| Previous Section | Index | Home Page |
Mr. Alasdair Morgan (Galloway and Upper Nithsdale): Is not the downturn in the south-east Asian economy the most significant factor in the decrease in inward investment in the past couple of years?
Mr. Gray: The hon. Gentleman may be right. I was not proposing an encyclopaedic tour of all the reasons for the decrease; there may be many.
Inward investment has declined considerably this year compared with the previous two and with its peak under the previous Government. One gets tired of constantly hearing about boom and bust. The hon. Member for Maryhill mentioned it. The truth is that the statistics demonstrate that inward investment in Scotland was much better under the so-called boom-and-bust Conservative Government. Let us lay that ghost to rest.
I want to discuss the devolution muddle, as I would describe it. It is peculiar that a Select Committee of the House produced the report but the response came partly from the Government and partly from the Scottish Executive. Will the Secretary of State carry back the
messages of this debate to the Scottish Executive and, more importantly, will that Executive listen to him? If press reports are anything to judge by, one is not entirely certain that it listens all that carefully to him.
As an observer of these matters, I find it hard to work out what the Secretary of State's job is and what the purpose of the Select Committee and indeed the Grand Committee can be post devolution. It is all a bit of a muddle, and I hope that he may clear some of it up.
What happens when there is a policy dispute between the Scottish Executive and the UK Government? Labour Members may say that there is no problem because that is all dealt with clearly in the concordats and memorandums, but what happens when a company is being courted by both England and Scotland and the UK Government want the investment to go to England? Who would get the investment?
Labour Members may say that we have gone through all the great mechanism of the concordats precisely to sort that out. That may work--possibly--while there is a Labour Government in Edinburgh and a Labour Government in Westminster. I concede that there is likely to be a Labour Government or a Lib-Lab pact in Scotland--the Liberals may have some other view on that--for some time, although I think back happily to the time when my cousin was the Conservative Member for Glasgow, Govan, so let us not laugh too much about the Scottish Conservative revival. [Interruption.] Let us assume that there will be a Labour Government in Scotland for some time. [Interruption.]
Mr. Deputy Speaker (Sir Alan Haselhurst):
Order. This is absurd. The hon. Gentleman should be heard.
Mr. Gray:
Thank you very much, Mr. Deputy Speaker.
What happens when there is a Labour Government in Edinburgh and a Conservative Government in Westminster, as will inevitably occur sooner or later? [Interruption.] Their febrile and fragile laughter suggests that Government Members may foresee that occasion coming sooner than some of the commentators would have us believe. What will happen to the concordats and memorandums then? If Government Members are saying that that will never happen, what has happened to their view of democracy? They are saying in their arrogant, new Labour way that there will never again be a Conservative Government because new Labour will run the world for ever and ever. The electorate will ensure that that arrogant approach comes back to haunt them.
Conservative Members do not believe that the concordats will prove to be sufficiently robust to withstand a fundamental disagreement between the two Governments.
I have concerns about inward investment in Scotland because of what the Government have done with taxes and regulations on business. Without any question, tax on business has greatly increased. The British Chambers of Commerce have calculated that costs for business will be increased by £30 billion by regulations introduced in this Parliament. Statistics from the Organisation for Economic Co-operation and Development, available from the Library, demonstrate that the annual increase in UK productivity has declined since the general election, from 2.2 per cent. between 1992 and 1997 to an average rise
this year of 0.7 per cent. I mentioned the Scottish figures earlier, but those that I have just mentioned show that the UK figures have also fallen.
The worrying fall in productivity, together with the rise in regulation, leads to loss of competitiveness. Indeed, in the world competitiveness league, Britain has fallen from fourth under the Conservatives to eighth under Labour. The Government must say why Britain is becoming less competitive and why Scotland, in particular, is suffering. British industry now produces 40 per cent. less per man hour than US firms and about 20 per cent. less than the French and the Germans.
Mr. Tim Loughton (East Worthing and Shoreham):
Does my hon. Friend agree that Scotland will suffer especially from the unparalleled rises in road fuel duty charges, given its greater distances? Does he also agree that some heavy goods industries in cities in Scotland will suffer disproportionately from the Government's proposed energy tax?
Mr. Gray:
My hon. Friend is right. His point about the climate change levy--or energy tax, as it should be called--is pertinent. It is interesting that the Government appear to be listening to their Back Benchers and backing off slightly, but the energy tax will still cost the steel industry--which especially affects Scotland--£20 million a year.
The president of the CBI, Clive Thompson, has said that the increase in taxation introduced by the Labour Government has amounted to much more than the sums that they give back, which are "trivial by comparison". How much worse that will be when the energy tax arrives. Bill Midgley, the president of the north-east chambers of commerce, has said:
My hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) mentioned transport issues, which are already affecting inward investment in Scotland. The Government's response to the Committee's report has been disappointing. Fuel duties remain, despite the Chancellor's brave attempt to pretend that he will do away with them. According to the Red Book attached to the pre-Budget report, fuel duties will increase next year. Scotland is vastly more affected than anywhere else in the UK by that disproportionate increase in petrol and diesel.
Mr. John Swinney (North Tayside):
The hon. Gentleman is pursuing an interesting line of argument. Were those arguments valid when the Conservative Government applied the fuel duty escalator many more times than even this disreputable Labour Government have done?
Mr. Gray:
The hon. Gentleman makes an interesting point. He was not here at the time but, if he had been, he
The Secretary of State for Scotland (Dr. John Reid):
I know that the hon. Gentleman would not want inadvertently to mislead the House. The Conservatives brought in the escalator at 2 per cent. and they immediately raised it to 3 per cent. They then raised it to 5 per cent. and, in a Green Paper just before the last election, they pledged that they would keep the fuel duty escalator. My right hon. Friend the Chancellor of the Exchequer has made it clear that he will not keep the fuel duty escalator. To complete the facts, of the 85p in the pound that is charged in fuel duty, 79p was imposed by the previous Conservative Government.
Mr. Gray:
I am grateful to the Secretary of State for his clarification of the fact that we brought in the escalator at 2 per cent. However, he repeats a worryingly misleading remark that the Chancellor of the Exchequer made in the pre-Budget statement. The Chancellor suggested that, somehow or other, he was ending the escalator. He is not; he is continuing it. All that he said was that he would hypothecate the extra and would use it for transport.
"It was disappointing that there was no mention of moves to reduce the amount of bureaucracy which is stifling business competitiveness."
Tax and regulation are going up, but competitiveness is going down. [Interruption.] Labour Members are chattering, but they should listen to what Scottish Energy has said of the energy tax:
"The Chancellor is doing what he does best--playing the three card trick. We are still concerned about the burden on the manufacturing industry because only energy intensive users are eligible for the discount quoted."
In other words, Scotland will be especially heavily hit by the energy tax.
| Next Section
| Index | Home Page |