Orders of the Day — Unemployment

Part of the debate – in the House of Commons at 12:00 am on 24 July 1978.

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Photo of Mr Douglas Crawford Mr Douglas Crawford , Perth and East Perthshire 12:00, 24 July 1978

I am sorry. I have given an undertaking that I shall be brief. I am appalled at the complacency of Labour Ministers in Scotland who on the one hand say that the SNP is chasing away investment and in the next breath preen themselves when new factories come to Scotland. I am equally appalled by the Conservatives, and their friends in the "Scotland is British" campaign who say that financial institutions will go away at the very time when we have had an unprecedented number of foreign banks actually coming into Scotland. I quote from an advertisement in Time magazine. In advertising the fact that the Swiss banking corporation had opened an office in Edinburgh, the corporation is reported as saying: We are banking on Scotland's financial future with our new representative office". This is at a time when the SNP is going from strength to strength.

The truth is that investment in Scotland, where it has happened, has largely been as a result of indigenous Scottish efforts. We need more political autonomy to increase this. The United Kingdom used to look down its nose at the Republic of Ireland. But according to EEC statistics, the Republic of Ireland is the fastest-growing economy in the EEC. It is no secret that the Republic of Ireland is now actively considering floating her pound away from the pound sterling and revaluing it.

Unemployment has been treated as a political football, largely and especially by the two Front Benches. That is wrong, because as many Back Benchers have said, it is not jobs alone but dignity which is at stake. I should like to offer one or two constructive suggestions. I suggest that the days of footloose industry are over and that the heydays of the 1950s and 1960s are past, when in to Scotland we had the IBMs, the Honey-wells, the General Motors, the Burroughs and the NCRs. I hope that the Secretary of State will be able to benefit from this observation. There is one notable exception to my thesis. That is Ford going to South Wales. I believe that the Prime Minister had a lot to do with that. I look forward to the day when a Scottish Prime Minister can exercise the same influence over footloose industry as the United Kingdom Prime Minister exercised in helping Ford to go to South Wales.

But by and large the welcome invaders, as the Scottish Council called them, have ceased, and footloose companies no longer exist. Therefore, the future growth in employment—this will apply to England as well as Scotland—rests with companies already established in Scotland, be they indigenous or be they attracted over the past few years.

But we need a more flexible system of grants for the existing companies, as well as a closer monitoring of the grants. I do not blame the Scottish Development Agency for the mistakes that it has made. The SDA must take risks. I would not have invested in some of the companies in which it has invested. and doubtless it would not invest in some in which I should like to see it invest. But I suggest that it should have closer monitoring of its investments. There should be a greater internationalisation of the Scottish Development Agency. There should be better infrastructure. Our roads should be improved. We need more direct nonstop flights from Scotland to continental Europe.

Earlier, the hon. Member for Belfast, South (Mr. Bradford) said that the Irish Sea was the most expensive sea route in the United Kingdom. It is not. The Minch is, and the constituency of my right hon. Friend the Member for Western Isles (Mr. Stewart) suffers especially from that.

To help the growth of industry in the more outlying areas of Scotland and in the islands, we should like to see the developing of a pricing system which treated the sea crossing as a bridge so that the cost for freight and for people was the same as if they were crossing a bridge from one island to the mainland.

Another matter which concerns existing companies is that we must ensure that service industries come under the ambit of the general system of grants and incentives. My hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) made a telling point about that in the Scottish Grand Committee two or three weeks ago.

But it is not just tourism and invisible earnings, of which Scotland has plenty, which are service industries. Software is a service industry. Electronics was the great Scottish white hope of the 1950s and 1960s, but it is no longer. The potential has not been realised fully. Silicon chips and micro-processors are the new "in" thing, and we can now put into a container the size of a microphone the logic that would have required the whole of this Chamber in the 1950s. This marks a new revolufion.

I suggest that all this talk about silicon chips and micro-processors may not be quite right. It may be that the hon. Member for Nelson and Colne (Mr. Hoyle) has not read it, but he was rehashing what Sir Leon Bagritt said in the 1964 Reith lectures. In "The Age of Automation", he said that automation would in time lead to a decline in manu- facturing jobs. I suggest that all the concentration on silicon chips and microprocessors may already be a little out of date and that we should be concentrating on telecommunications software and brainware which can overleap the silicon chip revolution into the 1990s and the next century.

Another source of employment is new companies. What are the springs of innovation? No one can answer that, but I suggest that there is a need for a Government-sponsored venture capital company. If we had private financial institutions joining it, so much the better. But I point to what American research and devlopment did with Digital Equipment Corporation in the early 1960s and what European development enterprises did with Membrane in the late 1960s and early 1970s. This Government-sponsored venture capital company would, like the SDA, lose money on some ventures, it might break even on others, but it might make a very great deal of money on even more.

There is an argument that a Government-sponsored venture capital company should divest itself of the shares in a company in which it invested when those shares reached a certain level. Against that, it could be argued that the taxpayer should have the benefit of dividends accruing from a successful investment. For it, the case is that the State should benefit from reinvestment from one company into other companies, so that the system of setting up new companies should be self-generating.

I make these suggestions largely in the Scottish context. Scotland is smaller and more manageable than England, but I suggest that they could be put into practice in England as well. If work along these lines is carried out, a start can be made towards the creation of real employment. Temporary employment subsidy and other palliatives are temporary. They are rather like applying Elastoplast to a gaping wound. But they are also a system of featherbedding, and they are, I suggest, a factor to be avoided in the long term. Of course, there are companies, areas and industries where local criteria must prevail over straight, hard capitalist criteria. But in the medium and the long term, they must be to create real and self-generating employment.

I realise that once we get back to the respective Front Bench spokesmen, this debate will revert to a political dingdong. But I hope that a brief outline of policies from the SNP Bench will give some food for thought and that the House will look at them in the constructive spirit in which they have been put forward.

Tonight, my party will vote against the Goverment, though not with the Conservatives. If ever there was a case for a third Lobby in this House so that the SNP could say "A plague on both your parties", that case is tonight's vote.