HC Deb 26 January 1977 vol 924 cc1483-5
13. Mr. Rifkind

asked the Secretary of State for Scotland what studies the Scottish Economic Planning Department has made of the place of banking in the future economic development of Scotland.

Mr. Gregor MacKenzie

The Government have always taken the view that the availability of satisfactory financial services is vital to the development of Scottish industry. We are in no doubt of the important contribution made by financial institutions in Scotland to industrial development and the Scottish economy as a whole.

Mr. Rifkind

Has the Minister's Department examined the curious banking policy of the Scottish National Party and, in particular, the extraordinary claim by the hon. Member for Perth and East Perthshire (Mr. Crawford) that the banking community favours separatism and a separate Scottish Parliament? Is the Minister aware that following that claim leading members of the banking community in Scotland immediately declared that the Scottish National Party's policies would be disastrous for jobs, employment and prosperity in Scotland?

Mr. MacKenzie

I must say that if the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) understands the financial and banking policies of the SNP I envy him very much, because in recent times I have tried to understand them—as others have—but I have concluded that I have never heard so much nonsense in my life. That view is well backed up by the recent pronouncement by important people in the banking world that the talk of a Scottish hound, and so on, would do irreparable damage to the Scottish economy.

Mr. Crawford

May I inform the Minister that the sub-committee appointed by the Committee of the Scottish Clearing Banks, when commenting on our financial policy, stated that the document was "well prepared"? May I ask him whether he would prefer to have a strong currency, as we shall have in a self-governing Scotland, and low interest rates or the high interest rates of today? May I also tell him that if he is very good—[HON. MEMBERS: "No."]—he might be one of the candidates for Governor of the National Bank of Scotland?

Mr. MacKenzie

The hon. Gentleman says that the statement was "well prepared". All I can say is that it must have been typed and issued in a better form than one sees in the usual Press notices issued by the SNP.

I am not quite clear about the present attitude of the hon. Gentleman and his friends, following the assurances that they have been giving to some of the British insurance companies, to which the hon. Member for Glasgow, Cathcart (Mr. Taylor) referred. I am not sure whether the statement that he is issuing now is the same as the one he issued in November. It is all a trifle confused. All I am certain of is that Scottish banking interests have already declared that they think that the hon. Gentleman's policy is nonsense.

Mr. Sillars

From a Socialist point of view, people in the Labour movement in Scotland have always been concerned about the rôle of the banks and investment institutions in lending their contribution to solving the problems of the Scottish economy. Is it not the case that if we are to overcome the economic problems and unemployment in the Scottish economy a Labour Government will have to take control of the banks and investment institutions and direct their capital into the country from which they draw it?

Mr. MacKenzie

We have already made our policy in this regard crystal clear. We believe that the best way of assisting industry is through the Industry Act and the Scottish Development Agency. The relationship that we have with banks and industry at present seems to me to be very satisfactory, and I do not think that there could be any great improvement in it.

Mr. Younger

Is the Minister aware that the Scottish banks will shortly be facing severe demands from their customers, whose cash flow will be very adversely affected by the abrupt withdrawal of the REP, as proposed by the Government? Does he recall that the Labour Party strongly objected to the previous proposal to phase out the REP when unemployment was below 100,000? Why is it now supporting a move to remove the REP overnight when unemployment is very nearly 200,000?

Mr. MacKenzie

My hon. Friend dealt perfectly adequately with these questions earlier. I can only repeat what he said, that we are naturally anxious to ensure that the money spent by the Government is used to the best possible advantage of the Scottish people, and the Chancellor's measures for schemes for improving industry, money for the SDA, and so forth, are a much better way of using money than was the REP.