HC Deb 25 January 1995 vol 253 cc355-6
13. Mr. Macdonald

To ask the Secretary of State for Scotland if he will give his assessment of the prospects for economic growth in the highlands and islands in 1995–96.

Lord James Douglas-Hamilton

As a result of the Government's economic policies, the prospects for continuing growth towards long-term prosperity in the highlands and islands look very encouraging.

Mr. Macdonald

Does the Minister understand the disbelief and dismay in the highlands at the fact that, although the European Community has designated the highlands an objective 1 area—recognising that it is one of the poorest and most disadvantaged areas in the Community—the Government are imposing a spending freeze on local authorities, forcing them to cut their spending plans and basic services and to propose steep increases in council tax? How can it be right for the European Union to give to the highlands with one hand while the Scottish Office takes with the other?

Lord James Douglas-Hamilton

Grant-aided expenditure for the Western Isles in 1995–96 is £44.6 million, a 3 per cent. increase over the year before. Highlands and Islands Enterprise is being funded to the extent of £77 million. There are many exciting projects in the hon. Gentleman's constituency, not least of which is the extension to Callanish Pharamceuticals, which the hon. Gentleman knows well. I am aware that Western Isles wants a number of objective 1 projects to be included.

Geographical targeting will apply to four programme priorities across a number of sub-areas of the highlands and islands. That will be achieved by determining a minimum level of resources to be allocated to each sub-area over the six years of the programme. There has been some good news for the hon. Gentleman's constituency about ferry services between Harris and North Uist. The hon. Gentleman is aware of that, and we shall not forget his interest in the matter.

Sir Russell Johnston

Will the Minister be so kind as to explain how the cancellation of motor-rail services in Scotland, which carry 20,000 cars a year, many of them from abroad, and the reduction in sleeper services, in particular the cancellation of the service to Fort William, are beneficial to the economic growth of the highlands?

Lord James Douglas-Hamilton

The hon. Gentleman asks a relevant question. I attended a meeting yesterday between my right hon. Friend the Secretary of State and the chairman and chief executive of British Rail. Those services are important for tourism and concern was expressed. British Rail is now continuing to examine options for Carlisle and Fort William sleepers. Options for motor-rail are still being examined. We shall remain in close touch with those who are involved in making the decisions, and I shall bear in mind the hon. Gentleman's interest in increasing tourism in his constituency.