§ 7. Mr. Macdonald
To ask the Secretary of State for Scotland if he will make a statement on the economic prospects for the highlands and islands in 1996–97. 
§ Mr. Macdonald
Will the Minister confirm that funding for Highlands and Islands Enterprise will be cut by £3 million in the next financial year; that funding for the three main further education colleges will be cut by £500,00 next year; that funding on housing in the highlands will be slashed next year; and, of course, that funding for local authorities has also been reduced, by some £2 million in the case of the Western Isles? When the Minister comes to Inverness next Monday, will he take the opportunity to explain to the people of the highlands and islands that all those cuts into the economic muscle of the highlands are necessary to finance pre-election tax cuts?
§ Mr. Kynoch
The hon. Gentleman refers to Highlands and Islands Enterprise. That organisation has a budget for 1996–97 of some £75 million. In the round of public expenditure settlement that we have had, that is a very fair settlement. Clearly, Highlands and Islands Enterprise has the opportunity to lever in private sector funds from industry, which it now does. It is more than capable of maintaining levels of output and improving on them.
990 The hon. Gentleman is perhaps unaware that we have increased funding to local government throughout Scotland by some 2.9 per cent. this year. With the reorganisation of local government, local authorities have a significant opportunity to deliver more cost-effective services. However, the hon. Gentleman and the Labour party seem intent on giving more money to local government. The hon. Member for Dundee, East (Mr. McAllion) was on BBC Television's "Scottish Lobby" with me at the weekend and he said that, if the Labour party had been in office this year, it would have given an extra £200 million to local government in Scotland. Would he take that money from the health budget, the education budget or another budget?
§ Mr. Matthew Banks
Will my hon. Friend confirm that, in the current financial year, some 3,200 jobs will be created in the highlands and islands, very much along the lines of previous years? Is not it about time that we talked up the economic prospects of the highlands and islands rather than denigrated them as the Labour party does?
§ Mr. Kynoch
My hon. Friend is right. I know that he is a regular visitor to the highlands as a tourist. Tourism accounts for 20 per cent. of employment in the highlands and islands and is a significant contributor to the economy. I believe that there are remarkable success stories to tell in that area. For example, Selfcare in Inverness represents a major inward investment in the area and should be welcomed. We rarely hear good news from the Labour party.
§ Mrs. Ray Michie
The Minister will be aware that the economic prospects for Campbeltown and Kintyre in my constituency will be greatly enhanced once there is a ferry link between Campbeltown and Ballycastle. He will be aware that the Secretary of State has taken a particular interest in the matter. Is he able to give any indication about when a ferry operator will be chosen? I am sure that he agrees that it will be a marvellous thing for the entire area—Kintyre and Northern Ireland—and that it would be a nice thing to happen in the new peace climate.
§ Mr. Kynoch
My right hon. Friend the Secretary of State and I have great sympathy for the hon. Lady's case. My right hon. Friend must take proper advice before reaching a conclusion. At this stage, no proposals have been put to Ministers, but we will bear the hon. Lady's comments in mind when we consider them.