THE SCOTTISH ECONOMY AND INDUSTRY

§ THE EARL OF DUNDEE

I am sorry to have made such a long interruption in your Lordships' debate, such a very long statement, but we can now return to the Motion which has been moved by my noble friend Lord Polwarth. I should like to begin by firmly contradicting the rumour that the Foreign Office has briefed me to speak in this debate in the belief that Scotland is a foreign country. No such comfortable delusion is ever entertained by any of my officials.

My Lords, my noble friend the Leader of the House regrets that Ms absence in the United States makes it impossible for him to be (here and to speak himself as Leader of the House for the Government in this debate, which he regards 38 as one of major importance, and he has therefore asked me to intervene in his place at an early stage in the debate. Although, as a member of the Government, I have no departmental connection with the Scottish Office, I am glad to remember that a few months before I joined the Government in June, 1958, I introduced a Resolution about unemployment in Scotland on which the discussion was probably mot unlike that Which we may expect from your Lordships this afternoon; and I am glad to see that seven or eight of your Lordships who were kind enough to help me by speaking on my Motion at that time are speaking again on this one to-day, including my noble friend Lord Strathclyde, who replied on behalf of the Government.

I was particularly grateful on that occasion for the support of my noble friend Lord Polwarth, who made a contribution to that debate not dissimilar in content and in ideas from that Which he has so ably delivered to your Lord-ships this afternoon. The views of my noble friend on these subjects are given very great weight by hits work over a period of years as Chairman of the Scottish Council, and we are always glad to hear his views which he expresses far too infrequently in Parliament. My noble friend has argued to-day, forcefully and reasonably, that in order to hasten the transition from what he called a 19th century to a 21st century economy in Scotland, we ought to have a vigorous policy for growth combining special inducements to new industries with a more rapid programme of expenditure on power and transport, on housing and on schools—not as a temporary palliative for unemployment, to be abandoned as soon as the figures go down, but as a permanent aid to economic growth. And I am glad, since that is cleanly a very long-term policy, that my noble friend had the vision to go forward to the 21st century; although many of us, or at least some of us here now, will never see it. But the 38 years which separate us from it are only a short hour in the life of our country.

I am particularly grateful that my noble friend did not disparage the progress which has been made under the Local Employment Act. At the present moment it is rather fashionable among 39 same people in Scotland to decry the benefits conferred by the Local Employment Act because it has not solved our industrial problem in 2¾ years; and in 1962 it has not at all kept pace with the loss of employment Which we suffered in that year. I remember that in the earlier debate in 1958 to which the noble Lord, Lord Polwarth, referred he used one simile which I thought was particularly apt: he compared Scotland to a person going up the down escalator of a moving staircase. He was going up the stairs and they were moving down against him, and he mare or less stayed in the same place. In 1962 the down escalator has been going down faster than we have been going up, and, in terms of unemployment figures, we are worse off than we were at the beginning of last year.

But the fact is that the Local Employment Act has brought a very substantial number of jobs to Scotland and a very valuable degree of diversity into our industries. This £41 million which has been spent in that short time (whether it has been provided by way of loan which has to be repaid or by way of grant which is not repaid) has all been used to build factories which would not have been built or extended if it had not been for the Act, and to provide 32,500 new jobs which would not otherwise have been there. That, I think, in less than three years is a large and a substantial achievement.

Of course, it is not enough and we must try to make our policy more fruitful in every way we can. I do not believe myself that in the immediate future, perhaps not in the foreseeable future, we can get on without a very tough policy of refusing industrial development certificates to an industry which seeks to expand in an area of high employment or in one of the great conurbations which it is socially desirable to restrict, if it is reasonably possible that the extension could take place in Scotland or in North-East England instead. I know there are some firms who will refuse to expand at all rather than go elsewhere, and this is more likely to happen at a time when the trade of the country or of the world is relatively slack and when the need for more industries in the development areas is therefore more obvious than usual. When trade becomes more active, then 40 more firms will be willing either to move or establish branches in Scotland; although in these circumstances, of course, the need for more employment will not be so pressing as it was before. That is one reason why we must continue this policy all the time, whether unemployment figures are better or worse.

As for the improved inducements for which my noble friend has asked, the "more juicy carrot" as he described it, the Government will certainly consider whether we can make our inducements better known and more effective than they are at the present time. Our aim is to reduce the imbalance of industry in Scotland. We want to help the older industries, most of whom have a very bright future before them, possibly with a smaller labour force and possibly concentrating on a more specialised type of production, such as has been our aim in dealing with cotton and textiles. We want to help these industries and bring new industries into any part of Scotland, though principally in those parts prepared to receive them.

While it would be quite wrong to pretend that one can do all this in two or three years we should certainly like progress to be quicker than it is now. Together with the ordinary procedure of the Local Employment Act there are certain kinds of Government expenditure on aid to new industries which are supplementary or ancillary to it although they do not proceed from it. Looking through Lord Polwarth's speech 4½ years ago, I find one of his most pressing demands was that a strip mill should be sited in Scotland, and not long afterwards the Government did undertake to finance the two Colville strip mills at Gartcosh and Ravenscraig, in North Lanark. There is no doubt, in my view, that this was one of the facts which induced the British Motor Corporation and Roote's to go to Bathgate and Linwood. All I am going to say about the strip mill now is that although it is most valuable on account of the direct employment which it provides to its own workers, its main value to our economy will be the attraction which it will give to the growth of other industries in Scotland; and this, of course, was the chief consideration which induced the Government to finance it.

My noble friend at that time also asked about advance factories—factories 41 which are built by the Board of Trade before they know who is going to occupy them. Noble Lords will know the history of these factories. After the war when it was very difficult to get a building licence and when it took an interminable time to get factories built any advance factories built by the Board of Trade were readily snapped up. Applicants were tumbling over each other to get them, because they wanted to take advantage of the sellers' market which then existed to restart their industries. Later on, when the sellers' market disappeared and building became easier, most firms preferred a factory built especially to their own measurements for their own requirements rather than a standard one, to which they had to adapt themselves. I have always thought, and have said so several times in your Lordships' House, that both kinds should be built, and that is what is being done now. Of course, we must have a flexible policy, having regard to the amount of demand which there is likely to be for these factories.

During last year, eleven new advance factories had been announced by the Board of Trade. The first, at the Royal Naval Air Force base at Donibristle, should be ready for occupation in June of this year. Then, in July, six more were announced for construction in Lanarkshire, Fife, Ayrshire, Dumfriesshire and Wigtownshire, which ought to be completed by the end of this year. And last November, four others were announced, slightly larger ones, in Glasgow, West Lothian, Dunbartonshire and Lanarkshire, which ought to be ready early next year.

The total area of these buildings adds up to 350,000 square feet. Since I happened to see on television the other night a speaker who declared that they would employ only 200 men, I think I ought to state that, on the basis of the average number of square feet per man, they are more likely to employ between 1,500 and 2,000. This is all in addition to the normal building ordered by firms availing themselves of the Local Employment Act. It is a comparatively small item, which we must consider together with other measures, in order to get a proper picture of the whole.

Together with the introduction of new industries, which is our main objective, 42 we must also consider power programmes, transport programmes and house-building programmes, which are needed for an expanding and a balanced economy. Your Lordships will have seen from the White Paper last November on public investment, that public investment in Scotland is expected to increase from £140 million last year to £162 million this year. A great part of that expenditure is on the electricity industry, whose chief problem in Scotland is to keep pace with the increasing demand for its product. More than 1,000 new or enlarged switching stations are needed every year, and about £50 million a year will now be invested by the Scottish Electricity Boards to meet an expansion in demand which is hound to increase proportionately with the success of our industrial policy.

Another matter, which is vital to our economic development in Scotland, is good roads; and road building is increasing every year. In the five years from 1956 to 1961, £28 million was spent on major, trunk and classified roads. In the next five years from now, from 1953 to 1968, it will be £71 million—that is, two and a half times as much as it was in the last five. By 1970 we shall have in Scotland a system of dual carriageways, linking all the main centres, from Dundee to Perth through the main industrial areas of Glasgow, Stirling, Fife and Edinburgh, with the South. In building these roads and transport facilities we want not only to increase the internal trade and commerce in Scotland itself, but also to facilitate the sending of products to the larger markets in the Midlands and the South of England.

The slowest feature of Scottish economy, all through our lives, has been housing. This has always been an intractable problem. When I was at the Scottish Office before the war it was then our first preoccupation. In 1938, I remember, we built what was then a record number of 26,000 houses, in spite of a miserably poor performance by the city of Glasgow, and it seemed possible, if we could get Glasgow in line with the other authorities and at the same time make full use of the Scottish Housing Association, which had just been planned and instituted by Walter Elliot and was carried on by John Colville, we might break the back of the problem in ten years; but instead of that we had six years' war, which set us back a terribly 43 long way. No building was done, and so little could be spent on repairs that the retrogression of houses towards being slums was tremendously accelerated.

Since the war, supplies of building labour and materials have enabled us to make only rather slow progress. Even if there were never any unemployment in the building trade, as there is now—and, of course, the Secretary of State intends to do everything he can to take up the slack in the building trade by encouraging works which can be advanced to be advanced, particularly by local authorities—and if our resources were used in the most efficient possible way, progress would still be slower than all of us would like. But some progress has taken place. We expect to have 35,000 houses under construction this year, compared with 31,000 last year. And the growth of our New Towns, although likewise slow, is, I think, considerable, and sometimes, I would say, impressive in its results.

The oldest of them is East Kilbride, which is already half-way towards its target population. I do not know whether my noble friend Lord Cones-ford is still here, but it is described by the Department as a target population—that means, a desired population—of 70,000. The economic significance of East Kilbride is shown not only by the fact that it attracts major new industrial units—the most notable of the new ones in 1962 were the factories now under construction for Satchwell Controls, employing 700 people, and for Standard Telephones and Cables, employing 800—but also by the large variety of other firms which have rented smaller standard factories. There are now 40 of these smaller factories in occupation for purposes which are very wide and varied.

The total factory area in this New Town now exceeds 2 million square feet, with a further 300,000 under construction. When it is all finished, the number employed in manufacturing industry alone will be over 9,000. And on the side of pure research, the National Engineering Laboratory, which was established at East Kilbride in 1954, has added 58,000 square feet to its space. Here is being built the research reactor for the use of the Scottish uni- 44 versities, mainly as part of their nuclear power engineering courses.

This represents in one locality an intensity of activity and employment which is much more familiar in the Midlands and the South of England, and which in Scotland we hope in time to achieve in our other New Towns and expanding areas. The newest one of the four is Livingstone, which was designated only last April. This new development area will occupy a situation of central importance in the economic development of Scotland. It will be placed alongside the main road from Glasgow to Edinburgh, which is to be reconstructed as a fast traffic road, and it is near the approaches to the Forth Road bridge. It is in the centre of an area of the greatest economic potential which has already proved its possibilities by the attraction of the British Motor Corporation factory at Bathgate; and this development is now to be associated with the major project for rehabilitation and progress of the surrounding countryside.

My right honourable friend the Secretary of State, the New Town Development Corporation and the County Councils of the two areas, Mid and West Lothian, have commissioned a development scheme for over 80 square miles surrounding the New Town. This will show how the potential of the area can best be realised and how the incidence and timing of the large expenditure already committed in this area should be adjusted to produce the maximum return in the shortest possible time. So, from this scheme, we hope to learn a great deal about techniques for stimulating economic growths, and these lessons will be applied wherever opportunities exist.

My Lords, I have seen some questions in the Press comparing the plants for Scotland with those for North-East England which are to be organised by my noble friend Lord Hailsham, and wondering how the position in Scotland will compare with that in England: because the Government have made it clear that there are now two areas which they consider demand particular attention—namely, Scotland and North-East England. My noble friend Lord Hail-sham's job is technical in character. As regards Scotland, the Secretary of 45 State, of course, already has Cabinet responsibilities of a similar kind, and executive responsibility for roads, housing, electrical power supplies and town and country planning which have a big part to play in reconstructing the Scottish economy.

One of the recommendations of the Toothill Report to which my noble friend referred was that there should be a new Department in the Scottish Office. The Scottish Development Department was set up last year to co-ordinate all these activities, and it is now intended to bring into this Department officials from other Ministries, who may be concerned but who are normally not under the authority of the Secretary of State, such as the Ministry of Labour and the Board of Trade. This inter-departmental group of officials to plan the economic and physical progress—which it is the duty of the Secretary of State to further—will include, in addition to the Ministry of Labour and the Board of Trade, the Ministry of Power, the Ministry of Public Building and Works, who are concerned with resources, building and civil engineering industries in Scotland and on whom so much will depend, and the Ministry of Aviation, because of their role in relation to air service's, and the Ministry of Transport who still control railways, though not roads, in Scotland. This group will operate in Edinburgh and will be serviced by a combined administrative and technical staff provided from the resources of the Scottish Office; and my right honourable friend the Secretary of State, with the help of my noble friend the Minister of State, will exercise direct oversight over the work of the group.

All these developments in housing, power and transport, which we must seek to accelerate year by year to the limits of our resources in materials and labour, are not merely aids for or stimulants to industrial expansion but are essential prerequisites of it. I put it to your Lordships that the present period of slackness in the economy is a challenge to our country, and in some respects, perhaps, an opportunity, too. The main task of all these numerous Departments for which the Secretary of State is responsible is to make the present pause in expansion into an opportunity, with the co-operation, of course, of 46 industrialists and public opinion, to make sure that we shall have in Scotland, both in the Highlands and in the Lowlands, a good basis, properly equipped with the right services which will be attractive to industry, into which now industrial growth will easily fit and from which it can expand still further, to the permanent advantage of the Scottish economy.

§ LORD TODD

My Lords, I rise to address your Lordships to-day with perhaps more than the usual trepidation. For one thing, this is the first occasion on which I have ventured to address your Lordships, and in that connection I must crave your patience and indulgence. Secondly, I fear that I cannot hope to match the dazzling array of statistics that has just been put before us by the noble Earl, Lord Dundee; and thirdly, I am not an economist, and I fear, therefore, that my views on economic matters may be of somewhat doubtful value, and certainly of a good deal less value than those of many of your Lordships. But I am naturally interested in the welfare of my native land, and I am concerned at the obvious industrial decline that has taken place there during this century.

The first thing one asks, I think, is why this decline should have occurred at all. Here I should like to follow the noble Lord, Lord Polwarth, and go a little into history, because I believe that the main reasons for the decline in the Scottish economy are to be found in the nature of Scottish industrial development in the nineteenth century and in emigration, two things which I hope to show are intimately connected. Scotland, as the noble Lord, Lord Polwarth, said, was very early to the fore in the Industrial Revolution; indeed, I would remind your Lordships that technical education, as we know it in this country, was virtually born there. As early as 1796 Anderson's University, the forerunner of the great Glasgow College of Science and Technology, was founded in Glasgow, as it was then said, for the good of mankind and the improvement of science. Three years after that George Birkbeck, who later founded the College which bears his name in Landon, became a professor at Anderson's University, and he 47 ran a course on "Mechanical and Chemical Philosophy" which was open to the public. He had to run that course in the Trades Hall in Glasgow because he had an audience of 700 people, which is a somewhat remarkable thing when you remember that at that time the population of Glasgow was only 70,000 souls.

I mention these facts to indicate the avidity with which the Scots took to the new technical knowledge of these days; because this was, in fact, the basis for the development of technically based industry in Scotland which led to a period of great prosperity in the country later in the nineteenth century. But I think that Scotland, in certain respects at least, suffered from her early industrialisation, because, since the main natural resources were coal, iron and oil shale, her economy became too narrowly based. It was associated mainly with the development of heavy industries, such as steel, heavy engineering and shipbuilding. And then, later on, with the depletion of readily accessible sources of power, raw materials and chemical industry, one found that mining, for example, became less important, from the point of view of employment at least, than it had been in the past.

Now, of course, the world still needs steel, ships and heavy machinery. But the competition for the supply of these is a great deal fiercer in the world to-day than it was in the heyday of Scottish industry. The plain fact is that you cannot stay competitive in industries like that unless you continuously and vigorously apply the results of scientific research to the development of your industry—in other words, there must be continued research and development in the pursuit of new products and new processes. I am afraid that a great deal more is needed in these industries than we have seen in the recent past, because these industries which I have mentioned have, in plain truth, a rather poor record in the matter of research and development, as they have also in the matter of training schemes for their employees. I do not claim that the picture is entirely black: there are some bright spats, and there are, I believe, the beginnings of a general change. But, broadly, this lack of progressiveness has been, I believe, the main trouble.

48 When one thinks back to the vigour of Scottish industry in the last century, one wonders why this decline should have occurred, and why, once it showed signs of appearing, new science-based industries were not found developing alongside the older ones. It is a very complex thing to disentangle a matter like this, but a purely personal view of mine is that a good deal of the trouble has been due to the slow passage, in the latter part of the last century, of the control and direction of industry from technical to financial hands: because the entrepreneurs who founded and built up the Scottish industries were technical men, and the decline has come since they passed away and their position in control has been taken by others. Accountants are pretty good at keeping books, but accountants alone cannot hope to direct the policy of a modern industrial undertaking.

The decline that has set in there has, of course, accelerated emigration, and it is emigration that is really the reason why new industries did not readily develop alongside the older ones in Scotland: it is not simply that Scotland herself was unable to produce people of sufficient vigour and intelligence to maintain her economy. The fact is that emigration from Scotland has been on an absolutely staggering scale. I am told that between 1900 and 1950 something over 1,100,000 people emigrated from Scotland, whereas during the same period England and Wales, with about eight times the population, lost just about half that number—in round figures, about 550,000. According to the latest figures I have, which relate to 1957, this process of emigration was still going on at about 24,000 a year. although the average natural population increase of the country was only 33,000.

On the side of science and technology, which is one that interests me, I would remind your Lordships that at the present time (or, rather, using the 1961 figures of the University Grants Committee) Scotland is producing about 11 per cent. of all the graduates in science and technology in this kingdom. A few years ago it was producing a good deal more than that—very nearly 20 per cent. Yet in a survey which was made seven years ago by the Department of Scientific and Industrial Research it was found that, of the people doing research 49 and development in industry in this country, only about 2.7 per cent. were employed in Scotland. To my mind it is no use our priding ourselves as Scotsmen on the magnificent contribution of Scots abroad, and it is no use talking about the historic rôle of Scotland in providing these emigrants. After all, she has not provided them in that number for such a very long time. The plain fact is that no country can stand a loss of its trained manpower at the rate Scotland has been losing it, and hope to maintain a sound economy.

I think that emigration, on top of declining industry, has been the major feature of what we have seen happening in Scotland. It is no use simply pleading for a decrease in emigration. People emigrate because of lack of opportunity at home, or because they see better opportunities elsewhere, and nothing will stop emigration except the provision of opportunity. So we come up against the essence of this problem: how to stop the decline in industry and the increase in emigration.

I said at the outset that I am no economist, but I should like to make just one or two observations here. In the first place, we must recognise that this is not a short-term problem with which we are dealing, though of course it has short-term aspects. There are problems such as temporary unemployment, and so on, which are very serious and must be dealt with; but solutions in solving the short term can be only palliatives and will not work in the long term. It is no use propping up an industry which has no future; in the end this will help nobody. Equally, I do not believe that, in the long run, bringing new industries into Scotland will solve anything unless these industries carry out on the spot research and development. You will not solve your problem simply by putting in production units or assembly units owned by firms the focus of whose research and development is located elsewhere.

The Government have already done a good deal in their efforts to attract or direct industry into Scotland, and I hope that they will continue with these. But I also hope they will encourage by every conceivable means, including fiscal incentives, the setting up of research and development units in association with these industries in Scotland because I 50 believe this to be absolutely necessary. I should like to see the Department of Scientific and Industrial Research carry out a really intensive survey of the possibilities of technological development in existing Scottish industry. I do not believe that enough has been done in that way at present.

The noble Lord, Lord Polwarth, mentioned something about Government research stations. I do not believe that anything is solved by simply putting up Government research stations. Of course, Government research stations are a good thing, but from a national point of view they should be put up only in the most appropriate situations. I am quite sure that the Department of Scientific and Industrial Research, and other departments, will, where appropriate, locate any new stations in Scotland—witness the Torry Research Station and the National Engineering Laboratory. Having mentioned that, may I add that I should like to see Scottish industry take the maximum advantage from the presence of the National Engineering Laboratory at East Kilbride. And I should also like to see Scottish industry making more use than it is doing of the possibility that now exists of getting development contracts for civil industry.

In this respect, too, the universities have a part to play. The universities and the technical institutions of Scotland can play a considerable rôle by increasing their contacts, not only with places like the National Engineering Laboratory but also with industry, where they can do it also by research. I must confess that I was a little disturbed to see from the Report of the University Grants Committee that although in 1961 there were 280 first degrees in technology given in the Scottish universities there were only 11 higher degrees in technology: that is to say, less than 2 per cent. of the total number of higher degrees in technology awarded in the United Kingdom (excluding Northern Ireland). Glasgow University and the Royal College of Science and Technology in Glasgow produced between them four higher degrees—and these are institutions right in the midst of heavy engineering industries and hard by the National Engineering Laboratory. There may be various reasons for this, but it suggests to me that perhaps the Scottish universities 51 could do more at research level in technology than they are doing. The universities should ponder this fact, because the power of a country to-day is measured exactly by its technological strength, and there is no country in the world to-day which is industrially strong which does not at the same time have strong academic technology.

I was very much impressed by a speech which I heard from the noble Earl, Lord Perth, in your Lordships' House on November 7, when he spoke about the Scottish economy. I do not agree with everything he said, but I agree with quite a lot of it. In particular, I feel, as he did, that a change has in fact begun in Scotland, in that we are moving to a broader-based economy. It is obvious that in a phase of this type there must be temporary difficulties, some of them very severe, and particularly very severe personal difficulties associated with unemployment, due to redundancy and movement from one industry to another. Here undoubtedly there is need for Government assistance—perhaps more than has been given up to the present.

The noble Earl, Lord Perth, spoke about communications, a matter which has been mentioned earlier this afternoon, and he spoke about road building and so on. These, of course, are important; but there is another area to which I should like to draw added attention, an area where I think there is room for a great deal more effort by the Government and local authorities. One needs only to travel casually through the industrial Lowlands of Scotland to see what a ghastly mess some of our forbears have made of what was beautiful country. I believe that there is room here—and not only room but need—for serious scientific study of these derelict areas.

There has been very much talk, both in your Lordships' House and elsewhere, about the drift to the South-East. In part, at least, that drift may be due to the attraction of better surroundings; because one must admit that the Home Counties are somewhat more attractive, from that point of view, than some of the industrial wastes we have inherited from the Victorian era. And when I say that a study should be made of these areas I do not mean that one should look at them and then put up two or three council houses in 52 the neighbourhood of a slag heap. There should be a scientific study into the possibility of complete restoration of these areas, and I am sure that, with the technical help which could be available through the universities and technical colleges in Scotland, studies of this type, backed by public money and by action upon the results, would not only give temporary alleviation in the matter of unemployment but also lead to a long-term improvement in the economy.

My Lords, I thank you for your patience and forbearance in listening to me. I fear that I have perhaps gone on rather long, but if I have done so it is because I feel very strongly that what I believe we can describe now as the past decline of Scottish industry exemplifies very clearly something of cardinal importance; that is, that it is impossible to keep an industrial economy strong without continued and vigorous application of technology in the direction of new products and new processes to maintain existing markets and win new markets. And I think there is in that past history of decline a warning and lesson not just for Scotland but for the country at large.

§ LORD BILSLAND

My Lords, it is a great pleasure to me, as a fellow Scot speaking immediately after the noble Lord, Lord Todd, to offer him very sincere congratulations on his maiden speech. The noble Lord brings to your Lordships' House a very distinguished record in science and affairs and we have heard this afternoon a thoughtful, well-informed and constructive speech, giving a number of facts which must cause concern and pointing in a very convincing way to the need for more research and development in Scotland. I hope that the noble Lord will frequently give your Lordships' House the benefit of his experience and knowledge in these affairs.

The Motion which the noble Lord, Lord Polwarth, has put down to-day is, I think, very opportune, and there is no one else who can speak with such authority on affairs in Scotland to-day as the noble Lord himself. We Scots all greatly admire the immense amount of work and leadership he has given in the affairs of the Scottish Council. There is, of course, serious concern in Scotland on the unemployment figures, but these figures are 53 not the main cause of our concern: it is that the action taken by Her Majesty's Government in the years since the war, including the effect of the Local Employment Act, has proved insufficient to redress the ills from which Scotland has suffered. In relation to the record of unemployment which so seriously affected Scotland in the middle 'thirties, the figures of recent years have, happily, been low. Nevertheless, when one reviews the period from 1953 to 1962—the past ten years— it is seen that average unemployment in Scotland has been double the United Kingdom average. In the United Kingdom in 1962 the average figure of unemployment was 2.2 per cent., but in the Scottish development districts, which contain 63.8 per cent. of the Scottish population, the figure was 5.3 per cent.

Unemployment figures are a soulless gauge of the situation. Behind them are apprehension, frustration, hardship, waste of skills, and fear of the dispersal of proved workers, with the loss of efficiency which results. But there is another unhappy figure affecting Scotland, to which the noble Lord, Lord Polwarth, and the noble Lord, Lord Todd, have referred. It is a figure which I think is more serious and significant than those of unemployment, and that is the figure of migration. In the past ten years, 1952 to 1961, the average migration from Scotland was 28,000 per annum, of whom exactly half, on the average, went to England. These migrants, one may be sure, come from the young and virile section of the population whom Scotland can ill afford to lose, and they go to swell mainly the concentrations of population which the Barlow Commission referred to as long ago as 1940 as producing an alarmingly unbalanced distribution of industry. In the years 1951 to 1956 the insured population in London and the South-East increased by 12.5 per cent.; in Scotland, in the same period, by only 2.4 per cent.

I would quote one sentence from the Barlow Commission: A reasonable balance of industry and population throughout the country should be a main feature of national policy during the coming years. If that aim has been a main feature of national policy, and I do not doubt that it has, then the Government must realise that it has proved very far short 54 of achieving its aim so far as Scotland is concerned. In the result there is real concern widely felt in Scotland to-day that the Government have failed to take cognisance of the situation and that there is need for a fresh appreciation of the situation and for the action that should follow. In saying that, I do not suggest that all remedial action depends on Government measures. Of course not. Industry in Scotland must play its part.

In the discussion of the position in Scotland to-day Lord Polwarth mentioned the reference sometimes made by very ill-informed commentators to the effect that the heavy industries in Scotland are in decline. Nothing could be further from the truth. Certainly they are very short of work but that is a very different matter from being in decline. I never felt more optimistic about their long-term future. A great deal of money has been spent in modernisation and re-equipment. For example, in the steel industry such expenditure has amounted in the last few years to £180 million, and equipment has been brought right up to date. Scotland now has a strip mill, as the noble Earl reminded us, and it is to be hoped it will make possible a wide range of new industry. Expenditure in the shipbuilding industry has been on a similar relative scale to that in steel.

We have long been hoping in Scotland that the Admiralty would accelerate and anticipate its naval programme. Here I must declare an interest as a director of Colvilles and a director of John Brown and Company of Clydebank. I welcome the statement made by the noble Earl in your Lordships' House this afternoon. As the noble Lord, Lord Hawke, said, it is a good beginning; it is a step in the right direction, I think were his words. But it is only a step, and I hope early action will be taken and on a considerable scale. Of the thirteen warship building firms in the United Kingdom six are on the Clyde. Therefore it is a very important matter for Scotland. It is well known that the Clyde made a massive contribution to armaments in both World Wars. In the present dearth of orders for merchant shipping, which is likely to continue for some time, it is surely of national interest that the teams of highly-skilled men in the shipbuilding industry should, 55 so far as possible, be held together. The British shipbuilding industry made a strong plea in this sense some time ago in a letter to The Times. I would quote one sentence: The facts afford the Government an opportunity which they should not ignore. Its acceptance could immeasurably strengthen a branch of our defence structure which we neglect at our peril and could contribute substantially to the continued preservation of a great national asset—our British shipbuilding industry. May I turn now to the operation of the Local Employment Act, and here I have several suggestions that I should like to offer to your Lordships' House. In 1937, the Commissioner for the Special Areas invited me to set up the first industrial estate in Scotland, and I continued as Chairman until 1955. After the war, on account of our national financial crises, we had many frustrations. In 1947, 1948, 1951 and 1952 the provision of factories on a lease basis was held up or postponed for long periods. Nevertheless, when I retired Scottish Industrial Estates operated 20 estates and 35 individual sites, totalling 16 million square feet of factory space, with 355 tenants, giving employment to over 64,000 workers.

To what was that measure of success due? It was due, of course, to the provision of factories on a lease basis; but it was due also to two other things very particularly. It was due to the autonomy my Board enjoyed, within the Act and to the inducements we were authorised to offer. To-day, where are the autonomy and the inducements such as we offered? They are gone. The Local Employment Act changed the whole conception. The Boards were replaced by Management Corporations. The running of the enterprise as it had been run—the salesmanship, securing, establishing, fostering of tenants—was withdrawn into the impersonal hands of the Board of Trade. Conditions became rigid and stereotyped to the exclusion, inter alia, of the inducements that had operated so effectively.

In the Second Reading debate on the Local Employment Bill in your Lordships' House two years ago I expressed the opinion, based on my experience, that the change in conception was a major blunder; and I continue to hold that view. However, one must face facts, 56 and I will offer one or two suggestions, which I hope will be helpful and practicable within the Act, to restore something of what that Act removed. Here may I say that I have the fullest confidence in the Management Corporation in Scotland, all men of wide experience, serving under the charmanship of Sir Robert Maclean, who had served as Regional Controller of the Board of Trade before joining the Scottish Industrial Estates Board on which he succeeded me as Chairman. But I regret their very limited powers. I acknowledge, of course, that impressive progress has been made, but more is patently necessary. From 1946 to 1960, factory space completed in Scotland was 10 per cent. of the British total. In the years 1960 to 1962 it dropped to 7.3 per cent., and in the same period it increased in London and the South-East from 13.3 to 14 per cent.

I offer my suggestions for improvement of the Act under three headings: inducements, salesmanship and simplification. I will conclude with two suggestions of a more major character. As regards inducements, I suggest the reintroduction of the small nest factory of 3,000 square feet or thereabouts at a very low rent to enable the man of limited means to develop a good idea. Several major projects at Hillingdon to-day, amounting to several hundred thousand square feet, started from such a seed. It is, of course, implicit in such a provision that the tenant be automatically relieved of his factory if he outgrows it, and be provided with a larger one, at of course an appropriate rent fin relation to space. There is a social value, I suggest, in building up such an entrepreneur who is more likely to become a useful citizen than an immigrant manager of a branch factory from elsewhere.

Scotland has been most fortunate in securing the British Motor Corporation and the Rootes factories; but the number of such projects is small. The small man, I would suggest, presents a field worth tilling. Special terms to encourage him would make no appreciable difference in the percentage return on the whole capital outlay. Secondly, it should be possible for the corporation to assure an applicant that an extension will be built for him at the same relative rental, whether the area has ceased to be 57 a development district or not. The change of designation does not affect loans or grants already committed under the Act, arid surely it should not affect the growth of the factory on which repayment of the loans depends. The point I wish to make is the importance of encouraging the expanding firm. Thirdly, a system of rebates of rent applied in my time, which made the inducements obvious to the applicant. I do not recall that any difficulty arose in the Operation of this provision. Here, I should like to suggest a new inducement—an allowance for movement expenses to an operator moving into a development district. Finally I suggest, as the noble Lord, Lord Polwarth, suggested, that the Board of Trade reviews the terms on which loans are made. One former inducement—abundant supplies of cheap coal—is no longer available. It is to be hoped that this discrimination in price against Scotland, which of course has nothing to do with the Local Employment Act, may soon be removed.

As regards salesmanship—the presentation of the services offered by the industrial estates and the securing of tenants—the noble Earl spoke a great deal about new factories being built, and I suggest that it is of the utmost importance that a new and a better approach than is being made to-day should be made to secure tenants. On this question of salesmanship, I should like to ask whether an impersonal body such as the Board of Trade, hedged in by regulations, is more likely to attract the tenant, or an enthusiastic, imaginative and vigorous corporation run by experienced businessmen bound to operate within the Act and working on the spot? It would be interesting to know what happens to applicants refused an industrial development certificate. I ask, are they encouraged to go elsewhere, and do many of them in fact do so? Are the corporations given the opportunity of contacting them? It seems only common sense to make the utmost use of, and to give the maximum authority to, the men running the organisation.

I come to my final point, simplification. There is great need for simplification. I should like to ask three questions to illustrate this point. Why cannot an applicant for a factory be told at the time of his inquiry what his rent would 58 be? Why need the purchase of ground be referred at every stage of the negotiations to ten separate people operating from a variety of local offices and headquarters, to give ten separate approvals? It is not surprising that an exasperating delay of five or six months frequently results before the project can get going. The corporation, I suggest, advised by the district valuer, should be empowered to carry through the deal. Is it not possible to simplify Clause 3 of the Local Government Act covering the provision of building grants? It is a masterpiece of obscurity, offering 85 per cent. of the difference between cost and current market value. A precise offer is essential. The terms and conditions under which factories are offered, and all the other facilities, must be clear, precise and available without undue delay to the inquirer, so that he can build up a table of costs and decide whether the proposition is viable or not. That is far from being the case to-day.

I conclude with my two major suggestions. The first is that the Local Employment Act be amended to make the facilities of the Act applicable in special cases where there are prospects of growth. The noble Lord, Lord Polwarth, referred to this matter. There are areas in Scotland where, through the help of the Development Commissioners, a measure of assistance has been given, but it would facilitate progress if the Act were to apply in similar cases. My second suggestion is that a Minister of the Board of Trade, a man selected for his experience of business, be placed whole time in charge of the distribution of industry policy, to review its operation, to work out standard formulæ of initial inducements and to examine the causes of delay and frustration, in consultation with those operating the policy in the corporations. Such a Minister should, I suggest, compare our methods and approach in this field with those of countries abroad, whose procedure has frequently been compared most favourably with ours in my hearing by American inquirers. The Minister meantime responsible under the President deals with distribution of industry policy as one of a large group of responsibilities. I suggest that this is a full-time job.

I base this suggestion not only on the case I have endeavoured to make for 59 the introduction of inducements, salesmanship and simplification, nor on account of the Board of Trade commitments in the cost of financial assistance given and of the provision of factories built under the two Acts, which amounts to close on £200 million. I have another reason. It is that when I was responsible, with others, for the provision of factories under the Distribution of Industry Act, I was all along conscious of a real lack of appreciation on the part of the Board of Trade of the problems arising and of the need for clarity, dispatch and understanding, in presenting the facilities offered. There was, I should like to add, one period when the position was wholly different, when the late Sir Stafford Cripps was President of the Board of Trade; but after he had gone that interest and understanding was not restored in my time. My Lords, I feel that it is upon interest end understanding, at the top that real progress depends.

§ LORD HUGHES

My Lords, I would start by joining the noble Lord, Lord Bilsland, in extending congratulations to the noble Lord, Lord Todd, for the maiden speech with which he has favoured us this afternoon. He has such a tremendous reputation in his own field that, in expressing congratulations to him, I feel almost in the category of the small boy who, in his first years at school, compliments the headmaster on the way he runs the show. What Lord Todd said in his particular field I am sure made most acceptable hearing to all of us. Like Lord Bilsland, I express the hope that we may hear him frequently in the future. I may add that it is a special pleasure to me to hear a Scottish Peer who makes it obvious from his accent where he comes from—who not only calls a spade a spade, but an Erroll an Erroll!

It is not mere politeness that causes me to express to the noble Lord, Lord Polwarth, my thanks for introducing this debate, particularly at a time when Scottish economic problems are more acute than they have been for a generation, and when, because of the national political situation, those who occupy the centres of power may be willing to listen to proposals designed to cure the causes 60 of our difficulties rather than tinker with the results. As Lord Polwarth stated in Edinburgh on December 17, it is no solution to wipe up the puddle on the floor if you do not mend the hole in the roof through which the water has come.

My Lords, I was sorry that the noble Earl, Lord Dundee, denied the rumour—which I heard for the first time at lunch yesterday—that he had been briefed by the Foreign Office. It is a pity it is not true because, so far as I can see, Scotland would fare very much better if the Government were to treat it with the same courtesy normally extended to foreigners; and if he can prevail on his colleagues to let this be regarded as part of his normal activities, all may not yet be lost.

I was interested in what the noble Earl said, and a great deal of what he said about the history of this problem was factual; but I must confess that I did not think that it was particularly relevant to what we are discussing today, because we are concerned with the future. If there is one thing which is obvious at the present time it is that, whatever has been done—and I would be the first to admit that a great deal has been done—the simple fact remains that it is not enough. Therefore, to refer to "the past" really begs the point. To me the most interesting part of his remarks was the information that Departments for which the Secretary of State is not directly responsible are to be represented in the new Scottish Development Department, and, if proper use is made of that representation, I think it can be an exceedingly useful thing for Scotland.

Much of what the noble Lord, Lord Polwarth, said as Chairman of the Scottish Council (Development and Industry) was, of course, exactly what we would expect him to say because of his past knowledge of these problems and the tremendous amount of work he has put into these matters since he took over that position from the noble Lord, Lord Bilsland. I was also very pleased to hear the constructive proposals put forward by Lord Bilsland in the speech which he has just made. The one which impressed me perhaps more than any other, simply because it is so easy to put into operation, was his point as to what happened 61 to the people who were refused industrial development certificates, and the suggestion that information as to such people should be passed on to the development areas. The Scottish Development Department should make it its business to arrange, as from now, with the Board of Trade that they should be informed al the, names and addresses of anybody who is refused such a certificate, so that the development areas and new towns in Scotland should get on their doorstep right away. That is most important.

The Government have constantly exhorted industry not to sit back and wait for business to come to them, but to get out after it. As chairman of a new town development corporation, I must say that I found this good practice when I recently followed it up by going to America, when an industry there had expressed an interest in Scotland. They were very impressed by the fact that the chairman of the corporation went to New York, to see them, and they have decided to come. The deciding factor between ourselves and another was that we were sufficiently interested in them to go to see them. If we get this information from the Board of Trade in East Kilbride, Cumbernauld, Livingstone, Glasgow, Fife, then we may well see new industries coming to those places. I would suggest that the Secretary of State for Scotland should be given a little more financial power in these matters. He approved my visit in seven days—that was in July; but it was on the day before I left to go to America, on October 5, that received formal Treasury consent to pay my fare. A little more speed than that is necessary.

My Lords, I do not believe that in a debate of this kind any useful purpose will be served by lengthy political attacks on, the Government or its members. In my opinion, that can be more appropriately and effectively done elsewhere. Such quotations as I propose to make from the Ministers' remarks are merely for the purpose of setting a background for my own proposals, because in the first instance there must be a radical change of attitude on the part of members of the Government. I was very pleased to hear the remarks of the noble Lords, Lord Polwarth and Lord Bilsland, on this subject because I find myself 62 merely following a theme which they have already set.

Speaking in this House on May 21 last, the then Minister without Portfolio, the noble Viscount, Lord Mills, said [OFFICIAL REPORT, Vol. 240, col. 820]: I have become a little case-hardened over these unhappy pictures of Scotland. I meet them in so many connections. My own experience is that the Scots are very well able to look after themselves. Unfortunately, that particular attitude is not peculiar to Lord Mills; he was peculiar amongst Ministers only in admitting it. Of course, he was right in saying that Scots are very well able to look after themselves; they are in those fields where power to do so lies in their own hands. But that is not in the field of Government where it is necessary to enlist the aid of at least part of the non-Scottish majority, if Government action is to be taken. In this connection I would draw your Lordships' attention to the fact that while there is no appreciable growth in Scottish nationalism in terms of political membership or voting strength, there is a very great increase in the number of people who preface their remarks on Scottish affairs by the words, "I am not a Scottish nationalist, but—". It is a symptom of a very real dissatisfaction with results from Government at Westminster.

In Glasgow, on December 12, the noble Viscount who leads this House said: Strange movements of population are taking place within this island—movements not fully understood, and, not being fully understood, very difficult to control. If the population chooses to regard the invasion of Surbiton as preferable to remaining in the Highlands or in Newcastle-on-Tyne, it is difficult to say, unless we are able to offer altertives actually more attractive to them, that either the Highlands or the population are worse off, or that the people who vote in this way with their feet (which is the most effective way of voting) are wrong. I am a United Kingdom Minister and must hold no special brief for Scotland over and above any other part of the Kingdom similarly placed. Within weeks of making that statement he has accepted a special brief, and Newcastle may not be particularly pleased now about his normal view of their needs, as I may say most of the Scots who were present at that luncheon in Glasgow viewed the remarks which he made so far as we were concerned. Quite briefly, we boiled it down to this: that the noble Viscount was telling us that we must stew in our own juice.

63 The phrase "voting with their feet" was, I believe, first used about those people who fled from Communist-controlled countries, particularly East Germany. Does anyone believe that they do so because they want to leave their own land? Is it not the policy of their Government which causes them to move, and is it not true that if that Government changed, if that Communist creed were abandoned, they would go back to their homelands in their millions? Such a change would immediately put an end to this outward trek from these countries. The same is true of Scotland. If the opportunities for employment in their own land had existed, many now in the South would not have gone there. Create these jobs in Scotland, and many who otherwise would leave in the years that lie ahead will be proud and happy to stay, and many who have gone away will be glad of the opportunity to come back.

When the noble Viscount, Lord Hailsham, said that these movements were not fully understood, I frankly did not know what he was talking about. There is nothing mysterious about it. A man loses his job in Glasgow, in Kirkcaldy, in Dundee or in Inverness, and he cannot find employment locally. He knows from what he hears on television, on radio, and from what he reads in the newspapers, that there are more jobs—or there were at that time—than there are people to fill them in the Midlands of England and in the South-East of England. He goes there and finds a job, sometimes with the difficulties of being separated from his family for a period of two years until he is in a financial position to set up house for them. There is nothing difficult to understand about that. Men who must live by what they can earn must, in the present circumstances, go where the jobs are. When the noble Lord, Lord Polwarth, said he was glad that this policy of laissez-faire in that respect was disappearing, he could have added that it was not disappearing fast enough.

I receive from time to time copies of the journal Town and Country Planning, and I was interested to read in this month's issue a reference to these problems of Scotland and the North of England. This was said of Mr. Erroll: 64 The President of the Board of Trade used the occasion to issue a clarion call to inactivity, on the grounds that any policy designed to strengthen the northern economy radically would interfere with personal liberty. All I would comment on that is that I hope it is not a doctrine which receives substantial support within the Cabinet. If it does so up to this moment, I should hope that one result of this Scottish debate would be to remove that attitude from their minds once and for all.

If Ministers are therefore prepared to change their attitudes and look at things afresh, what should they then do? First, as has been stated clearly by the noble Lords, Lord Polwarth and Lord Bilsland, there should be clearly defined lines of inducement to industrialists, either from abroad or from the South, which wild enable these people to make their own calculations of the assistance they can receive. That is done in Northern Ireland. An industrialist making inquiries in Northern Ireland can know within a week to a penny what he will receive in grants and loans. It may be a month, it may be three months, it may be longer before he knows what he will get from the Board of Trade, because there are no published rules available for him to know. Each case is dealt with on its merits, and only after the advisory committee have considered the merits of the proposal does the individual know what he is getting, if he is in fact getting anything at all.

Secondly, these terms must be more realistic as inducements than the present ones are. It is obvious that we are falling short of attracting industry to the extent which we require, because the inducement, the encouragement, the bribe—call it what you will—to industry is not enough. Now if it is not enough and you want to get results, you alter it. What is the present position? An approved applicant can get a factory built for him at rates which, for a limited period, cover only the interest charges, and later at a figure which includes an element of amortisation. He can receive certain limited grants in connection with the transfer of employees, he can receive loans which the Scottish Council has stated—and I am now quoting— are at rates only slightly more favourable than normal commercial loans—indeed, some companies have found that, with changing rates in the commercial market, they have obtained better terms over a period through their normal channels. 65 What do I propose in place of this? First, it should be obvious to all concerned that the financial inducements are real, and better than can be got elsewhere. Secondly, they should be of sufficient duration to enable concerns to establish themselves firmly and permanently. I emphasise "firmly and permanently" because too often in Scotland we have experienced, as we are now experiencing, the fact that what is set up is merely a branch, a limb, and when the parent end gets into difficulty the easiest thing is to chop off the limb and we are back where we started. What I propose is that factories built in approved areas by the Board of Trade or by New Town Development Corporations should for a period of seven years be rented at 4 per cent. of the capital cost, and thereafter at current rates of interest plus a suitable amortisation figure; and that the general directions given to the Board of Trade Advisory Committee, in terms of Section 4 (2) of the Local Employment Act, 1960. should be to make their recommendations on the following bases.

The first is to lend to approved applicants an amount up to the applicant's own working capital at an interest rate of 4 per cent. Where additional working capital is required this should be provided at current rates of interest. Secondly, to make a grant of the cost of moving plant and equipment from a present location to the new factory. That goes a little further than what the noble Lord, Lord Bilsland, said a few minutes ago, but it is merely following a pattern followed in Northern Ireland, and I think it is a most reasonable and equitable proposal. If a man has to move his plant and equipment from somewhere in the South of England or elsewhere in this country up to a new location in Scotland, and it costs him £20,000 or £30,000 to do so, at the end of the day he has no direct return on that money. It seems to me perfectly reasonable that he should receive an outright grant of the cost of transferring that plant and equipment—a cost which is involved not necessarily for his own direct advantage, or the advantage of his company, but for the benefit of the economy of the country as a whole. The third proposal is to make a grant to cover the costs of removal and settling 66 in of personnel transferred to the new factory. Basically, of course, that is what is done at the present time. I list it merely in case someone suggests later that by omitting to mention it I was suggesting its discontinuation.

Now these are the first of my proposals, and they can be done without any alteration of the law at all, because the present sections of the Local Employment Act covering these matters are in exceedingly broad terms and can cover directions of the kind I have mentioned. What I am now to propose (again, it is a follow-up of something which the noble Lord, Lord Bilsland, said, but I am again being a little bolder than he, and perhaps a little more incautious) would need action at the present time. I propose, in addition, that the Chancellor of the Exchequer should make arrangements for legislation to grant to industries setting up in approved areas total relief from income and profits tax for a period of five years, and a remission of 50 per cent. of such taxes for a further period of five years.

Having looked at the terms of the Local Employment Act I am aware that it contains a provision for the repayment of grants in certain circumstances, and it would be quite a simple system to extend that method to the remission of income and profits taxes which I have suggested to ensure the continuation of these industries in the approved areas for some years after they have received these grants. For instance, to suggest one possible method, before the remission of tax received in the first year became final, there would have to be one year remaining after taxation had remained. The twelfth year would make absolute the remission received in the second year, and so on; so that, to receive the full and final advantages of these remissions, these people would in fact be committed to remaining in the approved area for a period of twenty years. If I may follow up what the noble Viscount, Lord Mills, said about the Scots being well able to help themselves, if, after they have been there for twenty years, we have not impressed them with the desirability to themselves, of remaining there for their own sake, apart from anybody else, then we deserve anything that is coming to us.

These proposals are easily understood; they are generous and they are 67 workable. Any one of us, meeting an industrialist from -the South, or meeting an industrialist in America, in Sweden, in Germany, or in any of the countries where they are considering setting up plants in Scotland, can tell him these principles, if something of this kind is done, and he can sit down and work out for himself what he will get. If I may, I will quote the case of an actual industry which proposed setting up in either Scotland or Northern Ireland. It was a product which, fortunately for Northern Ireland, could be just as conveniently manufactured there as anywhere else in the United Kingdom.

There came to Scotland the head of the firm—incidentally, although the subsidiary is British-based, the head of the firm was American, and he was over on one of their very rapid visits. He went first to Northern Ireland, and he was there for three days. When he came away after three days he knew the exact amount of money he could get under various heads; he had an idea of the amount for which he could sell his factory in the South-East. And putting the two sets of figures together, he came to the remarkable conclusion that by shifting to Northern Ireland he would be £3,000 in pocket. If he sold his factory for more than he anticipated, of course, it would be £3,000-plus. Then he came to make his inquiries in Scotland, and he learnt that, with the utmost speed, three months must inevitably elapse before he could know what he would get in Scotland. Is it surprising that he decided to set up in Ireland, and is it surprising, although regrettable, that within a year of that decision being taken his subsidiary factory in St. Andrews was closed down and the manufacture of his golf clubs in Scotland no longer continued? Fortunately for St. Andrews, another concern has taken over the factory and has taken over the manufacture of these golf clubs there, so that the local skill continues to be employed.

I have said that my proposals are simple, generous and workable. But an obvious query in matters of this kind is: what will they cost? I thought the easiest way of dealing with that was to take an actual case from my own knowledge as chairman of a development corporation. This is a case where 68 the factory which the people are to erect will cost £100,000, where the working capital will be £250,000, and where the number of men (and I stress men, because that is the most important for us in Scotland: to get industries which will employ men, as distinct from women and girls) to be employed will be 300. Under the present set-up, the rental for that factory will start at £6,000 a year and will rise in due course to £8,000—an average, over a period of ten years, of £7,000 a year. Under the basis which I have suggested for rental, the rent over the ten years will be £4,000 a year, so that the cost per year under that head will be £3,000. Of the capital of £250,000 required, if the firm provided half they would then receive a loan of the other £125,000 from the Board of Trade, which, at present costs, would work out at £7,500 a year in interest. Under my proposal, it would cost them £5,000 a year in interest; so that the saving to them and the cost to the Exchequer under that head would be £2,500.

Now I come to the "64,000 dollar" part of the question—taxable profits. On a profit of, say, £25,000—and if the working capital was £250,000 I do not think it is unreasonable to assume for purposes of this kind a profit of £25,000—income tax at the present rate would be £9,687. Remission for five years and a 50 per cent. remission for a further five years would mean an average cost, at the present rates, of £7,265; so that the total annual cost of my proposals for that firm would be £12,765. At present rates, 300 men at present unemployed will draw (this figure, I must admit, was prepared before the statement made to-day by the noble Earl, Lord Dundee; so the new figures are obviously now altered in my favour), on average about £4 a week in unemployment benefit. That amounts to £62,400 per annum for doing nothing, instead of adding to the productive capacity of the country. It does not look like a bad bargain to me.

Some industries, of course, will be more expensive than others, and some will need a higher capital ratio or more expensive factories. But the costs I have given can be multiplied by five before they exceed the cost of unemployment benefit alone. In addition, the country will, of course, receive large sums in personal income tax from the wages and salaries 69 earned in the new factories, so that the figures I have quoted are not the end of the finances.

I believe that it is possible to work out methods of applying these grants, loans and reliefs to those people presently located in the approved areas, to enable them to increase the number of people presently employed by them. I think that that is important, because at present it is a source of grievance. People say, "Why are we so dependent on people coming in from England, or on people coming from America? What is wrong with the Scots that they do not expand themselves?". So many of the people in Scotland would not be eligible for assistance, that I think it is important that, if those who are presently there can increase the number of jobs, they should receive proportionately the same sort of assistance as is given to the incomer. It is quite simple to work out, given the will to do it.

In the interests of your Lordships' time I will confine my remarks to proposals directed to encouraging new industry into Scotland. I have said nothing about electricity, the use of coal, the continuation of railways, the need for air services (by subsidy, if necessary) and expenditure on roads. These all have their part in the pattern, and neglect of any of them will, of course, have a profound effect on the economy of the country. But I leave all these aspects to others. I would emphasise to industrialists, management and workers alike, that Scotland has much to offer them. The amenities of New Towns in Scotland are as good as those of England, and life in the existing towns is not so different from that in their English counterparts. In most parts the climatic differences are minor: on occasions such as the present, Scotland fares better. Meteorological comparisons show that in rainfall, temperature, and sunshine, Fife is very similar to Kent, except in fog, where the advantage is with Fife. It is easy to get to golf courses, and the golf is cheaper. No one needs to go far to get to good bathing beaches, and even with all that needs to be done in Scottish road works, the traffic jams are not so common as on Southern roads. Almost everyone has lovely scenery within a short journey. Shopping facilities are first-class in all the large centres 70 of population and wonderfully good in some of the smaller towns.

With all these advantages and sufficiently good financial inducements people should be queueing up to come to Scotland. If, in spite of the improved inducements, industry fails to come to the development areas in adequate numbers, then there must be something basically wrong with the private enterprise setup. I believe they will come, with these inducements, but I may be wrong. Maybe nothing we can do will persuade them. If that is the case, then the Government should not shrink from the only alternative—State investment directly in industry. And if that need should arise, and the present Government shrink from their duty, then I am certain that another and more bold one will not do so.

My attention has been drawn to evidence given to the Royal Commission on the Geographical Distribution of the Industrial Population (the Barlow Commission) on the 31st March, 1938. I have objected to the noble Earl, Lord Dundee, giving us history, and now I am going to do the same. It is a rather interesting snippet of history. Evidence was given by one Harold Macmillan, M.P. He was advocating a system of standard charges for the transport of goods, and he instanced, as a pattern of it, the fact that tobacco manufactured in Bristol is sold at the same price in Wick as in Bristol because the charges are equalised over all the customers. He was advocating an extension of that system, with all the difficulties that he recognised were involved in such a proposal. But what interested me particularly, because it seemed to me to be so appropriate, was one particular paragraph towards the end of his remarks. I have only extracts of his speech, and I do not know whether he was speaking for himself or for a group of people, or whether he was using the Royal and editorial "We". He said: It is in our opinion an aim which should be pursued even if it was found to involve some form of State subsidy. It would be better to spend money for this purpose and win freedom to determine deliberately the geographical distribution of population, the desirable size and location of our towns and the best means of preserving the amenities of the country surrounding the towns rather than continue our present huge expenditure in building sprawling areas of brick. To-day our towns are becoming larger and larger prisons within which an increasing portion of our 71 people live in complete isolation from the countryside It is, moreover, costly. A wiser direction of expenditure on the lines we suggest would liberate them and by wider distribution in the country improve their health and vitality. My Lords, a quarter of a century has elapsed since Mr. Macmillan said these things. They are, in my opinion, even more true to-day than they were when he said them, and they can be applied in a much wider sphere than that of transport charges. I do not think I can do better, in closing my contribution to this debate, than to say that I adopt his words in putting forward my own proposal.

§ LORD STRATHCLYDE

My Lords, my reason for intervening in this debate and intruding on your Lordships' time is that in my capacity as chairman of a public board I have acquired some practical experience of the subject under discussion which may be of some value. This comes about because the Act setting up the North of Scotland Hydro-Electric Board contains this provision: The North of Scotland Board shall so far as their powers and duties permit collaborate in the carrying out of any measures for the economic development and social improvement of the North of Scotland District or any part thereof. The Board have always taken this provision seriously, and although, in interpreting it, they quite naturally decided that first priority should be given to the extensive provision of electricity—at considerable loss—to the sparsely populated and remote areas of the Highlands and Islands covering no less than three-quarters of the land area of Scotland, they have also done their utmost to attract new industries into their district. In this they have had some success, for they have succeeded in attracting to the North a variety of new light industries with a high labour content. They include the manufacture of such items as electricity meters, small lamps, transformers, cookers, small tools and the like.

The Board's staff are continually seeking out further possibilities, and several very promising prospects are about to be signed up. They have reinforced these efforts by taking manufacturers to view suitable sites and by the publication of information in a booklet entitled The North for Industry in Scotland. In the 72 process of doing this the Board, of course, have become well aware of where weaknesses lie in the procedure which presently applies before assistance can be given to those seeking to establish new' industry. It is in this direction that I think I can contribute something of value to your Lordships.

The problem which faces us in the Highlands and Islands is to stop people from drifting away until communities cease to be viable and then gradually cease to exist. What the Highlands require are measures that will keep people from drifting away; and by far the most effective measure is to provide employment. Forestry is already doing that, and will do it to an increasing extent as our forests grow towards maturity and industries dependent on timber are established in their vicinity. Industries of all kinds are hesitant about moving North to the Highlands and that part of our country lying North of Dundee and East of Inverness, and many are unwilling to venture there without some firm assurance of the measure of help they will receive from the Government. Naturally, where public funds are concerned, forms have to be filled up and investigations have to be made, measures which I suggest to your Lordships are quite unexceptionable, if carried out without undue delay and without going into matters of detail which have no very obvious bearing on the financial worth of the undertaking or on its future prospects. Above all, as other noble Lords have said, it is essential to avoid delays such as are likely to create feelings of frustration in the mind of the applicant.

One of the very real troubles is that when the industrialist is in process of making up his mind there does not appear to be anyone who can tell him what measure of help will be forthcoming. My noble friend Lord Bilsland and the noble Lord, Lord Hughes, have both referred to that aspect. There is no one to tell what the rent of his factory is going to be or what financial assistance he will obtain if he wants to own his own factory. I will give an example of the kind of thing that happens, but before I do so, I wish to make it abundantly plain that I am not attacking anyone or imputing blame to anyone. My sole purpose is to point out the difficulties which have arisen and do arise and 73 Which would appear to be inherent in the present system.

The case I have in mind is that of an industrialist who, having decided that he would like to come to Scotland, entered into negotiations with a view to having a factory built for himself. During these negotiations it was indicated that the rent would be about 2s. 6d. per square foot, and it was on that understanding that he decided to go ahead. Later he received notice that the rent would be 5s. 6d. per square foot. In these circumstances, it appeared probable that the deal was going to fall through, but, fortunately, after lengthy negotiation, the rent was restored to the original 2s. 6d. Another case of which I know is that of a foreign company with an international reputation which was seriously considering setting up a factory in the North-East of Scotland. They had visited several sites and found them suitable. They had acquired all the information they required, with the exception of the amount of Government assistance they could expect if they went ahead and built their own factory. The project has not been proceeded with.

There are other questions which have been mentioned and gone into somewhat deeply, but I just want to mention them and no more. Questions on which it is difficult to obtain a ready answer are: Is Government aid available, such as exists in Northern Ireland and Eire, towards the cost of equipping a new factory? Is help available where persons from the area in which a factory is to be, built are required to go to the factory of the parent company for training? Are loans available towards meeting the initial outlay involved in setting up a new factory?

There is one matter which appears to be an insuperable obstacle to some people. This was a case where a loan was in question. All the preliminary hurdles had been successfully negotiated. When the conditions under which the loan was to 'be granted were formally placed before the company, the terms included this clause: The Board— that is, the Board of Trade— have the right to call on the company to remove and replace directors if their advisers report that the company has been incompetently managed and to require the company to alter their Articles of Association to allow 74 for the removal of any director holding office for life. The company refused to accept the clause and the project fell through. And I know of another case of a company refusing to sign an agreement which included that clause. Your Lordships will no doubt have your own views as to the merits or otherwise of a clause of that nature. My own view is that if there is any doubt about the competency of the management, a loan should not even be considered. But further, I should like to suggest that where a loan is in question, the terms on which it would be granted should be made plain at the outset, so that the time and effort involved in the initial negotiations should not be wasted. Once agreement has been reached in principle that a project should go ahead, is highly desirable that it should be completed without any undue delay. That, unfortunately, is not always the case.

At the end of December, 1959, a company made known its intention to manufacture in the North of Scotland. Three months later, full details of the project and the actual site on which the factory was to be built were given to the Press. Thereafter, for various reasons, on which I will not comment, there was one delay after another and the factory was not finally ready for occupation until August, 1962. It had taken two years and nine months to provide the company with a standard—I repeat, standard—factory of 7,000 square feet. Another case was in connection with an extension to an existing factory. Here the company had already been provided with a factory of 20,000 square feet. In August, 1961, agreement was reached to provide an extension of 10,000 square feet. A year later, in August, 1962, work on the extension was just starting, and according to my latest information the extension is not ready for occupation yet. In neither of these cases would there appear to be any real sense of urgency, although both factories were situated in areas of high and persistent unemployment.

There is another matter which, I suggest, calls for some consideration, as it is a source of irritation, and sources of irritation should be avoided in a matter of this kind. In one case of which I know it very nearly resulted in a project falling through. It is that an industrialist 75 wishing either to lease a factory or to have one built for him, is required to sign a letter of indemnity which makes him financially responsible for expenditure incurred by other parties, in the event of the project falling through, not at his wish or through any fault of his, but as the result, it may be, of a mere change of mind of some other party over whom he has no control.

I have a very considerable correspondence with chairmen and managing directors all over the country who, I have reason to believe, may be contemplating programmes of extension. The object of this correspondence, of course, is to interest them in the north of Scotland. The great majority of those to whom I have written—and I have written to some 500 within the last nine months—reply telling me of their interest and their intentions. Many of them tell me that they have recently completed their extension programme but, if they had known what the North had to offer prior to committing themselves, they would certainly have come and seen for themselves before finally deciding on the location of their new factory.

One chairman wrote to me some two months after I had written to him. He told me that he had been on a prolonged visit to the United States and that during his absence negotiations had been continued for a factory in the south of Scotland. He had no knowledge whatsoever that such facilities as I had made known to him existed north of Glasgow. He told me that in negotiation no mention was made of sites available out with the main industrial belt. On receipt of that letter, I got in touch with this gentleman and he asked to be shown what Dundee had to offer. He visited various sites there, called on the Lord Provost and had discussions with local officials, and left saying that he was completely satisfied that Dundee was entirely suitable for his purpose and that he would so report to his board. Some few days later I had a letter from him informing me that at a meeting of his board one of his colleagues had disclosed the fact that to all intents and purposes he had entered into a binding agreement to go to East Kilbride, a situation which he said he would have to accept.

76 I sometimes wonder—and I wondered during the speech of my noble friend to-day—why some people, when they speak of Scotland, can see no further than the valleys of the Clyde and Forth. They seem to be quite unconscious of that other three-quarters of our country where the introduction of industry is essential unless depopulation is to be accepted and a sportsground is to take the place of what was once, and still can be, a happy and prosperous countryside. Is it perhaps that they can take little interest in projects such as our northern burghs would find suitable and could support? If so, it should not be forgotten that a small project, employing, it may be, only 20 or 30 people, can mean as much to the majority of the communities in the Highlands as one giving employment to hundreds in the industrial belt.

Some of the letters I have received from industrialists speak of the cost of transport prohibiting their coming to the Highlands. Earlier I spoke of an extension to an existing factory. The people who made that extension wrote this: If you have not visited the factory for some time, you will find a very active and efficient unit, which saves about enough to offset the disadvantage of transport of raw material and finished products. Perhaps we make too much of the disadvantages arising from the cost of transport, which, as the experience of this firm shows, can be compensated for by the advantages gained through lower rates, ideal sites, freedom from congested roads and a labour force highly adaptable, very skilled, hard-working and intensely loyal.

I am not one of those who fail to recognise the great benefits which have accrued to our country through the operation of the Local Employment Act and other measures which the Government have taken. That Act, however, deals with a situation where there is a high rate of unemployment or where a high rate of unemployment threatens. Unemployment there must be, it seems, before the provisions of the Act can be brought into operation. In other words, it is not a preventative but a remedy to be applied in the hope of stemming the disease once it has broken out. As I have said before, what faces us in the Highlands and Islands is that people drift away until communities cease to be 77 viable. The Local Employment Act gives little or no help to deal with that situation. What the Highlands require are measures which will keep people from drifting away, and by far the most effective measure in this respect is to provide employment.

There are people who say—and it has been said this afternoon—that even then the drift will continue and the people who have left the Highlands will never return. That is far from being true. Forestry has brought people back from Glasgow to their native glens. When one of the new enterprises in the North advertised for people to go South and train in the new techniques, many of the applications came from England, from places like Corby, and also from the South of Scotland, stating that the applicants desired to be trained so that they could return home again.

If, then, the population of the North is to be retained, work must be provided. If it is not provided, the drift will continue until a stage is reached where the Islands and the northern counties may well have to be garrisoned to prevent unauthorised citizens of other countries from settling there. Your Lordships may think I am exaggerating. But go to the Orkneys; go to the Shetlands; and go even to the shores of the Moray Firth, and look to the horizons and you will see the ships in the distance that will be only too glad to land. For myself, I do not believe that that state will be reached. What I do believe is that, with abundant supplies of electrical power available; with the great improvement in communication by road which the Forth and Tay bridges forecast and which have been spoken of by my noble friend Lord Dundee this afternoon; with a modern freight transport system such as we have reason to believe may soon be forthcoming; with air services which bring Wick, Inverness, Aberdeen and, I hope before long, Dundee within a few hours of London and the Continent; with magnificent sites situated adjacent to safe deep-water harbours convenient to Europe and giving access to the oceans of the world and to every continent (just consider for a moment the potential of a place like Invergordon), industrialists in the not too distant future will discover the advantages which Scotland still has to offer.

78 But this must come quickly. To hasten the start, to increase the flow of the industrial migration from the South and from across the North Atlantic, the Government must prime the pump; they must provide incentives other than those which they have hitherto offered and must wholeheartedly play their part in selling Scotland to the world. I claim, with all modesty, that the Hydro Board and the Scottish Council are playing their part along with the Government. If the Government will continue thinking in terms of that help, this great area, one quarter of the area of the whole of the United Kingdom, may still be restored to prosperity and enabled to contribute its share to the economy of the United Kingdom.

§ LORD McCORQUODALE OF NEWTON

My Lords, I venture to intervene in this debate as one whose family, along with many other Scotsmen and Scotswomen, moved South to England to seek their fortunes more than 150 years ago. All I can claim is that we went back to Scotland: the firm that I represent has factories both in Scotland and in England; indeed, I have been fortunate enough to have other business connections in Scotland of which I am very proud. For that reason, as I say, I venture to intervene for a few minutes on a subject which I do not think has been touched upon to any great extent this afternoon. Before I embark on that subject, I would say this. I hope and trust that the Government, and Edinburgh in particular, will pay every possible attention to the speech which we heard from my noble friend Lord Bilsland. It seemed to me that, of the many speeches we have heard in this House on many subjects, none was more authoritative. He knows Scottish, industry probably better than any other living man, and I trust that the Government will profit by what he said, as I am sure that Scotland will profit if they do so.

Let me say straight away that, so far as work in the factory is concerned, in my industry and in other industries with which I am acquainted there is no difference that one can detect in the average productivity or efficiency of the workman or woman between England and Scotland. I have always been brought up to believe that the 79 Scottish farmer is superior to the English farmer, but I have no real method of judging that. I am sure, however, that, so far as industry is concerned, there is no difference in the quality of the industrial personnel. Therefore the point that I wish to make is that it is essential for the continued prosperity of industry in Scotland—after all the things that have been suggested to—day have been done; when all the new factories have been built and the people placed into work—that Scottish industry should be able to compete successfully, both with England and overseas, in the markets which lie open to both. To do that, Scottish industry must become and remain at least as efficient as, if not more efficient than, certain parts of English industry which have advantages of location and one thing and another.

So far as wages are concerned, trade union and employer organisations tend to embrace both Scottish and English industry, and the wage rates are normally the same in both countries. There is one small point—it is only a small point, but it is one of many—that in Scotland, by and large, the rents, especially of those in the municipalities and under the local authorities, are very much lower than they are in England, and the extra charges are borne ultimately by industry. Therefore, in Scotland we must remember that there is an extra charge on industry for the low rates, while in fact the Scottish trade unionist or worker in the factory is getting the best of it so far as money is concerned.

There are many points in regard to this matter which need to be equalised out in some way if we are going to maintain the efficiency of Scottish industry on at least a par with that in the South. A point I wish particularly to mention is in the matter of industrial relations. Good industrial relations are a vital, possibly the most vital, factor in efficiency in any industry or any factory. Good industrial relations are a key to increased output and increased productivity. It would appear, especially to those who stand somewhat outside, that the old antagonisms between employer and trade unionist, which were a lamentable feature in the past, are breaking down rather more slowly in Scotland than in England. I say it would appear to be so, and in discussion of the matter with 80 other industrialists that would appear to be their opinion.

I believe, and believe most strongly, that nearly all enlightened leaders of industry, both management and trade unionist, are now fully persuaded that benefits for both employer and employee come from co-operation rather than from conflict. But I have the uneasy feeling that, with this modern outlook—and Scottish trade unionist leaders will, I know, agree with this statement just as much as their English counterparts do—it takes longer to reach out to the rank and file on the shop floor, especially in some of the older industries. In the admirable Toothill Report on Scottish Industry some pertinent remarks were made on this subject which I think should be borne in mind by all. I think the state of industrial relations in Scotland has been misinterpreted in many quarters, and misunderstood both at home and abroad. It is a fact that time lost by industry in Scotland, although relatively small, about half a day per man per year, is nevertheless considerably more than it is in England. Why is this? The higher Scottish figures of absenteeism and stoppages are often regarded, and I think rightly regarded, as reflecting the true state of industrial relations in the area. The aim far Scottish industry, I would maintain, must be to achieve a record which is as good as, if not better than, that of the rest of the country.

Any economy which is trying to improve its position, as that of Scotland, must look at the factors which are under their own control. I would suggest—and I have said this before in this House—that good relations are a responsibility primarily of management, and it is for management to take the first steps to see that relations in their concern are good. Management must recognise the benefit of modern outlook, of good communications, of proper consultation and the like. But the trade unionists also have a most important responsibility for improving relations, especially, if I might say so, in the matter of indiscipline within their own body, which is causing a good deal of difficulty at the present time. I am sure that nothing would improve the efficiency of Scottish industry more than that steps be taken by the trade union leaders to relax such restrictive 81 practices as demarcation of labour, which is a curse of so many of our industries. I would urge that these matters should receive every possible study by Scottish industry until we can be assured that the time lost in industrial disputes in Scotland is as small as it can possibly be made.

There is one other question to which I should like to refer on the subject of employment, which always seems to be one which has been rather overlooked. The problem of employment in Scotland is mainly, as we have just heard, a problem of unemployed men and of unskilled men. I have long been of opinion (and I have said so in your Lordships' House before now) that it seems to me almost crazy, on social and employment grounds, that we should go on spending large sums of money ion hydro-electric schemes in the Highlands when coal-burning thermal schemes could give steady, permanent employment to the badly hit Scottish mining industry, especially if the economics of the question are more or less in balance. Up to now we have never really known whether they were, but we now have the authority of the admirable Mackenzie Report placed before us which shows that the balance is very small either way—on economic grounds coal-fired thermal stations can be justified just as much as hydro-electric stations. Indeed, the steady, permanent employment provided for Scots miners by the use of coal-burning thermal stations is large and highly beneficial. It is estimated in the Mackenzie Report that the big thermal stations which they suggest should be built in the East Fife coalfields, I think, would provide permanent employment for some 10,000 men.

It may be said that there is not a great deal of unemployment in the Scottish coalfields at the present time. If that is so, it is because of an almost complete cessation of recruitment, the allowance of wastage and encouragement to people to go and look for other jobs. We want to train our young people in skilled work, and coal mining is skilled work. We are assured in this Report that there is plenty of coal to sustain these thermal stations, arid I would urge, as part of the rehabilitation of Scottish industry from an employment point of view, that the 82 Government should act quickly in accepting these recommendations made in this Report, especially so far as coal-burning thermal stations are concerned, so that the Scottish coal-mining industry can recommence to recruit and train young people, knowing that they can promise permanent employment in the future. This seems to me to be nothing more or less than plain common sense, and I cannot for the life of me understand why it is not done and done speedily. Therefore, in intervening for a few moments in this Scottish debate, I put that point forward for most urgent consideration.

§ BARONESS ELLIOT OF HARWOOD

My Lords, following the noble Lord, Lord McCorquodale of Newton, I wish to intervene in this debate for only a very few moments on one aspect of our Scottish life which, though, strictly speaking, I suppose, is not economic, in the sense of applying to factories and other places which have been discussed, was mentioned by the noble Lord, Lord Todd, in his admirable maiden speech. I refer to the quality of the people of Scotland who are growing up to-day; who are being educated in our schools, in our technical colleges and universities, and who are going to be the people upon whom the responsibility of all this great efficiency, which the noble Lord, Lord McCorquodale of Newton, has so rightly stressed, is going to fall. I believe that it is tremendously important that we should look not only at the material side of our Scottish life but also at the side of the training of our young people, the education and social services. It is for that reason that, for a very few moments, I should like to draw attention to this aspect and to ask the Minister one or two questions with which I hope he will be able to help.

To begin with, there are a great many encouraging things about Scottish education at the present moment—and I am speaking now as chairman of an education committee of a rural county, responsible for ordinary State schools, to which the big majority of children go at the present time. There are to-day far more children studying at school after the age of 15 than there has ever been. In 1956, 31,000 children stayed 83 at school after the age of 15; to-day, there are 50,932 children still at school after the age of 15, an increase of 64 per cent. I think that is a very encouraging sign. It means that people are taking an interest in equipping their children for the technical age.

There has been introduced into the junior secondary schools—and I should like to congratulate the Government and the Scottish Education Department on this step—the new ordinary grade examination; and that has led to a great increase in the number of children taking that certificate. The number has gone up from 18,000, the total when it was started, to 43,000 in 1962. Although that is not a qualification of very high character, it does mean that children in schools are staying on and taking the trouble to do a certificate course; and that is very encouraging indeed.

In Scotland we are also to some extent free from what I understand in England is the great bogy of the 11-plus examination. That is due, first of all, to the fact that our children transfer from primary schools to the junior and senior secondary schools at the age of 12. Secondly, the transfer is done, apparently more successfully, by the transfer boards, and there is much less dissatisfaction. That is also, I think, a very good thing. The junior secondary school has a curriculum which is geared to try to fit a child for an environment in which it is living and is not academic, in the sense of leading on to academic certificate courses. But it is a very important aspect of our education that in these schools there is the greatest shortage of teachers. I hope that the Government will take this question up very seriously, because if we are going to obtain the full benefit of the junior secondary schools we must get more teachers into these schools.

In the senior schools again we are encouraged, because the standard is going up, as well as the number of children who stay on to take these further courses and who go to technical institutions and on to universities. This raising of the level of examinations, particularly the advanced level examination which is at the moment being discussed, and which I understand will be of great importance in the training of the young to-day, will also be of very 84 great help. All these advances, which are improving the quality of the young people who are going to work in all these factories we have been discussing, are excellent.

Furthermore, we have done quite a good job in the rehousing of children, in that 50 per cent. of the school population to-day is housed in new schools. Again, I should like to congratulate the Government, because I think that is a good proportion. Moreover, it makes a great deal of difference both to the teachers and to the children. We have, in fact, spent £1 million on new schools since the war; and that is a very good thing indeed. But there are one or two things which are not quite so good, and perhaps the Minister might consider these, because although we in Scotland have not had the kind of report which came out the other day on the condition of schools in England, I can testify from my own experience to the fact that in rural areas there are still old buildings; and the fact that none of the sanitation in the schools is inside is quite a serious problem. Certainly, it is a very serious problem in the weather we have been having recently, when all the lavatory accommodation which is outside has frozen. That is a matter I think the Government might look at; to improve some of the old school buildings and their accommodation. I should like to draw the Minister's attention to that point.

It is also of great importance to get more teachers in the primary schools. It is extremely difficult to get teachers for primary schools, yet what an important thing it is! Because if there is a really intelligent and delightful primary school teacher from the word "Go", the child is then interested in learning; whereas, how many children have been put off because in the primary schools there were far too many children in the classes and far too few teachers? And the teachers have the heart knocked out of them by what they have to tackle. I should like to appeal, if such a matter is possible in your Lordships' Chamber, to those boys and girls who are benefiting from the great improvement in our educational system to look upon teaching as one profession to which they might well turn; to become teachers when they leave school. It is extremely important that we should get more teachers for our Scottish 85 schools because, unless we do, we shall not be able to keep up, and, I hope, improve, the standard. I do not know whether it is a fact that conditions and salaries are not good enough. Certainly negotiations are always in prospect; but I do not think it is entirely that. I think it is that we want the whole community to care so much about education that people feel it is really a worthwhile profession to go into.

Perhaps I might also draw the Minister's attention to one other aspect of our economy, in the sense of the prosperity and happiness of the community in which we all live. We have another service to do with children, the Child Care Service, which is also absolutely essential. It is doing a fine job; it is doing what it can in difficult circumstances. And one of the difficult circumstances is that new responsibilities are placed upon the Child Care Service in the Bill that we are to debate in your Lordships' House to-morrow; and I am sure that another Bill will come up for Scotland at some time. For child care officers we have in Scotland no proper training; no professional status. They are paid lamentable salaries; local authorities, on the whole, treat the children's departments as a sort of Cinderella. I believe that that is a very great pity indeed.

I should like to see in Scotland a proper training scheme for children's officers, with proper salarie