HC Deb 17 June 1981 vol 6 cc1006-7
3. Mr. Grimond

asked the Secretary of State for Scotland what is now his assessment of the course of the Scottish economy in 1981–82; and if he will make a statement.

The Secretary of State for Scotland (Mr. George Younger)

The indications are that the fall in output in Scotland, as in the United Kingdom, is coming to an end, and I would hope to see some modest recovery over the period ahead.

Mr. Grimond

As there have been two important changes affecting the outlook —the fall in the price of oil and the fall in the value of the pound, which we used to be told were two of the greatest handicaps to industry —has not the Secretary of State revised his estimates much more upwards? May we now expect a great surge in Scottish industry? Will the right hon. Gentleman use his influence in the Cabinet to prevent any attempt to raise interest rates consequent upon the fall in the price of oil and the fall of the pound?

Mr. Younger

Like the right hon. Gentleman, I hope that we can look for good signs, but it would be wrong of me to give the impression that we can expect to see a surge of recovery. I think that the recovery from this recession will be slow and difficult.

The right hon. Gentleman is right to say that the fall in the value of the pound gives some welcome benefit to our exporters, but in the longer run it puts up import prices, which, particularly in the case of raw materials, may have countervailing effects. The net effect is helpful, but perhaps not greatly so.

Mr. Robert Hughes

Can the Secretary of State confirm that he has received the report of his special study group on the impact of oil-related industry on non-oil-related industry in the North-East of Scotland? When will it be publicly available?

Mr. Younger

I have received that report, and I am studying it carefully. As my hon. Friend the Under-Secretary of State announced recently, we intend to publish it. I think that it will be a few weeks before that can be done.

Mr. Bill Walker

Does my right hon. Friend agree that the real, underlying answer to Scotland's recovery lies in Scotland's own hands, and that if the Scottish people take a realistic view of prices, wages and productivity in the future, there is no reason why we should not compete with the best?

Mr. Younger

I agree. The root and principal cause of the great difficulties in the Scottish economy is that so many of our industries have become uncompetitive. It is up to all concerned in them to see that they become more competitive and that, in particular, they do not manage to pay themselves more than they can earn by the sale of their goods.

Mr. Millan

Will the Secretary of State let us into a little secret? At the crisis Cabinet meetings, is he still tamely following the policies of the Prime Minister, or is he doing what he should be doing, which is to fight for Scotland and for a reversal of the present disastrous policies, which have already brought record unemployment to Scotland?

Mr. Younger

I do not know whether the right hon. Gentleman has failed to read any newspapers in the past year or two. When he speaks of "tamely following", he might recall the efforts successfully made by the Scottish Office over such matters as the rescue of Weir and Ferranti. "Tamely following" is not the way in which I intend to do my job.

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