HC Deb 29 January 1992 vol 202 cc940-1
9. Mr. Douglas

To ask the Secretary of State for Scotland if he will make a statement on the progress being made by Scottish Enterprise in relation to its examination of the impact on the Scottish economy of the decline in defence spending.

Mr. Allan Stewart

Within the defence industries initiative, Scottish Enterprise has received a draft impact assessment from its consultants. Information from that study will be used to take forward work already in hand with local enterprise companies and defence companies to identify practical steps to help companies and communities to adapt to the changing demand for defence-related goods and services.

Mr. Douglas

Notwithstanding that interesting reply and the orders that were given to Yarrow's last week for type 23 frigates, will the Minister concede that there is a serious problem in terms of the diminution of defence orders? That is especially aggravated in areas such as Fife and the west of Scotland. What funding will the Minister provide to ensure that the high technology skills embraced by companies such as Ferranti are not lost to Scotland? We need not a paper exercise, but actual funding to ensure that we keep those skills. The Government have that responsibility.

Mr. Stewart

I do not want to criticise the hon. Gentleman personally—[HoN. MEMBERS: "Why not?"] It is, after all, a rather splendid day for anti-devolutionists. He puts forward a perfectly valid point of which Scottish Enterprise is fully aware. However, an independent Scotland would not get frigate orders for Yarrow's. Moreover, there would be no Rosyth dockyard and no Rosyth naval base.

Mr. Strang

Will the Minister accept that the defence industries initiative, which his right hon. Friend the Secretary of State for Scotland announced last October, is utterly inadequate? It provides not a penny of new money towards research and development, investment or retraining. It is clear that the only way to make real progress is to elect a Labour Government and set up a defence diversification agency which will really tackle the problem and help our companies to expand into civil products.

Mr. Stewart

Perhaps the hon. Gentleman will check with his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) to see whether there is any official Labour commitment for that amount of extra public expenditure, as I have never heard of one. I do not take the view that the problems of diversification from defence-related companies will be solved through state intervention. The initiative is right to assist the defence sector companies and subcontractors in commercial adjustments to new markets, to provide support—with other agencies and local authorities—to communities that may be heavily affected, and to support reskilling and retraining needs. That is a sensible and constructive approach. If the Labour party is making any massive public expenditure commitments for a different one, let us hear them.