expansion of industry in Scotland, emanating from those large combines or existing Scottish firms whose applications at the moment are refused by the D.T.I., thereby depriving Scotland of jobs which could have been created during the last six or 12 months. It seems to me that only if the Government indicate their concern by action can we regard the Secretary of State for Scotland as being sincere in what he says in reply to the debate.
5.3 p.m.
Mr. Edward Taylor: We have so far had three interesting, constructive and telling speeches, and I hope that what I have to say will not upset this very desirable trend. If I may say so, those speeches have been appropriate to the seriousness of the unemployment problem in Scotland, presented to successive Governments since the war and which successive Governments have tackled or have been desperately fighting to reduce if not avoid. Up to 1966 we were in a position of gaining more jobs in Scotland than we were losing, but ever

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since we have been losing more jobs than we have been gaining.
This is, as the right hon. Lady the Member for Lanark (Mrs. Hart) said, a structural problem, and not one which could fairly, within recent periods, be laid at the doorstep of any particular Government. That being said, it would be wrong of me to start my speech without pointing out, as reference is made in the Motion to spending, and the like, that the amount of additional capital spending on schools, hospitals and roads which has been approved by the present Government is one of the largest we have ever had, and we should pay tribute to my right hon. Friend for what he has achieved in the Cabinet in fighting for such spending in order to create jobs.
Everyone knows that Scotland has been fighting, and is battling now, to stay an industrial country. The problem of the last few years has been no less than that, and my fear, and the fear which was expressed by the hon. Member for Glasgow, Springburn (Mr. Buchanan), is that the day may well come when Scotland will have a glorious future as a centre for agriculture, tourism, fishing, Harris tweed, Scotch whisky, and so on, while the future for the heavy industry on which we depend so vitally in the West of Scotland may not be bright at all. Part of the reason may be structural, but when we are faced with this kind of problem it is the duty of every Government to do everything possible to make sure that that does not happen in the West of Scotland, not only because of the human problem involved but because of the effect on the morale of an industrial country which wants to remain and should remain an industrial country.
Most important is investment. Irrespective of what our answers to the problem are, investment always helps to create jobs and to create confidence. But, for various reasons, many of them outwith Government direct control, there is at present uncertainty about the future of investment.
There are three great uncertainties. First, we do not know which areas will be designated as central by the Common Market Commission. The fact is that the Commission, in discussion with our own Government, will, as it has done for every other country in the Common Market, designate areas as central, within which
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it is not permitted to pay more than 20 per cent. towards the cost of each enterprise. That 20 per cent. is about, or perhaps just a little under, the amount of grant we can give in an intermediate area in Great Britain.
We do not know when the decision will be made. We do not know which areas will be designated as central. We have had an assurance from the Government—and I know that they believe it sincerely—that we shall be able to arrive at amicable arrangements with the European countries, but what we must know as soon as possible—or at least there must be a timetable—is when the designation of the central areas is to be fixed.
We must know whether it is likely, or possible, that the whole or most of Scotland will be designated as a central area. At present, almost all Scotland is a development area, and the small part of it that is not is an intermediate area. What we want to know, and what would help industry, is whether we have any guarantee that the Common Market Commission will agree to the whole of Scotland not being designated as a central area.
Secondly, what is the future for regional aids? We have been over all the business of Articles 92 and 93 of the Treaty of Rome, and how all new aids have to be submitted to the Commission and existing aids approved by the Commission. We have had an assurance from the Government that they believe that our existing aids will be permitted in the Common Market. We heard an equally strong point put by the hon. Member for Caithness and Sutherland (Mr. Maclennan) a little earlier that in his opinion investment allowances are not transferable and would therefore not be permitted once we were members of the Common Market. There is uncertainty. The only clear statement we have had was from the Common Market regional commissioner, who visited us about three years ago and said that he thought that everything was all right; and the opinion of the Government that existing aids were O.K.—
Mr. Rankin: On a point of order, Mr. Deputy Speaker. I myself have no objection whatsoever to the line which the hon. Gentleman is pursuing, but he is basing his argument on the effect on us of joining

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the Common Market. Who is present on the Government side to answer in respect of the Common Market with the authority that will satisfy the hon. Gentleman and all other hon. Members? Is there any such Minister present? If there is not, may we in fairness entertain this line of argument?
Mr. Deputy Speaker (Sir Robert Grant-Ferris): It is quite customary, as the House knows, on Private Members' Motions to have a fairly wide debate. Nothing which the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) has said so far can, I think, be deemed to be out of order. The House will also know that I cannot compel any Minister to be present.
Mr. Taylor: I should say that although on the Common Market issue I disagree fundamentally with my party, I have confidence in my right hon. Friend the Secretary of State for Scotland within the context of what it has been agreed to do for Scotland, and the fight for her best interests, otherwise I would not be putting these points to him. But we would like to know some time soon when we shall have a statement on which aids will be permitted. We are told that this will be done by joint discussion and perhaps by agreement, but at some stage the Common Market Commission will have to decide one way or the other on things like regional employment premium, investment allowances, and so on. Whether the decision is for us or against us, it would help investment decisions in Scotland very greatly if we knew when that decision was to be taken, and if we knew what the decision would be.
The third question relating to investment is the great question of investment grants and allowances. For the normal prosperous firm there is little to choose in cash terms between allowances and grants. With free depreciation, it is possible that investment allowances might be just a little better. But, on the other hand, for new firms setting up, and for unsuccessful firms not making profits, the grants would be of great benefit. Apart from that, there is some evidence that the sheer psychological effect of investment grants and of getting cash in one's hand, as opposed to allowances, is perhaps considerable. I do not have
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the knowledge to say whether grants or allowances are preferable, but I am sure that the hon. Member for Lanarkshire, North (Mr. John Smith) will have that knowledge. He usually does.
Mr. John Smith: I am able to assist the hon. Gentleman. I draw his attention to an article in The Guardian of 20th October, 1971. Mr. John Rhodes, a research officer of the Department of Applied Economics at Cambridge, points to the relative value of investment grants against investment allowances as showing a differential value incentive of 12·2 per cent. for investment grants as against 2·8 per cent, for investment allowances and showing that this change has reduced the differential attraction by six times.
Mr. Taylor: If the right hon. Gentleman would look at other aspects of the matter, including building grants and free depreciation, he would find that the equation is not as simple as that, when looking at the whole package. But despite the excellent views of The Guardian and the hon. Gentleman's deep knowledge of them, we are entitled to ask that some high-powered study be made of whether allowances or grants are better, and then for a decision to be made. My inclination is that there might well be a case, psychologically in any event, for saying that grants might be a help to morale in Scotland at present.
Secondly, on the question rightly raised by the hon. Member for Glasgow, Springburn regarding the dispersal of administration, my right hon. Friend the Prime Minister has commissioned an inquiry into the dispersal of Government offices. I am open to correction but I believe that over 100,000 jobs are under consideration in one way or another. I understand that the results of the report will be given to my right hon. Friend towards the end of next year. On the other hand, while progress can be made with the dispersal of Government offices, it would be a great help if within that review the whole question of the administration of the nationalised industries could be considered.
Some of us have been greatly concerned that, while the Government have been looking at ways in which they can attract Government

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offices to Scotland, the nationalised industries seem to be operating against that policy. We had the recent example of the tubes division of the British Steel Corporation moving from Glasgow. That decision was taken by the Steel Corporation. We have recently discussed in the House a new Gas Bill to set up a British Gas Authority. The old Scottish Gas Board and the regional gas boards will be replaced. Will this mean a centralisation of jobs? Will the authorities say that there will be fewer jobs but that natural wastage and the like will enter into it?
With so many movements like this, it would be an enormous help, with this inquiry into the dispersal of Government offices, to consider the question of the centralisation of the nationalised industries. We have the Gas Bill centralising gas. I recently asked whether this would mean uniform prices for gas as we shall now have a gas authority. Although this will be subject to the Common Market, we shall have a uniform price for steel. I was told that gas prices were a matter for the gas authority. It seems likely that, as in the present situation, Scottish domestic gas consumers will pay on average 25 per cent. more than those in England and Wales. This matter seriously affects Scotland.
The worst possible example on the question of dispersal is the Steel Corporation. I remember being present, with the hon. Member for Bothwell (Mr. James Hamilton), when the steel nationalisation Bill was being discussed. I and some hon. Members of the Labour Party were desperately concerned that, like other nationalised industries, the Steel Corporation would establish a major headquarters in London. For the first time with a nationalised industry, we inserted into the Bill a Clause putting an obligation on the Steel Corporation to have regard to the need to disperse its offices and to locate them near manufacturing. But what has happened? We have established a giant colossus of administration for the steel industry in the centre of London, miles away from the steelworks. That is one case. There are other cases in which we could have a nationalised industry's headquarters outside London. The steel industry has not been very successful. It has lost a great
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deal of money. It would save cash if it moved its headquarters away from London to somewhere else in Britain.
My next point is on the question raised very ably by the right hon. Member for Lanark about grants and S.D.A.s. We all know that local industries setting up new businesses get very substantial grants, the normal grants for a development area. On the other hand, the S.D.A. is an extra bonus. We have rent-free accommodation for three years, and assistance with the wages bill for six months. It is anomalous that firms doing identical jobs in identical premises can be discriminated against just because they are local firms considering expansion. I am fully aware of the arguments advanced in support of the present situation. It is suggested, for example, that firms moving into an unfamiliar environment require extra assistance, and this is of great help to them. But we also know that many international and British firms who are considering expansion in this way have more experience about the problems of relocation than small local firms which are thinking of setting up for the first time, as it were, in the big time. There is a case for considering giving these grants to all firms expanding in S.D.A. areas, even if this did not have a massive immediate effect on jobs. Many local firms resent this and give it as their reason for not expanding.
Apart from that, if movement cannot be made along those lines, I hope that something can be done about the many delays which appear to occur, at least in the minds of some of my industrial friends. I have written to the Department of Trade and Industry about two cases. There is long delay in considering operational grants under the S.D.A. arrangements. Much of this delay is because the Department is anxious to give the benefit of the doubt to marginal cases. If there is doubt, no doubt the Department would rather take the extra week or two, or perhaps a month, to consider the case, so that the firm can be given the grant if possible. But delays are holding up investment.
As the hon. Member for Springburn said, Hunterston is crucial to the west of Scotland. There was a general delight in the west of Scotland at the announcement of the ore terminal. If we are to have a steelworks, the ore terminal is

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necessary beforehand. Precisely where do things stand on the Hunterston front? On 31st January asked the Secretary of State a Question whether he had received the report of the joint steering group on the steel industry. I tie reply was:
"I have nothing to add to the answer given to the hon. Member for Sheffield, Attercliffe (Mr. Duffy)… on 17th January."—[OFFICIAL REPORT, 31st January, 1972; Vol. 830, c. 11.]
I looked that up. The reply there was that he had nothing to add to the statement given by the Minister during an earlier debate on 16th December. I looked up the debate. He said:
"We expect this review to be completed—as announced last summer—around the end of the year, and it should be possible to make a further statement shortly after the House re-assembles."—[OFFICIAL REPORT, 16th December, 1971; Vol. 828, c. 864.]
It would help to know how things stand with Hunterston. What is the timetable? I recall that in the annual report of the British Steel Corporation in July it was stated that the long-term investment plans had been submitted to the Government and included a green field site in an area not yet designated. We understand that since then a joint steering group has gone into action and is now discussing what should be the long-term investment plans of the B.S.C. It would be helpful to know what stage we have reached—whether the plans have been submitted, whether the report of the joint steering group has been received and, if it has, when a statement about it will be made, and when we may have more news of this exciting and ambitious project.
There is little point in going again over the arguments for Hunterston. At Le Havre, Versailles, Antwerp and similar ports in Europe millions of pounds and even hundreds of millions of pounds are being spent to create the very circumstances which the Clyde has been given by nature as a great national asset. We know that there are great advantages in such a scheme. On the other hand, it would be interesting to know precisely what will happen when and if the Government get their port. Will the B.S.C. itself put forward a positive suggestion? Will it be necessary to get the approval or agreement of the E.C.S.C. before we make a decision?
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Another crucial factor on which Scotland has no indication is the pricing policy of the steel industry in the event of our joining E.C.S.C. We know that in Europe the general policy is to have a basing point for each major supplier and we know that by and large suppliers have to charge basing point price plus transport costs. That is the general rule apart from the special arrangement of aligning which is made for Italy, to cope with the regional problems there. It would be helpful to know whether there is to be just one basing point or several for Britain. If there are to be several, will the prices of steel be uniform at all basing points, or will there be regional economic prices? If there are to be regional economic prices, the Scottish price, as with gas and coal, will inevitably be much higher, and that will be very serious.
What is more important is that if we have regional pricing, or if the B.S.C. decides to go for regional prices, as it wished at one time, it is clear beyond a shadow of doubt that once we are in the E.C.S.C., the Government will not be able to stop the Corporation from doing so, or to influence it. It will be a decision which the Corporation will have to take in consultation with the E.C.S.C. That shows how vital it is for Scotland that we should have a source of cheap locally produced steel.
If, as I believe, Scotland is fighting a battle to remain an industrial nation, we have to have as sure a guarantee as we can get of our ability to obtain steel at a competitive price, if not at a very cheap price. Even with joining the E.C.S.C. and all that that means, we can still have steel at reasonable prices in Scotland if we make it easy for the industry to go ahead and to contemplate expansion and investment.
My hon. Friend the Member for Galloway referred to labour relations as a significant factor in Scotland's problems. It was particularly regrettable that we should have had a strike at Yarrows on the very day that industrialists were visiting the country to consider expansion on Clydebank. The unions could do much to improve the image of Scotland. As my hon. Friend said, this situation applies to only a few industries. Employers, too, could do a great deal.

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Many hon. Members find but little sympathy with those employers who seem to create trouble for themselves. Some complain bitterly about irresponsible shop stewards causing disruption and strikes and forcing employers to break contracts and so on. But it is often the very same employers who turn down wage demands from the official trade union leaders only, after a strike of two weeks, to concede the claim of militant shop stewards of whose conduct they have complained. Plainly, there needs to be more effort by the trade unions and by employers to improve labour relations and to change attitudes and to appreciate that strikes will continue so long as striking pays. Many employers in Scotland—and I am thinking of two major industries—have created much of the trouble for themselves.
I seem to have spoken for far too long. I am sorry to have done so and I hope that what I have said has not been too boring. I hope that my right hon. Friend will at least read what I have said.
5.26 p.m.
Mr. Russell Johnston: I join those who have congratulated the hon. Member for Glasgow, Springburn (Mr. Buchanan) on introducing this relevant and excellent Motion and on speaking to it so well. In the time available it is impossible properly to analyse the complicated nature of the present grim unemployment figures, or to advance any solutions in depth. I realise that in picking four subjects I shall not find it possible to deal with many others and that inevitably I shall over-simplify and perhaps not fully develop my arguments. In particular one has to economise on vital issues such as Europe and the internationalisation of companies, although their effect on unemployment is direct and considerable.
I first take public works. There is no doubt that this is the one area in which the Government can quickly and directly affect unemployment. The increase in the public works programme which was authorised last summer was welcome, but was it enough? Were the consents given with sufficient urgency? Was the scheme itself clear?
My hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr.
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David Steel) asked the Secretary of State about this subject on 2nd February and elicited the information that out of £100 million worth of applications £27 million were not authorised. That is a fairly large chunk, and that must mean that either there was delay in giving consents, or some muddle about what entitled a consent to be given.
Mr. Gordon Campbell: May I deal with that at once? This was a programme to be started and largely completed by March, 1973, which is just over a year ahead. A number of proposals were made which in the event could not meet that criterion, although they were genuinely made with the hope that they could.
Mr. Johnston: I am simply surprised that so many applications, £27 million worth, failed to meet the criteria. There must have been confusion about what the criteria were. There may be a good fiscal reason for choosing March, 1973, but I do not know of any and I should have thought that there was some justification for extending the period.
The hon. Member for Springburn dealt at length with regional unemployment. I find the statistics for my own area immensely depressing. The average of unemployment in the Highland planning region for this year was considerably higher than that 10 years ago. In 1971 it was 87·7 per cent. whereas in 1961 it was 6·7 per cent; so there has been a 2 per cent. increase. It was even more marked with male unemployment. In 1961 the figure was 7·6 per cent. Last year it was 11·1 per cent., a frightening total.
I have never thought that the job of the Highlands and Islands Development Board was one of containment. It is or should be one of development. I thought the letter from the Chairman of the Board, Sir Andrew Gilchrist, which appeared in the Scotsman last month was rather extraordinary. He said that the Board could use more money but then went on:
"There is a limit … the excessive injection of capital into an area of small resources can swiftly lead to overheating and social distortion with unfortunate consequences. Such distortion is an inevitable corollary of success."
He then instanced Shetland and said:
"Shetland at this moment has probably reached the point of being, if not overheated, over buoyant."

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I can assure him that this is certainly not the view of my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond). I am not worried about overheating but rather about under-firing. I am also worried about the differential which is now nothing like what it was.
It is the unemployment in the Central belt which is most serious, because of its size and nature. I do not want to labour the points already made by the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) on Hunterston or the reshaping of our shipbuilding industry and Oceanspan, or the points which the hon. Member for Glasgow, Springburn made about the refurbishment of our decaying industrial areas. The Secretary of State would do well to pay attention to what the hon. Member for Galloway (Mr. Brewis) said about R.E.P. I am not certain that I agree with his references to industrial development certificates.
The third point I seek to raise concerns oil. The House will know that Liberals have proposed the establishment of a development corporation funded from a share of oil royalties and from moneys from the auction of the development sites. Others have made similar proposals to the Secretary of State. The right hon. Gentleman is visiting Aviemore in my constituency on 24th and 25th February to attend a conference organised by the Scottish Council. I hope that when he goes he will take his top officials with him and will pay close attention to what is said, because I believe there is now a pretty general consensus in Scotland that there should be a definite earmarked share of this found money coming directly into Scottish investment.
The oil boom will reflect itself, as it has already in areas of the North-East, in other direct and indirect ways. There are more things of which the Government should be thinking, such as bringing pressure to bear on the oil companies to develop their installations in particular parts of the country.
Dr. J. Dickson Mabon: The Secretary of State will obviously object to the hon. Gentleman's last proposal about oil revenues on what are called classical fiscal grounds. I think he has once employed this defence in
1018
public but many times in private. Since the hon. Gentleman will find his proposal rejected on that ground—he knows the argument as well as I do—is he attracted by the proposal of my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) in his Regional Development Corporation Bill which may come before the House on Friday? How do Liberals react to that?
Mr. Johnston: It is an attractive proposal. I would like to go further but I am prepared to take portions of cake rather than no cake. The classical argument has already been advanced by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who is very classical in all these matters.
Mr. Gordon Campbell: I do not wish to raise objections on any classical grounds. There are practical problems. Would the hon. Gentleman suggest that Scotland should repay a notional share of the royalties from North Sea gas which has been coming from areas under the sea opposite England? These royalties are coming in now. Are we to start paying for them on the basis that we may get something in future?
Mr. Johnston: There is no great argument in principle about this. The essential thing is that here we have something new and the opportunity to treat it in a different, new way. There are logical arguments about whisky and all the rest, but I do not think they are relevant. The relevant thing is that this is an opportunity to do something new directly to channel money into the Scottish economy without putting any new strain on the Exchequer.
Fourthly, since the Secretary of State looks with some suspicion on new ideas, may I throw out a small, new idea—something about which Scottish Liberals have been thinking and which may help to tackle some of the environmental problems on which the hon. Member for Glasgow, Springburn laid such emphasis. Is it possible to introduce legislation empowering local authorities to take on unemployed people at the normal rate for the job and reclaim from the Government the money which that person would have received if he had still been unemployed? There are many administrative objections. We would have to create a new temporary category but at

1019
least there are lots of things that local authorities want to do.
There is the point which the right hon. Lady the Member for Lanark (Mrs. Hart) made in an interesting but rather long-winded speech about the percentages of unemployed unskilled and semiskilled persons. Here again there is an opportunity for them to do work without necessarily placing an extra financial burden on the Government. Many people have pointed out that we are paying at least £10 on average per week per person throughout the United Kingdom. That is £520 million a year. We could be using the skills of these people. It would be a way of helping local authorities to do many of the things they wish to do, such as building new roads, new buildings, fresh work in social work departments and so on.
I agree very much with the hon. Member for Glasgow, Springburn that unemployment is a waste and an affront. If we in Parliament fail to face up to it and overcome it we are failing in our most primary duty.
5.37 p.m.
Mr. David Lambie: I found myself agreeing with much of what the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) said. We are dealing not just with Scottish unemployment but rather with the industrial future of Scotland. During the last 140 years we have seen the Scottish economy changing. We had the clearances, when the crofting economy of Scotland was radically changed to make way for sheep farming and hunting interests. The crofters were forced to leave the land and move into the industrial areas. Today we are seeing the end of industrial Scotland, the Scotland that most of us on these benches have known nearly all our lives. Unless something is done quickly we shall be dealing not with an industrial Scotland but with a Scotland whose future lies in hunting, shooting and fishing. Scotland will be the area in Europe where people from the rich industrial areas of England and the Continent spend their holidays and enjoy these pursuits.
Some of the major factors affecting Scotland's industrial future have not been mentioned today, and I should like to deal with two of them. First, in my
1020
constituency and throughout central Scotland factories belonging to major concerns centred mainly in England are gradually being closed. They are not only private enterprise factories but, unfortunately, the premises of nationalised industries. Those of us who during our political lives have supported the principle of nationalisation are finding that this principle is being used as an excuse to close small industries in our constituencies and in central Scotland, but it is mainly because the people in control of the nationalised industries are English-based and have very little knowledge of the outlook of Scottish people or of conditions in Scotland.
My hon. Friend the Member for Spring-burn (Mr. Buchanan) referred to British Rail (Engineering) Limited, which is closing the railway workshops in Barassie, in my constituency, not because they are the "lame ducks" of the Secretary of State for Trade and Industry, or because they are not viable, or because they have not met production targets, but in order to fit in to the general rationalisation programme to centralise the wagon repair units in areas of England where a profit is not being made. Neither the 480 people who work in the Barassie railway workshops nor I can understand why the works should be closed and these 480 jobs transferred to major railway engineering centres in England.
In another part of my constituency the closure of the Baelz Equipment Company Limited, whose parent company is in Wolverhampton, in the Midlands of England, was announced last week. This concern came to Scotland in the early part of 1959 and, according to my information, has been working at a profit ever since. According to the latest reports, the company has enough work to keep it going for the next two or three years, but, because of difficulties with the parent company in Wolverhampton, it has been decided to close the factory, which is in an area where unemployment is already high.
I have received a distressing letter from the District Clerk of the Irvine District Council in which he says:
"I need not stress the effect which this depressing news"—
that is, the closing of the factory of Baelz Equipment Company Limited—
"is making on my Council and in the community in general particularly at a time when

1021
the incidence of unemployment has reached unacceptable proportions and when the outlook for the future is anything but promising. My Council would hope that since this industrial estate is within the control of a Government Department you will be able to attract immediate and special consideration to this problem."
I ask the Secretary of State for Scotland to deal, in his reply, with the problem of units of firms, whether nationalised or private, which are profitable and viable being forced to close because of reorganisation in the concern in England.
Mr. Gavin Strang: Some hon. Members opposite have the impression that my hon. Friend is arguing against nationalisation. Does he agree that the great advantage of publicly-owned industry is that the Government can change the policy tomorrow, whereas a large section of industry is owned by private enterprise and it is very much harder to change the policy?
Mr. Lambie: I agree. But we do not have a Labour Government. Unfortunately, the Conservative Government have control of the future of Scotland, and they have shown no consideration for Scottish interests.
Mr. Brewis rose
Mr. Lambie: I am sorry; I have not time to give way. I propose to continue with my speech in order to give more time for other hon. Members to speak.
I wish to draw to the attention of the Secretary of State the question of the future of the Glengarnock steel works in my constituency. In the last year or so we have been told that the British Steel Corporation proposes to centre future rail production in two areas, one being at the Glengarnock steel works. Suddenly, like a bolt from the blue when, at the beginning of this year, we saw the future plans for the next quarter, we discovered that the weekly production target for the steel works had dropped from 1,600 to 600 tons of rail per week and that the other 1,000 tons of production was to be transferred to the Cargo Fleet works in the North-East of England. According to the workers and management at the Glengarnock steel works, a unit which has met its target and been profitable for the last 20 or 30 years is being forced, because of rationalisation in the B.S.C., to lose 1,000 tons of steel rail production.
1022
Hon. Members today have said that they were happy when they heard the announcement by the Secretary of State last week of the go-ahead for the iron ore terminal at Hunterston. In fact, the decision by the Secretary of State to give approval to the proposal to build an iron ore terminal and deep water port at Hunterston was given, not last week, but at the beginning of December, 1970. On 19th December, 1970, Mr. A. G. McCrae, Chairman of the Clyde Port Authority, is quoted as having said:
"We are naturally delighted at the Secretary of State's decision. This confirms our confidence in the Clyde as one of the nation's great ports."
When I heard the Secretary of State's announcement, I got in touch with the Under-Secretary of State for the Environment and asked what was the Government's attitude to the terminal at Hunterston. He said in an answer to me on 16th December, 1970, that the Government would give every encouragement to any proposal to build an iron ore terminal at Hunterston. On 16th March, 1971, following an inquiry from me as a result of articles in the Glasgow Herald, I received a letter from the same Under-Secretary of State saying that the Clyde Port Authority had never envisaged raising money for Hunterston on the open market; it had always been the intention to seek a Government loan. In the same letter he said that the Clyde Port Authority and the British Steel Corporation were discussing with each other the commercial terms on which an iron ore terminal might be built but that no authorisation for such a scheme had been sought from the Secretary of State for the Environment. Therefore, on 16th March, 1971, the Clyde Port Authority and the B.S.C. were in negotiation about the commercial terms on which an iron ore terminal might be built in the Hunterston area.
In June, 1971, two provisional orders were published by the Clyde Port Authority for presentation to Parliament to clear the way for the construction of the iron ore terminal at Hunterston. When those two provisional orders were published people who had objected to the industrialisation at Hunterston, the North Ayrshire Coast Protection Committee, said they would object to the provisional orders and would use the rest of the

1023
money which they had collected in their initial campaign to fight to the nail the provisional orders.
On 10th November, 1971, I put a Question to the Secretary of State for Trade and Industry whether he could announce the starting date of the proposed new iron ore terminal at Hunterston, and the Under-Secretary in reply said:
"No; the choice of Hunterston as a possible location is one for the British Steel Corporation in the first instance and I understand that it still has the matter under consideration."—[OFFICIAL REPORT, 10th November, 1971; Vol. 825, c. 187.]
That was more than six months after I had been told by another Minister that the Clyde Port Authority and the British Steel Corporation were in negotiation.
The whole story of Hunterston has been a story of delay after delay. If one had stayed in Scotland and read only Scottish newspapers one might have concluded that that terminal had been built four or five times over. Unfortunately, the majority of people who take decisions in this country do not stay in Scotland but are down here in London where they have no concern at all about what is going on in other areas, whether in Wales, the North-East or North-West of England, the North-East or the North-West of Scotland. Their only concern is centred in London where the power lies.
We have now had this great announcement last week by the Secretary of State. Unfortunately I did not hear his announcement because at the time when he was making it on the Floor of the House I was meeting elsewhere in the building a deputation from the Barassie railway workshops. The people in that deputation appealed to me as their Member of Parliament, "What can you do to retain Barassie's railway workshops?" When the Secretary of State made his announcement every Scottish newspaper and most Members here, even on my own side of the House, shouted, "Hurrah. We have now got Hunterston." I have been too long on the Hunterston campaign to accept any announcement about Hunterston and about the great development at Hunterston till I have seen the first dredger there and the first construction worker there working on the iron ore terminal and the deep water port.
1024
When I got home last weekend I was blamed for being too pessimistic. "You are always on the losing side, David," I was told. "You have been handed this announcement. Do not antagonise the Secretary of State and people making the decisions. They have the interests of Scotland at heart."
But the Secretary of State did not announce that the Government would give the money to finance the iron ore terminal, and I ask that when he winds up tonight he will tell us how much of the £26 million the Government are prepared to give.
When at first the terminal was spoken of we were told it would cost £15 million, with £8 million from the Clyde Port Authority, which has at present very little available money, and £7 million from the British Steel Corporation. Now they talk of a figure of between £26 million and £27 million. Who is to finance it? If the Secretary of State announces today that the Government will give £26 million either indirectly through the British Steel Corporation or directly through the Clyde Port Authority I will withdraw my claim that we have again been discriminated against in Scotland and I will praise him, but if he does not make that announcement I am afraid that, with the history which I have pointed out, we must accept that he is insincere and that the Government are insincere in their ideas about the future of the Hunterston area.
I have always made the case that the iron ore terminal does not automatically mean the green field integrated site we in Scotland are waiting for at Hunterston or that, therefore, an announcement about the green field site would mean an iron ore terminal. Unfortunately we have been fighting amongst ourselves in Scotland. There have been those of us awaiting a big steel development at Hunterston and, quite rightly from their point of view, others who have wanted to see a continuation of the steel industry in Lanarkshire. I put it to hon. Members, that we are not going to get any green field site in Britain—
Mr. George Lawson: There was never an argument for development at Hunterston versus the retention of the industry in Lanarkshire. It was an argument on priorities, and that if the ore terminal could be obtained it

1025
would be possible that other things could follow the ore terminal, but that the ore terminal was essential in any case. That was the argument. It was not a question of one against the other.
Mr. Lambie: I accept the point made by my hon. Friend but I continue with my original contention that at the beginning of the Hunterston campaign there was this division between people who were supporting the new development in the green field site and those who wanted a continuation of development on the so-called brown field site.
I would put it to hon. Members that we shall not get the iron ore terminal, we shall not get the green field steel site in Scotland, or in any other area in Britain, because the Government will not give the British Steel Corporation the necessary finance to allow it to get up to an annual production target of £42 million which the Labour Government set, and that this is because—and here I agree with the hon. Member for Cathcart—we have decided to enter the European Common Market, so that we can no longer look at the future of the British Steel Corporation in isolation.
We have to look at the future of the corporation as part of the European Iron and Steel Community. When we do that we do not just read the Scottish newspapers about the future—the golden future for Scottish industry. Nor do we read British newspapers only. We have to read international papers to see the steel scene at the moment. My hon. Friend the Member for Glasgow, Scotstoun (Mr. Small) drew to my attention a report in the American magazine Fortune for January this year. Dealing with the present position of the steel industry in the world it said:
"Signs of increasing multinational investment are already apparent. Hoogovens, the Dutch company, is expected soon to merge with Hoesch of Germany, forming the Continent's second-largest steel company… The European Coal and Steel Community is urging more cross-border cooperation. It points out that a modern plant capable of producing eight million tons a year would require an investment equal to twice the cash flow of the Community's eight largest companies."
This is the problem which the British Steel Corporation is facing. The magazine Fortune goes on to say:
"The urgency of international joint ventures is perhaps most striking in the case of beleaguered British Steel Corporation, which
1026
lost an estimated $250 million in 1971. In desperate need of efficient capacity, the nationalised company has approached Hoogovens, Usinor of France, and a German company with joint-venture proposals. British steel has one of two projects in mind—an expansion of its Teesside plant on the north-east coast or a big plant on a new site on the Thames Estuary (or possibly on the Continent) that could produce 15 million tons a year."
I ask the Under-Secretary of State to deny these international reports that the British Steel Corporation is considering bringing in foreign capital to help it out of its cash difficulties and also putting future British steel capacity not in Scotland or England but on the mainland of Europe.
These are important points that must be answered tonight. These are the things that will decide whether Scotland will remain an industrial country. If we get the green field development at Hunterston we shall be ensured of an industrial future. If we do not get it we shall have an environment empty of everything but sheep and cattle.
6.1 p.m.
Mr. Iain Sproat: It is with great pleasure that I intervene in the debate which was opened in such a fair-minded, constructive manner by the hon. Member for Springburn (Mr. Buchanan). Apart from one or two small departures, the tone which he set for the debate has been followed by all hon. Members who have spoken.
Like all hon. Members who have spoken, I regard the Scottish ecenomy with grave concern. I think we all recognise that the hideous unemployment figures in Scotland hang like a pall over us as we debate the situation this afternoon. Unemployment is a personal and overall social waste and an economic waste. I am sorry the hon. Member for Inverness (Mr. Russell Johnston) has left the Chamber. I thought he was rather too modest in his approach to the problem. Since we have had contributions from one hon. Member lasting 25 minutes and from another hon. Member lasting half an hour, the hon. Member for Inverness could perhaps have said a little more about the Liberal proposals on oil, which vitally affect North-East Scotland.
Although I regard the position as extremely serious, I do not regard it as one of despair or despondency for Scotland. My remark may ring strangely in the context of the debate, but having

1027
thought long and deeply, I believe that the prospects now before Scotland, once we have got out of this present trough, can scarcely ever have been brighter. I will not use the word "boom". In his useful contribution to the unemployment debate last week my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) said that "boom" implied something which was short-lived. That should not be the impression we convey. This is not a question of a short-lived boom. Scotland's opportunities, if she will seize them, will stretch into the future as far ahead as we can see, and certainly as far ahead as we can plan.
There are two main reasons for my confidence in the future of Scotland. First, the Government have a coherent and long-range strategy for the Scottish economy, as indeed for the United Kingdom as a whole, of which Scotland is an integrated part. As we can see from the evidence, this strategy is working. We must not let our minds be totally blinded by the appalling unemployment figures—[Laughter.]—it is all very well for hon. Gentlemen opposite to laugh, but if we look at other parts of the Government's economic strategy—
Mr. Tom McMillan rose—
Mr. Sproat: No, I cannot give way, I want to get through my speech as quickly as possible. When the Government took office they were faced with four sets of rising figures—wage rates, prices, strikes, unemployment. Of those four, only one figure is still continuing to rise at a comparable rate, and that is unemployment. [HON. MEMBERS: "Rubbish."] It is no use saying "rubbish". A year ago wage rises were running at 14 or 15 per cent.; now they are between 7 and 8 per cent. A year ago prices were rising at the rate of 11 per cent.; now the rise is 5·6 per cent. Similarly, the number of strikes has been cut dramatically. Although the situation is not satisfactory, these are genuine indications that our economic strategy is beginning to work and will begin to bite on the appalling unemployment figures in the spring.
Mr. Ewing rose—
Mr. Sproat: I am sorry, I have been asked to get through my speech quickly, as one or two other hon. Members opposite wish to speak.
1028
In the Labour Government's infamous document "Scottish Economy, 1965–70" they promised an extra 50,000 to 60,000 jobs for Scotland. By the time the Labour Government had departed, 82.000 jobs had been lost. In other words, the Labour Government were out in their calculations by almost the unemployment figure for Scotland now.
I entirely agree with my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward Taylor), and also with the hon. Member for Central Ayrshire (Mr. Lambie) on the danger of Scotland disappearing as an industrial power. We must fight this danger.
The Labour Government went too far the other way. By the introduction of selective employment tax they legislated against the service industries. There seems to be an industrial puritanism—and it came out this afternoon—which says that someone who manufactures something with his hands and makes money in this way for the country is somehow better than a person who is employed in the service industries. This is an incredibly old-fashioned and reactionary attitude which, for Scotland's sake, we must get rid of.
To turn briefly to the immediate and.short-term problem, no Government in history has pumped so much money in such a short time into our economy.
Mr. Lambie: Or created so much unemployment.
Mr. Sproat: Under the Labour Government unemployment in Scotland doubled.
Out of the £160 million for advanced public works, Scotland's generous share is £65 million. If the Scottish Nationalist Member were here I would ask him to remember that next time he says that Scotland does not get a fair deal from the Treasury. A sum of £100 million has been allocated to advanced State Board expenditure; naval expenditure, £80 million; house improvement grants, £53 million; aircraft building, £23 million; National Health Service improvements, £33 million; repayment of post-war credits, £130 million; £1 million per year has been allocated for the five-year environmental improvement of Glasgow and a further £1 million for the environmental improvement of West Central Scotland.

1029
Have the Government made any estimate of the number of jobs for which they are directly responsible which these measures will create? I realise that the Government cannot have such an estimate for the number of local authority jobs which will be created.
The next section of the Government's strategy, which has not so far been much commented on, is that of stimulating the Scottish economy. By and large, only growth in the United Kingdom economy will produce growth in the Scottish economy. However much we dislike this, it is an economic fact of life. It is worth emphasising how much the Government have done to encourage and stimulate growth in the United Kingdom economy. There have been cuts in income tax, cuts in purchase tax, cuts in selective employment tax, and cuts in corporation tax. These cuts in taxation by the present Government have amounted to some £1,400 million. In addition, we have seen cuts in interest rates and the abolition of hire-purchase controls. Already this is having an effect.
I am glad to see that the right hon. Member for Lanark (Mrs. Hart) has returned at last to the Chamber. She said that these measures were not having an effect and gave the impression that the economy will grow this year, next year or some time, perhaps never. But I would remind her that the economy is already growing at double the rate it did under the Labour Government, and I believe it will continue to grow.
We have not seen the amount of investment we would like. This matter has been dealt with by my hon. Friend the Member for Glasgow, Cathcart, and I will not go into it extensively, save to say that I believe investment is growing and that if we get another expansionist confidence-making Budget, which I trust we shall have, it will continue to grow.
Furthermore, in the long term the Housing Finance Bill which we are putting through the House at the moment—
Mr. Lawson: The "welshing" Bill.
Mr. Sproat: I hope the hon. Member for Motherwell (Mr. Lawson) will not go on saying "welshing", as he has said
1030
interminably in Committee. We have in Scotland the worst slums and the worst overcrowding in Great Britain, and the worst record of owner-occupancy.
Mr. Ewing: On a point of order, Mr. Speaker. I should be grateful for your guidance. The hon. Member has had ample opportunity in Committee on the Housing Finance Bill to make all the points he wishes to make about unemployment, but he has refrained from making them.
Mr. Speaker: Order. One right hon. Lady spoke for 31 minutes. Another hon. Member spoke for 24 minutes. I am anxious that the hon. Member for Glasgow, Pollock (Mr. James White) should have a few minutes before I call on the right hon. Member for Kilmarnock (Mr. Ross). All these interventions, sedentary or otherwise, take time.
Mr. Maclennan: On a point of order, Mr. Speaker. In view of your anxiety to call as many speakers as possible, may I point to the desirability of maintaining some kind of geographical balance in this debate, since so far from the Opposition benches every speaker has represented the West Central region. There has been no spokesman from Edinburgh, or from the Highlands or Tayside. This is beginning to cause considerable annoyance on these benches.
Mr. Speaker: I apologise to the hon. Gentleman. I had hoped that speeches would be much shorter. I had arranged that there should be a geographical spread for the debate, but I expected that hon. Members would keep their contributions to a more reasonable length.
Mr. Sproat: I will try to get through my speech as quickly as I can. The Housing Finance Bill will in the long term benefit the Scottish economy, as will the Industrial Relations Act. It would be interesting to know how many companies which otherwise would have come to Scotland decide not to come to Scotland because of the appalling number of strikes—in certain parts of Scotland, not all—and bad industrial relations. These people do a great disservice to Scotland.
Mr. James Hamilton: It is unfair that the hon. Member should make such statements.
Mr. Sproat: In addition, we are now presented with an extraordinary package compounded partly of luck, partly of policy. We have the glittering package of Hunterston, Oceanspan, North Sea oil and the Common Market. I do not intend to go into these matters because of the time factor and also because many of them have already been covered. On the question of North Sea oil, which is a matter of great importance to my constituency, I feel that it is wrong for people to talk merely of Scotland getting part of the royalties. These royalties are as nothing by comparison with the money which will be spent in Scotland in servicing, construction and hardware. Scotland must seize the opportunity to get some of the oil revenues for Scotland, but it must stop worrying about the percentage it will get of oil royalties. In view of all the policies which are being pursued by the Government, I believe that Scotland's future is bright indeed if only Scotland will seize its opportunities.
6.16 p.m.
Mr. James White: I had intended to be brief, but I did not think that I should have to be as brief as five minutes. I will have to throw away half of my speech, and I know from experience that it is always the better half.
I was interested to hear my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) refer to his early life. It was unemployment and the first war that brought me into the Labour Party and gave me my interest in politics. I remember my father leaving the house between five and six every morning trying to sell his labour on the Clydeside; he did the rounds of all the yards and dry docks. I remember him telling me that he often used to take a different road home after these days of job-hunting just to avoid running into me when I was on my way home from school. This is the human side of unemployment which I want to emphasise to the Government.
My right hon. Friend the Member for Lanark (Mrs. Hart) referred to what would happen when the wage-related earnings finished. Once this happens people will begin to live in poverty. I know a lot who are on the borderline just now. Therefore, I was surprised to hear the hon. Member for Aberdeen, South (Mr. Sproat) speak of Scotland as
1032
though it were the land of Canaan, flowing with milk and honey. That is certainly not the Scotland I know and does not reflect the constituency which I represent.
I would go so far as to say that unemployment is part of the trouble in Northern Ireland. Glasgow Members will recollect that when we had a large number of unemployed years ago we suffered from gangs in the City of Glasgow. It is a crime for a man not to be able to sell his labour and to have to spend his time hanging around street corners. The fact that he cannot provide properly for his family in the same way as his neighbour invokes a sense of resentment in the man who cannot obtain employment.
It is imperative that there should be investment grants in Scotland. I speak not only as a trade unionist but also as one who has been an employer in Scotland for the past 20 years. I know how important these grants were and it is imperative that they should be restored.
The question of school leavers is most important in dealing with unemployment. It is not often I quote the Scottish Daily Express, but there were two very good articles in that newspaper last week by Mr. James Macmillan, with which I very much agreed. He said the fact that the school leaving age was being raised this year would save 277,000 jobs. When this happens I urge the Government to pay bursaries to these children who would normally be bringing in wages. Mr. Macmillan also advocated the payment of pension at the age of 64 rather than 65 to encourage earlier retirement. This again would save 150,000 jobs. I would like to see equality of wages for women. Too often in many parts of the country a man and his wife go out to work because it is cheaper to employ a woman; but it must be remembered that the man next door may well be out of employment. This totally upsets the balance of income in many working-class homes.
I believe that the present Government, as well as the Labour Government, should have given some thought to training of workers during leisure time. In this country a man works until he is 65 and then after retirement he does not know what to do with himself. I was elated last

1033
week to hear the announcement by the Secretary of State for Scotland about developments at Hunterston and I was delighted to hear about the increase in training awards. I had one reservation, as I made clear in a recent visit to Livingston. We are at the moment training long-distance drivers, but in any part of Scotland one can pick up a telephone and get as many long-distance drivers as one wants. This is because automation has speeded up and cheapened services, and it is faster to send goods by road.
The Government should also be doing more in terms of slum clearance. At present, we are knocking down slums in Glasgow where many families use one toilet. However, I visited a council house in my constituency last night where I saw water running down the walls like a burn over a waterfall. When we have finished with our old slums, we ought to start on our new ones. In Priesthill, Blackhill and many other parts of Glasgow, tens of thousands of building operatives are unemployed, and there is no shortage of bricks and cement. I suggest that the Government ought to be doing a good deal more in this direction.
In this House, we have had enough talk, and more than enough facts and figures about unemployment. Now is the time for action. We want no more talk.
6.20 p.m.
Mr. William Ross: I must first congratulate my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) not only on his timely luck in the Ballot, but in two other respects. By that, I mean his choice of subject and the way that he tackled it. If anything, he understated the position. It may be that, in view of the gravity of the position, it is not one which requires overstating.
My hon. Friend spoke with great feeling of the Springburn that he knew. He described how, with all its ups and downs, it is still a thriving community. I believe that it is one of the worthiest communities in the country. It was there that we had the greatest rolling stock manufacturing centre in the whole of Europe. I can remember seeing that as a desolate place when I was Secretary of State. I was there in the presence of Sir Robert Maclean, of Scottish Industrial Estates. We were creating a new industrial estate
1034
from which we hoped that new prosperity would come to the area. I asked, "Will people come here?" Sir Robert pointed to the houses round about and he said, "They will come here. They will see the houses. They will see the population, and they will know the traditions of the people." We in this House must remember those traditions. We must not accept pessimism. I have confidence not in this Government but in the people of Scotland. Given the opportunity, they will rise above their present difficulties.
I thought that the hon. Member for Aberdeen, South (Mr. Sproat) made the worst speech of the day—[Interruption.] The hon. Gentleman must accept that I have a right to my opinion. He said that the Government had a coherent, planned strategy. I wonder whether he realises what has happened since his right hon. and hon. Friends became the Government. I am grateful to my hon. Friend the Member for Lanarkshire, North (Mr. John Smith) for putting down a Question every now and again asking the Secretary of State for Employment
:…if he will publish a list of the redundancies in Scotland certified to his Department each month from June, 1970, to the latest available date."
The latest available date is 10th January, 1972. The total was 65,200. Those are redundancies registered with the Department of Employment. However, redundancies are required to be registered only if they are above a certain figure. The figure is way above that, and it is only up to 10th January.
The hon. Member for Ayr (Mr. Younger), the Minister for Committee Room 14, will realise that there have been redundancies declared in his constituency since that date. We have had redundancies in practically every Scottish constituency since then. Whereas in the latter part of last year the Secretary of State for Scotland was saying that redundancies were down to about 500 a month, he will be sorry to realise that in the last month they have risen to more than 800 a week. The last available figure, that between 7th December and 10th January, showed that there were more than 800 a week and 3,500 in the month. The position becomes even more serious when one considers where they are taking place, because they are occurring in those areas which have been hard hit in the past.

1035
My right hon. Friend the Member for Lanark (Mrs. Hart) produced a devastating figure and pointed out exactly what it means in human terms. She said that more than 34 per cent. of the unemployed in Scotland had been unemployed for more than six months. They have outrun their wage-related benefit and are down to the bare minimum. Many of them have families. They are families with the same aspirations as everyone else of keeping children on at school, having annual holidays and a decent standard of life. They want to be able to hold up their heads and pay their way.
When one studies the figures and discovers the number of unemployed who are just over 40 years old, one begins to realise how exactly right my hon. Friend the Member for Springburn was to describe unemployment as "a corroding malady". It is going right to the heart of the Scottish people, and the Scottish people are angry. They are not despairing; they are angry. They have been looking and waiting for this Government to do something about it. They do not want alibis like the silly one that we heard from the hon. Member for Aberdeen, South that my right hon. and hon. Friends doubled unemployment during our period in office. We did nothing of the sort—
Mr. Sproat: Then by what did the right hon. Gentleman and his party put it up?
Mr. Ross: All that the hon. Gentleman has to do now is listen. I have not very much time, but I shall use it to the full.
For five months after right hon. and hon. Gentlemen opposite became the Government, they did nothing. They went away on holiday. On 26th October, 1970, they produced their great new plan. The Secretary of State said, not in this House but at a Press conference:
"This is a great impetus for Scotland."
What did they intend doing? They proposed cuts in Government expenditure. They proposed cuts in local authority expenditure. They proposed to save £1,500 million by 1975. They intended to save it on housing and on practically everything else, including grants to industry. They intended to do it by the
1036
changes which have been attacked from all parts of the House today, one of which concerned investment incentives, and the change from grants to allowances.
That was to be the first great part of this new coherent strategy. The result, a year later, is that unemployment has risen in Scotland from just over 90,000 to 154,000, and it is still rising. The result of this great impetus has been that we have had in 1971 one of the lowest records of new industrial projects coming into Scotland. The Government proclaim that their new strategy is pouring money into the local authorities. They began by cutting down on the money going to local authorities. Now they have turned turtle.
We all remember the debate when the Government announced their special development area policy. Today, almost exactly a year later, what is the position? Following the Government's announcement in February last year, the Scottish Press carried headlines such as
"Bonanza for Scotland."
What has it done? It has confused industrialists. It has achieved nothing, one of the main reasons being the failure of the Government's coherent strategy. Today, from every side, there is an attack on this special development area policy.
The hon. Member for Galloway (Mr. Brewis) surprised me when he said that he wanted an inquiry into investment grants. My hon. Friend the Member for Motherwell (Mr. Lawson) spent weeks asking the Government what had happened about investment grants and why right hon. and hon. Gentlemen opposite had decided to change to investment allowances in advance of knowing what the inquiry would say. Clearly there was no coherence in this Government's policy. They thought that they knew the answers before the election. Then they discovered that they were dealing with a situation which was completely different.
Now we have structural unemployment. The Prime Minister has discovered it; so has the hon. Member. Where is the hon. Member who used to play the numbers game, whereby one picks a date when unemployment is high and another when it is low, subtracts one figure from the other, and says, "You have lost all these jobs." The hon. Member for Aberdeen, South was at it tonight. Does

1037
he realise that in the unemployment debate just before the 1964 General Election we had three estimates of unemployment. The hon. Member gave us another tonight. Let him continue to play the numbers game. In a fortnight's time we shall be given the latest figures of job losses. Let him then discover whether he is still willing to play the numbers game. It is a silly game.
The Government must deal with structural unemployment. They must make an analysis of what it means to new industry and ascertain whether or not we can come to terms with it. In the meantime, they must not worsen the situation for existing industry—as we have seen them do in the case of Rolls-Royce and U.C.S., and in their failure to intervene in the Plessey dispute. Time after time we have seen existing industry being thrown away, and on every occasion confidence has been further eroded.
The first thing that the Government must do is to accept responsibility for full employment. If they will not do so, let them say so, but if they are willing to do so they must accept the further responsibility of discovering how to achieve it. That means Government intervention in both private and public industry. It means providing the incentives that will bring about an expansion not merely in incoming industry but in existing industry.
If the Minister makes a further analysis of what has happened in Scotland since 1945 he will see that most new jobs have been created through the expansion of new industry. The special development area policy inhibits and restricts existing industry. In these areas that policy is wrong. I have told the Government about that before. They took up this business of special development areas, which had been applied to mining areas, where there was no other industry and where special preference brought about a considerable improvement in the position. The hon. Member for Dumfries (Mr. Monro) and the right hon. Gentleman know what has happened in their areas. When this policy is applied over a wide area, where other industry already exists, conflicts arise. There is enough to hold back expansion at the moment, without adding this. My hon. Friend the Member for Springburn and my right hon. Friend the Member for Lanark raised this matter, and I
1038
believe that the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) mentioned it, although he did not go so far.
Every—I nearly said "Establishment" institution in Scotland; it is amazing how they become Establishment institutions once we have a Tory Government—every industrial institution has been saying the same thing, but the Government will do nothing about it. I hope that the right hon. Gentleman will exercise his powers as Secretary of State and as a member of the Cabinet and make some announcement.
We have had the question of the ore terminal in relation to the steel industry. The right hon. Gentleman thought that we were going to have a Scottish debate and that I was going to speak, so the Government announced the decision of the British Steel Corporation to go ahead. It was the Corporation's decision to go ahead.
Mr. Gordon Campbell: It is the corporation's timing.
Mr. Ross: Of course it is. But over three years ago, at the public inquiry, the Corporation was talking about the position of an ore terminal at a time when we were concerned about the future of the steel industry. The ore terminal was essential for the continuation of the industry. For years before that a search had gone on round our coasts for a suitable site—in the Lower Clyde, along the Ayrshire coast, and at Ardrossan. Long ago it was known what was required, and where it should be put.
The right hon. Gentleman blindly came across Hunterston in 1969, like some pioneer, but he was centuries after other people had discovered it. He will bear responsibility if this project founders. I do not share the fears of some that it will founder, because I do not believe that the Scottish people will allow it to do so. We are told that the Corporation is in discussion with the Clyde Port Authority. What has it been doing for the last two years? I should have thought that those discussions would have been completed. What has happened to the feasibility study mounted by the Stenhouse Group and the Scottish Office in respect of a general port? Will this be used as an excuse by the Treasury or the Department further to hold it up?

1039
I realise that the Minister has nothing to do with the money aspect of the question; the Department of the Environment controls the purse strings. Port development is supported by the Department of the Environment, and the Government have made a decision about grants. This matter is urgent, and we want to know when the work will be started. It is no good saying that after it starts it will take two-and-a-half years. We want to know exactly how we are going ahead. This is the brightest gleam that we have had; let us not have it extinguished.
The right hon. Gentleman and the Government must intervene in respect of nationalised industries. I was interested in the point made about dispersal policy. This policy should not be confined to Government Departments. Unless our regional policy is coherently followed through in respect of industries over which we have a certain measure of control—the nationalised industries—one thing will cancel out the other. We have already had a hard knock in terms of dispersal. People talk about the Forestry Commission, but what about the new income tax centre? The decision had been taken to site it in Edinburgh, but that is now completely washed out.
I am sorry that my hon. Friends from Edinburgh and Dundee were not able to speak this afternoon. The position in Dundee is probably worse than it is in my area, in many ways, because additional to the other factors, such as lack of investment confidence, Dundee has to face difficulties in relation to the struggle that has gone on in Bangladesh, and the troubles that have affected supplies of fuel.
The Dundee area is one of the worst unemployment areas in Scotland. The male unemployment figure is 10 per cent. It is not in a special development area. It is not a small pocket of unemployment. I am surprised that the Minister still has his P.P.S. He represents part of the Deeside area, and he must be aware of the difficulties there.
When shall we have a coherent policy in respect of attacking unemployment through incentives and also setting up the administration to deal with structural unemployment? The Government must accept responsibility for full employment. They must take further measures to stimulate investment in both the private
1040
and the public sector—including the development of ports and the steel industry. In relation to Hunterston we want the green field site, and we want the development of Scottish steel.
What about power? What about the new power station in Banff? We have heard too little about that. I was Secretary of State when it was announced. It is time that we heard something about it.
The Government should take special steps to maximise continuous social building. I will not talk about housing now, because we have plenty of opportunity upstairs. However, I think that the right hon. Gentleman is wrong in the policy which he is pursuing on that matter. We need schools, hospitals and health centres. We need many facilities in the countryside and the towns.
There is also the task of cleaning up Scotland. There are parts of Scotland which are an absolute disgrace. I am not talking merely about the derricks in the former mining areas; I am talking about some of our towns and cities which pride themselves on what they have done. Cannot something be done to harness these efforts? We will not achieve very much by merely giving them capital grant support. The Government should have an imaginative programme supported by 100 per cent. grants. If necessary, they should organise special corps in each area for this purpose. The right hon. Gentleman can do this. Scotland can be helped by the organisation of development boards. Glasgow particularly requires help in this way. It needs a development and executive board with the money to get on and provide help. It could even handle the U.C.S. situation as well.
I should have liked to mention oil. This can either delude or dazzle. It could be an advantage which could be thrown away. We want to know far more about this matter. I should like to know how long these reserves of oil will last. The right hon. Gentleman will appreciate that the Opposition selected this debate, and it is only fair that our point of view should be expressed on this matter.
Mr. Gordon Campbell: The right hon. Gentleman has asked for answers.
Mr. Ross: But we never get them. Please do not give us the same thing about going away to pre-history.
Mr. Speaker: Order. I thought that it was agreed that each Front Bench speaker should have 20 minutes to wind up.
Mr. Ross: It was, Mr. Speaker. I think that at this moment I am probably just on my 20 minutes.
We want more information about oil. I want the Scottish Office to ensure that it is properly and adequately planned in relation to what it might cost us regarding our environment and to ensure the maximum number of jobs and financial advantage to Scotland deriving from the revenue.
If the right decisions are taken there is hope. If the right decisions are not taken, the serious position into which we have been driven by the neglect and failures of this Government will get worse. We eagerly await the right hon. Gentleman's speech to see whether we should divide the House on this matter.
6.43 p.m.
The Secretary of State for Scotland (Mr. Gordon Campbell): I congratulate the hon. Member for Glasgow, Spring-burn (Mr. Buchanan) on winning the Ballot and on the way that he raised this subject of compelling concern to all in Scotland of the intolerable level of unemployment and the best ways of improving it.
In the short time which is left to me I will try to deal with as many as possible of the points which have been raised. As I said in the debate a week ago—I shall not repeat what I said then —the Government are acutely conscious of the unhappiness and insecurity caused to families by unemployment. I pointed out that the new and insistent element to be tackled today is that industries have been shedding labour; though they are producing the same as or more than before they are working with considerably fewer men. In one year, as a result, there has been a reduction in manpower of as much as 4½ per cent. in manufacturing industry.
The debate today has concentrated on ways of dealing with this situation in two parts. The first part concerns immediate measures. The hon. Member for Springburn has drawn attention to ways in which the Government have already embarked on massive expenditure on
1042
infrastructure and other projects and suggested what more can be done.
The second part concerns the longer-term possibilities which affect present unemployment but could greatly influence industrial activity some years ahead. These are also important, and we have had the opportunity of discussing them today.
The right hon. Member for Lanark (Mrs. Hart) suggested that other Ministers should be here. At least five separate Departments are affected by this subject. If we take account of the point raised by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward Taylor) there are six.
I undertook as a member of the Cabinet to reply to the debate, and every point which has been raised will be referred to the appropriate Department. The terms of the Motion clearly take us back to 1970 with the reference to rocketing prices. Prices certainly were rocketing then as a result of cost inflation, but that wild inflation is now being curbed.
The origins of cost inflation were not difficult to discover—the excessive level of pay settlements which began in the autumn of 1969. There can be no doubt that such high pay settlements, leading to increases in money incomes far in excess of productivity growth, were the main factor in bringing about inflationary price increases.
In response to the right hon. Member for Lanark—
Mr. Norman Buchan rose—
Mr. Campbell: I cannot give way. In response to the right hon. Member for Lanark, I should point out that at the beginning of last year, 1971, average earnings were 14 per cent. above a year earlier and retail prices, excluding seasonal food, were 9½ per cent. higher at an annual rate than six months earlier. No nation can afford such high rates of increase and survive in international markets or protect the jobs of its men and women.
Our policy against inflation has been to impress upon employers in both the public and private sectors, and on the unions, the need for a substantial and progressive de-escalation of pay settlements. At the same time we have acted

1043
directly on prices. S.E.T. has been halved and purchase tax cut by 18 per cent.
Mr. Buchan rose—
Mr. Campbell: The nationalised industries are co-operating with the C.B.I. price restraint initiative, which is not more than a 5 per cent. increase in a period of 12 months.
There are many firm indications that our policy on wage and price de-escalation is succeeding. Increases in retail prices last December, excluding seasonal food, were at about half the rate in the middle of 1971. The improvement in retail prices has been widely spread. With the exception of seasonal foods, all components of the retail price index increased less in the second half of last year than in the same period in 1970.
I am sure that the House will welcome this latest information. The hon. Member for Springburn, in using the adjective "rocketing", will recognise that the rocket is now at the stage when its flight is slowing down. Besides this slowing down of price increases, pensions and benefits have been raised.
The rising tide of unemployment which we found on coming into office has continued, with industries reducing their labour forces without reducing output. Raging inflation was one of the causes in 1970 of this situation. We profoundly deplore this situation, and no Government have done more in so short a time to boost the economy. Bank Rate has been sharply reduced, credit restrictions lifted and taxes slashed. In these and other ways money has been pumped into the economy in recent months to assist business activity and investment.
In addition, programmes have been advanced and a vast public works programme for Scotland has been launced which will continue until the middle of next year. Most of it is applied to infrastructure of all kinds, and it is a large injection in addition to the normal programmes within my sphere of responsibility which are expected to account for some £370 million of capital expenditure during the coming financial year. This is over and above the expenditure in Scotland by the nationalised industries, which are also advancing some
1044
of their programmes to the coming months. The programme of additional public works in Scotland now amounts to over £60 million, most of which will be spent in the coming year.
In reply to the hon. Member for Inverness (Mr. Russell Johnston), this was an urgent programme. That is why it was tied to a short period ahead—because it was a special programme.
In addition, £6·5 million will be spent on environmental improvement in the Glasgow area and another £6·5 million will be spent in West Central Scotland, both with Government grants of £5 million each; £2·5 million will be spent on infilling the Queen's Dock in Glasgow, and 1·5 million on reconditioning Glasgow underground.
Under the Housing Act, 1971, there will be an increase of over £15 million in the amount of grant-aided house improvement work. These are the sorts of programme which the hon. Gentleman was referring to.
The Government have also brought forward—[Interruption.] I have been left very little time, less than was arranged. The Government have also brought forward defence programmes to help relieve unemployment. We have accelerated naval shipbuilding orders and £50 million worth of defence shipbuilding contracts have been allocated to Scotland. These are for three frigates worth £20 million which are to be built by Yarrows; two fleet replenishment ships and one experimental vessel, worth in all £25 million, the contract for which has been placed with Scott Lithgow; and one survey ship and two mooring salvage vessels an order worth £5 million in total, which are to be built by Robb Caledon on the east coast.
On the aircraft side, 100 bulldog training aircraft are to be constructed by Scottish Aviation at Prestwick.
These are advanced programmes by the Government with massive expenditure of the kind which the hon. Gentleman was referring to.
Mr. Ross: We have heard all this.
Mr. Campbell: It did not sound as though the right hon. Gentleman had taken it in. I will remind the right hon. Gentleman also of something else that he should have heard about—namely, of the upward turn of approvals of new house

1045
in the public sector, thereby reversing the trend since 1967. There has also been a sharp increase in house building for home ownership. This has caused an increase of nearly 50 per cent. in the number of starts of private houses in 1971 compared with the previous year.
The hon. Member's Motion calls for the encouragement of investment in the private sector as well as in the public sector. This reflects steps taken by the Government to stimulate building for home ownership—for example, the easing of credit restrictions on banks, the reductions in bank rate, the removal of restrictions on local authority lending for house purchase, the abolition of stamp duty, and, not least, the halving of selective employment tax. There is also the work of improvement of older houses—
Mr. Maclennan: On a point of order, Mr. Deputy Speaker. As I understand the position, it is in order for Ministers to seek the permission of the House to circulate information in the OFFICIAL REPORT. [HON. MEMBERS: "Cheat."] The Secretary of State has just given us information which could well fall into that category and apparently is intent upon continuing to give us such information for the rest of his speech. Would it be in order to suggest that the Secretary of State should circulate it in the OFFICIAL REPORT and answer the debate?
Mr. Deputy Speaker (Sir Robert Grant-Ferris): Not at all. That is not a point of order for the Chair.
Mr. Campbell: I now have two announcements to make in what I believe is the spirit of the Motion. We have been exploring and searching for even more work which will need to be done. Our aim is to keep and create jobs now during the difficult time following a very serious period of inflation and shortage of labour.
As a result—these both relate to environment and dereliction matters which were raised by the hon. Member—I am announcing two schemes. First, following the two £5 million schemes which were last year announced by the Government as grants for environmental work in and around Glasgow and in West Central Scotland, I am now initiating a special scheme, for a limited period, else-
1046
where in Scotland. My right hon. Friends the Secretaries of State for the Environment and for Wales are introducing similar schemes for England and Wales.
I am asking local authorities concerned in Scotland to bring forward, quickly, minor projects of environmental improvement which will create employment and also improve local amenity. The scheme will cover work completed by the end of June, 1973, and I am making grant available for approved projects at the rate of 85 per cent. in the development area under the Industrial Development Act, 1966. I would expect the total amount of grant to run to £1 million or beyond.
I am writing this week to local planning authorities asking them to submit schemes as urgently as they can. The kinds of project I envisage are those which are not normally done as major derelict land clearance.
The second scheme relates to clearance of derelict land, a subject to which the hon. Gentleman called particular attention. I am now seeking to increase the rate of submission of major schemes by local authorities to clear the most obtrusive dereliction. Although most local authorities in Scotland have made good efforts to deal with major dereliction in their areas, the problem which remains needs renewed drive.
I am therefore about to issue a circular to all Scottish local authorities calling for programmes which will aim at clearing virtually all areas of major dereliction within the next ten years. Generous grants at the rate of 85 per cent. in development areas are available and the capital allocations have been increased to support the greatly increased activity I am calling for. I should hope to see spending on these major items double—that is, rise to about £2 million a year.
My hon. Friend the Member for Cathcart raised the question of steel and the E.E.C. There is nothing in the Treaty of Paris which prevents a country from having a system of multiple basing points. I congratulate my hon. Friend on his own productivity.
As regards regional development, M. Borchette, the Commissioner concerned, when he visited Scotland recently, made it clear that our system of incentives can be calculated by E.E.C. criteria and are acceptable. There were references to

1047
investment allowances. We have capital allowances and free depreciation in development areas, building grants at high rates, and grants and loans under the Local Employment Acts. Free depreciattion has been much valued by industry. This point has been underlined recently by the Scottish Council, Development and Industry and I spoke of it as some length in my speech a week ago.
The right hon. Lady the Member for Lanark asked about projects at Lesmahagow. It was for the same factory that the three firms were applying, I understand. I am glad to say that one of them has decided to go ahead at that factory. The general question of the operational grant being available to incoming industry for three years and not to industry within special development areas is one of which we are very much aware. The operational grant is for the special purpose of assisting those who must move in and start from the beginning.
As to West Central Scotland, special development area status has led to an increase in the period from February, when it was introduced, to December, 1971, of 5,650 jobs coming in during that period compared with 3,600 during the equivalent period in the previous year.
I should have liked to have gone into the Hunterston question, but there is not sufficient time left. I announced that and also spoke at length on the question of the British Steel Corporation's plans and investment programme in the debate a week ago. Also at that time I was able to put an end to a number of rumours which seemed to be circulating about the Corporation's plans.
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Last week, Scots were treated to a homily on our shortcomings by the right hon. Member for Orkney and Shetland (Mr. Grimond). [HON. MEMBERS: "Where is he?"] He has been here. He has just left. Perhaps this was good for our characters, but I do not subscribe to the right hon. Gentleman's strictures and theories. I do not believe that there are great differences in the distribution of failings or weaknesses North and South of the border. I leave it to my hon. Friend the Member for Bute and North Ayrshire (Sir F. Maclean) and others to deal with this. Their Motion on this matter brings to mind the chorus from the Negro Spiritual—
"I hear their gentle voices calling—
We can unwittingly damage our prospects in Scotland by apparent pessimism and gloom and a reluctance to help ourselves. This is not a true picture, but this impression is sometimes given by those whom I would call the wailing willies—
Mr. Buchanan rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly and agreed to.
Resolved,
That this House, noting with concern the thousands of families in Scotland suffering the indignity of unemployment and the increasing poverty caused by rocketing prices, calls on Her Majesty's Government to initiate massive new expenditure on the Scottish social and economic infrastructure and to stimulate a very rapid rise in investment in new and existing industry.

ORDERS OF THE DAY

  TRANSPORT (GRANTS) BILL
  Order for Second Reading read.
  7.0 p.m.
  The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): I beg to move, That the Bill be now read a Second time.
  This is a short and, I hope, uncontroversial Bill. The major nationalised industries, as the House knows, agreed to match the restraint shown by private sector firms under the C.B.I. undertaking on prices. My right hon. Friend the Chancellor of the Exchequer made clear on 19th July last year the importance he attached to the C.B.I. initiative, which, the House may feel has been one of the key factors in slowing down the rate of price increases over the last six months.
  The major nationalised industries are, of course, members of the C.B.I., so it was only natural and right that they should match the efforts made by private sector industry. The fares charged by British Railways and the subsidiaries of the National Bus Company bear very directly on the purses of the travelling public. Moreover, a symbolic importance, out of proportion to the sums involved, is often attached to fare increases. It was quite clear to British Railways and the N.B.C., no less than to the Government, that for them to stand apart from the C.B.I.'s initiative would have been extremely damaging to its prospects of success.
  From the purely commercial point of view, however, it was difficult for the N.B.C. and British Railways to hold their fare increases to the limits set: their situation demanded far higher and steeper increases. British Railways made a surplus in 1970 but in 1971 it made a loss of about £15 million. The N.B.C. lost £8 million in 1970 and its likely loss in 1971 is about £1 million. Against this background, holding down increases of fares and charges, although unquestionably in the national interest, meant that, without special assistance, large losses would be inevitable for both nationalised boards in 1972.
  This might have been acceptable, of course, if there was a prospect of these
  1050
  losses being made up from future profits, but the trading situation of both is difficult. British Railways, for example, is faced with a long-term decline in its coal traffic, which in 1970 still accounted for nearly half its freight revenue and well over half its tonnage. The N.B.C., too, is faced in many areas with a long-term decline of passengers, largely because of the rise in car ownership.
  The prospects that either of these nationalised industries could recoup the losses arising from price restraint out of their ordinary revenue are therefore very slight, and both would have been pushed by their acceptance of the C.B.I. restraint into a breach of their statutory financial obligation to break even, taking one year with another. It was in all these circumstances that my right hon. Friend concluded that a special grant in aid should be made to each board. That is the reason for the Bill.
  Clause 1 provides for a grant of £27 million to be paid to British Railways and another of £7 million to the N.B.C. These amounts have been determined after the most detailed consultations with the boards themselves and they are intended to ensure that each, given good management, should be able to break even over a year.
  These amounts are somewhat less than the boards' initial estimates of their likely deficits, but we have felt obliged to take into account only the extent to which the forecast of the deficits could be attributed to their holding down increases in fares and charges in accordance with the C.B.I. initiative. Moreover, as I have said, we consider that, with good management, both hoards should be enabled to break even.
  Perhaps I can draw the attention of the House to a particular feature of the drafting of Clause 1. The grants are fixed in advance. The amounts will not be open to review should the boards find, for example, that their costs in 1972 are rising above current estimates—but, conversely, if they can improve their present prospects with good management, they will be able to reap the financial benefit.
  Mr. Julian Ridsdale: Does this grant bear any relation to the statement in the Daily Telegraph of 19th January about a grant for unremunerative services?
  Mr. Griffiths: No, Sir, it is quite separate from that grant.
  The boards' incentives to good management are to be preserved, simply because, if they can do better than the forecast deficit, they will reap the benefit. If not, because the amount is fixed, they must face that consequence too.
  The suggestion has been made in some distinguished quarters—indeed, by the right hon. Member for Sheffield, Park (Mr. Mulley)—that the granting of this special assistance conflicts with the financial disciplines created by the 1968 Transport Act. This is not the case. It is precisely to preserve these disciplines that this special assistance is being afforded.
  The major purpose of the 1968 Act was to relieve British Railways of the cost of services which the Government, for social or economic reasons, consider to be reasonable and which would otherwise not be within the Board's commercial interest to provide. Those are the unremunerative services to which my hon. Friend the Member for Harwich (Mr. Ridsdale) referred.
  It is in this way that non-commercial objectives under the 1968 Act can be undertaken while maintaining the kind of disciplines which encourage effective management. On the same principle, but with no connection with the grant for unremunerative services, the Government's action in this case to relieve these boards of deficits arising not from ordinary commercial decision but from a decision taken in the general public interest in connection with the C.B.I. initiative, runs on all fours with the philosophy behind that Act and is entirely consistent with the Government's own policy.
  The Government in no way regard these grants as compensation to the Boards for accepting the C.B.I. restraint. Rather, they are payments designed to enable the two nationalised industries to comply with their statutory financial duty in circumstances in which the public interest requires them to act in a way which would otherwise place them in breach of those duties.
  Clause 2 enables British Railways to respond to the Government's request to the nationalised industries to bring forward investment in order to promote
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  extra employment. Present plans are to bring forward investment projects costing more than £50 million. They include such things as the three Isle of Wight ferries, the new ferry for the Harwich-Hook service, 600 new Inter-city coaches, 360 new hopper wagons and so on. This acceleration of capital projects will entail additional expenditure of about £5 million in 1972 and £15 million in 1973.
  This will create or secure from loss more than 1,000 jobs in shipyards and about 800 jobs in railway workshops at Derby, York and Shildon, together with a substantial number of other jobs with contractors and private firms. All the schemes must be subject to the normal criteria for investment in the nationalised industries. In other words, they are all investment projects which, undertaken as a part of this exercise, would nevertheless have been undertaken in any case, though they would not have come forward so quickly.
  As I have said, this is a simple Bill. It is, I believe, uncontroversial. I commend it to the House.
  7.10 p.m.
  Mr. Tom Bradley: The Under-Secretary of State has been extremely brief. This is a very short Bill, but it merits our serious consideration. It provides what is neither more nor less than a straight payment to British Railways and the National Bus Company for doing a job for the Government—whatever gloss the hon. Gentleman may put on it. Both organisations were told that they had to comply with the C.B.I. initiative and restrain their price and fare increases to a limit of 5 per cent. Neither organisation could so restrain itself without incurring heavy loss—the hon. Gentleman has conceded as much.
  We must ask ourselves why this so-called C.B.I. initiative was necessary. It was necessary, I suggest, because of the Government's total failure to redeem their election pledges on prices and economic management generally. British Railways are particularly vulnerable to inflation, being a 63 per cent. labour-intensive industry. They are also extremely sensitive to all movements in the national economy.
  The National Bus Company has also suffered all the usual difficulties of other

  1053
  bus operators, with falling passenger revenue and increasing costs. Its outgoing chairman said on his departure that he had been beaten by rapid cost inflation. In addition, it has had to take over the burden of railway replacement and rural services. County and district councils have been most reluctant to make an appropriate financial contribution, and there has been any amount of disputes in the traffic courts in establishing maintenance costs. The Minister knows this very well. All too often either fares are increased or services are withdrawn.
  The Minister's proposals, and my right hon. Friend's proposals, which are still under discussion, to relax licensing laws in the rural areas to permit more private mini-bus and fare-paying lifts, are no proper substitute for regular scheduled services, and public and private bus operators and local authorities have made it known that they are against too much relaxation of existing licensing regulations.
  The reconstruction of the capital debt of British Railways in the 1968 Transport Act, which wrote off no less than £1,200 million worth of historic capital debt, has helped them for no longer than two years. After 15 years of mounting, and morale-damaging, deficits, we have seen profits of £14·7 million in 1969 and of £9·5 million in 1970. Now, after only two years' operation of that Transport Act, we are witnessing a return of a very familiar scene. We are told that a budgeted surplus by British Railways of £17 million for 1971 may turn out to be a loss of a similar figure.
  Why is this so? It is the result of a trade recession for which the Government seem to bear no responsibility, judging by the hon. Gentleman's rather casual approach to the problem this evening. The trade recession has hit British Railways very severely indeed, especially in their coal and steel traffics which are the lifeblood of railway traffic operation.
  The recession last year is calculated to have cost them no less than £18½ million loss of revenue; the Post Office strike —£1·4 million; the Ford dispute—£1 million; the miners' overtime ban in November—2 million. And the miners' current more serious conflict will be calamitous to this year's accounts. Even
  1054
  the Menai Bridge disaster has taken its toll.
  These instances show how dependent British Railways are on movements in the direction, the conduct and the course of economic management and business in general. Any chance of their breaking even this year—never mind taking up the £27 million bonus contained in the Bill—will depend completely on a revival of our economy which, of course, rests with the Under-Secretary's Cabinet colleagues: there is not much sign of that.
  The weakness of the Bill, as we see it, this is a once-for-all 12-month exer-—the hon. Gentleman expresses surprise or disbelief or astonishment: he does not pretend, does he, that the Bill is something that will go on? As I understand it, this is a once-for-all 12-month exercise. We shall no doubt return to that aspect, if that is possible, in Committee.
  The £27 million means, in effect, that because of the C.B.I. initiative and Government pressure only a 5 per cent. increase in railway fares is in prospect at the end of March. What happens after the expiry of the C.B.I. appeal? British Railways and the National Bus Company will almost certainly have to impose increases to cover the grant in the Bill in addition to containing further increases in costs which may arise meanwhile. Fare increases will have been held back, but the grant will disappear. Therefore, the budgets of both organisations for 1973 will start that much worse off.
  We should not, therefore, delude ourselves into thinking that the Bill will dispose of the difficulties of public transport. It merely postpones the crucial decision on how we should deal with the dividing line between commercial criteria and the political, social and economic obligations of these nationalised undertakings. Certainly, in the case of British Railways, the Measure is only the forerunner of what must be a further reappraisal of railway finances. I am not being party political about these serious matters, but we should ask ourselves whether it is right to finance a business, namely British Railways, whose turnover is directly affected by the level of the nation's economic activity, by capital which is wholly of a fixed interest character.

  1055
  Would it not be fairer to substitute equity capital for some of the interest bearing debt to the Minister? The anticipated loss for 1971 will be after paying interest charges of no less than £43 million. That has been the position in British Railways accountancy for as long as I can remember. Interest payments are a prior charge on the business, quite unlike private business practice. Surely the time is overdue for putting British Railways' finance on a fairer basis. The balance sheet at best is misleading; at worst it is unorthodox and grossly unfair to the true performance of the industry.
  There is something undignified about the recent—dare I say devious—but certainly admittedly ingenious new Railway Finance Company, whereby railway tax losses are set against private enterprise firms' profits. A major State enterprise ought not to have recourse to such a device. Presumably it had the sanction of the Under-Secretary's right hon. Friend. But the British Railways Board must have impressed upon him how much it prefers more open methods of conducting its business. So long as this state of affairs exists, the Minister should be seeking tonight permanent and continuing powers of assistance, and not the seemingly temporary once-for-all payment contained in the Bill.
  We shall not oppose the Bill, but I give notice that the time is not far away when we shall want a clearer and more fundamental approach to our public transport finance from the Government.
  7.23 p.m.
  Mr. Julian Ridsdale: I welcome the Bill, which was explained so well by my hon. Friend the Under-Secretary.
  The hon. Member for Leicester, North-East (Mr. Bradley) asked why the Bill was necessary. He said that it was to redeem Conservative election promises. We should face facts. The Bill is necessary because we have had to face a phenomenal rate of wage inflation. As the hon. Member rightly said, no industry is as much affected by wage inflation as the railways. British Railways, even before the present wage demand of 11 per cent., has had to meet wage increases of 20 per cent. over the last two years. It was
  1056
  for that reason that I had an Adjournment Motion in the House on 11th May, 1971, which my hon. Friend the Under-Secretary answered, when I pressed him on many of the arguments which are now being put forward to the House.
  I pressed him on the need to consider the long-term investment in the railways. I pressed him to consider particularly the position of railway commuters, and especially those who use buses. I realise the kind of fare increases they have had to face. Bearing in mind the market economy alone, this is something that they would be unable to afford, without at least taking drastic measures to curtail their way of life. That is why I wanted to see a new outlook towards financing British Railways, and why I welcomed the Chancellor's initiative in July when he called for a policy of wage restraint. At least it was the beginning of a voluntary prices and incomes agreement, which was so necessary if we were to face some of the economic facts.
  I welcome the Bill as a pointer. But the danger that I see hovering over this policy is one from which, understandably perhaps, the hon. Member for Leicester, North-East ran away completely; that is, how can we have this kind of policy of wishing to have long-term investment and to keep railway fares stable if at the same time demands come from the railway unions ahead of what it is possible for the management to bear? It is because of the 20 per cent. wage increases of the last two years and because of the present demand for 11 per cent. in the pipeline, and further demands, that we need to have a limitation put on them if we are to carry on a long-term progressive policy towards the railways.
  Mr. Bradley: I should declare an interest. As president of one of the three railway trade unions, I should be glad if the hon. Gentleman could indicate when any pay claim, or the satisfaction of any pay claim, of any of the unions of British Railways has exceeded the average for the rest of the country at any time?
  Mr. Ridsdale: I am glad that the hon. Gentleman has declared his interest. Nothing pleases me more than to argue in the House with someone who has a direct interest in railway wages. I

  1057
  assure the hon. Gentleman that my railway constituents—they may be his members—are concerned because they are losing employment because of the present demands which the railway unions are putting on the Government. [HON. MEMBERS: "Oh."] That is so. Members of the hon. Gentleman's union have attended my meetings, and they have said this. Hon. Gentlemen opposite may not like it, but the House has to face this.
  Mr. Ron Lewis: Is the hon. Gentleman suggesting that the railwaymen in his constituency are overpaid? Is that what they have been telling him? They have not been telling the union headquarters. They are all asking for an increase in wages.
  Mr. Ridsdale: I am not suggesting that railwaymen in my constituency are overpaid. But the pressure of wage demand, which continues all the time whether in the railways or any other industry, but particularly in the railways, means that lower paid workers in British Railways in my constituency have been laid off and have been losing their jobs.
  Mr. Stanley Cohen: Could the hon. Gentleman comment on the level of productivity British Railways has achieved, as opposed to almost every other section of industry in Britain? As far as I am aware, over the last 12 years British Railways and its employees have accepted a reduction in the level of staff far in excess of any other industry. The level to which the staff has now decreased more than compensates for any wage or salary increases given to them by British Railways.
  Mr. Ridsdale: I do not have all the facts at my fingertips. But although wages have doubled in British Railways over the last five to 10-year period, the staff employed has been halved. To that extent, the laying off of staff, with wages going ahead of productivity, causes unemployment. That is denied by hon. Gentlemen opposite, but it is a fact of life. It is happening. I welcome the presence of the hon. Member for Leicester, North-East because it enables one to argue with him.
  I am telling the House of the strong views of my constituents. Of course they want the railwaymen to be properly paid and of course they welcome in-
  1058
  creased productivity on the railways, but they sincerely believe that there is a relationship between the wage demands now being made and the fares which they are asked to pay. They are as desperate about the fares they have to pay as unions may be in asking for wage increases. That is why I have to argue on the Floor of the House as strongly for them as the hon. Member may argue for his union members. Many of my constituents are low paid workers and they are facing great difficulties because of the rise in the cost of living.
  That is why I support the Government's prices and incomes policy, because without a voluntary prices and incomes policy—
  Mr. John D. Grant: There is not one.
  Mr. Ridsdale: There would be if Labour Members would co-operate in trying to bring one about. The difficulty is that although we have proposed a voluntary prices and incomes policy, so many Labour Members are trying to undermine it.
  Mr. Grant: Could the hon. Gentleman give some guidance as to the criteria of the Government's prices and incomes policy, both public and private, presumably?
  Mr. Ridsdale: The criteria must be to try to keep wage and price increases within a 5 per cent. limit. Unless we have that voluntary limitation, we shall have further price rises and further difficulties. There will be further increases in fares and further cuts in the services that my constituents need. I lay the blame not on the Government, but at the door of the trade unions, because they are constantly making demands ahead of what productivity on the railways can stand.
  Mr. Bob Brown (Newcastle-upon-Tyne, West): If the hon. Gentleman is appealing for a genuine prices and incomes policy, he will find some support among the Opposition. However, how does he find any justice in the drivel we are hearing tonight, when he suggests that railwaymen should voluntarily agree to wage increases of no more than 5 per cent., although there has been an increase in food prices since the election of 14 per cent., when the Government have

  1059
  allowed 30 per cent. to doctors and dentists?
  Mr. Ridsdale: Wage increases paid by British Railways over the last two years, plus the current demand of 11 per cent., make the equivalent of a 30 per cent. increase in wages over two years.
  Such increases affect the lower paid workers and no one, least of all me, will say that they should not be helped. But the basis must be voluntary restraint. Without that restraint, there will be increased unemployment among the very men who desire jobs most earnestly, and for that reason I commend the Bill. I congratulate my hon. Friend on having introduced it, and I welcome this opportunity of a contretemps with the shadow Minister, who is a trade union leader, because it has permitted me to tell him what is felt by many people in my constituency.
  7.36 p.m.
  Mr. J. Grimond: I do not want to waste too much time in this debate, which is about a grant to the railways, in discussing wider economic issues, but after listening to what has been said, I must point out that Tory words on the subject of wages mean exactly what anyone wants them to mean. We are told that there is no prices and incomes policy, that a Bill has to be brought in to establish a prices and incomes policy allowing price increases of only 5 per cent., that we must have wage restraint at all costs; and yet we all know that at the top of the scale there is no wage restraint.
  Salaries and perquisites at the top of the scale have been rising far faster than 5 per cent. I will not mention M.P.s, but there are others. Only this week I have heard of a scheme by a firm in the City of London allowing executives to put down 2p a share to buy at any time in future shares at their present price of 585p. That is an extremely good offer, far in excess of anything offered to the railwaymen.
  We could have a useful debate about the principles upon which wages should be paid, but one discrepancy which has always struck me as remarkable is the extremely low wage of a train driver who takes a heavy express through busy junctions and into stations and the high
  1060
  wage of an airways pilot. The differential is out of all proportion. Both are assisted by much technical apparatus and rightly so, but I should have thought that the responsibility for bringing a Scottish express through fog and snow, as is frequently the case, from Aberdeen to London, is, if not as great, certainly in the same range as that of flying an aircraft on so many days a week, but the payments bear no relation. It is slightly curious that the Government should be prepared directly to intervene in one nationalised industry and, although they may find it necessary to make a similar intervention in another, they are so far stoutly resisting doing so.
  However, I have risen to draw attention to the difference between what the Government are willing to do for the Railways Board and what they are willing to do for my shipping company. We, too, have suffered from a number of increases in cost, not of 5 per cent., but of 10 per cent., and not in one year, but in every year. We have been waiting for years and years for a payment which would enable us to keep within the norm set by the Government. We have not had it. We are still awaiting a final decision about a subsidy to keep down freight costs to Orkney and Shetland
  It is widely believed that somehow the South subsidises the North, that the rural areas draw enormous subsidies for transport, while the urban areas pay; but that is no longer so. We have been told that £1,200 million has been written off the capital of the railways and we know that year after year subsidies, overt or covert, have to be paid to the railways for travel in the South. And yet in the North, when we ask not for £27 million, and far less do we ask for £1,200 million, but for an amount very much less than that, there is continual delay. I trust that the Minister will draw the attention of his colleagues to that state of affairs, because it is totally unfair and totally anomalous.
  Secondly, I should like to ask about payments to the National Bus Company. There are great difficulties in the provision of bus services in many rural areas. I am not aware whether the Bill will make any contribution to a solution of those difficulties, but perhaps the Minister will deal with that.

  1061
  In the North of Scotland there is a line which runs through some of the finest scenery at least in the country and probably in Europe. It is a very important link and it will become more important if we join the Common Market. Moreover, there are other lines in the North, for instance, in Aberdeenshire, which may become increasingly important, particularly if it turns out that we have a major change in the economy.
  If it is Government policy, as it should be, to encourage capital expenditure, partly to promote employment, no doubt, and partly for the long-term benefit of the country, I wonder whether the Minister could ask British Railways to consider fines in the North of Scotland. There are two lines north of Inverness which are in a twilight condition. Very little is done to improve them, or to bring them up to date, or to increase the number of services. The services run at anomalous times of the day and night and do not satisfactorily connect with other services for people who want to go to the South, and they are most inconvenient for people who wish to come to London, and for that reason they are loss mating and expensive. I suggest that a more frequent type of service might be initiated. A good deal of capital expenditure could be laid out with advantage to the ultimate economy of the railways.
  Mr. Keith Stainton: Is it not true that £5 million in this context is derisory?
  Mr. Grimond: Certainly. It is a beginning and it can be increased. It is small but it shows that in principle the Government are prepared to spend money on the railways as part of their justifiable attempt to cure unemployment. It is conceivable that some lines may have to be reopened if major sources of oil are discovered in the North Sea. Having accepted the principle of State assistance, this might be extended in other directions to the railways.
  For years we have been trying to get assistance for our ferries in Orkney and Shetland. While we have got some, we have certainly not got it on this scale. We have been trying for years to get minimal assistance, yet now we have this Bill rushed forward to assist British
  1062
  Railways because it is felt that £40 million is something they can lay out, partly to preserve an incomes policy which they say on other occasions does not exist and partly, rightly, to utilise under-used resources and bring people back into employment.
  7.43 p.m.
  Mr. Ernle Money: Like my hon. Friend the Member for Harwich (Mr. Ridsdale) I welcome the Government's initiative in bringing this Bill forward and I congratulate the Under-Secretary upon it. I was surprised to hear the hon. Member for Leicester North-East (Mr. Bradley) taking what seemed to be a "Jonah-like" view. As he is a distinguished railwayman it somewhat surprised me to find him entering into that rôle with some zest. One of the things that strikes me most as a constituency Member is the great will there is in the railways to make the most of opportunities and existing facilities. To do this they will need capital above all and it is to that particular end that these moneys are being applied.
  Mr. Frederick Mulley: I am sure that my hon. Friend the Member for Leicester, North-East (Mr. Bradley) would agree with what the hon. Gentleman says about the will in the railways to make the best of what they have and to make a success of things. The point he was making was that this is merely replacing revenues, it is not a contribution to the backlog of capital deficit which has built up over many years.
  Mr. Money: I take the right hon. Member's point. I want to deal with ways in which the revenue could be replaced other than having to turn to the Government when a specific crisis arises. I ask my hon. Friend to look carefully at the increasing opportunity there is in the railways—and the increasing social and amenity pressure—for transferring freight from the roads to the railways.
  On 10th December of last year the East Anglian Daily Times had a leading article headed:
  "The Right Lines".
  It pointed out the risks to East Suffolk —becoming known as the "Juggernaut country" because of the effect of road

  1063
  transport on our already overcrowded roads—and went on to say:
  "Some of the heavy traffic ought to be carried on an efficient rail system though no one ought to accept the simplistic belief that some of our roads, relieved of their burdens, would then regain the adequacy which they lost ten or twenty years ago. The campaign to switch heavy loads on to the rail system ought to be in conjunction with the long battle…to bring major road improvements to East Anglia, particularly in an east-west direction."
  That is particularly our special problem with the build up of Common Market activity and freight traffic from Felixstowe.
  It is interesting to note that one firm in the constituency of my hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton), known as Freightliners Limited, was able to announce in December of last year the completion of a rail link between Felixstowe and North London capable of handling 60 containers a day in each direction and taking something like 120 heavy lorries off the roads. I put this forward as being one of the ways in which the amenity position can be improved along with the financial position of the railways. I hope that my hon. Friend's Department will show an initiative, impetus and encouragement that will encourage this kind of development.
  The 23rd December issue of Country Life said:
  "It is clear that the pendulum has swung too far in favour of road traffic in recent years, to the detriment of the railway network. Only the Government can break the vicious circle that makes the railways an uneconomic means of transporting freight owing to a steadily reducing amount of business. But even if the number of heavy lorries on the roads could be reduced, the problem would only be partially solved."
  It is clear that these things must go hand in hand.
  One of the best ways of keeping a fair balance will be to preserve an open mind on the matter of closures. There are some passenger and freight services which may at one point be uneconomic but which may, in a couple of years' time, have altered their financial position entirely. The decision over the reopening of Needham Market Station in the constituency of my hon. and gallant Friend the Member for Eye (Sir H. Harrison) is an example. There may be many more stations particularly in the rural areas
  1064
  which could be re-developed in this way where there is a genuine market demand.
  In approaching the future of the railways I hope that the Government will not just look at the statistics as they stand on any one of the so-called non-profitable railways but will seek to determine how far they can genuinely be made to pay. I hope my hon. Friend will look carefully at the potential and social importance of railways such as the Ipswich-Lowestoft-East Suffolk line. There is far more that can be done to revive that type of railway in terms of the needs of the community than is being done or has been done in recent years.
  7.49 p.m.
  Mr. Ron Lewis: Those of us on this side of the House who are actively engaged in railway work heartily concur with many of the arguments of the hon. Member for Ipswich (Mr. Money). What he said about taking traffic off the roads and putting it on the railways has been said from this side of the House for many years. The hon. Gentleman's speech was in direct contrast with that of the hon. Member for Harwich (Mr. Ridsdale), who tried to create the impression that all railwaymen, or at least those in his constituency, were satisfied with their lot. That is not the experience of my union, the National Union of Railwaymen, which is receiving letters from branches throughout the country asking the union's negotiating committee to expedite pay increases in order to meet the excessive cost of living.
  Mr. Ridsdale: Does not the hon. Gentleman realise that large wage increases have led to unemployment on the railways among some of the low-paid workers?
  Mr. Lewis: I disagree. However, speaking on behalf of railwaymen, I say that they still think that they are underpaid. Railway shopmen, in whose work I was engaged before I became a Member of the House, are very perturbed about what is likely to happen as a result of the British Railway Board's proposal to make 5,500 railway shopmen redundant.
  Since September, 1971, the railway unions have been showing how the problems resulting from redundancy can be alleviated. They have co-operated with the British Railways Board and in the joint working party in considering

  1065
  ways of dealing with the problem. They have met the Minister for Transport Industries on at least one occasion to discuss this. I understand that these redundancies arise mainly from the rundown of the wagon fleet from 299,000 to 173,000. We are told that there will be extensive redundancies in the very near future.
  The railway unions are not Luddites; they are realists. They have co-operated to a considerable extent in the modernisation programme, as a result of which the number of workshop staff has been cut by half. They have encouraged modernisation in railway workships. They have encouraged new methods of working and streamlining.
  The Minister said twice, "We can get by, given good management". Does he suggest that we have had bad management or that we have not had good management in the past or even during the present? Some of us who have been engaged in railway work have been perturbed for some time at the number of top personnel brought in from outside. Many ordinary railway workmen who rose to the top, particularly under private enterprise, did a wonderful job. Perhaps the Minister will comment on this aspect. Many of us in the railways would be much happier if many of the people engaged in the industry were given better promotion opportunities.
  Most of the £30 million involved in the Bill will go to private industry. This annoys many of the trade unions. At the same time, the Minister proposes to close a number of railway workshops. I hope that he will give the trade unions involved an assurance that every effort will be made to ensure that there are no redundancies among railway workshop staff.
  7.57 p.m.
  Mr. John H. Osborn: I accept the Bill, but with reservations, although after the speeches of the hon. Member for Leicester, North-East (Mr. Bradley) and the right hon. Member for Orkney and Shetland (Mr. Grimond), I came to the conclusion that I should be better advised to welcome it. Putting myself in the shoes of my hon. Friend the Under-Secretary of State and the Minister for Transport Industries, I regard the Bill as a grim necessity because the Government must take
  1066
  some action about British Rail—bearing in mind the need to constrain inflation—which is a fine industry providing a line service. My hon. Friend outlined the alternatives before him. When one studies them, one can only come to the conclusion that this alternative is by far the best. I therefore support the Bill.
  I welcome the news that there is to be additional investment providing additional employment including employment for railway workshops. I was surprised that the hon. Member for Leicester, North-East should be so critical. I hope that he will be here later tonight when we deal with the remaining stages of the Iron and Steel Bill. Also, it would perhaps be wise if hon. Members opposite attended the debate on the coal industry tomorrow. The criticism of the Members opposite about the handling of the steel industry is far from compatible with the criticism from them of this Bill. To subsidise or give grants to nationalised industries is less than palatable to Conservatives, and I am sure that my hon. Friend the Under-Secretary of State is aware of that.
  In the Committee which considered the Iron and Steel Bill, my hon. Friend the Minister for Industry had to listen to a number of attacks about the so-called lack of understanding and sympathy of Conservative Governments for nationalised industries in general and the steel industry in particular. The Steel Corporation is reputed to be constrained and restricted by the present Government. Surely this Bill runs counter to this, and if hon. Members opposite who were on the Standing Committee of the Iron and Steel Bill were here now they would realise that my right hon. and hon. Friends have taken a very bold step indeed.
  Let us consider this from another point of view. Would hon. Members opposite, let alone former Ministers in Government, or even a Conservative Government, contemplate similar subsidies for the private sector of British industry? Today the private sector of British industry is having to stand up to the C.B.I. undertaking, and meet pressures from its own resources—they neither ask for nor expect a subsidy. The private sector of industry, aided and abetted by the nationalised industries, through the C.B.I. gave this price

  1067
  guarantee. I would remind the hon. Member for Leicester, North-East that the C.B.I. has nationalised industries among its members and the nationalised industries undertook to support the initiative given by Mr. Partridge of the C.B.I. So to a certain extent the nationalised industries must share responsibility for the lead which has been given by this organisation.
  When I first knew of this initiative by the C.B.I. I was sceptical, slightly critical, and certainly mildly cynical about its chances of success. With hindsight I consider that this initiative, underwritten by the Chancellor of the Exchequer in his statement, has brought about much greater stability in prices. Therefore, with hindsight, I now support the step which was taken—an initiative which has given respite from uncontrolled inflation.
  This lead will be successful only if it results in reduced wage demands throughout industry. What I fear is that the Jack Joneses and the Scanlons and, in the coal industry, the Dalys and Gormleys, and perhaps some in the railway industry will not follow this constraint. Hon. Members opposite, particularly those who have been taking part in the picketing by the coal miners, may have gained the sympathy of the coal miners, but they must bear in mind that they are also no more and no less than an instrument of inflation. This supports the point made by my hon. Friend the Member for Harwich (Mr. Ridsdale).
  Therefore, in putting this Bill before the House with £34 million to the Railways Board and the National Bus Company and £5 million to the Railways Board or their subsidiaries, my right hon. Friend has in my view taken a bold step.
  What those who are critical or cynical about the Measure ask is, will this be an invitation to the N.U.R. and perhaps hon. Members opposite to justify claims by the railwaymen? What assurance have we had from Sir Sidney Greene? What is the position of the chairman of British Rail, Mr. Richard Marsh, and the negotiators who have to settle the future wage agreements on the railways. What my right hon. Friend must bear
  1068
  in mind is that by making this grant he will inevitably place the management of British Rail under new pressures, and this is one of the difficulties which will have to be faced in making this generous and bold step forward. Will he indicate the wage claim that will have to be considered?
  Mr. Ron Lewis: I understand that the hon. Member has wondered what Sir Sidney Greene's criterion for a settlement would be. What would the hon. Member's critierion for a settlement be?
  Mr. Osborn: I am not going to deal with a settlement. I was asking a question at this stage. It requires even greater responsibility on the part of all concerned not to exploit the passenger, the consuming public, as a result of this very generously bold initiative by the Government. This is the point which I wish to raise.
  Mr. Ron Lewis: Railway people have got to live.
  Mr. Osborn: So have coal miners got to live and so have power workers got to live. Perhaps the hon. Member will allow me to finish my speech and then some other hon. Members will be able to make their contributions.
  I have said that my right hon. Friend and the Government, as far as British Rail is concerned, have taken a bold measure which I certainly support and would wish to back in this debate tonight. It is absolutely right to make this an outright grant, not a loan which can be a handicap and disincentive to management in the future. I share the views put forward by my hon Friend on this issue. The comment by the hon. Member for Leicester, North-East, that this grant should be permanent caused me to be critical, particularly when it is implied that it might be raised year by year. Would such an offer be made to private industry? What sort of cloud cuckoo land do we live in when it is suggested that grants such as this be offered to State or nationalised industries? So much for the financial obligations of nationalised industries as reviewed by a Labour Government. There is even the suggestion that there is to be a further writing down in capital. The hon. Member may have forgotten that in 1968 there was a drastic writing down of capital.

  1069
  I want to raise three points in particular. Quite obviously—it is well known —British Rail is contemplating fare increases of between 10 per cent. and 15 per cent. Obviously some fare increases will have to be considered. What information have we about that?
  My second point relates to that which my hon. Friend the Member for Harwich raised. Anyone talking to railwaymen will know that they say they are underpaid; and the coal miners say they are underpaid; and the power workers say they are underpaid. I very much hope that the hon. Member for Carlisle will intervene in the debate on the coal industry tomorrow and decide whether a railwayman is worth more than a coal miner or not. One might gain the impression that it is the coal miner who is worth more, but I hope that hon. Members will not interrupt me now but discuss that tomorrow. It was failure to contain wage claims two years ago that caused recent inflation.
  My third point is about the management of British Rail. My hon. Friend referred to the challenge which faces the management of the British Rail. This I accept but hon. Members have had brought to their attention the fact that London Transport is running into a deficit of possibly up to £5 million a year through fare evasion. From time to time we have had brought to our attention the fact that some fares are not collected on British Rail. We have no idea what the amount of this fare evasion amounts to. One figure given to me is that it may be as high as £3 million on the commuter services in and out of our major cities, particularly London. Obviously, passengers, particularly those on the commuter services at the beginning and at the end of the day, want to be able to board or leave their trains, with speed and ease, but there must be rigid inspection. Without good morale and good standards of management on British Rail, both at the main line stations and the branch stations, it will be difficult to stop this fare evasion. What new measures for the issue, checking and collection of tickets are contemplated in order to meet this deficit?
  I had not intended to intervene for long. I say again that this is a bold step. Morale on British Railways is good. Visitors are impressed by our passenger services. They are impressed by the im-
  1070
  provements in British Rail. I very much hope that this generous and bold step will be accepted as a challenge by British Rail and that it will be accepted responsibly by the N.U.R. and other unions. In this way we can see British Rail pulling out of its present difficulties, and being able to look forward to better times, and so I beg to support the Bill.
  8.9 p.m.
  Mr. Emlyn Hooson: In this sparsely filled House we are considering a Bill which is of great importance. It is a landmark in the economic policy of the Government, but it has been almost surreptitiously introduced. It has been described as a short Bill, which it certainly is, and as a small Bill, which it certainly is not, in that it deals with £39 million of the taxpayers' money. The Bill is said to deal with a temporary situation. Anyone who believes that is living in cloud cuckoo land.
  We are being asked to hand over £39 million for two specific purposes. The first is contained in Clause 1. We are being asked to hand over £34 million not to enable the nationalised industries to give more wages, not to enable uneconomic railway services to be run, but to enable British Railways to keep down fares to help the Government's nonexistent prices and incomes policy. This is an intervention by statutory means to try to put forward an incomes policy the existence of which the Government have denied.
  We are asked to provide £34 million because the British Transport Board and the National Bus Company have agreed to abide by the voluntary price restraint of the C.B.I. which comes to an end in August, 1972. Yet, according to the Explanatory Memorandum, we are asked to provide this subsidy to deal with what otherwise would be a loss in 1972. The purpose surely is to enable the Government to backtrack on what they said during the election. They are bringing in a prices and incomes policy by a side wind. As my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) said, how can we possibly have voluntary wage restraint when we read in the newspapers almost every day of enormous increases in directors' emoluments and the various stratagems employed by companies who are making large profits to distribute shares?
  Mr. Ridsdale: Does not the hon. Gentleman believe in a voluntary prices and incomes policy?
  Mr. Hooson: No. If we are to have a prices and incomes policy, it must be worked out properly and not introduced in this way, which is fair in some aspects but not in others. I do not believe, for example, in a prices and incomes policy based on percentage increases, because proper adjustments cannot be made between the poorly paid and the well paid at the point where the prices and incomes policy begins.
  The second purpose of the Bill is to enable the Government to alleviate possible further unemployment by encouraging British Railways to invest money to prevent unemployment from getting worse. The Government are acknowledging that they subscribe to the idea of a mixed economy, which they deny in theory but subscribe to in practice by bringing forward the Bill. If the Government think it right to provide a subsidy—and I believe it is—the transport industry should be regarded as a public service, as I have always maintained.
  The Under-Secretary of State referred to problems in certain areas, the lack of use of the railways and rural buses, which he said was because people had private motor cars. That is right, but the people who depend on railways and buses are the elderly, the poorer people and the younger people who are not able to own and drive their own motor cars, Yet which method are the Government choosing to help? They are giving a straightforward grant of £34 million. The burden of what the Under-Secretary said was this: if British Railways or the National Bus Company, with financial discipline, can do better and make a profit, good luck to them; the Government will neither reduce the sum nor increase it. But what is happening in the meantime? In my area the Crosville Bus Company, which is a subsidiary of the National Bus Company, is withdrawing services. Voluntary restraint comes to an end in August, 1972, yet the subsidy covers the whole of 1972. Are proposals in the pipeline for a considerable increase in September, 1972, when the C.B.I.'s voluntary restraint comes to an end?
  1072
  I entirely agree that it is the Government's duty to support the transport services and to keep fares at a modest level. It is of general benefit to the community, and passengers who are least able to pay for their own transport are directly subsidised. The Government have a duty to see that there is much more capital investment to deal with the unemployment, which is much more serious than they expected. Under the Labour Government very often five men were doing four men's work. Naturally, if wages go up and the margins get tighter, four men will be doing four men's work, but the Government's duty is to encourage capital investment to bolster the economy to provide work for that fifth man.
  It is no use saying, as do hon. Gentlemen opposite, that driving up wages causes unemployment. That does not follow. We must have economic efficiency in the community, and we are much more likely to get economic efficiency with higher wages and with people getting eight hours' work done in eight hours. It is equally important from the point of view of economic expansion to encourage capital expenditure to take up the slack. If the Minister thinks the House will accept that this is a temporary situation and that inflation will be cured, he is living in cloud cuckoo land. This situation will have to be dealt with year by year.
  I represent a farming community. For a number of years farmers have had a hard deal. They have done much better this year and, if we go into the Common Market, they will do better still. It is largely artificial, but they will do better. If the Government think that this will not force up the cost of living, they are wrong. Farmers cannot have better prices unless the price of food is driven up. As food represents a major portion of most people's budget, especially lower budgets, there is bound to be a tremendous pressure for wage increases. The inflation which is driving up the cost of nationalised industries this year will recur next year and the year after. We are on a galloping inflationary spiral which many advanced civilisation have had to face before today. It is nothing new in history. It has happened before, and it will continue.

  1073
  The Government are not facing reality. I certainly support the Bill, but I do not support this way of subsidising British Railways. One needs an overall picture of the whole situation. Is transport a public service? If it is, the Government should declare it to be so. A subsidy this year as a temporary measure is no good. Either the transport companies should be allowed to put up fares and run economically or there should be a permanent grant or subsidy to transport as a public service, which I think is the right course for the Government to take.
  8.20 p.m.
  Colonel Sir Harwood Harrison: I think I am correct in saying, Mr. Deputy Speaker, that this is the first time that you when occupying the Chair have been kind enough to call me to speak. As an old friend may I, somewhat belatedly, offer you my congratulations on your present position.
  The hon. and learned Member for Montgomery (Mr. Hooson) said that the Government had brought in the Bill surreptitiously. I do not see how that can be so, since it is the first Government business of the day. How much further forward could it possibly be?
  Mr. Hooson: I was not referring to the Bill but to the policy.
  Sir H. Harrison: With great respect to the hon. and learned Gentleman, I thought that he was referring to the Bill.
  Mr. Hooson: If I said "the Bill", I meant that it was a major departure from overall Government economic policy.
  Sir H. Harrison: I thought the hon. and learned Gentleman said that in the following sentence. I may be wrong, but that was the impression I had.
  This is said to be a short Bill. Nevertheless, it provides for the spending of £34 million of public money. As a member of the Expenditure Committee and Chairman of one of the Sub-Committees, I spend a great deal of time looking at Government expenditure. The House should not let such a Bill go through easily or quickly just because it is said to be a short Bill. It will lead to the spending of a considerable amount of public money and therefore should be examined.
  1074
  I would ask my hon. Friend the Under-Secretary of State to say how the sum of £27 million required by the railways was computed. Was this operation undertaken by chartered accountants in his Department? Were cost and works accountants, who really understand these figures, brought in? If they were able to calculate that this figure represented the exact cost to the railways, then they were extremely clever.
  I have been engaged for some years in looking at the situation on the East Suffolk railway line. My hon. Friend the Member for Lowestoft (Mr. Prior), who is not taking part in this debate because he is a member of the Cabinet, in those days was always concerned that the right figures could not be obtained from the railway companies. They tried to say that the costs of a line, such as that in East Suffolk, which I take as an example, involved an element of loss. They never seemed to take into account the situation on a feeder line in creating traffic on the main line. The whole calculation is thrown out if the feeder line is closed. Then the passenger concerned uses his car to go the rest of the way. This is why the traffic on the feeder lines is so important. Therefore, I should like some assurance from my hon. Friend that this point is carefully considered by the actuaries in putting forward accounts on behalf of the railway authorities.
  It has been said that with good management there will not be losses in the future. It is with that thought in mind that I support the Bill. I would not agree with hon. Members opposite in believing that this should be a permanent arrangement. There should not be the impression that this money should be easily obtained, and there should be a spur to good management. I hope that there is good management and I am not querying this matter tonight. I wish to know whether good use is being made of capital assets in the railways, particularly on feeder lines.
  I believe that in the nationalised industries—and this also applies to a number of private companies—the best use is not made of spare land which today is so valuable. I remember that when we were looking into the cost of keeping open the East Suffolk line, we had the advice of a great railwayman who lives in my constituency, Mr. Gerard Fiennes,

  1075
  who was at that time the general manager of the eastern section of British Rail. He said that if the line were kept open we could use one line and capitalise on the lines that were over. However, these lines have never been taken up and I should think that this applies to many other railway lines. This means that capital in that form is not being fully utilised. This is why we must be careful to see that capital is being properly employed.
  What strikes me as rather extraordinary is that the amount of money required to finance a bus service is only a quarter of that required by the railways—some £7 million as against £27 million. From my own experience in the eastern counties, in the area where I live, I have observed that the buses are far more empty than the railways in the area. The feeder line is often crowded but the buses are under-used. One realises that the buses are used by the elderly and other people who are visiting friends and relatives in hospital. They are there for the people who require an occasional service. I believe that one of the reasons that the bus services require only £7 million is that those companies keep more exact accounts than do the railways. It is therefore easier to see what the costs are.
  Mr. Stainton: Could my hon. Friend quote the figure of cost per mile in terms of fares as between the National Bus Company and British Rail? I would aver that the National Bus Company's cost is in excess of 5p per mile, whereas British Rail in East Anglia is trying to make do on a passenger cost per mile of 1·2p.
  Sir H. Harrison: I am sure my hon. Friend will be able to develop that point if he is able to take part in this debate, because he is obviously very learned on this subject. My point was that the bus companies keep much more accurate accounts in regard to costing.
  I hope that the Chairman of the Railways Board and the bus company authorities will see that there is good management and, above all, proper use of assets. It is important that assets which are not earning money should be liquefied.
  8.28 p.m.
  Mr. Tom McMillan: As a railway shop man on long
  1076
  leave, I think that I am entitled to intervene in this debate. However, it was the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) who brought me into it because, some six or seven times, he said that this was a bold step on the part of the Railways Board. It so happens that tonight I have received a letter from the Minister for Transport Industries telling me that there will be fewer railway jobs in Scotland in the year 1972. Already we see a situation where the Barassie workshops, at present employing a labour force of 500, are to be closed. Even worse, the future is very uncertain at the Swindon and Ashford workshops.
  My own railway workshops were under the hammer of redundancy for two years. I do not know whether hon. Members know how it feels to a man who has to work in that sort of atmosphere, where his wife, family and other dependants face an extremely uncertain future. When I was elected to this House, I was a redundant railwayman, and many thousands were made redundant with me. When hon. Members talk about British Railways taking a bold step, they forget the existence of ordinary human beings and that some 5,500 of them will be under the hammer in the railway workshops alone.
  The Assistant-General Secretary of the N.U.R., Sid Weighel, is coming to this House tomorrow night. Representatives of the Scottish General Council are coming the following night. The mood of the country has changed a great deal, and this Government have failed to judge it. Railwaymen will not stand by any longer and take what they have taken before. They have seen their numbers reduced from 330,000 to 180,000, and there comes a time when we must call quits. The railways play an important rôle in the country's economy, and that rôle will not diminish in the future.
  To appreciate the folly of declaring too many redundancies, one has only to look at the situation in Los Angeles where it has been found necessary to rebuild the railways. Nearer to home one has the example of the Glasgow network where, against the best advice of railwaymen, the track was taken up. Everyone regrets that today since the existence of that network would have relieved a great deal of traffic congestion.

  1077
  All that we see is the result of accountants' thinking. It is not railwaymen's thinking.
  The Railways Board's offer of £34 million is inadequate. Jobs must be safeguarded for men who are under the hammer. If the proposed redundancies are implemented, I am sure that the National Union of Railwaymen and A.S.L.E.F. will not tolerate the situation. They accepted it before, but they will not do so again.
  What do right hon. and hon. Gentlemen opposite imagine that railwaymen take into account when they ask for an increase? Upstairs in Committee, there is a Bill which will increase Scottish rents, and rates accordingly, by some £2·50 a week. If the railwaymen claim an extra £2, it means that they will soon ask not to have it since they will have to pay more than a wage increase of that kind in additional rent, rates and income tax. A man with two children earning £19 a week will say, "Do not give me the increase. I cannot afford it in the light of the new Housing Bill." Right hon. and hon. Members opposite have to consider the increased cost of living, their iniquitous Housing Bill and the additional income tax that a railwayman will have to pay on any wage increase and ask themselves what he will get at the end of the day. It is clear from some of the figures which have been produced that a man receiving £2 or £3 extra will lose money.
  Obviously, this Bill will receive a Second Reading. However, the mood of the country is such that the attitude of the railway unions will be the same as that of the miners. The time has come to say, "Enough".
  8.34 p.m.
  Mr. John E. B. Hill: The hon. Member for Glasgow, Central (Mr. Tom McMillan), has spoken from a great depth of experience and sincerity in regretting, as he must, the degree of redundancy likely to come in the sector of industry in which he has spent most of his working career. We sympathise with him very much on that score—
  Mr. Ron Lewis: We cannot live on sympathy.
  Mr. Hill: That is true. But I think that people live best by facing realities. If there is a decline in an industry, surely
  1078
  it is important to redeploy and retrain its manpower so that those made redundant are able to move to new industries—
  Mr. James Dempsey: Where?
  Mr. Hill: At a time of high unemployment, obviously it is difficult. But it will not be difficult when the economy picks up again and there is a need for labour. When that happens, industries will want labour which has been retrained. I welcome the Government's policy in that respect.
  Mr. McMillan: The only place where retrained men will be able to find jobs today is in Germany, where they are about two million men short.
  Mr. Hill: They may wish to go, as and when we enter the Common Market. But we have a great reservoir of industrial skill which may attract German capital to this country and mean the building of new factories. That is to be welcomed. It will depend on the willingness of those with industrial skills to accept new training for new industries.
  I welcome the Bill, but not the circumstances that have given rise to it. Without the Bill fares would have to rise under the statutory responsibility of the railways to break even. By avoiding this the Government are at least removing or reducing one of the factors which enter into demands for increased prices for manufactured goods, arising from higher freight costs, or increased wages resulting from higher fares.
  I want to reinforce the speech of my hon. and gallant Friend the Member for Eye (Sir H. Harrison). I am a constituent of his. I support what he said about some of the problems of the feeder services. I want my hon. Friend the Under-Secretary to take into account a capital investment point which certainly arises in East Suffolk and may arise elsewhere. The East Suffolk line have certain disabilities, notably that it has lost all its freight. The enormous tonnage going into and coming out of the farms in the region does not go by rail; most of it goes by way of heavy lorries, and much of the rest, consisting of material from the food-processing industries in Yarmouth, goes round by way of Norwich. The coastal route now does

  1079
  not have the remunerative freight traffic which it would have in the ordinary way.
  The area also has a higher ratio of manned level crossings per mile than anywhere else in the country. As a result, although passenger traffic has been reasonably buoyant, the current running losses require a substantial subsidy. It may be a question not so much of power as of authority, but I regret that it is not now possible to make the laboursaving capital investment which would help the present unremunerative branch line to break even over the years. A fairly substantial capital investment is required in order to mechanise most of the manned level crossings and to complete the work that the railways have done in reducing current costs. The railways have been greatly helped in this respect by the railway unions. I pay tribute to them. The East Suffolk line pioneered the pay-train concept, in which the guard takes the money and issues the tickets. Stations have had their staffs removed, except at manned level crossings, and this has enabled substantial economies to be made.
  Nevertheless, the Government pay out an annual subsidy to recoup the loss on running account. British Rail is not interested in undertaking capital investment to keep open a line which, on strict economics, it would close; nor does it know whether the Government of the day will renew the subsidy from year to year. No one is in a position to make a sound economic plan and to carry it out. There is a deadlock, which I do not like to see. Taking a 10-or20-year view, it should be possible to make this line a viable proposition. In addition to commuters in employment, the line is definitely needed for social purposes, and it will probably be needed for other purposes in the future.
  We have a civic college at each end of the line, and there are several schools in between. There is holiday traffic, and it will also help if we could get some of the enormous agricultural loads back on to the railway. This is difficult. I am a farmer, and I know how expensive it is to send produce by rail. It is much easier to send it all the way by lorry. But the lorries are enormously big; they are knocking the roads to pieces. It may
  1080
  be that in a year or two new technology will enable some agricultural produce to be put back on the line.
  For these reasons, I hope that the Under-Secretary will consider this point so that a plan can be made and, if necessary, financed.
  8.41 p.m.
  Mr. David Steel: The Bill provides for the Government to make grants to two public transport undertakings in consequence of the restraint that they will exercise on price and fare increases during 1972.
  The question which I ask basically in my short speech is: why, among the bodies receiving money, is there no mention of the Scottish Transport Group which has undertaken to abide by the C.B.I.'s request until August, 1972?
  I understand that one of the subsidiaries of the National Bus Company, the United Bus Company in the North of England, is already applying to increase its fares, presumably to take effect immediately after August, 1972. I do not know whether that is the correct date. At any rate, there is an application from a subsidiary of the National Bus Company, but no application for increased fares from the Scottish Transport Group.
  There seems to be something severely lacking in transport financing in Scotland. Again, this particular need appears to be missing from the Bill, because £7 million is to be voted tonight for the National Bus Company, but not a penny for the Scottish Transport Group.
  I want the Under-Secretary to do his best to answer some questions which I intend putting to him on this matter.
  A few years ago, when we lost the Waverley railway route in the Borders, the Government of the day said that, by that measure, they would save £750,000 a year which they would otherwise have to pay as annual subsidy on an unremunerative line. They took away the railway line, but made no financial provision for its replacement by bus services. Had they taken away £700,000 and given an annual subsidy of £50,000 to the Scottish Bus Company, it might have made sense. But no, they placed a statutory requirement on the Scottish Bus Company to provide extra services while at the same time maintaining the general

  1081
  statutory requirement to balance the books.
  It is impossible for the Scottish Bus Company to carry out two contradictory instructions from the Government without direct Government financial help. I have no doubt that the Under-Secretary will refer me to Section 34 of the Transport Act, 1968, which enables local authorities to make grants to bus services in rural areas of which the Government would pay 50 per cent. Looking back, this Section was wholly unrealistic, because often local authorities in areas requiring assistance are poor, small, local authorities.
  There are three town councils within my constituency where, if 1p were put on the rate, there would be a yield of less than £1,000. These are the very authorities which require assistance for transport in their areas. Therefore, Section 34 of the 1968 Act has been shown to be totally inadequate in dealing with the problem of how to keep essential services going in rural areas.
  The machinery is defective because of the number of local authorities involved. I wonder whether the Under-Secretary can tell me how many local authorities there are on the Edinburgh-Carlisle route which used to be traversed by the Waverley railway route and are now covered by the Scottish Bus Group? If he does not care to hazard a figure, I will tell him. There are eleven. This is a real problem. How can we expect eleven local authorities collectively and unanimously to agree on the precise need for a particular service or the precise rate of grant they are prepared to provide? It is impossible to operate this cumbersome machinery because the initiative has to come from the local authorities.
  The Scottish Bus Group can do nothing except say, "The Government tell us to balance our books and to maintain these services which incur a loss". The group cannot do both and it is entitled to expect financial help. If by no other means, that help should appear in the Bill. As the group has undertaken to abide by the restraint, it must do so, presumably, at the expense of balancing its books next year or, at any rate, by not increasing fares in areas where it incurs losses. It is high time the Gov-
  1082
  ernment gave the group direct financial assistance.
  One reason why the group gets nothing is that the machinery for controlling Scottish transport is inadequate. The railways in Scotland come under the Ministry of Transport, now part of the Department of the Environment. The bus services in Scotland come under the Secretary of State for Scotland, whose name appears on the back of the Bill.
  Apparently no benefit will accrue to the Scottish Bus Group. There is no Scottish Minister here to take part in our discussions or answer any of our questions. I should like the Government to consider whether the whole of the Scottish bus network should not come under the Department of the Environment, together with the railways, so that there could be comprehensive planning and financing of buses—or, preferably the other way round, with the railways in Scotland coming under the Secretary of State. Somebody should have joint responsibility.
  On the Borders the Minister of Transport of the day overruled the Secretary of State, saying, "I will close this line. I am responsible for railways", leaving the Secretary of State for Scotland with the responsibility for road transport in the area but with no funds to support it. We do not want a similar situation to arise again.
  We welcome the limited amount of help to the National Bus Company and to the railways in England and in Scotland, but I hope that the Under-Secretary would deal in his reply with the point that I have raised.
  8.47 p.m.
  Mr. Stanley Cohen: When I entered the Chamber today I had no intention of participating in the debate. However, having listened to some of the ill-informed and unjustified criticisms which have been levelled at the railway unions, and consequently at the management, I feel constrained to say something in their defence.
  The hon. Member for Harwich (Mr. Ridsdale) has apparently been inundated with pleas from low-paid railwaymen who want him to ensure that they do not get a wage increase. No doubt they prefer to carry on in low-paid jobs. The hon. Gentleman should point out to his

  1083
  constituents that there is no direct relationship between the level of their income and the fact that there has been a reduction in the number of staff employed on the railways.
  The reduction in the numbers employed by British Rail did not just happen. It was planned over many years by unions and management. This is the price of progress. The staff and the railway unions worked with management in the interests of securing modernisation and productivity.
  The figures of salary increases quoted by the hon. Gentleman were wrong. I know from having been involved in wage negotiations as a union representative that on every occasion that an increase has been secured, there has also been an agreement between unions and management for the achievement of productivity to compensate for the increase in wages.
  Mr. Ridsdale: Since the hon. Gentleman says that my figures are wrong, would he say exactly what figures he means?
  Mr. Cohen: The hon. Gentleman talked about a possible 11 per cent. That is hypothetical. He should not talk of a possible 11 per cent. added to percentage increases already given and say that this is a total percentage. Anyone who has negotiated knows that one starts off with a figure in mind but does not necessarily expect to come out with that figure.
  Mr. John D. Grant: Does my hon. Friend also recall that the hon. Member for Harwich (Mr. Ridsdale) talked of 5 per cent. as the limit which the Government want for wage increases? That is news to the House and I am sure that it will be news to the Government.
  Mr. Cohen: Yes, if any figure is involved, it is more like 7 per cent. Railwaymen will consider this Bill with great interest, certainly not with glee and pleasure.
  The hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) was not so outspoken in his attack on the unions. He was more subtle, but equally dangerous. I regret that he is no longer here. In referring to the total of £39 million in the Bill, he hoped that the unions and management would not decide to exploit the
  1084
  passenger public. In fact, for years, railwaymen have been exploited by the country and by the passenger public. As railwaymen, we have subsidised the industry ourselves in the interests of the public. This £39 million will not change the situation. Whether it is in grant or not, it will not affect the right of railway men to a reasonable standard of living.
  Five per cent. increases for railwaymen would mean a lower standard of living than they had 12 months ago, because their purchasing power has dropped so steeply. Far from exploiting the public, the railways, both management and unions, have carried a burden of responsibility in ensuring that a service has been provided—for which the workers often paid out of their low incomes.
  When the Bill has been agreed, I hope it will be recognised that, in view of the railwaymen's contribution, we would not be giving them anything by giving this increase. We are merely trying to do what we should have done years ago and must do constantly in future—trying to ensure that the railways can provide the sort of efficient service that the country has a right to demand and that it should be paid for not by the workers in the industry but by the people who use and enjoy the industry.
  8.53 p.m.
  Mr. Leslie Spriggs: I support what my hon. Friends have said about the proposed closure of railway workshops, the withdrawal of passenger services and the closure of feeder services, the branch lines to which the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) referred.
  Many of us appreciate what congestion on the roads means to the travelling public. Many academics have estimated the cost at £600 million to £1,000 million. I would put it half way between the two. That figure is growing fast, yet the Government agree to the closure of branch lines and the withdrawal of passenger services.
  We have to acknowledge that in its economic policy the Railways Board must act in accordance with its master's voice—that of the Government of the day. For a number of years the Government of the day, through the appropriate Minister, have given the orders. I do

  1085
  not speak only of the present Government: to do so would be unfair, because more than one Government have been guilty of getting their economics wrong.
  Unfortunately, the Treasury, when facing the needs of such a public enterprise as the railways, considers the matter from the profitability point of view. It asks: is it viable? No one ever questions the real value of the social service given to the community. When we close a line we are taking from thousands of people a method of transport. Is it not ridiculous that we should be building new motorways to run in parallel with one of the finest railway systems in the world while at the same time advocating closing down or reducing that railway system in what is said to be the interests of economy? I wonder what the economists of the future will think of the transport economists of today?
  Wage negotiations have been referred to. Those of us who have come up through the transport industry know only too well the price of working on the railways. It was right that one of my hon. Friends should refer not only to the effect of closures and economies on railway and workshop personnel but to the terrifying effect on their wives and families. I have known railwaymen who, because of redundancy, have moved about the country from place to place not once or twice but several times. That being so, can anyone on either side of the House associated with either road or rail transport expect transport workers to be enthusiastic? How can we expect them to understand the Minister who lays down the law yet says that the decision whether or not a service shall remain in operation is a matter of day-to-day decision by the board? That is not the whole story. Right from the days of the Railway Executive, Governments have interfered with the commercial running of the railways. By having to control the necessary increases in fares from time to time, the Railways Board, and the Railway Executive of many years ago, were robbed of many millions of pounds by Government interference.
  The Under-Secretary will understand that. The Railways Board was instructed to operate commercially by the Transport Act, 1962. By the same Act, its hands were tied behind its back. It was made almost impossible for the Railway Execu-
  1086
  tive and, in later years, the Railways Board, to operate on a fair commercial basis.
  I ask the Under-Secretary to convey to his right hon. Friend the sentiments expressed in the various speeches tonight about the effects upon the travelling public, the congestion on our roads and the effects upon the environment, which are very great but have not been touched upon whilst' I have been in the Chamber this evening. That is very important. Far more assistance is required if we are seriously to deal with unemployment. I appeal to the Government to make a start with the railway workshops and to do far more than what is intended in the Bill.
  9.2 p.m.
  Mr. Frederick Mulley: As my hon. Friend the Member for Leicester, North-East (Mr. Bradley) said, echoed by the hon. and learned Member for Montgomery (Mr. Hooson), despite the Bill's limited scope and the smallness of the House tonight, it is an important Bill. It is important because it poses the problems of public transport, although, candidly, it does little to solve them. It is generally agreed by both sides of the House that the maintenance of an efficient system of public transport is a serious problem that somehow or other we have to try to solve. The Bill is not controversial in the sense that apart, perhaps, from some hon. Members opposite, we are all agreed that we should pay the sums set out to the British Railways Board and to the National Bus Company.
  I regret the form of the Bill in the sense that it is drawn very narrowly and almost precludes any kind of Amendment or discussion in Committee. It would be very difficult to put down an Amendment. No doubt that is deliberately the case. We can debate that at a future stage. I do not complain about it. It is a money Bill. Every word of it, except the Title and the Preamble, is in italics. We understand that we are somewhat circumscribed from that point of view. But it is very limited.
  Before Liberal right hon. and hon. Members left the Chamber, I thought that the Liberal Party was suggesting that the Bill is designed to deal with possible wage applications or something else of that sort. As I thought that the Under-Secretary made clear, the sums set out in the first Section of the Bill are wholly and

  1087
  exclusively to meet the calculations over which the Treasury has no doubt poured much midnight oil as to the sums reasonably to be given to these two bodies to compensate them for limiting any fares increases during the period of the C.B.I. voluntary initiative to not more than 5 per cent. It is only for that purpose and it does not go any way to meet any of the other problems.
  One problem has been discussed with force and eloquence by a number of my hon. Friends—the hon. Members for Carlisle (Mr. Ron Lewis), for Leeds, South-East (Mr. Cohen), for St. Helens (Mr. Spriggs), and for Glasgow, Central (Mr. Tom McMillan), who all spoke with great experience of the railway industry, as did my hon. Friend the Member for Leicester, North-East (Mr. Bradley). I must point out to the hon. Member for Sheffield, Hallam (Mr. J. S. Osborn) that private industry is quite different in this respect from public industry and that wage increases must not be limited by the financial viability of what may be an essential public service.
  We are already in great trouble because this principle has been wrongly applied to coal. The incomes and standards of living of those who provide public services must not be allowed to continue to fall merely because on the balance sheet the profit and loss account show and that the industry is not paying its way, although the country would broadly agree that what it would regard as justifiable wage increases should be paid. I hope that such a situation will not develop on the railways.
  I was glad to see the profits which the railways made in 1969 and 1970 after a long period of deficit financing. It is understood that the figures probably did not include realistic depreciation allowances and certainly were nowhere near providing the kind of self-financing necessary for the railways to achieve the provision of a thoroughly efficient public service. Both sides of the House accept that we had to put an end to deficit financing in the 1968 legislation and we all know what a tremendous increase in morale there has been on the railways since 1968 for that reason.
  At the same time, with the wisdom of hindsight we can see that this is not necessarily a permanent situation, perma-
  1088
  nent in the sense that exactly the right amount of historic capital debt was written off. There is no great political argument in this, but a great change for the worst has overtaken public transport since 1968.
  Some hon. Members have dealt with the difficulties which county councils have experienced in meeting the modest requirements imposed upon them by Section 34 of the Transport Act when they want to subsidise rural bus services. Although 50 per cent. of the subsidy may be obtained by Government grant and half of the local authority contribution is usually obtained by a general rate subsidy, so that the actual cost to the authority is never more than a quarter, inflationary pressures on local authorities in other directions mean that there is hardly any council of any political complexion prepared to undertake new sources of rate expenditure, even though there might be enormous social demand for them.
  This is also true in terms of railway finances. There have been great changes. I was impressed by the speech of the hon. Member for Ipswich (Mr. Money), who made as eloquent a plea as I have ever heard for quantity licensing, which was provided in the 1968 Act. Presumably, he did not know that one of the first actions of his right hon. Friend the Minister was to refuse to have anything to do with quantity licensing.
  I am only too ready to concede that any device or administrative arrangement to move freight from the road to railways will pose difficulties and will not be liked by the road hauliers. It is important, in terms of railway finance and socially, to get more freight on to the railways. If a bigger volume of freight could be organised I expect that the charges could be reduced. It is no good making eloquent speeches about the environment—and I regretted the transfer of the Transport Ministry into the octopus of the Department of the Environment—if we do not take account of the social factors. It seems that the environmental considerations involved in maintaining an adequate rail and public transport service are less well catered for at the new Ministry. All this talk about this being a once-for-all Measure to meet a special problem ignores the fact that there is a social benefit in further use of public transport.

  1089
  What we would have liked is some permanent arrangement, not necessarily in the form of a Bill, but an undertaking by the Under-Secretary that in future the Government would try to find a way of avoiding increases in fares to increase revenue on transport services. This is a "chicken and egg" situation. Any hon. Member who uses the bus service knows that as the fares go up, fewer people use the buses. The marginal passengers either walk a little further or use their own cars. Often people use their own cars because they are more reliable. As a result the cost per passenger rises and fares have to be increased. We cannot accept a situation in which the wages of operators are conditioned only by the amount of revenue received. The railway and bus services are labour-intensive and scope for productivity is limited. There have been tremendous strides in productivity, for example through the one-man bus system. There has been no lack of co-operation.
  Grants for unremunerative services have formed an important part of railway finances. The decision sharply to cut the grants for the London region will have an adverse effect on the Railway Board's operations, as it will on the commuter's pocket. I guess that next year the amount of these grants will be less than last year, just as the amount last year was less than the year before. I shall be happy if I am wrong about that. The expectation of the railways of more freight through quantity licensing which would have resulted as the freightliner operations developed, the amendments in respect of carriers' licences and the loss on grants for unremunerative railway services are all reasons why it would be wholly wrong to say that the Transport Act, 1968—a great piece of Labour legislation—should be totally inviolate and, like the laws of the Medes and Persians, could not be amended. We should be willing to look at these matters and to have the principle of special assistance accepted for future years.
  Perhaps my predecessors in 1967 and 1968 were wildly wrong in that they did not foresee the coming of a Conservative Government and the enormous trade recession which has completely ruined railway finances. The concept in 1968 —and it was not denied by anyone involved—was that we should work on
  1090
  the basis of a fully employed economy. Any drop from the norm has disastrous effects on railway finances.
  I wish to say a few words about Clause 2. I had much sympathy with the intervention of the hon. Member for Sudbury and Woodbridge (Mr. Stainton), who described the£5 million as a derisory sum and much too small to meet the situation. Several of my hon. Friends have explained in detail the problems facing the railway workshops. The sum should be more than £5 million. The sum of £50 million would not be out of place for bringing forward essential railway investment. The Under-Secretary of State may be familiar with the plans of the Railways Board for Southern Region, and particularly for improving the commuter trains to London, which is greatly overdue. The railways cannot possibly finance these developments by themselves. We have been talking about freight. I hope that in more enlightened days we shall have a scheme to require industry to use the railways to a greater extent. The railways could profitably use a very large investment in wagons.
  Clause 2(2) refers to
  "…any project…pursuant to an agreement entered into with the Secretary of State".
  As this is a public Bill, a copy of the agreement should be published. Is this a running agreement under which the amount can be increased at any time between now and April, 1974?
  Mr. Eldon Griffiths: It refers to "any project".
  Mr. Mulley: Must every project be the subject of a separate agreement? There is not, then, a list which has been arrived at between the Railways Board and the Secretary of State? If this is an open-ended agreement, I should have thought that the Railways Board would have no difficulty in finding projects to the value of £50 million up to 1st April, 1974. At a time when we have over 1 million unemployed, I should have thought this would meet a situation we have, unusual in politics, of being able to hit two targets at one stroke. As we know, the Conservative Party is very keen in its political strategy to do things "at a stroke". I suggest to that party that here is something which it can do "at a stroke" to help reduce unemployment and to help public transport.

  1091
  As I have said, we are not opposed to the sum involved. Indeed, for reasons which we would like to argue, we feel that the Government should now commit themselves to making provision each year for special circumstances should they arise. We should like to argue that in Committee, though we shall, perhaps, not be able to do so.
  There is the very big question, one which should concern all Members of Parliament: what are we going to do to see that public transport finance is not totally eroded by the need to put up fares, or to reduce services, to meet the sacred argument that revenue has to meet outgoings? The question is whether the Secretary of State for the Environment, if he is concerned, as I am sure he is, with preserving environmental factors and making the environment and amenities better, will agree there is a case for a social cost-benefit analysis to be done for public transport, and whether both the National Bus Company and British Railways should have some subsidy additional to their revenues before they have to put up fares.
  Every time fares go up, a number of people take to their motor cars; they even buy motor cars to take to them; and all those motor cars add to the congestion on the road. I noticed last year's road estimates. They remind me of the year in which I was the Minister and overspent and had to come to the House when, I am glad to say, I got a supplementary estimate for overspending. Last year the Vote for new roads was under-spent by £6 million. That is the sort of sum which might be added as a starter to the sums already specified in the Bill.
  I recommend my hon. Friends to give the Bill an unopposed Second Reading. We shall certainly not wish to hold it up in Committee, but I ask the Government to give us an opportunity for a thoroughgoing discussion on public transport, for it concerns practically every family in the country.
  9.22 p.m.
  Mr. Eldon Griffiths: With permission, Mr. Deputy Speaker, I will reply to the debate.
  The House has ranged very widely indeed, possibly beyond the strict limits of the Bill. It seems to me that there
  1092
  have been four broad features of the debate. There have been the contributions, mainly from the other side of the House, of the railwaymen, who have spoken with knowledge and experience of the industry. There have been the contributions of the right hon. Gentleman the Member for Sheffield, Park (Mr. Mulley) and his hon. Friends. There have been the rather special contributions from the East Anglians, contributions which I have been very glad to hear, and led by my hon. and gallant Friend the Member for Eye (Sir H. Harrison) and my hon. Friend the Member for Harwich (Mr. Ridsdale). And then there has been the most extraordinary contribution of a whole minibus load of Liberals. I have never seen so many here on so narrow a subject, and they all made their contributions.
  However, I must deal with the Bill, and not with the other threads which have been followed in the debate, and which, I say with respect, are not strictly within the Bill. Essentially the Bill is not about unremunerative services; it is not about British Railways workshops; it is not about lorries and congestion on the roads. It is about providing to British Rail and the National Bus Company a total of £34 million to assist them in meeting their statutory obligation to break even one year with another. Because they acceded to the C.B.I. initiative in the national interest, they find it impossible to maintain that statutory obligation, and the Government feel it right to put them in a position where they can do so.
  Mr. Mulley: The hon. Gentleman is right in putting forward his view of the Bill, but in a Second Reading debate surely any factors that touch on the revenues of British Railways and the National Bus Company are valid, and the points raised by hon. Members on both sides of the House are worthy of comment?
  Mr. Griffiths: I shall touch on the points raised, but I am essentially trying to deal with the Bill as I have been asked to present it.
  There are four considerations on the Clause providing £27 million for British Rail and £7 million for the National Bus Company. First, does the House approve of the C.B.I. initiative? I think that a majority of hon. Members do. Secondly,

  1093
  does the House now think that the nationalised industries should play their part within that initiative? Once again, it is common ground that they should, and certainly the chairmen thought they should. Thirdly, is it common ground that, because of the difficult trading position of British Railways and the National Bus Company, acceding to that initiative would lead them into deficit? Again, I think it is agreed that that is so.
  It follows from those three facts that we want the C.B.I. initiative, we want the nationalised industries to subscribe to it and we recognise that this will leave them in deficit. It follows as night the day that some provision has to be made to British Railways and the National Bus Company to allow them to carry out their statutory duty to break even, taking one year with another.
  Mr. Dennis Skinner rose—
  Mr. Griffiths: The hon. Gentleman has not been in the House and I think I should get on, as the debate has already gone on for a long time and the House has other business.
  Clause 2 deals strictly with the bringing forward of new types of capital investment which British Railways can make to generate employment. I am sure it is common ground that in the present circumstances of high unemployment, which we all regret, it is right that British Railways should be encouraged to do this, but even the right hon. Member for Sheffield, Park did not have this right. The £5 million referred to in Clause 2 is not money that the Government are giving to British Railways for particular capital projects. It is simply to meet the additional cost of accelerating a programme of capital investment which would have been undertaken anyway. British Railways will have to pay additional interest on capital expenditure which is being brought forward to this year, next year and the following year. The £5 million simply takes account of that additional cost to British Railways of accelerating the investment and creating the new jobs.
  Mr. George Grant: I have listened carefully to what the hon. Gentleman is saying. Will he pass on the criteria which he is applying to transport to his right hon. and hon. Friends who
  1094
  are dealing with the National Union of Mineworkers and the National Coal Board?
  Mr. Griffiths: My hon. Friend will deal with this matter if it is relevant to his speech, but I must get on with mine. My hon. Friends, speaking with knowledge and eloquence on behalf of various transport considerations in East Anglia, raised several questions. My hon. Friend the Member for Harwich rightly put some of the blame for inflation and the difficulties of the nationalised industries where it belongs—on excessive wage increases in the general economy, although I would not say particularly in these two nationalised industries.
  My hon. Friend the Member for Ipswich (Mr. Money) raised a number of questions. The main answer I give him when he makes the point about transfer from road to rail is that my right hon. Friend, only a few weeks ago, announced that of 79 rail services outside London for which grant renewals have been requested no fewer than 71 have been agreed. In the East Anglia area my hon. Friend will be pleased to learn that the Colchester-Clacton line has received a further grant and that the Ipswich-Felixstowe line has received a further grant. I wish I were able to help my hon. Friend the Member for Norfolk, South (Mr. John E. B. Hill) in respect of the East Suffolk line. I am not able to do so tonight, but I will look into the matter as he requested.
  Mr. Ron Lewis rose—
  Mr. Griffiths: I am sorry, but I must get on. My hon. and gallant Friend the Member for Eye, who has great experience in these matters, asked the proper question as to how the figures were computed. I hope he will accept from me that this was examined most carefully with most vigorous scrutiny and that it had to be and indeed was agreed with the Treasury. I will write to my hon. and gallant Friend setting out in rather greater detail how the figures were arrived at.
  Sir H. Harrison: Did my hon. Friend have professional advice on this?
  Mr. Griffiths: Yes. My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) asked whether this might not be inflationary in the sense that British Rail might be encouraged to settle

  1095
  for higher figures than otherwise. There is no incentive for British Rail to go in for that. It is not an encouragement to inflation to leave the board in a position where it is barely able to meets its statutory obligations even with the additional grant.
  So far as the Liberal Party is concerned, the one question I must deal with is that put to me by the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel), who asked about the Scottish Transport Group. He is right that it is the responsibility of my right hon. Friend the Secretary of State for Scotland but I understand that, although the Group proposes to restrain its fare increases in 1972, it does not expect to incur a major deficit. Therefore, it is not in the same position as British Rail and the National Bus Company—in other words, it is not in danger of contravening its statutory obligations.
  Mr. David Steel: Surely there is no reason to say that because the Group is carrying out the same policy as the company in England the Government will give them no assistance. If they provide a more attractive and modern service for my constituents, the Group will incur a deficit. In that case will the Government provide the money?
  Mr. Griffiths: Not in this Bill.
  I turn to the speeches made from the Opposition Front Bench. The hon. Member for Leicester, North-East (Mr. Bradley) was not quite right—and, unusually, not quite fair—when he said that this was a Bill to pay British Rail and the National Bus Company for doing a job for the Government. I must ask him to accept that they were doing a job in the national interest as they saw it. It is in the national interest to help reduce inflation and I am sure the hon. Gentleman recognises this factor.
  Secondly, the hon. Gentleman was not right when he said that the Government had called in the two industries in question and told them to toe the line of the C.B.I. initiative. This is not so. The two chairmen gladly did so and agreed to this in the national interest, although quite fairly they pointed out the financial consequences. This is the reason
  1096
  the Bill has been brought before the House tonight.
  The right hon. Member for Sheffield, Park made a number of remarks about general railway and bus company financing. These are matters which the House could debate at length, but this is not the opportunity or occasion to do so. However, I assure the right hon. Gentleman and the House that I will make certain the points he has raised are considered by my right hon. Friend, and it may well be that we shall return to a wider debate on this issue at another time.
  Mr. Ron Lewis: Before the Minister sits down, can he say how much of this money will go towards saving railway workshop jobs?
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Fortescue.]
  Committee tomorrow.

  TRANSPORT (GRANTS) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to authorise the Secretary of State to make grants to the British Railways Board and to the National Bus Company, and to make contributions to expenditure by the British Railways Board or their subsidiaries intended to promote employment, it is expedient to authorise the payment out of money provided by Parliament of—

  (a) £27 million to the British Railways Board for the credit of their revenue account,

  (b)£7 million to the National Bus Company for the credit of their revenue account, and

  (c) sums not exceeding £5 million to be applied as contributions to expenses incurred by the British Railways Board or any of their subsidiaries in connection with agreements entered into with the Secretary of State to promote employment.—[Mr. Patrick Jenkin.]

  IRON AND STEEL BILL
  Not amended (in the Standing Committee), considered.
  Motion made, and Question, That the Bill be now read the Third time, put

  1097
  forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]

  SUPPLEMENTARY BENEFITS (HOME VISITING)
  9.35 p.m.
  Mr. John D. Grant: I begin by explaining my interest in this matter. It arose because of anxiety which I found expressed by those engaged in social service work in the Borough of Islington. That anxiety lay in the fact that people got wind of the proposed change that the Secretary of State intended to make, namely, to cut back drastically on home visiting to long-term recipients of supplementary benefit, which means, chiefly, pensioners.
  The Under-Secretary of State confirmed to me in a Written Reply to a parliamentary Question on 17th December that this change was proposed. He contended that postal contact would largely be substituted and that this would lead to improved contact and an improved service. I wrote to the hon. Gentleman on 21st December and said that I was extremely disturbed by his reply. I posed a number of specific questions to him and asked him to amplify the overall situation. I received no acknowledgement of that letter and, because I considered it to be a matter of some urgency, I decided to make my own inquiries.
  It so happens that I act as a consultant to the Civil and Public Services Association, which represents the bulk of the staff in the hon. Gentleman's Department, including some 28,000 in the Department's local offices. Talking to representatives of the union, I found that it was extremely hostile to the proposed change since it felt that it would be adverse to its members and also that it would be extremely adverse to those members of the public who were in need of this form of help.
  I spent some time checking my facts very carefully. Subsequently, on 11th
  1098
  January, I had an article published in The Times. At that stage, it appeared that the hon. Gentleman began to wake up to the very controversial nature of what he was suggesting. Three days later, he had a letter published in The Times in which he accused me of failing to check my facts with him before rushing into print. He also suggested that I was irresponsible for trying to embroil
  "…our loyal and hard working staff"
  in what he called my "ill-founded argument".
  I hope that the hon. Gentleman will have the grace to make at least a partial apology for his remarks. I accept that he is entitled to the opinion that my argument was ill-founded. It may be that I shall be able to change his mind about that. But he cannot say that I did not try to check the facts with him, because I did, as I pointed out in a subsequent letter to The Times. It so happens that on the day that my letter was published, the Minister chose to reply to my original letter, and he tried to answer some of my points.
  The hon. Gentleman's allegation that I attempted to embroil the staff in my argument is best dealt with by referring to another letter in The Times from Mr. W. L. Kendall, the General Secretary of the Civil and Public Services Association. He described the Minister's reply to me as "petulant", and he stressed that the staff was "incensed" by the proposed change. He told me that the staff felt that the loyalty to which the hon. Gentlemen referred so glibly had been very much abused. Mr. Kendall also said that in his view the proposed scheme must result in a reduction in the quality of the service.
  So much for that little piece of history; it reflects badly on the Minister—who, I suspect, at that point knew a little less than he should have known about the scheme.
  I turn to the scheme itself. There is general recognition that excessive overtime is being worked in the Department. The staff is overworked and the Department generally is understaffed. As a consequence, the home visiting programme has fallen far behind schedule.
  The previous Government approved an investigation into the situation. I mention that because if I did not do so, I am

  1099
  sure that the Minister would. The previous Government approved an Organisation and Methods survey. What they did not do—and I trust that they would not have done had they had to consider the outcome of the investigation of the running of this scheme experimentally in 36 local offices—was to suggest that the scheme had been justified by the result of the experiment and should therefore be introduced everywhere, as is now proposed.
  I have a copy of the O, and M. survey. It seems clear that there was a quest for economy; it was not a welfare function. The O. and M. people could not be expected to fulfill such a function. It is a matter for the Minister to decide subsequently what should be done and to what extent, welfare should be taken into account.
  I want to give an example of the approach of the O. and M. people which struck me sharply. In their document they talk about "potential problem cases."—I stress the word "potential"—as those people whose cases would be reviewed by clerical visits, by post, or by office interview, at no more than 26-weekly intervals. The examples which the document gave of potential problem cases included women claimants with dependant children, sick, disabled, senile, handicapped or mentally affected claimants living alone, without outside contacts. Those are merely "potential problem cases." The non-problem cases would be visited at five-yearly intervals with only a postal contact in between.
  This is the report on which, basically, the Minister is acting, as indicated in his letter to me of 21st January. He says that there will be an improvement in the frequency of contact with pensioners and others who might otherwise neglect to tell us about changes in their circumstances which could result in increased entitlement. He claims that the experiments with postal question-and-answer forms back up this claim, and that if a form is not satisfactorily completed, or not returned, there will a rapid visit to the claimant, or would-be claimant, by the officer of the Department. He says that the great majority of pensioners can deal quite well with this new method, anyway. That is a key part of his argument.
  The O. and M. survey—the pilot scheme was carried out—showed that 60
  1100
  per cent. of claimants could understand and complete without difficulty the forms sent to them, and that a further 13 per cent. could do so provided they had the help of a third party. The O. and M. people seemed to think that that was sufficient, but it means that 27 per cent. of the claimants—that is a high proportion —clearly found it totally inadequate.
  That example illustrates the problem that I posed to the Minister. Many old people will not be able to cope with these forms, and many—albeit a minority —will be caused acute anxiety when they receive them. Form filling poses a number of formidable snags. I remind the Minister of the disappointing take up of F.I.S. in that respect. The Minister indicates dissent. I am told that at present officers of his Department are visiting factories trying to boost the figures for family income supplement take up because they are not getting sufficient response. It is curious, if the voluntary take up is sufficient, that that kind of exercise should be necessary. In any case, family income supplement does not involve old people.
  I return to the question of somebody making a visit when the form does not come back properly filled in. In some of the 36 offices operating the pilot scheme I understand that the scheme has been found wanting. If the Minister wishes to know how I know, I should tell him that I have talked to some of the staff involved. I understand that it is not necessarily the case that they can make the quick visits to which the Minister has referred, because their workload has continued to increase. I am not suggesting that that is purely because of this change; it is a result of other Government policy in respect of the social services. However, the change has had some effect on increasing the workload. In those circumstances, it means that arbitrary decisions have to be taken whether one of these badly filled in forms requires a visit to be made. If the pressure of work in that office, at that time is heavy, the decision is more likely to go against such a visit. That is clearly the salient, if not the overriding, factor in reaching a decision. It is clear that where the pressure is greatest on those offices, inevitably the need is greatest in that area.
  The Minister knows that, with the Government's overall policy on Civil

  1101
  Service manpower—I accept that there has been a small increase in the Department's staff; none the less, the overall policy is to cut back—he cannot give guarantees about future services and the ability of the service and the staff to match the increasing demand. More selectivity, which is the Government's policy in this work at this time, must mean more people to do the selecting. I suggest that the Government in this respect are trapped in a policy web of their own spinning and that those who are likely to suffer as a result are the people who particularly need help.
  I should like to deal with another matter which the Minister has previously raised with me: namely, the argument that local authorities should be responsible for keeping a continuous watch on the welfare of supplementary pensioners. The welfare rôle of the Department's staff is very real in local offices. I hope that the Minister will agree. If he thinks otherwise, I suggest that he talks seriously about it to his staff.
  The local authorities do not have the resources to enable them to carry out this function. My local authority, Islington, is apparently strenuously trying to improve its social services. However, there are still glaring gaps in those services. There are great problems of liaison between the local authority and the local officers of the Department of Health and Social Security. I hope that the Minister will look into this matter. I believe that he is receiving representations about it.
  I should like to remind the hon. Gentleman of a report called "Old and Cold in Islington", about which the Secretary of State has expressed considerable concern. That report was the result of voluntary effort, not of work by the local authority. I shall be approaching the Secretary of State shortly to talk about a similar report which is shortly to be published covering a wider area. The point I wish to illustrate is that such reports show up the gaps in the social services in dealing with welfare which local authorities cannot properly meet.
  Another example appears in a report which recently appeared in the Evening News. It concerns a Mr. John Mayberry, an old gentleman of 70, who died of exposure in his Notting Hill council flat. The report says that for two years he
  1102
  was virtually ignored by the welfare services. That is another example of the gaps which I have mentioned. The Department's home visits help to fill these gaps. Sometimes the Department's staff are the only contact old people have with the welfare services.
  In a recent article about the work of the staff, Red Tape, the journal of the Civil and Public Services Association, says this:
  "This home visiting is a vital link in the system showing up, as no amount of interviewing can bring out, the actual background and the full extent of the need."
  Yet the central Government are retreating from their responsibility.
  The Department's clerical staff are angry at being asked to do executive officer work without compensation. This is an understandable and traditional trade union reaction. It means, too, that the job is being downgraded. Clerical officers who go out to do this work must report back and recommend, whereas if the work is done by an executive officer—I stress that frequently these are emergency cases—he can make an on-the-spot decision to give help. Thus further delay is being caused in the meeting of claims and another tier is added to the decision-making process.
  The Minister has not distinguished himself so far in handling this issue, because initially he seemed to want to be unduly secretive.
  The Under-Secretary of State for Health and Social Security (Mr. Paul Dean)indicated dissent.
  Mr. Grant: That is how it seemed. Subsequently, if his letter to The Times was representative, he began to bluster. He risks an unpalatable reaction from the Department's staff if he persists in pushing this change through. I understand that there are seriously conflicting views within the Department at senior level about the desirability of the change.
  The Under-Secretary could best distinguish himself tonight by telling me that he is prepared seriously to reconsider the situation with a view to tackling this problem in a very different way. His letter to me probably contained the true answer, because he suggested that he hoped to save £1 million a year by the

  1103
  change. He spoke not of an improved service but of an economy drive.
  I hope that the Under-Secretary will come clean tonight and will accept that the change has little, if anything, to do with welfare, but everything to do with saving money. It is short-sighted, unfeeling and potentially dangerous. I hope that the Under-Secretary will be able to scrap this economy measure.
  9.53 p.m.
  The Under-Secretary of State for Health and Social Security (Mr. Paul Dean): I am grateful to the hon. Member for Islington, East (Mr. John D. Grant) for raising this subject tonight, because it enables me to deal with some of the misconceptions which have arisen in his mind and to which he has given publicity on previous occasions.
  The whole object of these proposals is to improve the service to pensioners and others in receipt of supplementary benefit. Before explaining why we believe this is so, I want to comment on what the hon. Gentleman said about the attitude of the staff and the staff situation generally. I do not accept the hon. Gentleman's criticisms. He will realise that it would be improper for me, at a time when discussions are still taking place with the staff through the appropriate Whitley Council, to make judgments on the points he has raised. I fully understand his position.
  He explained that he was speaking as the consultant to the Civil and Public Services Association. However, it would be wrong for me, when these discussions are taking place through the duly appointed procedures, with full representation by the staff, to make detailed comments. I can tell him categorically that we are as anxious as he that these new arrangements should come into operation with the full acceptance of everyone concerned. I am sure that this is common ground between us.
  We fully accept that the staff work hard and conscientiously. They deserve the tribute of the whole House and the country for the way in which they administer extensive schemes involving large sums of money, in which over 99 per cent. of those who receive benefits receive them on time from a sympathetic staff in the right amounts and with the minimum of trouble.
  1104
  Equally, I entirely accept that the new benefits that this Government have introduced have meant more work for the staff. But numbers in the Department have responded to this. Staff have expanded considerably over the past two years and this trend can be expected to continue, since we intend to make resources available for the proper expansion of health and social services and for the care of the elderly and infirm.
  The hon. Member will recollect that the Prime Minister was very specific about this in this Answer he gave in the House on 27th January. We recognise therefore that the expansion of the social services means additional staff to carry them out. We accept that commitment and have already responded to it.
  On the merits of the case, the object is to improve our contact with long-term recipients of supplementary benefit and to give greater attention to those who have special problems requiring more frequent visiting. There is no question of a cutback or an economy drive.
  One has only to look at the figures to see the expansion of our social services. I am not making a party political point. This has happened under Governments of all colours. There has been an expansion of the services in the supplementary benefits scheme and an expansion of take-up; as a result more money each year is spent on these services. It is therefore not a question of an economy drive but of the best use of the available resources to do the best possible job.
  The main purpose of visiting people in their homes is to get up-to-date information about their circumstances in case they fail to tell us about changes which entitle them to more money. However, visiting is a relatively expensive way of doing this, and in practice we are unable to call on most pensioners more than once every two years.
  This is, then, the background to the experiment which began when the Labour Government were in office. The Government, acting in full consultation with the Supplementary Benefits Commission and the staff associations concerned, set up an experiment in 36 selected offices in all parts of the country, to see whether it would be possible to achieve more frequent and satisfactory contacts with pensioners and those receiving supplementary

  1105
  benefit by means of regular postal inquiry at yearly intervals.
  This has been a very thorough experiment, lasting more than 18 months and closely controlled by our management service experts and by senior officers in the regions. Experience has shown that a postal inquiry system works well. The great majority of pensioners can deal—
  It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fortescue.]
  Mr. Dean: The great majority of pensioners can deal perfectly well with the simple question and answer form we send them. I admit that, as the hon. Member said, there may be a small number who cannot do so, but in the minority of cases where the forms are not satisfactorily completed or are not returned at all an officer visits the person without delay, and this is the real point here. This system will enable us to concentrate most of the visiting service on new claims, and on frequent and detailed attention to difficult cases where interviews in the home are essential. The great advantage of the new system, therefore, is that it will make staff time available for giving more detailed attention to the needs of such people, and it also makes possible thorough investigation of new claims which still have to be dealt with by home visits. Each pensioner is visited at least once in five years and in the vast majority of cases more frequently.
  The hon. Gentleman asked very fairly about cases of sudden deterioration or of change in the circumstances of the people concerned. Our normal arrangements provide for our local offices to establish contact with friends or relatives living nearby who can tell us if the elderly person is taken ill or is otherwise in need of help. An inquiry form is sent by post under the new scheme asking whether there are any problems for which help is needed. As soon as it becomes apparent that there are problems which require to be dealt with by visiting, the necessary visits are made. This work is closely allied to the work of social service departments of local authorities.
  1106
  No change is proposed in the policy of the Supplementary Benefits Commission with regard to the referral of claims to local authority and other social services when the need for them comes to light.
  I do not for a moment claim that the link-up between my Department and the local authority social service departments is by any means perfect yet—there is a long way to go—but what I think I can fairly claim, particularly since the new social service departments have been set up with one organisation for personal social service rather than a number of organisations, is that we have already begun to establish more effective links which will undoubtedly be to the benefit of the people concerned, and will make for a more comprehensive range of services than has perhaps been the case in the past.
  I mentioned that in practice it is not at present possible to call on most pensioners more frequently than every two years. This is, of course, not an effective way of looking after the welfare of old people: that is the job that Parliament has given to local authorities, not to the Supplementary Benefits Commission and the members of the Commission's staff. Welfare work must be limited to those cases arising in the normal course of investigating claims for benefit, and that is where the link up between the Commission and the local authorities comes in. The services which are now unified under the social service departments have under recent legislation been given an additional function and new targets at which to aim in the level of provision they make for the elderly, the physically handicapped, the mentally handicapped, the mentally ill, for children in trouble and for families at risk.
  As the hon. Member knows, my right hon. Friend recently announced that over the next few years additional capital resources will be made available to local authorities, in particular for residential provision for the elderly, and 10-year plans for their social services generally, which he will be asking local authorities to prepare later this year, will provide a national picture of the future development of these services. It is, therefore, the work of the Supplementary Benefits Commission and the work of the local

  1107
  authority social services departments as a whole in conjunction which should be the true measure of the services which are provided.
  To return to the scheme of visiting arrangements which the hon. Gentleman raised, our proposals for introducing the new arrangements have the full support of the Supplementary Benefits Commission. They are at present under discussion with the staff representatives on the Departmental Whitley Council. Subject to the conclusion of these discussions we plan to start extending the new arrangements throughout the country from the spring of this year. We hope to complete the process within about 12 months. The results will be closely watched. In due course, we shall be making any modifications which may be thought necessary in the light of wider experience.
  This experiment which I mentioned has been very carefully carried out. But we do not claim—no one can claim—that it is perfect and that we shall not learn from a wider extension of it. Assuming that it is agreed, of course we shall make —and we shall be very anxious to make —and changes which the Commission may feel in the light of experience to be desirable.
  Concerning the announcements, there is no question of being coy about this. Again, it would have been quite wrong and improper to make a detailed announcement about these new arrangements until they had been fully discussed with all concerned, including the staff. That is why I was not able to give a very full answer to the hon. Gentleman when he put down his Question before Christmas. That is why, too, there was some delay in my replying to his letter. I apologise for the delay in the reply to his letter, but I am sure that he will appreciate probably more than anyone, as a consultant to the association concerned, that he would have had great cause for complaint had we announced in detail what the arrangements were likely to be while we were still discussing
  1108
  them with the staff concerned. But as soon as the arrangements are finalised we shall take steps to see that they are widely known.
  Mr. Grant: There would have been nothing wrong and nothing considered improper by the staff associations—this is an important far-reaching change—if the hon. Gentleman had announced the proposals so that they could have been discussed much more openly not only by the staff associations but also by local authority interests and so on. I should not have thought that there would have been anything improper about that. The hon. Gentleman would not have been announcing a decision. But in the way that he is doing it now he has come very close to announcing a thing after a decision has been made. That is not consultation.
  Mr. Dean: I understand the hon. Gentleman's point. But, equally, we would certainly have been subject to criticism had we announced the chapter and verse of the proposals while we were still have genuine discussion and consultation on a number of detailed matters through the appropriately constituted machinery for these matters.
  But when the decisions are made, arrangements will be made to inform all those concerned in the detailed proposals for the new scheme, both for home visits and for postal reviews. I hope, therefore, that the hon. Gentleman will be reassured as to our motives, which, after all, were begun under the previous Administration, as to the intention of the scheme to try to improve the visiting arrangements in the light of the work load which exists, and to improve the co-operation which exists between the Commission and the local authority associations. That is the object of the exercise. I hope that what I have said this evening will be of some reassurance to the hon. Gentleman.
  Question put and agreed to.
  Adjourned accordingly at nine minutes past Ten o'clock.

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