HC Deb 23 February 1999 vol 326 cc165-9
5. Mr. Dennis Canavan (Falkirk, West)

What steps he is taking to improve employment opportunities in Scotland. [70823]

The Secretary of State for Scotland (Mr. Donald Dewar)

The Government are supporting employment growth in Scotland by securing a stable economic environment based on low inflation and sound public finances. From 1 July, this will be a matter for the Scottish Parliament.

Sadly, jobs sometimes go, but jobs are always being created. Seasonally adjusted data from the civilian work force jobs series show an increase of 33,000 in the number of employee jobs in Scotland in the period between June 1997 and September 1998.

Mr. Canavan

Is my hon. Friend aware that, according to International Labour Organisation statistics, unemployment in the United Kingdom fell by 98,000 last year, but that in Scotland it rose by 9,000? That was before the declaration of redundancies at firms such as Wrangler, BP, Kvaerner and Volvo, and at places such as Bishopton. In the Falkirk area alone, more than 1,000 redundancies have been announced in the past month.

When will the Government listen to people in industry who legitimately complain that interest rates and sterling are still far too high? Is it not about time that some senior Ministers were sent to places such as Falkirk to hold high-level crisis discussions with representatives of local people and business to try to devise an urgent action plan to save as many existing jobs as possible, and to attract new jobs through inward investment?

Mr. Dewar

We want to attract as many jobs as we can to Scotland, and to encourage firms already operating in Scotland. I need not tell my hon. Friend that, since January 1998, unemployment in his constituency is down, though marginally so. I accept that there has been bad news in Falkirk, including the Wrangler closure. However, my hon. Friend will have read of the difficulties in that industry: Levi's for example, is closing half its capacity in America, laying off more than 6,000 people. The industry has significant market problems.

My hon. Friend is right to draw attention to the problems of job creation, but we are creating jobs all over Scotland, and the balance between jobs created and jobs lost tips to the right side. On the ILO statistics, I do not like any reverse gap between us and the rest of the United Kingdom, but the Scottish unemployment rate is well below that of large parts of London, Merseyside, the north-east and other parts of England. A little perspective would be rather more helpful than suggesting that the end of the world is nigh.

Miss Anne McIntosh (Vale of York)

Has the right hon. Gentleman assessed the potential impact on employment opportunities in Scotland of a potential loss of objective 1 status for Scotland? Has he assessed the effect of losses in the farming sector through reforms in Agenda 2000? Are the Government likely to take steps to make good any job losses caused by those reforms?

Mr. Dewar

I assume that the hon. Lady made a slip of the tongue in seeming to suggest that Scotland is entirely an objective 1 area. In fact, objective 1 relates only to the highlands and islands. We are keeping the matter on the agenda, fighting hard—with, I hope, her support and that of her hon. Friends—on grounds of gross domestic product per head, on which we narrowly miss the present criteria. We are also using the Nordic rim and sparsity arguments in doing everything possible to try to retain objective 1 status for the highlands and islands.

The hon. Lady will know that extensive beef production is affected by the shape of what may come from the Agenda 2000 discussions. We are watching matters closely, and Lord Sewel is with the UK delegation, which is united on the importance of the matter. The hon. Lady will realise that enlargement of the European Union and the pressing needs for budgetary stability and agricultural reform are among the difficult problems to be faced.

Mrs. Irene Adams (Paisley, North)

Does the Secretary of State agree that when areas such as mine—the Paisley postcode area—have lost 90 per cent. of their manufacturing jobs, there is a great need for inward investment? For how many projects has Locate in Scotland been responsible during the past year, and how many jobs will they bring to Scotland?

Mr. Dewar

If I remember correctly, there are 87 inward investment projects. I shall refresh my memory later in case—perish the thought—I am misleading my hon. Friend. Those projects have created a great deal of employment, and have also preserved many jobs. It is encouraging that more good news is likely in future. This week, for example, I visited Dingwall—an area which the hon. Member for Moray (Mrs. Ewing) knows well—to launch a 300-job plant promoted by a French company, Cap Gemini. That is particularly welcome, and there is much mileage in inward investment. Locate in Scotland has an absolutely first-class record and will continue to have the full backing of the Government.

Mr. Donald Gorrie (Edinburgh, West)

First, will the Secretary of State consider stopping his present policy and that of his colleagues of blocking the employment opportunities sought by the hon. Member for Falkirk, West (Mr. Canavan) in the Scottish Parliament? On a wider front, will he consider using some of the funds that he has for training to create many hundreds of jobs insulating houses, preventing damp and conserving energy in homes? That is a labour-intensive activity, which would create many real and continuing jobs. It would not cost a great deal, but it would do a huge amount for the housing and health of the Scottish people.

Mr. Dewar

Of course, I do not disagree with the hon. Gentleman about the importance of thermal efficiency and the house insulation programme. I should have expected him to remember that we are in the middle of a large programme of that sort, which involves about 50,000 houses. We certainly intend to work hard on it and I look for further progress. As he knows, we are also using the new deal and the opportunities that it provides to progress that work. It is important that we have job creation constantly in our minds. That is why environmental work, thermal efficiency improvements and the work of Locate in Scotland, which has safeguarded or created nearly 18,000 jobs with the 87 projects to which I referred, are all important and must be progressed to the best of our ability.

Mr. Tom Clarke (Coatbridge and Chryston)

In view of the importance for jobs of the Scottish tourism industry, which already employs 175,000 people in a £2.6 billion industry, does my right hon. Friend agree with Lord Gordon that it is still important for the British Tourist Authority to continue to project Scotland overseas, particularly in view of the advantages of that promotion? Because the authority markets the whole of the United Kingdom, we in Scotland leave the advantage of such marketing from Greenwich to the Grampian, which can only make sense.

Mr. Dewar

I agree with my right hon. Friend that we have to promote Scotland as a tourism centre in every way possible and on every scale. He will know that we have found additional money for the area tourist boards and have increased the funds of the Scottish tourist board overall, perhaps modestly but still significantly. In the area to which he referred, we have found money for Project OSSIAN—a database into which people key—which we hope will make Scotland a more accessible centre for world tourism and underline its great attractions and charms. I am strongly in favour of tourism as an important part of the Scottish economy. I was interested to note that Anne Lorne Gillies—I presume that she was not speaking for her party—a Scottish National party candidate and a member of cabinet told The Northern Times: Don't depend on tourism, it's only the icing on the cake. That is rather undervaluing it.

Dr. Liam Fox (Woodspring)

When Labour-supporting newspapers such as the Daily Record have such headlines as, "The jobs graveyard", I am sure that it makes the Secretary of State take note. What is it about the Scottish economy that is causing unemployment to rise at present when it is falling in the rest of the United Kingdom? To return to the point made by the Secretary of State's hon. Friend, or, perhaps I should say, the hon. Member for Falkirk, West (Mr. Canavan), apart from the 250 direct job losses at Bishopton, what other jobs will be lost as a consequence of a closure that the Government could prevent if they wanted to?

Mr. Dewar

The hon. Gentleman should look at what is happening and not take the simplistic and populist approach, which I fear is his trademark and does him little credit. That is gentle advice, not a rebuke—I fear that a rebuke would be ineffective. I repeat that there are enormous variations in unemployment in England. It is higher in Merseyside, the north-east and London than in Scotland. I do not like high unemployment. Our unemployment level is, perhaps, not exceptionable compared with the levels that often occurred under Conservative Governments—I point that out merely as a comparison, not an accusation.

Let us consider job creation. Even if one takes out one third of the promised jobs to allow for a shortfall, since we came to power we have been still more than in balance—we have a balance on the right side. If the hon. Gentleman is suggesting that things are bad and can only get worse, he should at least look at that perspective and recognise that that is so. I recommend a little more research.

Ms Rachel Squire (Dunfermline, West)

From the 10,000 jobs lost at Rosyth and the closure of the Fife coal mines under the previous Government, I and my constituents, like many hon. Members, know only too well the devastation that unemployment brings to local communities. However, when I visited Rosyth on Friday, at Lexmark I found a buoyant work force of 500 people and heard of plans for expansion and for a further 200 jobs. Does my right hon. Friend agree that Lexmark is an excellent example of successful inward investment; and that it is a good example of the effective partnership that can be developed between a council such as Fife council, Fife Enterprise, Locate in Scotland and the Scottish Office? Will he say what other such projects currently in hand in Scotland might bring hope and new jobs to communities?

Mr. Dewar

I have no difficulty in agreeing with my hon. Friend about the example she instances, which is important to her and lies within her constituency. New jobs are coming on stream: for example, I was happy to visit Standard Life bank recently, which had no employees 18 months ago, but now has more than 700, and the number is rising rapidly. One can find similar examples throughout Scotland. Like everyone else, we are having a tough time in our manufacturing industry and in some of our traditional industries, but a lot is happening that is good and positive and, as I said, the balance is on the right side.

There are examples of difficulties arising, of which perhaps the best known are Mitsubishi and the problems at Prestwick, but the sort of co-operation which my hon. Friend describes between private industry, Government, local authorities and other interested agencies has fully replaced, or is in the process of fully replacing, the job losses that were experienced. Those two examples are hopeful signs of the times.