HC Deb 31 January 1996 vol 270 cc994-6
11. Mr. Norman Hogg

To ask the Secretary of State for Scotland what plans he has to encourage employment opportunities in Scotland's new towns; and if he will make a statement. [10797]

Mr. Kynoch

Scottish Enterprise and the local enterprise companies recognise their responsibility to maintain economic development in new towns.

Mr. Hogg

Would I be absolutely right to say that new towns and their staff had an excellent track record of creating jobs and attracting inward investment to Scotland's new towns and that the new towns have led inward investment in Scotland since the second world war? That being the case, would it not be appropriate for the Minister to ensure that the employment of those staff is cared for in the transition from the development corporations to the new unitary authorities? Will he ensure that everything possible is done to guarantee their future employment?

Mr. Kynoch

There seems to be a game of trying to get us to say, "You are absolutely right." I am interested to hear the hon. Gentleman's comments. He raises some valid points. Over the past five years, in Cumbernauld, for example, which is obviously of great interest to him, Locate in Scotland has recorded 36 planned inward investment projects, involving planned investment of more than £87 million associated with the expected creation or safeguarding of more than 2,000 jobs. I am anxious to ensure that we continue the process of inward investment into the new towns. They are of course no longer new towns, which is why the new town development corporations are being wound up. Locate in Scotland has been in regular contact with the new town development corporations and I am very confident that the positive efforts that have been brought about remarkably successfully by many people through partnership will continue in future.

Mr. Neil Hamilton

Does my hon. Friend agree that Scotland's recent record on job creation, compared with that of other parts of the United Kingdom, has been excellent, but that all those encouraging gains would be set at nought if we had a tartan tax, the extra imposts on employers that the social chapter would bring, and a minimum wage? Is he aware of the budget announced yesterday in Germany? The German Government are now well aware of the job-destroying consequences of all their foolish decisions over the years, which have loaded employers with huge costs and will only reduce the wealth-creating potential of the country.

Mr. Kynoch

My hon. Friend draws attention to Germany, where unemployment is rising, whereas it is falling consistently in this country. Not only are the taxes to which my hon. Friend has referred important to the future competitiveness of Scottish industry in particular; the costs of labour in Scotland are important too.

If new Labour is all about trying to go forward, having stakeholding and involving the unions more closely on factory premises, I should like to know whether it disassociates itself from what Mr. Bill Speirs, the deputy general secretary of the Scottish Trades Union Congress, said yesterday. He demanded that the working week be reduced to four days and expected no reduction in earnings. That would mean an effective increase in wages of some 25 per cent., which would be catastrophic not only for Scottish businesses but for British business. All the successes and records being set daily by industry in Scotland would be for nought.

Sir David Steel

As the Minister responsible for industry, does the hon. Gentleman agree that employment opportunities are directly linked to the quality of education and training in Scotland? Is he aware that, yesterday, Borders regional council had to withdraw free transport for people aged between 16 and 18 attending day-release classes at further education colleges as one of 30 cuts in education in the region? How can the Secretary of State tell the shadow Secretary of State that there have been no cuts in education? Will Ministers stop fantasising about tartan taxes and deal with the situation on the ground?

Mr. Kynoch

The right hon. Gentleman should be aware that, in fact, there has been a 2.5 per cent. increase in education spending this year. It is up to local councils to decide how to spend their funds. Local councils have asked for more responsibility for, and more choice in what they can do with, the funds that they are given, and they are being given both. We are consulting on areas in which they can take on greater responsibility. They must stand up and be responsible for what they do. They have the opportunity to decide how to spend their money. I hope that they will give priority to the areas to which the right hon. Gentleman referred.

Mr. Donohoe

The Minister will recall that, last year, I asked a question about the effects of £11 million for urban development being lost from Irvine new town because of the closure of Irvine development corporation. He said that the money would be distributed to local enterprise companies. Why, then, must the LEC in Ayrshire put up with a cut of £2.5 million? In those circumstances, how can industry be promoted in the new town beyond the life of the development corporation?

Mr. Kynoch

The difference between the hon. Gentleman and his party and the Government is that we recognise that LECs, as with Scottish Enterprise, have levered in a ratio of 3:1 of private funding to public funds. They clearly believe that they can exist with less funding and maintain, through efficiency improvement, the same output—and, indeed, improve on it. If the hon. Gentleman spoke to his LEC he would understand how successful LECs have been. Rather than running down the Ayrshire economy, he should tell the positive stories about Irvine, inward investment into Irvine, and the successes of Ayrshire.