HC Deb 17 August 1991 vol 195 cc344-6
8. Mr. Ernie Ross

To ask the Secretary of State for Scotland what initiatives he intends taking to reduce unemployment in Scotland.

14. Mr. Strang

To ask the Secretary of State for Scotland whether he plans any new measures to reduce unemployment.

Mr. Allan Stewart

My right hon. Friend the Secretary of State recently announced a package of measures amounting to some £40 million to help unemployed people in Scotland back to work. That is on top of the substantial funding for Scottish Enterprise, Highlands and Islands Enterprise and the local enterprise companies, which is already more than £½billion in the current year. In the final analysis, it is a productive economy which provides new jobs and we are vigorously removing barriers to economic growth.

Mr. Ross

As the Minister has identified the need for industry to be healthy and given the drubbing that he and the Secretary of State for Scotland took yesterday in the Scottish Grand Committee, I am sure that the House will think that they should have read the proceedings of that Committee and come forward with a better response. Will we have to wait until the Prime Minister comes to the House on Friday to report on the G7 meeting to see some stimulus for investment given Scotland's heavy reliance on capital goods?

Mr. Stewart

I was not able to respond to all the points made by the hon. Gentleman in that debate because he did not sit down until about nine minutes to one. I am disappointed in his supplementary question. I thought that he would say how pleased he was that General Accident has invested £3.75 million in an office complex in the Dundee technology park in his constituency which will result in 350 locally recruited jobs. That is just one example of the health and dynamism of the Scottish economy.

Mr. Strang

Is the Minister aware that the Secretary of State's recitation in the Scottish Grand Committee yesterday of selective, spurious statistics about the Scottish economy demeans the debate about Scotland? Everyone who lives in Scotland knows that unemployment there is serious and getting worse. The Secretary of State partially excuses the run down in the steel industry on the ground that heavy engineering, shipbuilding, car manufacturing at Linwood, and vehicle production at Bathgate have all been closed—but that was done by the present Government. It is now wholly unacceptable for them to shut down the steel industry itself, because that will make it impossible to attract steel-using industries back to Scotland.

Mr. Stewart

The Government do not propose to shut down the steel industry in Scotland and, as Labour does not propose to nationalise it, a Labour Government would have no power to intervene either. I draw the hon. Gentleman's attention to the fact that the number employed in business and financial services—which are of great importance to Edinburgh, where the hon. Gentleman himself represents a constituency—increased by 50 per cent. since 1979. Between 1986 and 1989 the Scottish economy grew by about 12 per cent., which contrasts markedly with the miserable average growth rate achieved under the last Labour Government of less than 1 per cent.

Mr. Andy Stewart

Does my hon. Friend the Minister agree that if Labour's plans for a minimum wage were implemented, it would have a catastrophic effect on employment in Scotland?

Mr. Allan Stewart

My hon. Friend is absolutely right, and a whole list of independent commentators agrees with him.

Mr. Wilson

indicated dissent.

Mr. Stewart

Does the hon. Gentleman want me to read out the list, because it is quite long? Gavin Laird, who I understand is greatly respected by Labour Members, described Labour's proposals for a national minimum wage as "a nonsense". He said: It has never worked in the past. There is no logic for it. It does not work in any other country, and it will certainly not work in Great Britain. Labour could do the unemployed a great service by heeding Gavin Laird's wise words.

Mr. Dewar

How can the Minister ignore the fact that when the Conservatives came to power, unemployment in Scotland—comparing like with like—was 140,000, but is now 220,000 and rising? How can the Minister be so criminally complacent, when already this year another 20,000 Scots have joined the dole queue? In the last six months, bankruptcies in Scotland have risen by 80 per cent., and liquidations by more than 50 per cent. Has the hon. Gentleman forgotten the hammer blows dealt to the Scottish steel industry, and yesterday's grim news that 900 jobs are to go at Rosyth and that 1,000 naval personnel there are to be withdrawn? When will the Government learn that problems cannot be solved by pretending that they do not exist?

Mr. Stewart

Over the past 10 years, the number of companies in Scotland has increased by 25,000, or by 68 per cent.—[Interruption.] Just listen. Every independent commentator has pointed out that Scotland is coming through the present economic downturn—and yes, there is an economic downturn—relatively well.

Mr. Dewar

indicated dissent.

Mr. Stewart

I refer the hon. Gentleman to Cambridge Econometrics and to the Fraser of Allander Institute, which have conveyed the same message. I am not suggesting that there are no problems—of course there are. However, they would be a great deal worse if there were a Labour Government, who would allow local authorities to spend as much as they liked at the expense of business ratepayers. They would also be a great deal worse off if the hon. Gentleman's plans for a Scottish Assembly with tax-raising powers were imposed on the Scottish people, and if Labour imposed a statutory national minimum wage. That could cost Scotland as many as 174,000 jobs.