HC Deb 09 November 1999 vol 337 cc874-6
6. Dr. Lewis Moonie (Kirkcaldy)

What representations he has made to the Chancellor of the Exchequer regarding the effects of United Kingdom Government policy on the competitiveness of Scottish manufacturing industry. [96350]

The Secretary of State for Scotland (Dr. John Reid)

The Chancellor and I are in regular contact about the effects of United Kingdom Government policy on Scotland and its economy. Like the rest of the UK, Scotland has benefited from the fact that economic policy is now based on long-term stability, low inflation and sound public finances.

Dr. Moonie

I can heartily agree with that sentiment. Has my right hon. Friend had the chance to discuss with the Chancellor the effects of the climate change levy on companies such as British Alcan in my constituency?

Dr. Reid

I discuss a large range of issues with the Chancellor. Of course, convention prevents me from detailing any of them. However, my hon. Friend will be aware that the Chancellor has presided over a recovery in our economy, and a sustained and stable development of our economy that is unsurpassed, with inflation and interest rates—despite the increase that took place a few days ago—at a record low, and with unemployment in Scotland at an all-time low. That same Chancellor will address the House this afternoon, and perhaps my hon. Friend will then have a chance address himself to the other side of the equation.

Mr. John Swinney (North Tayside)

Will the Secretary of State tell the House what representations he has made to the Chancellor of the Exchequer in advance of today's pre-Budget report, especially in relation to the potential impact of the climate change levy on manufacturing companies in Scotland, and the real competitive disadvantage of the fuel duty escalator which has been affecting manufacturing companies throughout Scotland? If the Chancellor fails to announce the abolition of the fuel duty escalator this afternoon, will that be a failure of the Secretary of State's lobbying for Scotland? Will that not show that it is not the Secretary of State, but the Chancellor of the Exchequer, who takes the big decisions about the Scottish economy?

Dr. Reid

The hon. Gentleman knows that, along with all the other members of the Cabinet, I cannot reveal our discussions. However, he will have to wait only a little time before my right hon. Friend the Chancellor makes announcements on a range of issues. We can be certain of two things. The first is that the Chancellor and the Labour Government have presided over the most stable and prosperous British economy for many decades—even in the context of a very difficult global situation. Secondly, we should not have such certainty or stability from the hon. Gentleman or his party. Even on the one issue of the euro, they have managed to have three different policies in three years. At the last but one meeting of the Scottish Grand Committee, the hon. Gentleman called for differential interest rates for the Edinburgh region, which takes the biscuit. We all look forward to hearing what my right hon. Friend the Chancellor has to say this afternoon.

Mr. Tony Worthington (Clydebank and Milngavie)

The Secretary of State attracted much praise for his role in saving the Kvaerner shipyard in Govan. The Kvaerner works in Clydebank—the former John Brown gas turbine works—are under a good deal of pressure. It is most important to maintain manufacturing capacity there. Discussions are taking place with the Minister for Enterprise and Lifelong Learning in Scotland, my hon. Friend the Member for Central Fife (Mr. McLeish). Is the Secretary of State ready to give whatever assistance he can to save those jobs?

Dr. Reid

As my hon. Friend points out, the situation is difficult for the Kvaerner concern. I am aware of that, and my hon. Friend the Member for Central Fife, who is also the Minister for Enterprise and Lifelong in the Scottish Parliament, has been following the matter closely and is involved in discussions about it. Should he feel that I can do anything, I shall of course be only too keen to assist him.

Miss Anne McIntosh (Vale of York)

Does the Secretary of State agree that the introduction of the minimum wage and the increase in national insurance contributions, together with the burden of the devolved Parliament in Scotland, have damaged the competitiveness of Scottish industry, as compared both with English and with other European industries?

Dr. Reid

Quite the opposite: the introduction of the minimum wage and the £100 bonus for pensioners at Christmas, the restoration of free eye tests, the biggest-ever increase in child benefit and the new deal, which has halved unemployment, have illustrated clearly that it is not impossible to combine social justice with enterprise and a stable economy. Quite apart from the social justice programme, the output of the Scottish economy continues to expand, with gross domestic product up by 2. 3 per cent. in the year to the first quarter of 1999, manufacturing output up by 1. 2 per cent. in the past year and manufacturing exports up 6. 4 per cent. in the same period. The Labour Government have not only combined social justice and economic prosperity, but have put an end—for a long time, I hope—to the Tory years of boom and bust.