Scotland: Inward Investment (Hansard, 15 May 1990)

§ The Minister of State, Scottish Office (Lord Sanderson of Bowden)
My Lords, figures for the total investment made by inward investing companies since 1985 are not available, but statistics produced by Locate in Scotland show that between April 1985 and March 1990 companies locating in Scotland in these years were planning investment of some £2.6 billion.

§ Baroness Carnegy of Lour
My Lords, I thank my noble friend for that extremely encouraging reply. The published figures show that despite inflation and high interest rates the economy of Scotland continues to improve in relation to the economy of the UK as a whole. Will my noble friend tell the House whether this is mainly due to the massive increase in investment in oil which is now taking place or whether there are other important reasons for it?

§ Lord Sanderson of Bowden
Lords, it is certainly true that the recovery from the low point in 1986 in the oil industry has contributed to the figures, but so also have our export industries, particularly whisky and electronics. Those latter two industries have benefited from strong growth in world markets.

§ Lord Carmichael of Kelvingrove
My Lords, we are all delighted to hear of new inward investment in Scotland. The announcement today concerning Motorola is particularly welcome. However, can the Minister give us any indication of the number of jobs that have been created as opposed to those that have been promised by the Scottish Office and certainly in the newspapers? I understand that over the past five years the number of jobs that have been created has never reached more than 60 per cent. of those that were promised. Will the Minister comment on that?

§ Lord Sanderson of Bowden
My Lords, it is perfectly true that the difficulty lies in estimating how many jobs will result from any planned arrangements. I can do no better than to say that planned job figures are those indicated by the companies concerned when decisions to proceed with their projects are taken. Evidence over a period of years suggests that an average of around two-thirds of planned jobs are achieved. In answer to the question of the noble Lord, I can say that inward investment planned by companies locating in Scotland has totalled some £3.8 billion since 1981. Those plans are associated with the intended creation of safeguarding of over 70,000 jobs. It is difficult to give the noble Lord exact figures but I can tell him that Compaq is a good example. In 1986 that organisation planned 350 jobs in Erskine. However, in 1991 that figure will rise to 1,100 jobs. Of course it does work the other way in some cases.

§ Lady Saltoun of Abernethy
My Lords, while the central belt has undoubtedly benefited from all this investment, will the noble Lord indicate how he sees the industrial future of the Highlands and Islands?

§ Lord Sanderson of Bowden
Yes, my Lords, I can do that, but it is difficult to generalise about the Highlands and Islands. There are, as the noble Lady knows, problems in Caithness in relation to the run-down of Dounreay. In the inner Moray Firth area things are going extremely well, but the rest of the area is in many cases fragile. However, I can tell the House that 2,000 jobs have been created in fish farming. That appears in the 1989 figures and it is a good tale to tell. In various towns in the North of Scotland substantial numbers of jobs have been created. There is the example of Zonal in Invergordon, where 80 jobs were created recently. Further, 110 jobs were created in Inverness as a result of a relocation from Derbyshire.

§ Lord Mackie of Benshie
My Lords, will the noble Lord expand on his figure of £2.6 billion? It would be useful if he could tell the House approximately how much of that figure is due to native industry—for example, the whisky industry—and how much is due to incoming foreign investment.

§ Lord Sanderson of Bowden
My Lords, I cannot give the noble Lord an answer to that question. However, I can say that both the SDA and the Highlands and Islands Development Board are looking for investment from whatever source. Since 1985 £700 million of government money has been 151 produced by SDA and £147.8 million by the Highlands board. However I shall look at the question and write to the noble Lord with details.

§ Lord Lyell
My Lords, can my noble friend give the House the latest figures for the Locate in Scotland campaign which has contributed to the success already mentioned by my noble friend? Locate in Scotland has had a considerable impact. Does my noble friend have any recent figures?

§ Lord Sanderson of Bowden
My Lords, the Locate in Scotland campaign is an ongoing campaign and last year was a record year.

§ Lord Ezra
My Lords, although there are benefits of a short term nature from inward investment in Scotland, will the noble Lord say to what extent he believes that the large amount of money which has been invested in Scotland from outside will have long-term advantages?

§ Lord Sanderson of Bowden
My Lords, in answering that question it may be instructive if I tell the noble Lord that the total number of jobs in coal, steel and shipbuilding in Scotland is now 24,000. To put that into context, in 1989–90 Locate in Scotland has 64 projects totalling £853 million which are forcast to provide 12,000 jobs. That gives an indication of the swing that we are trying to achieve in Scotland to new industries and new developments from the old industries.

§ Baroness Carnegy of Lour
My Lords, training and local access to training for medium and small-sized companies is extremely important. Can my noble friend tell the House how the local enterprise companies are progressing, how many are planned and how many there will be in various parts of Scotland?

§ Lord Sanderson of Bowden
My Lords, development funding in the Scottish enterprise area has been awarded to 12 prospective local enterprise companies, including Moray which straddles the border between the Highlands and Islands enterprise area and the Scottish enterprise area. Development funding for five prospective LECs has been awarded in the Highlands and Islands enterprise area and bids in respect of a further four are currently being considered.