HC Deb 24 February 1982 vol 18 cc847-9
7. Mr. McKelvey

asked the Secretary of State for Scotland what plans he has to reverse the continuing upward trend in unemployment in Scotland.

Mr. Alexander Fletcher

We are taking firm steps to control inflation—the main reason for the loss of markets and of jobs—and to encourage the expansion of existing firms and the starting up of new ones.

Mr. McKelvey

I am sure, Mr. Speaker, that you will share my disappointment that the Minister has trotted out the same stuff as he trotted out in the Scottish Grand Committee. Is not unemployment in Scotland getting worse primarily because of the Government's present policies? Will the Minister and the Secretary of State show some backbone, throw off the shackles of the monetarist policies of the Government and take the initiative to release the strictures placed on local government public spending? If that were done, the building industry in Scotland would perhaps start to expand before it disappears altogether.

Mr. Fletcher

Such policies cause inflation and, therefore, unemployment. The upward trend in unemployment will be reversed only by improved output per man and woman in employment in Scotland. There is no magic solution to the situation. Nevertheless, job prospects are encouragingly good. The hon. Gentleman will know that in recent weeks, on Clydeside alone, Scott-Lithgow, Govan Shipbuilders and Yarrow have announced orders worth more than £200 million, and other Scottish companies are competing well in a difficult international situation.

Mr. Russell Johnston

What is the Minister doing to speed up the decision from his Department and the SDA on the imaginative proposals of Messrs Elias and Robertson to reopen the pulp mill at Fort William, which would create much needed jobs? In particular, what is he doing to prevent the sale of essential machinery by Wiggins Teape?

Mr. Fletcher

We are still in close consultation with Mr. Robertson and his proposed partner. This is a difficult and complex issue. Frankly, I think that they were a little over-optimistic to begin with as to their chances of finding private capital. We are trying to help on both counts—to raise private capital and to make public funds available for a viable project. As to the equipment in the pulp mill, we are in close consultation with Wiggins Teape, which will move nothing out if, by doing so, it would destroy any prospect of a viable operation.

Mr Myles

Does my hon. Friend agree that it is slightly anomalous that, on the one hand, the Government lash out a large amount of public money to encourage employment and, on the other, do not allow someone who wishes to employ on a personal basis to make the wages tax deductible?

Mr. Fletcher

I am not sure that I follow my hon. Friend's point. I thought that he was going on another tack, so I shall answer the point that I thought he was making. Local authorities agreed with the Government to make grants available in their areas to provide jobs, but they then taxed those jobs away with high rates increases.

Mr. Gregor MacKenzie

Is the Minister aware that, whether there is an upward or a downward trend in unemployment as a result of yesterday's figures, the majority of us think that unemployment is still too disastrously high? During the next few weeks will he talk to his right hon. and learned Friend the Chancellor of the Exchequer and indicate, as the CBI has done, that Scotland requires extra money to improve its infrastructure, particularly in the industrial belt? The new infrastructure would create new jobs and make Scotland a more attractive place for inward investment.

Mr. Fletcher

I agree with the right hon. Gentleman that we must always try to make Scotland more attractive to investors, both inward and indigenous. The most attractive thing that we can provide is improved productivity. There are areas in Scotland, not least in the public sector, where productivity is lagging behind that not just in Europe but in other parts of the United Kingdom. If we want to attract jobs, we must prove that we can produce the goods at least as well as anyone else in Europe.

Mr. Fairbairn

I do not wish to usurp the function of my hon. Friend who is responsible for education, but I return to the question posed by my hon. Friend the Member for Banff (Mr. Myles). A serious situation affects Scotland particularly, because people who pay out of their own income for their own employees are taxed twice. In other words, they pay for the gross income out of their taxed income. Can there not be some understanding so that the position in rural Scotland might be relieved?

Mr. Fletcher

I shall certainly look into that point.

Mr. Harry Ewing

Does the Minister appreciate that he is the last person to lecture industry on productivity, when we examine his productivity? How can he be so abysmally complacent against the background of these disgraceful unemployment figures? Will he stop deceiving the people of Scotland about an upturn in the economy when he and the Secretary of State know that the figures will get worse? When will we get some positive action to deal with the disgraceful unemployment situation in Scotland?

Mr. Fletcher

There is no complacency by the Government about unemployment in Scotland or its economy. It is reasonable to remind Labour Members that in the past few weeks shipbuilding orders worth more than £200 million have been achieved on the Clyde alone at a time when competition is severe. The Government accept the criticisms that are made when unemployment figures are as high as they are, but we believe that we have a right to point to the good news about jobs and orders in Scotland. That is what my right hon. Friend and I are doing.