§ 9.37 p.m.
§ Mr. Bruce Millan (Glasgow, Craigton)
I want to talk principally about Upper Clyde Shipbuilders, but I shall first set the situation there against the general background of the unemployment situation in Scotland. We have just listened to a very interesting debate about the Welsh position. The unemployment situation in Scotland is much more serious than is that in Wales. There are more than 134,000 people unemployed in Scotland. The male unemployment rate is 8.2 per cent. Apart from a particular month in 1963 when weather conditions contributed to the situation, it is necessary to go back to the 1930s before we can get figures which compare with the present disastrous figures in Scotland.
One of the S.T.U.C. representatives who interviewed the Secretary of State for Trade and Industry yesterday told the Press afterwards that he felt that the Government had no grip on the situation. It has also been our feeling over the last year that nothing that they have done—the special development area policy, the increased public works programme for the winter and the third Budget of three days ago—is a real response to a situation which is characterised in Scotland by high unemployment and—just as serious—by a tremendous falling away of confidence among business, industry and work people about the Government's ability to tackle the present situation successfully.
The second thing that I hope that the Government have in mind is the situation of Rolls-Royce There is sometimes a tendency to think that the future of the RB211 and of Rolls-Royce as a whole is principally a matter for Derby. Derby would be badly affected if the contract did not go ahead, but Rolls-Royce is also a major employer in the West of Scotland. We have suffered serious redundancy already this year and there is still great uncertainty, which we hope will be cleared up before the recess, about Rolls-Royce.
We were promised a statement of Government policy towards the shipbuilding industry a few months ago. In a Written Answer yesterday to my right 328 hon. Friend the Member for Sunderland, North (Mr. Willey), the Government's commitment to a statement has been considerably qualified. Now, it is only a statement dealing with shipbuilding credit that is to be made before the House rises. But we have had this unfortunate period of uncertainty, when it has not been clear to the House and the industry what the Government's policy is and will be over the next few years.
I have no intention of going over the whole history of this unfortunate company, U.C.S., in what must be a short speech in a short debate, but I want to go back at least to February of this year, when the Government guarantees for shipbuilding credits, suspended during the winter, were resumed. It is now accepted that had they not been resumed the company would have gone bankrupt then. A large element in the serious financial position of the company was precisely the withdrawal of credit between November and February. This meant that 80 per cent. of the money going into the company was cut off. So the Government, in that and other respects, bear a very heavy responsibility for the crisis which overtook U.C.S. in February and which continued until the liquidation of 14th June.
It is also clear that Government credits would not have been resumed in February if there had not been at the same time the Rolls-Royce collapse. The Government could not have afforded two major simultaneous collapses affecting the West of Scotland.
It is significant that the date on which the Secretary of State for Trade and Industry informed the U.C.S. management that the credits were being resumed was 3rd February, precisely the date on which Rolls-Royce collapsed, the announcement of that collapse being made on 4th February. It is clear, therefore, that if if it had not been for the Rolls-Royce situation U.C.S. would have been allowed to go into liquidation in February instead of in June.
I shall not go over the whole history of the company, but one must observe, having in mind this sort of situation, the Rolls-Royce affair, and, for that matter, the inadequacy of the Government's White Paper on the Common Market, that the conclusion becomes more and more clear that we need a considerable 329 extension of the work of Select Committees so that we may look into the whole history of affairs of this kind.
The point which I make about the situation as it was in February is that, whatever one may think about the management of the company over the past few months or over the years, it is ludicrous and indefensible for the Government to say, as they have been saying, that they had such assurances in February about the viability of the company that they felt at that time that they need take no further action, that the company had a long-term future, and that it would no longer need Government assistance. In the light of the whole history of the matter, the suspension of the credits, and the circumstances in which the credits were resumed in February, it is scandalous that the Government took that attitude of disengagement in February. In the event, of course, it was not long before the situation had become even worse, and we had the diquidation on 14th June.
One of the ironic features is that, although the Government at the end of the day refused to give the money for which U.C.S. was asking to maintain the company in being, they had already spent about half the sum immediately involved, namely, £3 million, in commitments to keep U.C.S. going up to the end of the first week in August, and it is likely, of course, that the eventual reconstruction of the company will cost many millions more. Thus, one of the reasons for the Government's attitude in June, that they could not afford the money, or that the money was not worth spending, has already been falsified by events and will increasingly be seen to be falsified in the months to come.
The Government have appointed four expert advisers. Along with my right hon. Friend the Member for Kilmarnock (Mr. Ross) and my hon. Friend the Member for Glasgow, Maryhill (Mr. William Hannan), I had the opportunity to meet the four advisers on Friday, 16th July. I am willing to accept right away that not only do they understand the financial aspects of the U.C.S. affair but they have an understanding of the human and social consequences for Clydeside. One looks forward to seeing what their recommendations are. But I must emphasise that the appointment of the four expert 330 advisers and the receipt from them of advice about what should happen in the reconstruction of U.C.S. in no way diminishes the major responsibility for the future of the company, which rests firmly on the Government.
I hope that there will be no attempt tonight, or when we have a statement of the Government's position on the company, to hide behind any advice which may have been given by the advisers and to use that as a means of avoiding the Government's major responsibility for the situation. The Government must have wider considerations in mind in relation to the human and social consequences than any advisers can have, however eminent or expert and however wide their remit may be.
We see in the Press today that the advisers have made their report to the Government. I should be glad if the Minister were able to confirm that and, if so, if he could give some indication of what the report contains. I appreciate that if there is to be a statement later this week the Minister may not be willing to give us that information tonight.
Further, I hope that the report will be published. I express that hope having no idea what it contains. It may include criticisms of the former Government—so be it—but we are entitled to have a full report published so that we may know the advisers' views of the present situation, and may know how they think the company has been handled up to now. Most particularly, we want to know when the Government will state their conclusions on the report, and their proposals for the reconstruction of U.C.S.
Incidentally, the hon. Gentleman may care to comment on a report in the Scottish Daily Express this morning that the Government have already made up their minds before receipt of the advisers' report. If that were accurate, it would be scandalous. If it is not, I hope that we shall have a categorical denial from the Minister, because I hope that the Government will take account not only of what the advisers tell them but of the speeches in this debate.
My own main interest, and what I shall look for more than anything else in the Government's proposals for the reconstruction of U.C.S., is the maintenance of the jobs of the men at present employed by the company. I say quite firmly and 331 without qualification that the unemployment situation in Glasgow and Clydeside is so serious, and comprises such an appalling proportion of the working population in the summer months, that we cannot afford to lose a single additional job there at the moment. That is my main consideration, and that is the main test we shall make of the Government's announcement.
There have been a number of statements in the Press recently about initiatives taken by individual industrialists to buy up bits and pieces of U.C.S. at Clydebank or elsewhere. I hope that the Minister would give us an unqualified pledge tonight that such initiatives will not be accepted; that what we shall have for U.C.S. will be an overall solution. It would be absolutely disastrous to have a reconstruction of U.C.S. which was based on the acceptance of proposals which in isolation might seem plausible and attractive but which would militate against an overall solution for the U.C.S. consortium as a whole. I warn the Minister that if the Government do accept this kind of piecemeal approach they will call on their heads very considerable anger and bitterness from the workers, and from this side of the House as well. In this connection, again, I hope that we shall have no solution which involves the closing down of shipbuilding in Clydebank. There has been a good deal of loose and facile talk about Clydebank being dispensable. My hon. Friend the Member for Dunbartonshire, East (Mr. McCartney) will no doubt expand on this point, if he gets the opportunity, very much more eloquently than I can, but anything that involves the closure of shipbuilding there would be a disaster, and would be felt very bitterly on Clydeside as a whole. I hope that we shall have no such solution.
If the solution which the Government propose this week—and I hope that it will not be the case—involves large-scale redundancies, there will be an explosion of anger on Clydeside. There is already considerable anger and resentment there, but it has been contained so far. The men concerned have behaved very responsibly, whether in their trips to London, their demonstrations in Glasgow, or in any other way. The Minister should not be misled by that. If we 332 have an announcement this week involving large-scale redundancies in Upper Clyde Shipbuilders there will be a considerable outburst of anger and resentment in Clydeside, and the consequences can be very serious.
I hope that despite the mistakes they have made over U.C.S. over the past few months, and their negligence in allowing the situation to deteriorate between February and June, the Government will have appreciated by now the strength of feeling in Scotland as a whole about the situation and will produce a solution which will allow the men now employed by U.C.S. to get on with the job in a responsible way, and restore some of the image of U.C.S., which has been so seriously damaged in the past few weeks.
§ 9.56 p.m.
§ Mr. Peter Doig (Dundee, West)
Scotland has the highest unemployment of all the regions in Great Britain. The present figure is 6.2 per cent. One of the highest areas of unemployment is Tayside.
I in no way begrudge the development area status given to the West of Scotland, whose problem is equally serious, but that status has not been given to the Tayside region, which has every bit as great a need, in relation not only to its present unemployment figure but to what is likely to happen in the near future. The prospects are pretty gloomy on the Clyde, but they are equally gloomy in the Tayside area. For example, we recently had over 800 applicants for one lorry driver's job in Dundee. We have on our unemployment register draughtsmen, analysts, industrial chemists, electronic engineers and toolmakers—all sorts of highly skilled people, as well as unskilled.
We have an additional hazard. The main industry of the region for a long time has been the jute industry, which has been suffering a more rapid contraction than was ever bargained for. A further problem is that because of the trouble in East Pakistan there is a serious threat to the continuing supply of raw jute to the area. If those supplies are cut off or seriously curtailed the effect on Tayside will be catastrophic, and we shall be back to the 1930s, when at one point half the working population of Dundee were unemployed. In four different years 333 we had over 30,000 unemployed in the area. So we know what high unemployment is, and its effects. I know, because I was one of those who was unemployed then.
We also worry about what will happen if the Government have their way and take us into the Common Market. The position will undoubtedly get worse in our area, because the pull to the South East, which is considerable, will be greatly increased.
§ Mr. Ian MacArthur (Perth and East Perthshire)
Would the hon. Gentleman care to consider that just as American industry came into Scotland, not least to Dundee, in order to gain entry through Britain into the Commonwealth and the sterling area, and later the European Free Trade Area, so European industry will come into Scotland in order to build in Scotland the new Europe?
§ Mr. Doig
If the hon. Gentleman will consider for a moment he will realise that, according to his argument, we shall lose the advantage we now have of preferential treatment in the Commonwealth and in E.F.T.A. and get in its place hypothetical trade with Europe. Is the hon. Gentleman aware that the majority of international companies now have factories in Europe?
I have raised on many occasions in this House the worsening unemployment situation in my area. I did so as recently as 18th February of this year and pointed out that the prospects were bad. Since then we have sent a deputation to St. Andrew's House from our area. That deputation comprised representatives of the town council, including the Lord Provost, members of the Trades Council, of the Chamber of Commerce, local M.Ps and, in a separate delegation, the Provost of Arbroath.
The House can take it from me that when the Dundee Chamber of Commerce starts to get worried about unemployment the situation is really bad. If there is one body of people which has continually played down the prospects and the high unemployment it has been the Chamber of Commerce. We had high unemployment in the 1930s, when the Labour Government passed a Distribution of Industry Act which brought vast new industries to our area. Fortunately they are still there otherwise we should 334 be in a bad way. It was in that situation, when Government policy was proving so successful, that the Chamber of Commerce went to the Board of Trade and requested that no further industry be brought to Dundee.
Recently, together with the Secretary of the Chamber of Commerce, I took part in a programme on Grampian Television about unemployment in our area. The Secretary tried to persuade me to play down the bleak prospects. When we find that Chamber of Commerce is worried things are really bad.
I ask the Government to treat Dundee as they have treated other areas with comparable unemployment and with prospects not as bad as ours. They have given those other areas special development status but have refused to accord the same status to us. [Interruption.] One of my hon. Friends says that it means nothing. I shall explain that it means quite a lot. During that visit to St. Andrew's House I made two points to the Under-Secretary of State. I requested first that we should be given special development area status. Like my hon. Friend, the Under-Secretary said that this did not make much difference. My reply to that was, "Well if it does not make much difference why not give it to us?" He did not give it to us because he knew there was a considerable difference. I also asked the Under-Secretary to persuade the Government to change their policy in favour of a more expansionist course.
We have had a reduction of purchase tax, probably because almost every other area has been making the same demands. Eventually this will help, but it will take a long time to work its way through. Hire-purchase controls have been relaxed but this was not done willingly by the Government. It was forced upon them because the finance companies were giving better terms than the Government would allow on ordinary credit. The regional employment premium is to end in 1974. The gross profits of a number of firms in Dundee are less then the regional employment premium they are getting, so some of them will go out of existence in 1974 or before then.
Dundee Council is enterprising. It has proved its success when given the same incentives as other areas. Indeed, it has probably been the most successful in 335 Britain in attracting new industries. Now we do not have such incentives and are failing to attract industry but, in its tradition of enterprise, as it has done before, the Council is sending a delegation to the United States, headed by the Lord Provost. It hopes to attract the interest of American firms in establishing factories in Dundee.
Why is the delegation going to the United States? It is because of our experience with English and American companies. The last time we got a number of English companies and a number of American companies to Dundee, in the end, practically all the English companies disappeared while nearly all the American companies are still there and growing. Secondly, the American firms have given better wages and conditions and have raised the standard of living of the workers in the area. We have thus good reason to go to America.
But it is terribly important that the delegation, which is going there at the expense of its members and of the Council, should be able to tell American manufacturers that Dundee is one of the areas which can give the top inducements. If the delegation cannot say that, the ground will be cut from beneath it. This is why it is important for Dundee to get special development area status as soon as possible. Under these inducements, a factory would be free for five years and would get 30 per cent. of the wage bill for three years. These are not small concessions. We have a right to this status because of our high unemployment figure, which has been growing for a considerable time and is still growing, and because our future prospects are worse than those of most other areas.
I want to turn now to considering how the two Governments have treated the unemployed. The Labour Government started the redundancy payments scheme to cushion the effect of redundancy. They gave earnings-related benefit for a year in order to help people to adjust to a lower standard of living if they lost their jobs, very often through no fault of their own. They gave rate rebates to the badly off. What have the Conservative Government done? They have stopped the payment of unemployment and sickness benefit for the first three days. They have put up rents, and are to increase 336 them further. They have put prices up. They have done everything to make the position worse and not better for the unemployed—and they are creating more unemployment.
Then there is the serious problem of the young people leaving school. Soon, another group will be coming out of school in Dundee—highly trained, qualified and well-educated children. But the last group who left school have not yet found jobs. What are the chances, therefore, of the latest school leavers finding jobs? How many of them will stay in Dundee when there is no prospect for them?
One group has usually found work by the time the next group of school-leavers leaves school, but this time those who left on the last occasion are still looking for jobs with the fresh lot due to arrive shortly. One can appreciate the effect on these young people, who have studied to equip themselves for a career and who will find no jobs to do. Is it any wonder that crime increases when these intelligent young people find that this is how the world treats them?
The unemployment rate in Dundee is almost 9 per cent., but in Arbroath it is 14 per cent., a shocking figure. The Provost of Arbroath has agreed to support our application for the whole of Tayside to have special development area status, because he recognises that the prospects for Arbroath depend on those for the whole area, which consists largely of Dundee and the area round about. Dundee is the big centre which must attract people before the places round about can benefit. The Provost of Arbroath recognises that, and supports the application for special development area status for the Tayside region.
§ 10.12 p.m.
§ Mr. Dick Douglas (Clackmannan and East Stirlingshire)
I do not propose to follow my hon. Friend the Member for Dundee, West (Mr. Doig) and comment on his area. I know the problems of Dundee, because, before I was translated to membership of this House, I lectured in the College of Technology in Dundee. The whole House will appreciate the strength of feeling in my hon. Friend's constituency about the problem of unemployment in the city. But the topic of the debate is unemployment in Scotland generally, with particular regard to 337 the relationship of that unemployment to the future of Upper Clyde Shipbuilders.
One of my most poignant memories is of the early days of the Second World War when I saw a film called "The Shipbuilders" which was based on George Blake's novel of the same name. The film struck a clear note, because I remembered in my own family the feeling of uplift on the Clyde, perhaps mistaken, when in certain areas in Govan and Clydebank and the north bank of the river, the yards had orders, albeit for naval craft, the feeling, perhaps mistaken, that at last some of the horrors of the deep depression years had been removed.
I do not want in any way to exaggerate the position and I do not want to paint it blacker than it is, but in the West of Scotland the feeling of hopelessness is again arising. That is a bad thing, because we have moved a long way in economic management from the dark dismal days of the '20s and the '30s. Clydebank and the U.C.S., I warn the Government, have become a symbol. If, on the basis of economic management and industrial logic, the Government choose to disregard that symbol, they will do so at their peril.
There is no point in the Minister lecturing Scotland about changes in industrial structure. I would like to indicate briefly some of the changes in the industrial structure of Scotland which have taken place over a very short period. In 1959 mining and quarrying in Scotland employed 100,000 people. In 1970 the number had been reduced to 40,000. In 1970 the approximate numbers in employment in shipbuilding were 34,000. This was a reduction by one-third of the 1960 level. The fall in employment in key industries and services, excluding agriculture, during the 1960s was well over 100,000.
Before hon. Members opposite—I refer particularly to the hon. Member for Perth and East Perthshire (Mr. Mac-Arthur), who likes to quote the reductions—rise on this issue, I want to make it clear that one of the things the Labour Government did during their term of office was to produce a rather unusual consequence in the later years of the 1960s. It was the first period since the war when Scottish employment moved in tune with, or slightly more favourably 338 than, employment in Great Britain as a whole.
We have seen changes in the employment potentialities in Scotland, particularly over the past year. There has been a loss in male employment in Scotland and we are seeing evidence again of the earnings gap widening. That gap, which was closing particularly during the last few years of the Labour Government, is beginning to widen. It is all very well for the Government to quote their new hasty measures—they are not well planned as the Prime Minister would have us believe—to produce an acceleration in economic growth, ostensibly to the extent of 4.5 per cent.
§ Mr. J. Bruce-Gardyne (South Angus)
The hon. Member said that the earnings gap was beginning to widen. Where does he get those figures from? The last figures which I saw in a Parliamentary Answer showed that the earnings gap was contracting.
§ Mr. Douglas
The hon. Member is quite right in what he says. I take what I have said from an article in today's Financial Times by Andrew Hargrave, who draws attention to the Scottish Digest of Statistics figures, published today. I have tried to get the most recent information but I quote from that article in good faith. If I am wrong, I will take an early opportunity to correct it, but I take it that Mr. Hargrave, in quoting from an official publication, is right on the ball, as he usually is.
The situation in Scotland is different from that in other areas of Great Britain. Our problem has been to maintain a high enough level of investment to employ all our labour resources. We see the danger that skilled manpower in the Scottish economy will not be employed.
In addition to the problem of U.C.S., my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) has instanced the problem of Rolls-Royce. We cannot afford to have an erosion of skill in Scotland. We certainly cannot afford to have that erosion of skill in West Central Scotland. The Chancellor's policy must be to increase the level of investment, not only in the economy as a whole, but particularly in the regions. That is why we regret in some ways a further reduction of the differential. The 339 increase in the first-year write-off allowance from 60 per cent. to 80 per cent. albeit for a short time, reduces the differential in the incentive for industrialists to go to regions like Scotland.
Let me turn briefly to the catalogue of events which has led to the present position concerning U.C.S. My hon. Friend the Member for Craigton has rightly asked for a full submission of the views of the four advisers appointed by the Secretary of State for Trade and Industry. We want full publication in this House of the report and the advice given to the Government on this issue.
The triggering off of the present position goes back to 14th October last. It was all very well for the S.I.B. Director to present evidence—and I am not sure how it was done—directly to the Department for Trade and Industry on that date about the position of the company and casting doubt whether it would in the long run be profitable. I do not doubt Mr. Mackenzie's commercial competence, but I am willing to say that his pessimistic view fell on very receptive ears in the Department. I want publication for the House not only of the views of the industrial advisers but of the report on the shipbuilding industry which the Minister prepared for his party. There was a significant gap from 14th to 27th October before the Under-Secretary of State told the Chairman of U.C.S. that until the Government were satisfied about the future viability of the company new credit guarantees could not be issued to shipowners. Mr. Mackenzie cast doubts on 14th October. It took the Government 13 days to give the company their views about the credit guarantees.
I think that Mr. Mackenzie, because of his position at that time, was saying, "Yarrow (Shipbuilders) Ltd. is in difficulties and if Yarrow (Shipbuilders) fails Yarrow and Company and U.C.S. come down as well; the whole lot crumbles. Therefore, you must take steps, not by the use of the Department of Trade and Industry, but by the use of Ministry of Defence money to shore up Yarrow (Shipbuilders) and, indirectly, Yarrow and Company. You have to extricate Yarrow (Shipbuilders) from U.C.S."
Perhaps there were reasons for that, but the time scale must be examined by 340 the House. I am not doubting the industrial logic, but it does not look very will when we realise that the only part of U.C.S. for which a purposeful existence can be guaranteed is Yarrow (Shipbuilders). I have no objection to companies trying to save themselves, but let us consider what Yarrow (Shipbuilders) has obtained.
Yarrow and Company was paid money, from the public purse indirectly, against profits on orders which were building in Yarrow (Shipbuilders) when the consortium was formed. The ships in question were not profit-makers but loss-makers. Also, Yarrow (Shipbuilders) received a substantial loan from the S.I.B. to build a covered berth. It received a £4.5 million loan from the Ministry of Defence. Perhaps the Minister, in reply, will indicate the total subvention to Yarrow and Company and Yarrow (Shipbuilders) from the public purse. It would be very interesting to know that, because I doubt the credibility of some of the answers I have been given in the House to the effect that there was no possibility of incompatibility in having the S.I.B. director on the board of Yarrow and Company when the negotiations were going on. At the time Yarrow and Company had two directors on the board of U.C.S. This is not a happy situation. Sufficient information could come to the Department from the board of the U.C.S. from one director rather than two.
To return to the Scottish economy as a whole, we have seen in the second half of 1970 a level of redundancies which equalled the whole of the redundancies in 1969, and 60 per cent. of the redundancies recorded were in West Central Scotland.
We know the level of unemployment in Scotland of 134,572, but let us contrast that with the number of unfilled vacancies. There are 13 persons looking for every job available in Scotland. In terms of males it is much worse than that. In terms of the number of young people coming out of school and university who are being deprived of a job, it is a scandal.
I return in my closing remarks to what I tried to emphasise at the beginning of my speech. Clydebank and U.C.S. have become symbols. We cannot discard on narrow pragmatic, economic grounds; 341 we do so at our peril. I have never looked for unconstitutional ways of solving problems. I have come to the House to plead the case for the people of Scotland, the people of the United Kingdom and the under-privileged sections of the community in general. If the House has an unreceptive ear to the pleadings of the people in West Central Scotland, and in particular of those who might be deprived of a livelihood by the 342 failure of U.C.S. or by some narrow piece of industrial logic that will dismember U.C.S., we shall have gone back a great distance in terms of time and of economic thinking. We have to be responsive to these demands. These men are asking for their right to work, their right to be employed in purposeful employment for the nation's good, and I hope the House will be responsive to these pleas.
§ 10.28 p.m.
§ Mr. Ian Campbell (Dunbartonshire, West)
The problems of U.C.S. are in the minds of most people in my constituency. My constituency is adjacent to East Dunbartonshire, which includes Clydebank about which we are all worrying tonight. Unemployment is already high in my area. There are people working with U.C.S. and for firms which supply the shipyards. The seriousness of the situation has not been exaggerated by my hon. Friends.
I will deal first with the help that can be given by the granting of special development area status. I was interested in the views expressed by my hon. Friend the hon. Member for Dundee, West (Mr. Doig) on the added incentives to industry which he feels development area status might bring. Unfortunately, it has not so far provided any great impetus locally. In my constituency a holding firm took over a factory and, having seen the availability of labour, the type of labour employed and the adaptability of the labour, the firm decided to bring another project into the area from the south. However, the firm was unable to claim special development area grant because it was already operating in the area with its other small factory. The Government should look at this matter closely, particularly at this time when unemployment is so high that rules might be bent a little.
I appreciate that care must be taken when using taxpayers' money to subsidise firms, but this matter must be looked at carefully in order to maintain the balance.
Local authorities can build factories for rental. They have to apply for Government finance to do so, but they are not allowed to give special development area terms to industrialists in the way of rental. The Government should seek to tie up this matter as between local authorities and central government.
There are other things Government and local authorities can do to help to ease the tragic situation in Central Scotland and Clydeside. Some have already been mentioned, such as the roads programme: but this does not go far enough. More money should be spent on 344 the infrastructure by increasing housing and school-building programmes, and at the same time we should seek to help the construction industry.
In the debate in the Scottish Grand Committee this morning on housing finance, the right hon. Gentleman the Secretary of State for Scotland called on planning authorities to do their utmost to assist new private housing developments by giving consents and where possible making grants available. In an area of high unemployment new houses are necessary to attract new industry to the area. Industry requires houses for its managers and key workers. Housing is a matter to which industry pays great attention.
It is not always the planning authorities who are slow to move in these projects. Too often the Scottish Development Department Roads Division worries too much about access and egress in regard to trunk roads. A "trunk road" in my constituency can mean a two-lane road.
There is another hazard in my area. We live in a scenic area and therefore many of our schemes must be passed to the Countryside Commission. Although this is possibly correct as a concept, it does not help schemes to get off the ground quickly, and sometimes interests clash.
One long term answer to combat high unemployment in West Dunbartonshire is to improve the tourist trade. One needs only to walk in the area just outside this House to see what tourism means to London. We have Loch Lomond which is famous the world over, and that area is under-developed. People are seeking to develop in that area at the moment, and for some months there has been a project to provide an immediate number of jobs. There is an application to provide a bear park. This may be a strange thing to bring up in the middle of an industrial debate, but if that project could be got off the ground this winter 200 jobs could be provided for unskilled men in the area. Many of these unskilled men have been signing on at the employment exchange for a number of months. That project would involve many of those unskilled people and this must be of advantage to the area. This would provide an impetus, so that we could carry on from there.
345 I want now to turn to the blackest spot in the constituency, to what might be termed "the Plessey affair". Twice already in this House I have called for a public inquiry into the closure of the Alexandria factory, which was once the Royal Naval Torpedo Factory. Two years ago, the factory had built in it a clean area, probably not equalled anywhere in the country, to prepare for the manufacture of the Mark 24 torpedo, which was to be one of the most advanced weapons of its type in the world. The factory had new machines installed, and it had a work force of 1,500.
The project ran into trouble 18 months ago and was abandoned. Then Plessey was given the job of getting rid of the "bugs" in the design. Plessey took over the factory to use it for other purposes, and the Government handed it over to the company in January of this year. In July, six short months later, its closure was announced. In the Glasgow Herald yesterday there was an article by a naval correspondent which said that the new wire-guided torpedo's trials had been a success. The bugs have been ironed out, and the weapon has been proved. Where is the manufacture to go?
One of the unfortunate aspects of the situation is that it is clear that Plessey must have known for some time that the design problems were on the point of solution. Yet the company decided to close the factory which was tooled, equipped and had the manpower to carry out the manufacture of the torpedo. I believe that the company is to be the sole manufacturer of this defence project.
If Plessey was a dirty name before, it has become a lot muddier this week. One wonders whether the take-over of the factory was a sop to get the torpedo contract.
On 5th July, I wrote to the Secretary of State for Trade and Industry in order to find out some of the facts about the takeover of the factory. We had been assured that the firm had been given incentives to take over the factory and to try to make it a going concern. However, I received a reply to my letter yesterday, from which I am surprised to learn that:The factory and machinery were acquired by the firm from Ministry of Defence as a normal commercial transaction and the terms of sale are therefore confidential. No invest- 346 ment grants were paid and in the circumstances there can be no question of imposing any restriction on the company's right to dispose of the property as it sees fit. Nor, as they have not received assistance under the Local Employment Acts in respect of the Alexandria project, are they under any obligation to provide continuing employment there.Today, two telegrams were sent to the Secretary of State for Defence by the Provost of Dumbarton and the County Convenor of Dunbartonshire, urging that… all steps possible be taken for manufacture of this torpedo to be carried out at Plessey's factory at Alexandria to prevent closure of factory and alleviate unemployment in West Dunbartonshire.In The Times yesterday there was a full-page advertisement, saying:We, the undersigned, are convinced that British membership of the enlarged E.E.C. will provide unequalled opportunities for expansion of investment and production in Britain. … The opportunity for growth will mean more jobs and greater prosperity for all in Britain.One of the signatories was Sir John Clark, the managing director of Plessey. What happy reading this makes in West Dunbartonshire.
If the Plessey board has any social conscience, it should employ the people of the Vale of Leven to do the work, instead of closing the doors of this large factory. If the Government mean what they say about unemployment in Scotland, they should insist that Plessey carries out this advanced project in the factory where it was born.
§ 10.40 p.m.
§ Mr. William Hamilton (Fife, West)
My hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and other hon. Members have rightly and properly concentrated primarily on the future of U.C.S. I hope that every Scottish Member is concerned about it. We are not by any means convinced that the Government are telling us the whole truth. My hon. Friend was right to impress on the House and on the country the importance of a Select Committee of Inquiry of this House. Clearly the Government have no intention of giving us the truth voluntarily. That being so, this House must use its own machinery to do the job which the Government, for one reason or another, do not want done.
I refer not only to U.C.S. but to the squalid plan for dismemberment which the Under-Secretary put to the Tory Party 347 before the election. We do not know where that originated or what happened to it. We do not know whether it was the declared intention of the Tory Party to dismantle U.C.S., irrespective of what else might happen. We do not know what took place concerning Rolls-Royce. My hon. Friend the Member for Dunbartonshire, West (Mr. Ian Campbell) has referred to the torpedo factory and Plessey. These are three prime cases about which the House and the country ought to know all the facts, but we are not getting them.
The Government were elected to give honest and open government. We are getting more secrecy than the Ku Klux Klan. They are not telling us anything. We have to drag things out of them. We do not know what the report of the advisers will produce tomorrow or the next day. But, whatever it produces, whatever condemnation it might contain of the previous Government, this House and the country have a right to know where the trouble started, who started it, and the people who caused it ought to be brought to account in this House. [HON. MEMBERS: "Hear, hear."]
The Ministers say "Hear, hear". All right. Is that tantamount to saying that they will publish the advisers' report? Is that tantamount to saying that they will publish the full Ridley Report on the dismantling and dismemberment of U.C.S.? Is that tantamount to saying that they will appoint a Select Committee to get to the root of all these troubles and closures? Or are they content merely to appoint a receiver? Is this the key man in the development of Scotland of the future?
I want to spread my wings a little. My hon. Friend the Member for Dundee, West (Mr. Doig) mentioned the problems of Dundee. I want to come a little further south, but keep on the east side of Scotland. Before doing so, I want to put the problem of Scottish unemployment as a whole in perspective.
The average monthly unemployment figure for the first six months of 1971 is more than 122,000 in Scotland. In only one post-war year in the whole of Scotland's unemployment history has the monthly average exceeded 100,000. That was 1963, the twelfth year of that Tory 348 Government. It was then 104,800. My guess is that by the end of 1971 the monthly average will have gone up to 130,000.
The monthly average of male unemployment in the first few months of 1971 has been running at 95,000. But more startling and stark than that figure is the comparison between the number out of work and the number of unfilled vacancies.
Going back to May, 1954, there were 38,700 on the dole and a total of 10,300 vacancies. In other words, there were three to four unemployed seeking every job available. In May, 1964–10 years on, all under the Tory Government—there were 56,200 on the dole and 5,000 vacancies or 11 unemployed seeking every job available. In May, 1969, under the Labour Government, when unemployment certainly rose, there were 60,600 male unemployed and 9,000 vacancies, or I vacancy for every 6 or 7 unemployed. In April, 1971, there were 99,300 male unemployed and 4,400 vacancies, or I vacancy for every 23 or 24 unemployed. That is the measure of the failure of the Tory Government to tackle the problem.
That was one reason for the panic measures announced last week by the Chancellor. They received a cool reception in Scotland, because they will do nothing during the next 12 months to solve Scotland's problem. The Prime Minister opened a Tory garden fete at the weekend. That is where the Prime Minister makes his controversial speeches. He has full protection at a Tory Party garden fete. There is no question of his getting lynched at a Tory Party garden fête. Only there dare he utter the kind of nonsense that he uttered at the weekend—that this was a carefully planned operation and that this was the third Budget which had been planned as long ago as June, 1970. Three Budgets in 12 months! If the Prime Minister had said that in Glasgow we could not have been answerable for his fate.
The Prime Minister was saying that Scotland's 134,000 unemployed were all part of the long-term Tory plan, because it was that unemployment that enabled the Chancellor to tell the House, "We are jolly good chaps. We have now created the unemployment which enables me to get rid of hire purchase controls and 349 reduce purchase tax". That will earn three cheers from every one of the 134,000 unemployed and from everyone in U.C.S. who does not know when the axe will fall or where it will fall.
I turn from the question of U.C.S. and from the national problem to a specific case which has been worrying me in Glenrothes. Here we have second-generation industries. They are the industries of the future. We prided ourselves on the fact that in Fife we had the largest electronics industry in Europe. This was a very welcome big investment to take over from the declining coal industry. Elliott Automation came there in the 1960s. It was taken over by English Electric in 1968 and became known as Marconi-Elliott. Subsequently some manufacturing was transferred to Witham in England but not so much as to cause undue concern. Then there was a merger with G.E.C., which planned to expand at Glenrothes in 1970. The plans did not materialise. There was a sudden deterioration in the semiconductors business. United Kingdom factories were faced with a flood of cheap imported circuits of the standard type which arrived in very large quantities from low-cost assembly plants in areas such as Hong Kong and Singapore.
I received a letter only today in reply to one I sent him a week or so ago giving the facts as they saw them. On 8th July, 1971, G.E.C. notified the unions of the intention to close the Glenrothes factory—these are the new industries of the future. G.E.C. pointed out that the total value of orders received for the Glenrothes and Witham factories between March and May, 1971, had fallen by 55 per cent. from the previous low levels of orders between December, 1970, and February, 1971. As well as the fall in orders there was a big fall in the average selling price for United Kingdom manufactured devices, in some cases by almost 50 per cent.
G.E.C. therefore decided to phase out the Glenrothes factory in the course of the next few months and concentrate their production at Wembley and Lincoln. The 80 or so hourly-paid employees will be offered jobs in Kirkcaldy in their other telecommunications factories. But there is no hope of employing the staff of 60 skilled technicians and these valuable 350 teams of trained technical people may well disperse, to the great disadvantage of them and the nation.
I put a question to the Government yesterday about the dumping of units manufactured in Hong Kong, Singapore and elsewhere. The Minister replied in rather quaint language. He said there was no dumping in the legal sense. I do not know in what other sense there can be dumping. Will he tell us the "illegal" way of dumping? It is difficult to prove dumping.
Did the Government know about these developments at G.E.C. a month or two ago, that G.E.C. were intending to concentrate their manufacturing facilities at Wembley and Lincoln? If so, what pressure did they bring on the company to concentrate in Glenrothes? What has happened is counter to the policy the previous Government were committed to—preventing that kind of concentration in the South-East and the Midlands.
§ Mr. Bruce-Gardyne
Can the hon. Member not see that the very policy of the previous Government in encouraging mergers of firms like G.E.C. created the situation such as he is faced with today? It is precisely because of the policy of encouraging industrial mergers conducted by the right hon. Member for Bristol South-East (Mr. Benn) that so many of these cases have happened.
§ Mr. Hamilton
The hon. Gentleman knows nothing about it. The merger had nothing whatever to do with this case. The American space programme was running down and the major cutback led to diminished demand for these products which affected production in this country. The Americans then flooded our market with low-priced units from Singapore and Hong Kong and this created the present situation. This would have happened whether or not there had been a merger. The Minister knows that very well. It is supply and demand rather than any question of whether or not there was a merger. But if there is a reduced demand, the Government should ensure that that demand is concentrated in development areas, instead of allowing it to go to Wembley. The Government have a commitment to interfere to stop that kind of thing.
The Electronics Weekly, a non-political trade publication, said in the editorial in 351 its issue of a fortnight ago, headed "G.E.C. Go Out of the Game":G.E.C.'s withdrawal from the standard, high-volume integrated circuit business is the first major British casualty of the semiconductor price war, and the electronics industry's first victim of the ground rules introduced by the Conservative Government.On the semiconductor industry's growing roll of the fallen, G.E.C.—despite retaining some specialised activities—must now be counted among the honoured names of those who failed to make it. For despite all the effort that was exerted, the downward spiral of both prices and demand proved too costly an experience to be borne.The comment continues:But is seems to have been a Government decision not to support the British microelectronics companies with tariff protection that finally decided G.E.C. to cut their losses. Market forces have been allowed to have free play.