Overview of Economic Development – The Fourth Statistical Account

Martin Higgins

By the end of the period, East Lothian was one of Scotland’s most popular areas with people choosing to live in the county in unprecedented numbers and unemployment at record low rates. The population was projected to increase to 101,231 by 2016, primarily as a result of in-migration (GROS, 2002, p11); at 3.1% the unemployment rate was below the Scottish average (National Statistics, 2001, pS55).

There were, however, some features of the East Lothian economy that gave cause for concern. For example, although unemployment was low so too were average earnings, at £361.90 some 5% less than the Scottish norm (Scottish Executive, 2001, p122). The number of people earning less than £250/week (or £13,000/year) was 25% of the working population (Business Strategies, 2002, p20). The pockets of unemployment that existed were in areas where heavier industrial tasks such as mining used to be staples. And with agriculture and tourism mainstays of local employment, seasonal jobs and low pay were not uncommon. The 1991 census also suggested that something like 40% of the local work-age population commuted to work outside the county and many schoolchildren headed to work rather than to further or higher education, which may affect the workforce skills base in future. East Lothian’s young people had long been attracted by the prospect of jobs in Edinburgh. As early as 1950, the county council had employed a Youth Employment Officer to help schoolchildren find work locally.

In the twentieth century, East Lothian was not one of Scotland’s economic powerhouses, but its performance was not completely detached from that of the rest of the country. So a brief socio-economic account of East Lothian is premised on the fact that national events such as currency devaluation, stagflation, mass unemployment, runaway interest rates, and even record low interest rates and low unemployment, had more often than not been the context and backdrop for the local story too. Conversely, the individuals whose entrepreneurial spirit and skills contributed most to change in the area are absent in such a short narrative.

Since 1945, the shift to a service-based economy generated wide-scale social change in East Lothian; mining villages and fishing towns for instance, have been reinvented as, or replaced by, commuter villages and dormitory suburbs. Targeted government policies also provided a national framework for economic development and, at various times and places, East Lothian benefited from these interventions. The need to diversify the economy, expand tourism, and develop employee skills was a constant theme throughout the period.

The demise of heavy industry

At the end of the second world war, East Lothian still had a number of coal mines at the west end of the county while farming was also a major employer. Coal and food were comparatively scarce so the main socio-economic problem in the county was ensuring that there were enough workers to supply these goods. The county council devoted significant resources to addressing the housing shortages across the county for ten years after the war.

Although an extension to mining in the area was proposed in the late 1940s, the reality was the closure of the last deep mine in 1964. Open-cast mining at Blindwells in the 1980s and 1990s was a temporary blip in the demise of the county’s industrial character. The last salt pan closed in 1959 and the post-war fishing industry was never strong. By the mid 1960s, heavy industry in East Lothian was on its last legs.

Since the second world war, more effective technology and better distribution links changed trading patterns and expanded markets. This meant major changes to the structure of East Lothian’s rural economy in particular. Haddington was a market town but bigger centres, notably Edinburgh, became the focus for fresh produce. The impact of the Common Agricultural Policy on agriculture, and the growth of multinational food retailers, also affected the most basic principles behind supply of, and demand for, food. The Haddington Farmers’ Market, started in 2000, was perhaps an indication that a long-term trend was about to change.

The Third Statistical Account reported that there were 1881 cars licensed in East Lothian in 1948. Even then rail links were being cut; Haddington railway station closed on 2 December 1949. Cars and lorries have altered production and supply methods and worker travel patterns. As early as 1956, concern was expressed about the number of East Lothian schoolchildren taking jobs in Edinburgh and the Haddingtonshire Courier reported in 1962 that Prestonpans was about to become a 100% commuter town.

While 100% commuting in 1962 may have been an exaggeration, the 1991 census suggested that 44.5% of East Lothian workers commuted to their jobs (GROS, 1991 Census, p79); this proportion probably remained similar in the nine years to 2000. Most of these jobs were in Edinburgh, and the dominance of the capital city and its influence on employment, transport and housing patterns in the county cannot be underestimated. But it is worth noting that even when heavy industry was significant in the area, lots of workers travelled outside, and not just to Edinburgh. Figures supplied by the National Coal Board indicated that as late as 1975 there were 1,605 NCB employees in East Lothian, 6.7% of the resident working population. Even in 1982 there were more than 1000 mine employees in the area (Coalfield Communities Campaign, 1986). East Lothian has long been a place to live rather than work.

Avuncular assistance

The year-end commentary of 1947 in the Haddingtonshire Courier summarised an emerging strategy for economic development in the area.

An endeavour has been made to attract light industry to East Lothian, but it would appear that the county has not a particularly strong case in view of its low percentage of unemployment.

(Haddingtonshire Courier, 1947 December 26)

Attracting new industries into the county remained a challenge to 2000, and was exacerbated by a shortage of land suitable for industrial development. Through the 1950s, under the guidance of the chief planning officer Frank Tindall, the county council zoned land for industrial development at Haddington, Prestonpans and West Barns and attempted to encourage business re-location to the county and expansion of existing businesses. Plans to develop tourism in Dunbar emerged around the same time and tourism development was a constant feature in economic development plans from then on.

In 1960, two of the three major post-war industrial developments emerged. Associated Portland Cement Manufacturers announced plans to quarry outside Dunbar and the South of Scotland Electricity Board revealed details of its proposals to locate a power station at Cockenzie. The power station development was confirmed in 1961 and for a time, East Lothian, often best known for its rural and agricultural attractions, was the venue for the biggest industrial development in Great Britain. (The third development, by far the most controversial, was the Torness nuclear plant. The proposal was tabled in 1974 but the plant was officially opened only in 1989).

Yet 1962 brought warnings that East Lothian’s traditional economy was doomed.

A report on the Scottish economy by John Toothill was supplemented by comments to the Haddingtonshire Courier in which he predicted that farming and mining would continue to decline. Instead, ‘[East Lothian County Council] would have to give a lead. To do this they had to go out and “sell themselves.”‘ (Haddingtonshire Courier, 1962 December)

That year, Frank Tindall announced that the council would embark on a speculative factory-building scheme, starting with a site at Macmerry. By 2000, Macmerry Industrial Park was one of the area’s industrial centres and speculative building projects were a feature of economic development policy until the late 1980s. Tindall described the approach of his team as ‘our tradition of “avuncular help” to industrialists and of nurturing “home-grown” industries’ (Tindall, 1998, p106).

Local policy was supplemented by assistance from central government. After years of lobbying, East Lothian became a Scottish Development Area in 1966 so making it eligible for loans and grant schemes that would be incentives for business development. In 1975 the Scottish Development Agency (SDA) was set up by the Scottish Office as an investment agency to aid economic development. Its influence became apparent in East Lothian in 1976 when it assumed management of the Ranco Motors factory in Haddington. This was the first takeover of its kind by the SDA and presaged its involvement in a number of East Lothian businesses through the 1970s and early 1980s.

The 1970s were dark days for Britain and East Lothian as far as economic performance was concerned and East Lothian was one of the first local authorities to act in response. In 1971 the county council appointed a full-time Industrial Officer and was the first Scottish authority to offer a business grant scheme to support entrepreneurs in the area. In September 1980 the council launched an economic survival plan. The proposals included redesignation as a Special Development Area, factory development, grant aid to small firms, and partnership with private industries wanting to develop in the county.

In the early 1980s, unemployment and recession hit the area hard. The yearlong run-up to the Miners’ Strike of 1984-1985, and the strike itself had particularly deleterious effects. National government policy at the time militated against state involvement and it was only after the worst of the recession that assistance became available. In 1986 the European Community designated all Lothian a Coal and Steel Employment Area, which meant that it was eligible for industrial aid funding. Dunbar had been designated a Special Development Area in 1985 recognition of the fact that the end of construction work at Torness meant that unemployment and economic problems needed to be prevented.

National policy chopped and changed through the 1990s. In 1991, the Scottish Enterprise Network replaced the Scottish Development Agency. Its role was to provide business assistance, develop export policies and highlight workforce skills improvements. In East Lothian, Lothian and Edinburgh Enterprise Ltd. (LEEL) and then Scottish Enterprise Edinburgh & Lothian (SEE&L) worked directly with local companies, complementing the work of the Council Economic Development Unit. In 1999, the Holyrood parliament also took on responsibility for economic policy – with its 3% tax-varying power a fiscal tool, as yet unused. The Executive produced a raft of policy documents; ostensibly, these provided guidance for development agencies and organisations. Exporting, e-commerce, workforce skills improvement and in particular, the encouragement of new small and medium sized businesses (SMEs) were priorities. By 2000, inward investment was no longer the concern it once was. In Haddington, the closure of the Mitsubishi factory in 1999 was a painful lesson about the impact of a high-profile business failure and withdrawal of overseas investment.

The economy at the millennium

By 2000, East Lothian had an economy that was not dependent on any single sector. Although many people worked outside the area there was still much activity and growth locally. The largest single employer in the area remained the council. Other major employers were from diverse sectors (see Table 1). There were also many people working in retail and small businesses – micro-SMEs in modern parlance – but while many were (and always had been) employed in these occupations, in terms of productivity they did not generate enormous amounts of money or spin-off other jobs. A similar concern applied to agriculture and tourism, both sectors that tended toward temporary and seasonal employment

Table 1

East Lothian Council	4,435 employees
Scottish Nuclear (now British Energy), Dunbar	620 employees
Inveresk Research, Tranent	600 employees
Hart Builders (Edinburgh) Ltd, Tranent	330 employees
Ian Glass/Lowland Coaches, Musselburgh	250 employees
Lothian Electric Machines Ltd, Haddington	210 employees
Blue Circle Cement, Dunbar	209 employees
Zot Engineering, Musselburgh	200 employees
Scottish Power, Prestonpans	201-500 employees
Fords the Bakers, Prestonpans	143 employees
PPL Therapeutics Plc	110 employees

Source: East Lothian Business Database, June 1998 – excludes retail

By the end of the period, at a national level, interest rates were as low as they had been for forty years, as was unemployment. Some businesses locally expressed concern about the high price of sterling and its effects on exports. There were also concerns that the level of economic activity in East Lothian was comparatively low and that the claimant count for the jobless ignored people out of work and not claiming benefits, as well as carers, people on early retirement, or those classified as long-term sick. The last category was one that in old industrial areas had been identified as a means by which working class men were removed from the lists of unemployed. In a booming economy, a shortage of labour might mean that development would be stifled and prices rose as wages rose, although the latter was good news for workers in the short-term.

The rapid growth of the Edinburgh economy also affected East Lothian. Property prices in the county were increasing as people opted to commute into the city; local people, in lower-paying jobs, were in danger of being priced out of the housing market. To counter this, the Council committed itself to ensuring affordable housing was available and that training and education was on offer so that the workforce was able to take advantage of better quality jobs. The identification of sites for business development was another council priority, as was its focus on the alleviation of commuter travel and its negative environmental impact.

The main foci for economic development, both nationally and locally, were based on encouraging more people to establish their own businesses and on people improving their skills. In the past, East Lothian’s natural resources – its land, its mineral deposits and its coastal waters – were the primary source of its wealth and employment. Although the land and sea are still important, it is the ambition, skills and knowledge of the area’s residents that will be fundamental to growth and change in the future.

Martin Higgins

The demise of heavy industry

Avuncular assistance

The economy at the millennium

Table 1

Further reading & references