§ 1. Mr. Crispin Blunt (Reigate)When he next expects to meet representatives of Scotland's financial services industry to discuss investment. [41250]
§ 7. Mr. Andrew Lansley (South Cambridgeshire)When he last met the CBI in Scotland to discuss prospects for investment in Scotland. [41256]
§ The Minister for Education and Industry, Scottish Office (Mr. Brian Wilson)My right hon. Friend the Secretary of State and I maintain regular contact with Scotland's financial services industry on a whole range of matters. He last met the Confederation of British Industry in Scotland on 30 January when several issues were discussed, including the favourable climate for investment in Scotland.
§ Mr. BluntIs the Minister aware of weekend press reports showing that Edinburgh is slipping down the league table of European financial centres? Does he agree with the chief executive of Scottish Widows that that will be accelerated if the Government keep giving in to nationalist demands?
§ Mr. WilsonI do not accept either of the premises of the hon. Gentleman's question. The financial services industry in Edinburgh, and the rest of Scotland, is in very good health, and employment has increased since the downturn of 1994. No doubt that will continue. I also have no doubt that a constitutional settlement for the United Kingdom is no threat to the financial services industry. The Scottish financial industry does a high proportion of its business in other parts of the UK, and it has no wish to see those places turned into a foreign country.
§ Mr. LansleyHas the Minister seen the Scottish chambers of commerce report for the first quarter of 1998, which shows a reduction in investment intentions among manufacturers in Scotland? Does he understand that the Government's high pound policy, combined with their 714 intention to allow taxes and costs on business to rise, is causing manufacturing investment—the wealth-creating sector of the Scottish economy—to decline?
§ Mr. WilsonAgain, the hon. Gentleman has been badly briefed. There is no intention of allowing taxes on business to rise. The chambers of commerce survey shows the rate of growth in Scotland over the past year at its highest level since—again—1994.
§ Mr. John Home Robertson (East Lothian)As my hon. Friend knows, 510 jobs are being lost in my constituency following Mitsubishi's decision to close its colour television factory at Haddington—[Interruption.] I wish that Conservative Members would take issues like this seriously; it is a very serious matter for my constituents.
Following my hon. Friend's visit to Haddington on 6 April—the day of the announcement—can he report on the progress made by the task force in creating new jobs for people in Haddington and in finding new enterprises for the factory that has been closed?
§ Mr. WilsonMitsubishi's decision was regrettable, but the company had provided employment in Haddington for more than 20 years. The circumstances that led to the announcement related not to the Scottish economy, but to a restructuring of Mitsubishi, which is taking place in several other countries as well as Scotland. We have adopted a task force approach, and that has worked reasonably well so far. According to the latest figures, 35 per cent. of the work force have already found other employment.
My hon. Friend the Member for East Lothian (Mr. Home Robertson) attended a successful jobs fair at the weekend, and a further 50 jobs are in the pipeline as a result of it. We continue to work on finding an alternative use for the Mitsubishi factory. All that has happened in advance of closure, and it is a proper response by the Government and our partners. The situation in Haddington is unfortunate, but my hon. Friend is contributing to a solution.
§ Mrs. Maria Fyfe (Glasgow, Maryhill)May I draw my hon. Friend's attention to something that has had remarkably little notice in the Scottish media—the funding package for the Forth and Clyde canal? Various bodies had put together a substantial amount, but the project was in danger of collapse until my right hon. Friend the Secretary of State and his colleagues intervened to ensure funding that will bring jobs to my area and along the length of the canal.
§ Mr. WilsonI am delighted that my hon. Friend has taken the opportunity to draw attention to an important funding decision—one of several that have been taken in recent weeks, which will have long-term beneficial effects on the Scottish economy. I pay particular tribute to my right hon. Friend the Secretary of State, who played a crucial role in ensuring that outcome, when other sources of funding did not prove as successful as we had hoped. We did the right thing by the project and by the Scottish economy. All that will be good news in the future for jobs and the economic dynamism that will flow from the canal project.
§ Mr. James Wallace (Orkney and Shetland)Given the importance to the Scottish economy of exporting, 715 and especially exporting to Europe, is the Minister aware that some Scottish companies must reduce their prices by 20 to 25 per cent. in overseas markets to remain competitive? How does he see profit being generated to fund future investment in Scotland, including important investment in training and in research and development?
§ Mr. WilsonI am aware of the difficulties that some exporters are facing, and I am aware of the excellent efforts of Scottish exporters to deal with that problem. They are finding it necessary to trim their costs and to compete even more effectively. Despite that, Scottish export records are extremely good and we are continuing to encourage new exporters. The Scottish export campaign that I launched recently aims at getting 500 more companies exporting by the turn of the decade. I have no doubt that we can do that. We must diversify, encourage existing exporters and help far more Scottish companies to overcome the psychological barriers that dissuade them from becoming exporters.
§ Mr. John McAllion (Dundee, East)Scotland has ambitions to be a world-class competitor in targeted industrial sectors. At the same time, Locate in Scotland has targeted certain industrial sectors for foreign direct investment. What assurance can my hon. Friend give me that those are not the same sectors, and that taxpayers are not being asked to pay out money to attract foreign investment into our country, at the expense of crowding out indigenous companies that we are trying to make into world-class competitors?
§ Mr. WilsonI have repeatedly invited examples of indigenous companies being crowded out by the allocation of money and support—on exactly the same terms, incidentally—to inward investors. I want more Scottish companies to grow and invest, as well as a healthy inward investment sector. We owe the wonderful success of winning the Cadence and Project Alba for Scotland to the fact that we already have a strong electronics base in Scotland.
All the pieces fit together. The occasional setback to inward investment should be viewed in a mature way. It is not a disaster, and no one should dance on the grave of inward investment because of the occasional setback. Of course there will be setbacks. We are not immune from what is happening elsewhere in the world, but, overwhelmingly, inward investment is a magnificent success story for the Scottish economy. Hundreds of thousands of Scottish families depend on inward investment for their livelihoods and prosperity.
§ Mr. Bernard Jenkin (North Essex)What assurances did the Government give the Scottish financial services sector about the consequences of devolution? Have not the sector's fears been vindicated by the fact that the Scottish National party has overtaken the Labour party in the opinion polls? Now that both of the Government's former referendum partners are actively campaigning for a referendum on the full independence of Scotland, what assurances can the Minister give the financial services sector?
§ Mr. WilsonIt would be an extremely odd financial services company in the shrewd business community of Edinburgh that formulated its policies and actions on the 716 basis of an opinion poll. Perhaps the Tories think that that is how financial services companies conduct their affairs, but I doubt very much whether it is.
The assurance that the financial services sector was given, like everyone else in Scotland, was that there would be no differential business taxes within the United Kingdom. That is exactly what it wanted to hear. As I have said already, if the financial services sector in Scotland, which has the vast majority of its business in England, faced a differential tax regime, of course it would take flight. However, it will not face that, because it is within the United Kingdom and that is where it will remain.
§ Mr. Alasdair Morgan (Galloway and Upper Nithsdale)Given that some Scottish financial institutions have already located part of their operations in Dublin, does the Minister agree that that is partly because the Irish Parliament has passed some 40 pieces of pro-business legislation over recent years? Does he agree that it would be a good thing if the Scottish Parliament had similar powers?
§ Mr. WilsonI imagine that some companies also have business in Ireland, so it is natural that they would locate some of their operations there. I can only point to what the Government have done in terms of corporation tax. The financial services industry is very happy with the Government's performance. The hon. Gentleman conspicuously fails to address the fact that the majority of business for the Scottish financial services industry is in England. I do not think—and I imagine that the hon. Gentleman agrees—that they would want to see the rest of the United Kingdom become a foreign country, as he proposes.