CAB129-78 — Page 131

Page 131

་་་-- --

PUBLIC RECORD OFFICE

Page Pagefi 321of 321

Reference

SAB129/78.

ALL ODD NUMBERS BETWEEN

FOLIOS

131-137.

ARE BEARD HAVE

NOT BEEN COPIED

132

(THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT}

-Page-133 of 321--

-Page-133-of-32-1---

SECRET

C.P. (55) 177

16th November, 1955

CABINET

COPY NO.

61

WEST LOTHIAN; UNEMPLOYMENT PROSPECTS

Memorandum by the Secretary of State for Scotland

I feel bound to bring to my colleagues' attention the very serious situation that is threatening in the area of West Lothian which is dependent on the shale oil industry.

2.

Scottish Cils, Limited, a subsidiary of the British Petroleum Company, produces fuel oils (and some by-products) from shale mines in the north-east corner of West Lothian. It employs 4,000 men in the pits and the works which produce the oils and by-products. This part of West Lothian is a "one-industry" area, and its employment depends almost wholly on shale oil.

3.

In order to enable the home production of oils to compete in selling price with imported oils, the former pay a lower duty to the Exchequer. The preference was 9d, a gallon in 1950 but was increased to ls. 3d. a gallon in 1953 to allow the industry to meet rising costs of production unaccompanied by a rise in selling price. Even with this preference, however, home produced light oils still pay a duty of ls. 3d, a gallon,

4. Over a year ago the trade union represented to me that a further reduction of the duty was essential if the industry were to be re-organised and put on an economic basis; and since then the Company have urged the same point on the Minister of Fuel and Power, They claim, I understand, that the industry is running at a loss of about £200,000 a year and that, unless further relief is given, they will have to close down. 'The rate at which the industry would run down if no further assistance were given is not yet known. It may be that the Company would agree to spread its closures over three or four years and so allow an opportunity for other employment to be considered. There can be no certainty however that the Company will not decide to cut their losses and close down immediately. One group of pits and works employing some 600 workers will in any case require to be closed very soon but by a happy combination of circumstances, which is unlikely to recur, the prospects are that most of the men will be able to be absorbed in the other parts of the industry and in other develop- ments at Grangemouth as they become redundant.

But if the rest of the industry is to close, absorption in it will provide only temporary employ-

ment.

5.

The whole case for further assistance to the industry has been discussed with the Treasury by the Departments concerned, but the Treasury have Rageak 33tof Belthat the Company shoulPagiafoed fth32 The

-1-

134