HC Deb 13 October 1976 vol 917 cc416-21
11. Mr. Fairgrieve

asked the Secretary of State for Scotland if he is satisfied with the industrial and economic position in Scotland.

12. Mr. Teddy Taylor

asked the Secretary of State for Scotland if he will publish a White Paper on the economy.

14. Mr. Henderson

asked the Secretary of State for Scotland if he will make a further statement on the prospects for the Scottish economy for the remainder of 1976.

22. Mrs. Bain

asked the Secretary of State for Scotland if he will make a statement on the present state of the Scottish economy.

23. Mr. Crawford

asked the Secretary of State for Scotland if he will make a further statement on the progress of the Scottish economy.

Mr. Millan

Prospects for the Scottish economy are closely linked to developments in the United Kingdom economy, where output, particularly of manufacturing industry, is now running well above the levels of a year or so ago. Recent surveys of industrial trends in Scotland also show a rising value of output and export deliveries.

I have no plans to issue a White Paper on the economy as I am satisfied that the Government's policies are the right ones to put the national economy on a sound footing and that they will strengthen employment prospects in Scotland as elsewhere.

Mr. Fairgrieve

I am not quite sure whether I understand exactly what the right hon. Gentleman meant by that answer. I shall ask him a simple question. Is there not one sector of the Scottish economy that can more quickly put matters right than any other sector—namely, small businesses? If we changed our interest and taxation policies, that sector could immediately take on one more person per firm and halve unemployment in Scotland immediately.

Mr. Millan

I do not accept that. However, I accept that the small business sector of the Scottish economy is very important. It is not true that it has been neglected by the Government. Similarly, the Scottish Development Agency is paying particular attention to encouraging the small business sector, attention that I very much welcome.

Mr. Henderson

What contribution does the Secretary of State consider that the Scottish Development Agency is making towards improving employment prospects? When is it likely to receive a realistic budget?

Mr. Millan

The agency is already making a very significant improvement in the Scottish economy, and that improvement will be considerably developed over the next few months. Apart from one particular major acquisition that it has announced, for example, I know that it is considering a number of other prospects at present.

Mr. Buchan

Has my right hon. Friend considered the implications for the industrial regeneration of Scotland if we failed to bring forward a new power generating station order for Babcock and Wilcox? Further, will he consider what implications it would have for industrial development if the Scottish National Party's wish to cut back on electricity expenditure and to cut us off from the possibility of ordering from an English nationalised generating board were fulfilled?

Mr. Millan

I am very well aware of the particular problem of Babcock and Wilcox. The Government have promised a statement about generating capacity and orders generally before the end of the year. If Babcock and Wilcox were to rely simply on the Scottish generation programme, it would be in a very bad way indeed. It is only if we look at the whole United Kingdom generating capacity, as well as exports for that matter, that there is any future for Babcock and Wilcox. In saying that, I am simply saying what the company and its workers recognise. However, there is a problem there and I hope that we shall be able to end the uncertainty as soon as possible.

Mr. Taylor

Will the Secretary of State say whether he has made an estimate of the extra unemployment that will stem from the higher interest rates and the payroll tax, or whether he is simply not prepared to tell the House of Commons?

On a different question, does he not agree that his answers to all of these questions have been deplorably complacent in view of the fact that unemployment in Scotland is at 150,000? Is it not a further sign of the right hon. Gentleman's total ineffectiveness in safeguarding Scotland's interests?

Mr. Millan

On the first point, it is not possible to give a precise figure. [Interruption.] The hon. Gentleman wants figures on unemployment in Scotland. In Scotland so far, approvals under the temporary employment subsidy, the job creation scheme and the subsidy for school leavers have saved about 32,000 jobs. I hope that Opposition Members welcome that.

Mrs. Bain

Does the Secretary of State agree that one major way in which we could help the Scottish economy and employment prospects would be to operate a policy of preference for orders at home? Will he undertake publicly today to ensure that all platform orders that may be forthcoming over the next few years for the development of North Sea oil will be given to yards working in Scotland, thereby guaranteeing employment for the men?

Mr. Millan

We have provided the capacity in Scotland, and to a lesser extent in England, which may be available for, as far as we can see, any orders for production platforms which may be likely to come forward. I shall certainly expect to see those orders placed in Scotland. We have a memorandum of understanding with the oil companies on that matter. However, it is not possible, for various good international reasons, simply to make an absolute commitment to home preference in these matters. Nevertheless, the capacity exists and I certainly look forward to the orders, when they come, coming to Scotland.

Mr. Robert Hughes

Will my right hon. Friend also understand that a vast number of people who have been employed in oil rig construction on Teesside have recently lost their jobs? If we are to take the view that orders for the North Sea should go only to Scotland, there will be a demand from England and a loss to Scotland of orders that could be placed in Scotland. That is the way to economic disaster for all the working people of Britain.

Mr. Millan

Yes, my hon. Friend is quite right, and in so far as his question contains a reprimand for forgetting to mention the Teesside yard I accept it, because that is a very efficient yard and it is a considerable tragedy for the United Kingdom that it has run out of orders. I am talking specifically about United Kingdom orders, but the fact is that the bulk of these orders go to Scotland because that is where the capacity is.

Mr. Crawford

Leaving aside the fact that small businesses were not helped in 1973 by the imposition by the Conservatives of the levy on the self-employed, is the right hon. Gentleman aware that the simplest way of creating jobs in Scotland and reducing unemployment to the Norwegian level of 1 per cent. is by the injection of Scottish oil revenues, which are now running at £700 million a year?

Mr. Millan

As far as Scottish oil, so-called, is concerned, there has been far more expenditure on North Sea oil than there has been revenue from it so far.

Mr. Buchanan-Smith

The Secretary of State has mentioned some of the temporary schemes that the Government have introduced to help employment in Scotland. Worthy as they are and much as we welcome them, does he not realise that the fact that they are necessary at all is a measure of the failure of the Government's economic policies? Will he lift his eyes to the future instead of giving such complacent answers, and realise that what we need in Scotland is the prospect of productive industry with a future? In that respect, what relevance have high interest rates and the payroll tax? It is new jobs and modern industry that we want.

Mr. Millan

There has been concern in the United Kingdom as a whole about investment levels in many areas. No one expressed it more eloquently than the right hon. Member for Sidcup (Mr. Heath) when he was Prime Minister. Indeed, the particular speech concerned was quoted in the House in the economic debate on Monday. Therefore, to suggest that there is some particular worry about investment which has come only from the announcement last week is really no way of solving the present problem. I have already said that high interest rates, by themselves, are not an incentive to investment. Obviously that is the position. But the investment trends generally in Scotland are more favourable now than they have been for a considerable time, and I expect that situation to continue. From meeting Scottish industry, I do not find that it shares the pessimism of Opposition Members.