HC Deb 03 May 1989 vol 152 cc171-2
10. Mr. Robertson

To ask the Secretary of State for Scotland what studies he has commissioned into the likely impact of the integrated market after 1992 on the Scottish economy.

Mr. Rifkind

My hon. Friend the Minister of State is chairing the single market committee of the Scottish Economic Council which is examining the effects of a single European market on Scotland. In addition, a number of studies have been commissioned.

Mr. Robertson

Is the Secretary of State aware of the two reports that were published last month, one by Peat Marwick McLintock and the other by the CBI Scotland, and of yesterday's words from Professor Neil Hood of the Scottish Development Agency which confirmed that Scottish industry is singularly ill-equipped and feels that it has inadequate backup to meet the major challenges of 1992? Is it not time that the Secretary of State cast off the south-east England bias of his right hon. Friend the Chancellor of the Exchequer and conducted some more detailed studies about the impact of 1992 on Scotland's manufacturing base?

Mr. Rifkind

Many Scottish companies are ready to meet the challenge; others are not. Our objective must be to ensure that the challenge is fully realised—[Interruption.] Labour Members seem to be more interested in the relevance of a slogan than in the content and substance of the point being made. The committee that has been set up under the Scottish Economic Council includes representatives from industry, the trade unions and others concerned with this matter in Scotland, and they will examine the important point that the hon. Gentleman has properly raised.

Mr. Ian Bruce

Does my right hon. and learned Friend agree that the removal of the Scottish economy from the United Kingdom, which is what some anti-Unionists would have us bring about, would damage the whole of the British economy and does he further agree that if the Scottish economy tried to work on its own with such a heavy dependence on the oil industry, that would be damaging to Scotland? Does he also agree that all studies have demonstrated that trying to run those economies separately would damage the industries of both countries and would be the death of the 1992 spirit?

Mr. Rifkind

It is certainly the case that irrespective of political institutions the people of Scotland and the people of England are geographically destined to share the same small island. A consequence of that is bound to be a highly integrated economy and it has been shown over the years to be in the interests of the people of Scotland and of England that they share that economic destiny.

Mr. McLeish

Has not the Secretary of State been far too complacent about 1992? Is he aware of the labour force survey figures released for 1988 which show that of the 1.6 million jobs created between June 1983 and June 1988, 700,000—40 per cent.—were created in the south-east, but only 30,000—2 per cent.—were created in Scotland? Does he agree that we need an effective regional policy, investment in infrastructure and a low interest rate policy? If those policies are not adopted, Scotland will not benefit from 1992.

Mr. Rifkind

I remind the hon. Gentleman that the latest report from the Fraser of Allander Institute suggests that the Scottish economy is growing faster than that of the rest of the United Kingdom. If that is the view of the institute, it should be a matter of satisfaction to both sides of the House.

Sir Russell Johnston

Does the Secretary of State agree with the view of Jacques Delors, the president of the European Commission, that the open market of 1992 must be balanced by an effective regional policy or does he agree with the recent remarks of the Chancellor of the Exchequer, who said at Chatham house that a regional policy can be positively damaging to the economy?

Mr. Rifkind

I do not believe that a regional policy is damaging to the economy and that is why the present British Government exercise an extremely healthy and successful one.

Mr. Allan Stewart

Does my right hon. and learned Friend agree that a recent poll, which shows that a higher proportion of companies in Scotland and the north of England than in the rest of Britain are intending to expand in Europe is significant? Does my right hon. and learned Friend also agree that the Scottish financial services sect or has tremendous opportunities for growth within the single European market?

Mr. Rifkind

Yes. It is extremely encouraging that a Scottish company such as Christian Salvesen is taking over a Belgian company and James Howden and Weir Pumps is acquiring continental subsidiaries. That clearly demonstrates that a number of the most effective Scottish companies appreciate the opportunities offered by the single European market.