Economy (Hansard, 7 December 1994)

§ 6. Mr. Salmond
To ask the Secretary of State for Scotland when he next intends to meet representatives of 300 the Scottish Council (Development and Industry) to discuss the current state of the Scottish economy; and if he will make a statement.

§ Mr. Lang
I look forward to meeting members of the Scottish Council (Development and Industry) before long, when I expect the current state of the Scottish economy to be among the topics of discussion.

§ Mr. Salmond
Was this morning's interest rate rise an act of petulance by a discredited Chancellor, or does the Secretary of State claim that it was justified by economic conditions? Is the Secretary of State seriously telling the House that the Scottish economy is overheating? If it is not, is it not intensely damaging to have two consecutive interest rate rises without reference to Scottish economic conditions? Does the right hon. Gentleman have any role in interest rate determination, or did the Chancellor pay as much attention to his views on interest rates as he did to his views on the second tranche of VAT on fuel?

§ Mr. Lang
My right hon. and learned Friend the Chancellor, who is responsible for deciding upon the level of interest rates in consultation with the Governor of the Bank of England, has my full support on that policy, as he has my support for his Budget.
I am sure that my right hon. and learned Friend will reflect upon the success of the Scottish economy. For the first time since statistics have been kept, unemployment in Scotland is lower than in the rest of the United Kingdom. Scottish manufacturing output increased by 5 per cent. last year and is at an all-time high; exports increased by 19 per cent. last year and are at an all-time high; productivity increased by 5 per cent. last year and is at an all-time high; inward investment is at an all-time high and employment has increased in the last decade by about 150,000.
The Scottish economy is in fundamentally better shape now than it has been in living memory. That is something that even the Scottish National party should welcome.

§ Mr. Raymond S. Robertson
Does my right hon. Friend agree that it is quite shameful for the hon. Member for Banff and Buchan (Mr. Salmond) to speak in the way that he does, given that the economy of Grampian—an area which we are both privileged to represent—is leading the Scottish economy, the Scottish economy is leading the United Kingdom economy and the UK economy is leading European economies? As Scots, we should be proud of that record. We should not create fabrications to talk down Scotland and her achievements.

§ Mr. Lang
My hon. Friend is absolutely right. I was delighted to hear the news from Amerada Hess today of an oil discovery named "Dauntless" in block 21.11, located 140 km east of Aberdeen.

§ Dr. Reid
In the months since the last Scottish Question Time, has the Secretary of State had time to reflect upon my accusation that in the awarding of the Samsung project to Britain he was outflanked, undermined and outwitted by his colleague the President of the Board of Trade? Will he accept and admit that up to £10 million of Government money was made available through English Partnerships from the Department of the Environment under a scheme presided over by Mr. Peter 301 Walker, an ex-colleague of the President of the Board of Trade and present adviser on inward investment to the Board of Trade?
How should we regard the Prime Minister's pledges that Lanarkshire will offset its disadvantages by special treatment when his colleague and possible leadership contender, the President of the Board of Trade, undermines those pledges with Government money in order to ensure that the biggest project to come to Britain in the last two decades did not go to Scotland but to the north of England?

§ Mr. Lang
Scotland's offer to the Samsung electronic group was every bit as good as the offer from the north of England. The regional selective assistance component was identical.
Whilst we cannot win every inward investment case that comes to the United Kingdom, the fact is that Scotland has won proportionately far more than its share. In the past five years we have won almost 350 different inward investment decisions, bringing in investment of between £2 billion and £3 billion and creating and safeguarding up to 47,000 jobs. That level of achievement reflects the confidence that the rest of the world has in the management of the United Kingdom's economy and Scotland's economy under a Conservative Government.

§ Mr. Wallace
Does the Secretary of State accept that increasing interest rates at this stage of economic recovery, when unemployment in Scotland is still more than 220,000, is a real indictment of past failures of Government policy—not least their failure to invest in skills and in education and capital investment? What effect will the latest interest rates increase have upon the Scottish economy in the next six to 12 months?

§ Mr. Lang
I believe that it will restore confidence which must have been shaken by the behaviour of the Opposition parties in the Division Lobby last night.
Unemployment in Scotland decreased by 18,000 last year and long-term unemployment fell by 9 per cent. My public expenditure statement made good provision, through the budgets of Scottish Enterprise, Highlands and Islands Enterprise and in other ways, for continuing to build on our success in the training area. I believe that we have every reason to hope and expect that the Scottish economy will continue to outperform that of the United Kingdom.

§ Mr. McFall
Does the Secretary of State think that the Scottish Council (Development and Industry) will agree that gains from the national lottery pale into insignificance compared with the multi-million pound gains made by Mr. John Mather and his three Clydeport directors? At a time when the Scottish economy desperately needs a kickstart—not least for the benefit of the 220,000 unemployed—how can it be fair that that chief executive stands to gain more than £5 million from his £75,000 investment in a public trust company? In light of cases such as that, does the Secretary of State agree that when the Government talk about economic development in Scotland, the public perception is that they are more concerned with the prospects of a few privileged individuals rather than the nation as a whole?

§ Mr. Lang
The Government have been concerned in all their privatisation programmes to release the talent and quality of Scottish enterprise and of British enterprise, 302 which has been constrained and suppressed by nationalised state ownership, introduced by the Labour party. Not a single utility or industry has not suffered drastically as a result of nationalisation. The electricity industry, the gas industry, the airlines industry and any of the other industries that have been privatised have been able to raise money in the markets, invest in modern plant and develop new prosperity and jobs.