House of Commons Hansard Debates for 8 Feb 1990

Mr. Tony Banks (Newham, North-West) : Is the Leader of the House aware of the extensive public support that has been expressed for my Protection of Badger Setts Bill? Do the Government intend to support the Bill when it comes up for Second Reading? Is the right hon. and learned Gentleman also aware that hon. Members of all parties receive a considerable amount of correspondence and have various representations made to them by their constituents about all areas of animal conservation, and especially about elephants, the ivory stocks in Hong Kong, whales and porpoises? All hon. Members know that to be true. Please may we have a general full-day debate in Government time on animal conservation so that all hon. Members can give vent to the various concerns that they have been expressing?

May I ask the Leader of the House not to continue to encourage me to put in for an Adjournment debate, because I have done that every week for the past 12 weeks and have got nowhere? Perhaps the right hon. and learned Gentleman could use some influence.

Sir Geoffrey Howe : I must commiserate with the hon. Gentleman in that respect, because he will see that one of

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his hon. Friends has an Adjournment debate next Friday on Government policy on the ivory trade and the threat to the African elephant. In that sense, he will be shooting one of the hon. Gentleman's foxes. The hon. Gentleman continues to raise many such topics conscientiously in the House, and I shall certainly bear in mind his assiduity and the wider merits of the case.

Mr. Charles Wardle (Bexhill and Battle) : Bearing in mind the continuing turbulent weather conditions, will my right hon. and learned Friend find time for the House to consider some of the public safety issues that have become apparent during the storms? Is he aware of the dangers of improperly loaded commercial vehicles, badly fitted scaffolding and cladding, and loose metal signs, all of which have become potentially lethal missiles in high winds? They should have been made secure, but were not. Should not this matter receive urgent attention?

Sir Geoffrey Howe : It certainly should receive urgent attention-- probably more urgent and more widespread attention than this House is likely to be able to give it. People who have property, equipment or vehicles to look after should be taking very careful note of it.

Mr. Charles Kennedy (Ross, Cromarty and Skye) : As the Secretary of State for Scotland is sitting next to the Leader of the House, can the right hon. and learned Gentleman explain to us why, when the severe weather conditions were first experienced in England a couple of weeks ago, the Department of the Environment was able to furnish the House with an immediate oral statement--on the Friday--whereas, today, the Scottish Office, so far as we can see, has made no effort to make an oral statement? Indeed, there will be only a written answer to a question from the hon. Member for Tayside, North (Mr. Walker) about his part of the country. May we have from the Scottish Office an early oral statement about the severe conditions being experienced in many parts of the country, not least the Highlands, with specific reference to the fact that the so-called Bellwin formula for recompensing local authorities fails to take account of the distinctive geographical problems that the Scottish Highlands are experiencing?

Sir Geoffrey Howe : While I was receiving the hon. Gentleman's question through one ear, I was receiving the answer from my right hon. and learned Friend the Secretary of State for Scotland through the other. The heart of that answer is that the criteria that apply in Scotland are exactly the same as those that apply in the rest of the kingdom, and they will be upheld by my right hon. and learned Friend.

Mr. Andrew MacKay (Berkshire, East) : Has my right hon. and learned Friend received through the normal channels any representations from the Opposition Front Bench concerning early-day motion 447? [That this House views with horror the statement of Mr. Kuomba Balogun, Chairman of the Bristol West Labour Party, reported in the Bristol Evening Post of 2nd February, as follows : We make a public plea to the IRA to consider ways of strongly giving some assistance to the armed wing of the ANC in the same light as Colonel Gaddaffi sought to assist in the liberation of the people of Ireland' ; calls on the Leader of the Opposition to condemn this incitement to

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violence in South Africa and its implied support for Libyan and IRA terrorism in the United Kingdom ; and calls on him to expel Mr. Balogun from the Labour party forthwith.]

It alleges that, in the Bristol Evening Post, the Bristol, West Labour party has been supporting IRA and Libyan terrorism. I should have thought that Opposition Front-Bench spokesmen would like to deny that allegation and to repudiate that constituency party.

Sir Geoffrey Howe : The fact that my hon. Friend has drawn attention to this matter will give the Labour party an opportunity to answer the allegation one way or the other.

Mr. Harry Cohen (Leyton) : With fares rising faster than the rate of inflation, and with the threat of continuing cuts in bus services, including services in my constituency of Leyton, may we have a debate on London Regional Transport? It is now a year since the debate on the LRT levy order. The Government seem to be using the disappearance of the levy order as an excuse not to have a debate, even though it is still reflected in the poll tax that Londoners have to pay. During the passage of the London Regional Transport Act, commitments were given by the Government. I was a member of the Committee that considered that Bill, and I can tell the House that the Government, when they took power away from the GLC, said that there would be accountability to this House. May we have a debate?

Sir Geoffrey Howe : I should be surprised if the hon. Gentleman could not bring himself within the rules of order to enable him to deal with those topics in the debate that is to take place next week.

Mr. Ivor Stanbrook (Orpington) : Will my right hon. and learned Friend please avoid wasting the time of the House? Will he avoid over- burdening further an already heavy legislative programme by attempting to implement the recommendations of the Hetherington inquiry? Is he aware that opinion against that inquiry and its recommendations has hardened since the matter came before the two Houses of Parliament? I assure him that if he attempts to get it through this House the opposition will be very strong indeed.

Sir Geoffrey Howe : I am grateful to my hon. Friend for reminding the House and me of the strength of his own insight into this matter. It is not to be dismissed ; it has to be taken seriously. On the other hand, I have to take seriously the fact that a very large majority in this House voted in favour of the motion that dealt with this matter before Christmas. As I have said already, we must await the announcement that will come shortly from my right hon. and learned Friend the Home Secretary.

Mr. Kenneth Hind (Lancashire, West) : Is my right hon. and learned Friend aware of the two private Bills that are currently blocked--the Tees and Hartlepool Port Authority Bill and the Clyde Bill? They relate to two of the 60 trust ports whose level of operation is restricted by their legal basis. Those two ports are trying to change that,

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following the abolition of the dock labour scheme, in order to meet the challenge of 1992. Do the Government have it in mind to bring forward in the near future legislation to enable ports to convert to the private sector so that they can maximise their expansion plans and have a much better ports industry ready for the challenge of 1992?

Sir Geoffrey Howe : I understand the importance of the general request made by my hon. Friend. On the other hand, as Leader of the House, I have no direct responsibility for private business, which falls within the empire of the Chairman of Ways and Means. He will no doubt take account of his responsibility in the matter.

Ms. Joan Walley (Stoke-on-Trent, North) : May I remind the Leader of the House that barely a week goes by without a complaint being made about the way in which the Palace of Westminster is run? The last time it was necessary for me to rise during business questions, I spoke about masonry falling off the House of Commons. This week I have been down to the cellars. Will the Leader of the House liaise at the earliest opportunity with the Serjeant at Arms? Will he investigate the toxic paint which is being used on some paintwork in the cellars? Will he investigate the fumes which are going into the kitchens and the conditions in which the House of Commons catering and refreshment staff are working? Will he then allow Government time for a debate on the urgent need to remove Crown immunity from the Palace of Westmister?

Sir Geoffrey Howe : Obviously I cannot be expected to deal with all those matters with promptitude, but I share the hon. Lady's concern about many aspects of the management of the Palace of Westminster which, as I have said before, owes a great deal to the long history and limited geography of the place. I shall investigate the matter that she has raised this afternoon.

Statutory Instruments, &c.

Mr. Speaker : With the leave of the House, I will put together the six motions relating to statutory instruments.

Ordered,

That the draft Representation of the People (Amendment) Regulations 1990 be referred to a Standing Committee on Statutory Instruments, &c.

That the draft European Parliamentary Elections (Amendment) Regulations 1990 be referred to a Standing Committee on Statutory Instruments, &c.

That the draft Local Elections (Northern Ireland) (Amendment) Order 1990 be referred to a Standing Committee on Statutory Instruments, &c.

That the draft Representation of the People (Northern Ireland) (Amendment) Regulations 1990 be referred to a Standing Committee on Statutory Instruments, &c.

That the draft European Parliamentary Elections (Northern Ireland) (Amendment) Regulations 1990 be referred to a Standing Committee on Statutory Instruments, &c.

That the draft Representation of the People (Scotland) (Amendment) Regulations 1990 be referred to a Standing Committee on Statutory Instruments, &c.-- [Mr. Dorrell.]

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Opposition Day

[State the Allotted Day]

Scottish Economy

4.16 pm

Mr. Donald Dewar (Glasgow, Garscadden) : I beg to move, That this House condemns the failure of the Government's economic policy in Scotland which has resulted in relative economic decline, unacceptable levels of unemployment and inadequate industrial investment, has involved a perverse determination to reduce regional incentives, and has neither protected vital areas of Scottish industry and commerce from the effects of high interest rates, nor properly prepared for the testing challenge that will come with the Single European Market in 1992.

Mr. Speaker : I must announce to the House that I have selected the amendment in the name of the Prime Minister.

Mr. Dewar : The debate has been called for by the Labour party to reflect the widespread concern and anxiety about the state and performance of the Scottish economy. I make that point because I understand from almost every member of the Scottish press to whom I have spoken today that they have been enthusiastically briefed by the Scottish Tory Whip to the effect that the Secretary of State is hellbent on a debate about local government finance. I hope that he will think better of that. The vital issues of investment, jobs and the country's economic performance are the subjects of today's debate.

The Secretary of State ought also to think of the workers who have been involved over the last two or three months in redundancies or threatened redundancies ; many of them have been in contact with hon. Members. I am thinking of what has arisen in Philips of Bishopbriggs, Weir pumps, Lowndes Queensway plc, House of Fraser administration offices, Peterhead Engineering and Redpath Dorman Long. In almost every area there has been bad news as high interest rates bite. We owe it to those people and to their communities to take a serious look at our economic performance.

The Secretary of State for Scotland (Mr. Malcolm Rifkind) : If the hon. Gentleman believes that the economy is in crisis and that this is a major debate, can he explain why only 10 of the 49 Scottish Labour Members are in the House?

Mr. Dewar : There are several places where hon. Members may be legitimately, as the right hon. and learned Gentleman knows. Of course, he is very strongly supported by two Scottish Conservatives. I have no doubt that that was a good point in the right hon. and learned Gentleman's new smart-Alick role with which he has been entertaining the Scottish public, but I do not think it does much for the seriousness of the debate.

If, at some future date, the right hon. and learned Gentleman wishes to have a debate about the poll tax, the division, bitterness and injustice that it has brought in its wake, and how to replace it with a sensible and solid scheme, I should be delighted to have one, and would look forward to it and to coming well out of it.

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Economic forecasting is always a subjective art. There is a traditional flurry of reports on a quarterly basis. In recent months I have had some amusement from seeing, within a few brief weeks, the Fraser of Allander Institute being attacked with vim and vigour by the Minister and then, almost immediately afterwards, being clutched to him as a shield and buckler because another document happened to suit his brief at that time.

I accept that, because such forecasting is subjective, one can usually find something to give comfort in almost any of the reports. The one on which I wish to concentrate today comes from a good pedigree and a longer perspective. The report was produced by the industry and enterprise development directorate of the Scottish Development Agency in November 1989. It is an authoritative substantial description and analysis of our economic performance. It was not written with any wish to embarrass the Government. It is written with a degree of objectivity which makes it of particular interest to the House.

The report flatly contradicts many of the Minister's assumptions about the health of the economy about which we have heard so much in recent months. I shall summarise its main message :

"While aggregate output has increased, the Scottish economy has experienced a prolonged period of relative decline. There is no evidence that this has been reversed during the 1980s. Indeed, it is not fully participating in the UK's economic recovery and its relative position has further deteriorated during the 1980s. For example, over the period 1983-88, UK output rose by 21 per cent. and employment by 8 per cent. ; the equivalent figures for Scotland are 15 per cent. and minus 0.1 per cent. UK growth is heavily concentrated in Southern England. As job opportunities have appeared in the South, so net out-migration from Scotland has increased reaching over 20,000 in 1988."

The report goes on to comment on the disappointing position of Scotland in a number of the league tables on unemployment and productivity with which we are so familiar. It comments on the fact that the average household income is 86 per cent. of the UK average. The following amazing sentence, underlined in my copy, states : "Scotland remains locked into the process of relative economic decline compared to the United Kingdom and the rest of Europe." I shall give another quote, from near the end of the paper, which also summarises its theme :

"The paper demonstrates the long-term relative decline of the Scottish economy. It has been unable to generate sufficient new output in employment to match the available labour supply. Consequently, Scotland has experienced high net out-migration, population decline and high unemployment. The contribution of indigenously based industry has been particularly disappointing. There is no evidence that Scotland has or is about to break out of this process of relative decline."

That is put in restrained terms that are sober but contain an unmistakable message : we face major difficulties, there are worrying long-term trends and the Government's policy has failed on a series of vital objectives and issues.

The Opposition believe that there has to be a partnership between Government, industry and the community. The Government cannot stand back, take a hands-off attitude and leave it to the market. To the credit of the Secretary of State, I believe that he is a reluctant convert to that attitude. However, these days he is surrounded by zealots and has succumbed. In the key parts of the report, the case for concern and for the prosecution is substantial.

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Mr. Rifkind : Is the hon. Gentleman aware that the substance of the report, which is by an official within the SDA, was reported in, I think, the Glasgow Herald on 12 December last year? It was not endorsed by the SDA board, precisely because it disagreed with many of its views. Is he aware that the period of economic decline to which he referred started, according to the report, in 1955, not 1979?

Mr. Dewar : I welcome the fact that the right hon. and learned Gentleman agrees that this is a genuine document that represents research done in the Scottish Development Agency. As the Secretary of State knows, the SDA is an organisation which he and his Ministers often laud as an important part of the Government's machinery. Its expertise is something on which they often rely. I am delighted to know that this represents the position of officials in the SDA, at whom I do not sneer. Naturally, it looks at long-term trends. I do not disguise that ; indeed, that is one of its virtues. I said that it had wider perspectives, which gives it a certain objectivity and authority, and I hope that the Minister recognises that.

The investment figures for Scotland are not good enough. I quote from that document again, and I assume that the Secretary of State, who may have disagreements about the interpretation placed on the facts, will not quarrel with the facts themselves :

"Despite the recovery since the early 1980s, manufacturing output remains below the 1973 peak. Output has risen dramatically in electronics and instrument engineering, but few other sectors have yet surpassed their 1973 production levels. Some, including metal manufacturing and mechanical engineering, have shown little sign of recovery."

That is a different interpretation of the facts and figures than we normally get from Ministers and it is cause for concern.

I was told in a written answer on 31 January that gross domestic fixed capital formation was running, in cash terms, in 1985 at £861 million ; in 1986 at £788 million ; and in 1987 at £738 million. For reasons that are not clear to me, I was told that it was impossible to apply the inflator and produce the figures in constant prices. But even in cash terms, they are alarming enough.

We have the extraordinary situation that regional preferential assistance to industry in Scotland--I am now dealing in constant, 1988-89, prices--has more than halved since 1978-79, when it was £349 million. In 1988-89 it was £151.2 million. It is sad to note that, according to the public expenditure White Paper, the intention is that that decline should continue.

My hon. Friends and I do not see the point of asking industry to do more with less. The problems will mount because in Europe we shall have difficulties, with the new arrangements for objective 1 areas--none of which are in Scotland--creaming off about 80 per cent. of the structural funds. That puts a premium on Government effort, and that effort has not been forthcoming. From the way in which regional incentives have been ruthlessly dismantled, the Government's policy amounts to a dereliction of duty.

The impact of all that, as hon. Members in all parts of the House know-- even some who are comparative strangers to Scottish economic debates-- results in our having an unemployment rate which remains persistently 50 per cent. above the British average.

Another index about which Ministers often talk is wages. The rates for full -time male employees on adult rates, taking weekly wages in Scotland as a percentage of

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those in the south-east of England, reveal a stark picture. In 1984--I take that base year because I am advised by the Library that before then there was a difference in the basis of compilation, so in fairness 1984 is the best starting point--the Scottish wage was 90.2 per cent. of that in the south-east. In 1989 it was 80.4 per cent., a drop of about 10 per cent.

Compared with Britain as a whole, the Scottish rate was 99.9 per cent. in 1984--almost certainly due to the impact of oil wages, but at least satisfactory in that it was almost at the British average--but by 1989 it had tumbled to 93.2 per cent. Net migration is also a constant source of worry to all who have the interests of the Scottish economy at heart.

Mr. Robert Hayward (Kingswood) : The hon. Gentleman seems to have left the question of investment without referring to inward investment. In particular, he did not refer to a written answer that he received on 1 February from the Department of Trade and Industry which, in a table, showed under inward investment in 1979 in Scotland new and safeguarded jobs totalling 2,757. I presume that he made no reference to the figures given in that answer because they did not fit his case, for by 1988 the figure of new and safeguarded jobs had reached 7,370.

Mr. Dewar : I am flattered and delighted that the hon. Gentleman reads my parliamentary questions with such interest. If I were not a man of trusting faith, I could almost have imagined that someone had drawn it to his attention. In case that is so, I draw to his attention the excellent debates in the Standing Committee on the Enterprise and New Towns Bill, when we dealt with that issue at some length. Perhaps he would like to read also the report of the National Audit Office, which strongly criticised the presentation of the figures by the Scottish Office. He might then have a more rounded, balanced view of those matters than one can obtain from reading a slip of paper from the Whips' Office.

I was about to refer to net migration. The Scottish Development Agency report stated :

"It is widely expected that in Scotland manufacturing employment will continue to decline, private services will grow more slowly than the UK average and that the economy will underperform UK growth rates. Based on past relative performance within a UK annual growth rate of 2-3 per cent., Scotland would not generate sufficient employment to bring any substantial fall in unemployment. Nevertheless"--

this is the good news, I suppose--

"unemployment would fall to somewhere near 7.5 per cent." now the bad news- -

"due to continuing out-migration to Southern England."

It is a mark of concern that the Registrar General's projections--which I admit are raw statistics--for the population of Scotland in the year 2027, which is not far away, is about 500,000 lower than at present. I accept that many things will distort that projection, but there is no doubt that we are in danger of paying a high price for our failure to hold our own population and to attract the type of industry that gives us a base for future prosperity.

Mr. Rifkind : We are all concerned about migration, but is the hon. Gentleman unaware that in 1988-89, the last financial year, net migration from Scotland was the lowest of any year since 1975? If the hon. Gentleman wishes to comment on migration, should not he refer to that fact as well?

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Mr. Dewar : I am perfectly prepared to accept that correction from the Secretary of State for that one year, if he will accept the general picture that I have recorded. We are in a serious position, and the long-term trend is still of the type that I have described.

The Minister of State, Scottish Office (Mr. Ian Lang) : Perhaps the hon. Gentleman would also draw to the attention of the House the fact that, during the two periods of Labour Government in the 1960s and the 1970s, net migration--not just to the remainder of the United Kingdom but overseas-- totalled 150,000.

Mr. Dewar : The Minister makes an extremely valid point. The problem has been running for a long time. I object to the fact that we are constantly told by Ministers that we have nothing to worry about and that the corner has been turned. There is a complacency that borders on folly about the way that Ministers deal with those matters. We are right to point to the results of Government policy and high interest rates. Yesterday, the National Farmers Union of Scotland was worrying about investment in its industry--a different but nevertheless important industry, but it could be almost any sector of the Scottish economic scene.

There is also the problem of geography. That is not a fatal impediment to success in these days of high technology, but it must be overcome with Government help for the infrastructure of the country. We hear a great deal of the challenge of 1992. I sometimes think back to the days when we were campaigning--and I was campaigning for the yes vote--in the referendum on the Common Market. We talked about the challenge and the opportunities. However, what has happened is that the United Kingdom is now running a balance of trade deficit with the other members of the EEC of about £14,000 million. Clearly, if we are to put that right after 1992, we shall have to take a tumble to ourselves.

There has been reference to a report produced by the university of Louvain for the European Commission. It is of particular interest to Scots because one area that it studied was the Strathclyde region. It makes depressing reading. It talks about technological backwardness, of training not in touch with technical developments and of the dangers of areas such as Strathclyde being marginalised. From the report it was obvious that Britain and Spain were at one end of the scale while France, Germany and Belgium were at the other. That is a great worry for people such as myself, and I hope for Ministers also.

The SDA report spoke of the shake-up that may come and the fact that we have already had an enormous loss of control over industry and commerce in Scotland. It said :

"The corporate base and therefore growth capacity has been continuously eroded by the external acquisition of Scottish companies. Between 1983 and 1986"--

part of the time when the Conservative Government were in power-- "321 Scottish companies were taken over by non-Scottish companies. They tended to include the faster growing and better performing companies. In total these companies accounted for about 7 per cent. of the Scottish GDP."

On the basis of those statistics, we have a real problem. Nothing that we heard from the Minister in Committee leads us to expect that our problems will be solved by the restructuring and emergence of Scottish Enterprise, particularly a Scottish Enterprise working, apparently, a standstill budget.

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Under-investment in transport is particularly highlighted in the Louvain university report, and there are the problems of the Channel tunnel. There are obvious worries and no guarantees of the kind of investment that will give us the links we need if we are to get into the European markets efficiently and effectively. If we do not, the long-term trends to which I have been referring will be very worrying indeed

I put it no higher than to say that I sometimes think we are a little complacent about our export record. The SDA report says : "The real value of manufacturing exports remains below the 1978 peak, and outwith whisky and office machinery/data processing equipment Scottish industry remains less export orientated than the UK as a whole."

We tend to sit back on the basis of some rather superficial figures and to think that all is for the best in the best of all possible worlds.

In particular, will the Minister turn his attention when he replies to the anxiety about the steel industry? That is not just of symbolic importance ; it is part of Britain's core manufacturing industry. Our fear is that the Government have not so much abandoned

responsibility--that might be unfair--as that they abandoned their ability to influence events when they privatised the industry. I do not doubt for a moment that the Secretary of State is concerned--he has good cause for concern--but it is not so clear that he speaks for his colleagues. There was a now well-known and rather notorious exchange during questions to the Department of Trade and Industry the other day when the Secretary of State made it clear that he believed that the only test that should properly be applied is the commercial interests of British Steel. I hope that the Secretary of State for Scotland will take this opportunity of dissociating himself from that narrow view. We cannot have a Government who assume the role of a curious, even if anxious, spectator to what is happening to such an important industry.

As we know, there are pressure points in the strip mill at Ravenscraig, the plate mill at Dalziel, tubes at Clydesdale and at Imperial. This would be a good opportunity for the Government to give us a progress report. There is a strong case for the industry. The market in steel will recover and we need that capacity.

My opinion may not be persuasive on that and on a number of other issues, but let me draw the Secretary of State's attention to the autumn report of Cambridge Econometrics which refers to a net output stagnation in the steel industry during 1990, but suggests that output growth will be strong in 1991 as export markets revive. The long-term forecast talks about output growing steadily.

There is a good deal of evidence that the United Kingdom, and perhaps even Europe, will need the capacity in the Scottish steel industry in the period that lies ahead. It will be a tragedy if the narrow commercial and perhaps short-term interests of British Steel were the only test to be considered in deciding its fate. We remain convinced that there is a need for investment, particularly in the mill at Clydesdale. Great efforts have been made to find new markets and it would be a scandal if we were to go out of tubes, and the North sea were to be supplied not only from outside Scotland but from outside the United Kingdom.

There are many rumours about a French connection. We should like to know whether the Government are monitoring the situation. Are they involved? Are they

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pressing for investment, not only in the mill but in the more immediate modest package that has been urged by the plant which would give it a competitive edge and boost morale? Has it been made clear to British Steel that regional incentives would be available for such investment?

The point--I do not want to go into too long a passage when my hon. Friend the Member for Motherwell, South (Dr. Bray) is here--also applies at Ravenscraig, where a proposal for automatic roll change gear and other relatively modest but very important and competitive investments is on the table, and the best that we can get out of British Steel is that it may be considered ; this has not been said in as positive a tone as we should like. I very much hope that the Secretary of State is pressing hard for that investment and that he will make that clear during the debate.

We recognise the importance of the guarantee on steelmaking until 1994 at Ravenscraig, but it would be of little comfort if this were a bridging operation for the convenience of British Steel, leading nowhere. At Dalziel, too, there are concerns. We hear reports of the possibility of a one plate mill strategy, that decisions may well be imminent on that, and that it may be a case not so much of "if" as of "where". We are anxious that the Scottish Office should have a positive input into the argument.

Much manufacturing industry has changed or contracted. We make no bones about it. We accept that it was bound to happen. It is true to say, however, that we in Scotland have borne an unfair share of the burden. Perhaps I can take as a statistical basis for that assertion the view expressed in the Scottish Development Agency report : "While Scotland's manufacturing output was still below its 1975 level in 1987, elsewhere in Europe over this period output had risen substantially (e.g., Germany--28 per cent., Italy--31 per cent., France--15 per cent.). With higher output the relative fall in manufacturing employment was much less than in Scotland."

That, again, is a mark of our failure. We should not just write off that comparative gap as something about which we can do nothing and say that we must just watch and wait. New industries are important. I do not want to talk just about the steel industry and the old, traditional sector. Electronics has a future, but, again, it is a future bedevilled by lack of investment, research and development, product innovation and long-term economic development. Those points are forcefully put in the SDA report ; it concludes its discussion of electronics by saying :

"the indigenous Scottish industry remains small and embryonic". The report is damaging because it undermines many of the Government's assumptions and supports the doubts and worries that are expressed, sometimes to derision or almost to the suggestion from Conservative Members that such doubts are unpatriotic or panic-stricken. It reinforces our fear that complacency has got out of hand and that we are not facing up to the problems that lie ahead.

Scotland has a great deal to offer, but even in the service sector, where there has been growth, it has tended to be slower than in other parts of the country. The SDA report says :

"It is in consumer orientated services--reflecting Scotland's falling population--that underperformance is most apparent. While Scotland has been losing jobs in distribution during the 1980s, employment has continued to grow rapidly in the UK. Perhaps more surprising is the performance of tourist related employment, which now

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accounts for some 130,000 jobs. In contrast to a 33 per cent. growth (1983-1987) in Great Britain, Scotland's growth is only some 12 per cent.; the difference has been most obvious during the 1980s when the Scottish industry contributed few additional jobs". That cannot be a reason for satisfaction ; it must be a cause for worry and for an anxious re-examination of what the Government have been doing.

I found the report a deeply depressing and worrying document. The Secretary of State for Scotland has tried to pass it off as the work of an official. The SDA is an official body with expertise, playing a very important part in the economic planning of the Government, as we have always understood it. The Secretary of State tries to brush it off by saying that some of it has already been published. If it has, it was presumably not all that unimportant or meant merely to moulder in a drawer. It seems to me a thoughtful, thought-provoking and, from the Government's point of view, damaging document.

Scotland has a great deal to offer, and I agree that there are major opportunities, but those opportunities must be taken. We cannot afford a neutral Government who simply hold the ring. That has increasingly been the Government's role, and the Secretary of State must take much of the blame for it. There has been a lack of commitment, imagination and basic will. If it is not put right, the long-term trends and the habit of decline will be entrenched, to our cost. The battle for tomorrow must always be fought today. There is precious little sign that the Government are prepared to accept that responsibility. That is why we tabled the motion and will vote for it.

4.44 pm

The Secretary of State for Scotland (Mr. Malcolm Rifkind) : I beg to move, to leave out from "House" to the end of the Question and to add instead thereof :

"congratulates the Government on the success of their economic policies in Scotland which have resulted in higher living standards, greatly reduced unemployment, a substantial increase in the workforce in employment, and record levels of manufacturing productivity and output ; have promoted the competitiveness of Scottish industry and its readiness to meet the challenge of the Single European Market ; have encouraged the growth of investment, of enterprise and small businesses, and have provided a basis for sustained growth and development across the economy as a whole ; and notes that unemployment is now falling faster in Scotland than in the United Kingdom as a whole."

I ought in all politeness to begin by welcoming the hon. Member for Glasgow, Garscadden (Mr. Dewar) back to the House of Commons after his dramatic flight to Glasgow yesterday for a press conference to try to save the tattered remnants of the roof tax. I assure him that I do not intend to speak on that subject today, and I am delighted that he is anxious to defend his proposals at the first opportunity ; I am sure that that is something that we can easily accommodate.

There is one respect in which what the hon. Gentleman said yesterday is relevant to our debate today and to the Scottish economy. I understand that the hon. Gentleman gave various reasons why the Labour party has decided that a local income tax would be highly undesirable in the interests of the Scottish economy, and I hope that it will not embarrass the hon. Gentleman if I say that I agree with his analysis and conclusions.

I must add that if the hon. Gentleman believes, as I do, that the consequence of a local income tax would be to add some several pence, perhaps up to 10p, to the standard rate of income tax in Scotland, and that it would be undesirable

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