Manufacturing Industry (Hansard, 27 July 1988)

§ 9. Mr. Millan
To ask the Secretary of State for Scotland if he will make a statement about the prospects for manufacturing industry in Scotland.

§ Mr. Rifkind
The prospects for manufacturing industry in Scotland are extremely favourable, Manufacturing output in the final quarter of 1987 was 4.7 per cent. up on the previous quarter and I expect further strong growth this year.

§ Mr. Millan
Does the Secretary of State agree that it is important to manufacturing industry in Scotland that it should have available to it an efficient and economic electricity supply? Is he aware that today's Energy Select Committee's report on the Government's proposals for electricity privatisation is a devastating indictment of the proposals, showing them to be ill-thought-out and thoroughly muddled? It also shows that the so-called competition by comparison that the Government have claimed would keep down costs in Scotland is largely meaningless, that the proposals pose real dangers to Scottish consumers and, particularly, that Scottish consumers, including industrial consumers, may very well finish up by subsidising the export of Scottish electricity to England. Why does the Secretary of State not drop the proposals?

§ Mr. Rifkind
I have not yet had an opportunity to read the Select Committee's conclusions, but I understand that they question the value of continuing with vertical integration in Scotland whereby generation, production and distribution are in the same company's control. As the right hon. Gentleman shares the Government's view that vertical integration has been to the benefit of the Scottish economy, and as that will continue, I am surprised that he did not refer to that.

§ Mr. Steel
Does the Secretary of State accept that the adverse effect of the high value of the pound and of high interest rates is bound to be considerable on manufacturing in Scotland in general and on the woollen trade in the Borders in particular? Does he not receive a warning from this morning's trade figures, which show that we are on target, not for the Chancellor's £4 billion deficit at the end of the year, but, possibly, for a £10 billion deficit? Does the Secretary of State accept, therefore, that the Government's economic policy appears to be constructed on a pack of credit cards?

§ Mr. Rifkind
No, I do not, because, as the right hon. Gentleman will appreciate, if we returned to the levels of inflation that existed when he was in a pact with the Labour Government, the prospects for Scottish industry would be disastrous. Scottish industry and manufacturers are going through a period of unprecedented growth, which they recognise as being favourable to their interests and those of their employees. The alternative economic prescriptions that the right hon. Gentleman supported during the period of the last Labour Government would create a gloomy future for the textile industry in his constituency, as well as for Scottish industry as a whole.

§ Mr. Favell
Does my right hon. and learned Friend agree that the recent marked and welcome improvement in the performance of Scottish manufacturing industry comes through a growing awareness among the Scots people that the way to success and to compete against the rest of the United Kingdom is not through the Socialist dependency preached by all three Opposition parties, but through hard work, free enterprise and individual promotion—in other words, Thatcherism?

§ Mr. Rifkind
Yes.

§ Mr. Dewar
May I help the Secretary of State by telling him that the Select Committee on Energy did not make the comment that he has reported to the House. Instead, it made the interesting point that vertical integration has been favoured in Scotland and not in England, and that no arguments, except that of historical convenience, have been adduced by the Government to justify that difference of approach. Does the right hon. and learned Gentleman accept that he cannot shrug off a Committee with a solid Tory majority, which has condemned in the most stringent terms as ill-thought-out and ill-considered the Government's plans to privatise the electricity industry? It makes the telling point that no real effort has been made by the Government to establish or argue that there will be any advantage for the consumer. It condemns in the most forthright way the atmosphere of hostility that has, for example, conditioned the Government's approach to the coal industry. Is it not clear that the Secretary of State will have to rethink his position following the devastating job that has been done by the Select Committee?

§ Mr. Rifkind
I recall that before every previous privatisation there have been those who have made exactly the same predictions, which have been found to be entirely incorrect when the results have been announced. Since the Government have announced their proposals for privatisation in Scotland—those for the electricity industry and the Scottish Bus Group, for example—we have found a tremendous increase in interest among the employees of the industries. Their main interest lies in the opportunity for them and their fellow workers to enhance their participation in the industries that are important to them.