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6.4 pm

Mr. John Swinney (North Tayside): It is a privilege to follow the hon. Member for Dumbarton (Mr. McFall) who has just delivered a speech which demonstrates why he was such a successful Minister at the Northern Ireland Office. I warmly compliment him on his term in office there, and wish him well in his work on behalf of his constituents in Dumbarton.

The hon. Gentleman spoke about after care for businesses, and that applies across the board. In too many cases, while there is almost an overdose of support for starting up businesses--which has its own problems--there is a poverty of support when it comes to after care. That is of fundamental importance to the issues with which we are wrestling.

I compliment the hon. Member for Glasgow, Shettleston (Mr. Marshall) on the report of the Select Committee on Scottish Affairs, of which he is Chairman. It is a valuable report, assisted by the hon. Gentleman's experience of chairing other Select Committees. He brought to bear his considerable experience of transport issues in his contribution to the earlier debate. Perhaps I will leave that where it ended--in the debate.

The report is thoughtful and dispassionate. I could accuse the hon. Gentleman of being thoughtful in his contribution, but I could not accuse him of being dispassionate. He expressed his views, including his views about other parties, very firmly. I shall come on to some of those points in a moment.

The report makes many good, common-sense points, a number of which have been responded to positively by the Scottish Executive and the Secretary of State for Scotland. I specifically welcome what the Committee said about transport infrastructure. Considering the poverty of investment that our transport infrastructure has suffered in the past, and the dearth of investment in road and rail, it is no surprise that there is debate on both sides of the House about which project is the most important.

I welcome the Committee's comments on encouraging a movement up the value chain of successful investments and projects. The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) made the serious point that some people are still trying to get near the value chain before they can move up it.

I also welcome the Committee's comments on the importance of measuring the success of assisted projects. All too often, debate is not enhanced by clear information about which projects have been successful and which have not. The hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) raised a number of points about the difficulties that require scrutiny and answers. I hope that the Scottish Parliament may be able to consider some of those points.

The hon. Member for Shettleston said that this was an unusual debate. It is unusual--it is a hybrid debate between one era and another. The Select Committee started its report pre-devolution and reported on the verge

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of devolution taking legal effect. The Secretary of State's office and the Scottish Executive both responded to the report. Those two responses illustrate what has happened over the past few months. A vast number of areas of policy have passed from this House to the Scottish Parliament where they are being dealt with by Ministers.

I would like to make some additional comments about three areas of the report. The first is about the relationship between Scottish Trade International and Locate in Scotland. The Committee recommended that the Scottish Parliament should consider merging Locate in Scotland and the STI, and suggested that more resources were required for the work of Locate in Scotland in the United States.

I have always been concerned about the balance of resources allocated to inward investment and exporting. It has taken some time for the allocation of resources to export support to catch up with the support allocated to inward investment and exporting. The two are largely in the same ball park area within the Scottish budget. However, it is important that effective support is given to exporting, which has always struck me as the poor relation of that aspect of our approach to economic development. A huge challenge faces us on exporting. Too few of our companies do it. The report mentions that a substantial number of small and medium-sized enterprises export, but there are not enough of them.

Mr. Douglas Alexander (Paisley, South): Can the hon. Gentleman enlighten us on how a reduction from the significant diplomatic presence that the British state provides for Scottish exporters to the limited number of commercial embassies that the hon. Gentleman's party suggested at a previous Scottish election would in any way benefit those exporters?

Mr. Swinney: I wondered how long it would take before the first pathetic Labour intervention on my speech--[Interruption.] If the hon. Member for Cumbernauld and Kilsyth (Mrs. McKenna) will listen to what I have to say, I shall answer the points raised in the Select Committee's report. We are here to discuss that thoughtful report, which was agreed by all parties.

The report suggests a merger of Locate in Scotland and the STI. During the general election campaign, the Scottish National party argued for the closer integration of those two bodies and the Scottish tourist board. We argued for a single agency that would draw together all the external presence of those three bodies to ensure that we had a strong overseas presence to promote Scottish interests in exporting, inward investment and tourism.

Mr. Alexander: Will the hon. Gentleman give way?

Mr. Swinney: Will the hon. Gentleman let me finish making my point? The response of the Scottish Executive to the report makes it clear that they do not agree with the Select Committee's recommendation for merger, but it adds that there is room for greater co-operation and synergy between them. Surprise, surprise, the response continues to tell us that:


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    That was the argument that my party pursued at the election. If the hon. Member for Paisley, South (Mr. Alexander) wants to hark back to the 1999 election campaign, he should hark back on the facts, not his invention.

Mr. Alexander: Will the hon. Gentleman give way?

Mr. Swinney: No, I have dealt with the hon. Gentleman's point and have nothing more to say on the matter. We need a realistic explanation of how the representation of Scotland can be advanced. It is a disgrace that Labour Members ridicule the arguments that we made at the election but now the Scottish Executive have submitted an endorsement of the SNP's policy at that election.

Mr. Alexander rose--

Mr. Swinney: The hon. Member for Paisley, South can keep bobbing up and down trying to make the same point, but I am going to move on.

The second point on which I wish to touch is concordats, to which the hon. Member for Shettleston and the report referred. I thought of intervening on the hon. Member for North Wiltshire (Mr. Gray) when he lambasted the concordats for failing to deliver harmony between the Scottish Executive and the United Kingdom Government. I restrained myself because I could not remember whether the Conservative group in the Scottish Parliament had voted to endorse the concordats. I am fairly sure that it did, but I did not want to intervene only to find that I had the facts wrong. I am certain, none the less, that the hon. Gentleman's point was absolutely futile.

Mr. Grieve: The hon. Gentleman is well aware that the concordats are not legally binding documents, but agreements between the Executive in Scotland and the Westminster Government. For a party in opposition--although not the hon. Gentleman's as he does not believe in the Union--an endorsement of the concordats is an endorsement of the best agreement that can be reached between the two Executives at any given moment. I do not see how the hon. Gentleman's criticism of my hon. Friend the Member for North Wiltshire (Mr. Gray) can possibly be valid. [Interruption.]

Mr. Swinney: If the hon. Member for Greenock and Inverclyde (Dr. Godman) would like to explain what all that meant, I shall happily take his intervention. I do not quite follow the argument of the hon. Member for Beaconsfield (Mr. Grieve).

Paragraph C7 of the concordat on financial assistance to industry states:


I imagine that that is intended to cover the issues raised by the hon. Member for Tweeddale, Ettrick and Lauderdale in relation to Viasystems. In that respect, it may be a fair point to argue.

My concern relates to evidence that was before the Select Committee. The hon. Members for North Wiltshire and for Tweeddale, Ettrick and Lauderdale dealt with

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competition between different parts of the United Kingdom--an inward investment project coming to Scotland, versus one that was going to the north of England, perhaps, or the midlands. Paragraph 110 of the Select Committee report, entitled "Learning from the competition", records the evidence of--I assume--Mrs. Ray Macfarlane, the managing director, operations, of Scottish Enterprise. The report notes:


    "As previously stated, the Republic of Ireland has always been Scotland's 'arch enemy' in terms of inward investment. Mrs. Macfarlane hoped that as Scottish Enterprise went further down the line of looking for 'tailored' 'bespoke' projects which specifically suited the Scottish economy, the difficulty of putting 'clear, blue water' between the two would recede. This remains to be seen."

While Locate in Scotland and perhaps a regional development agency for a part of England are duly submitting their respective bids to the Joint Ministerial Committee for adjudication, and while the bids are being discussed in Committee, the global market is applying pressure to the inward investor for the contract. What we should fear is not other parts of the United Kingdom, but the global competition. The market is now a global market, and there is a danger that, while we are negotiating in Committee, the projects are haemorrhaging away to other parts of the European Union. That point remains unanswered, and I look forward to the answers at the end of the debate.

A related issue between the Scottish Parliament and Westminster is regional selective assistance. There is an inconsistency between the map being reserved, and responsibility for decisions about allocations resting with Holyrood. We shall no doubt return to the matter in due course.

The Select Committee recommends that Scottish Enterprise should provide a central service to advise indigenous firms seeking advice or assistance. The hon. Member for Maryhill referred to the report of the Enterprise and Lifelong Learning Committee of the Scottish Parliament, which reported yesterday. I had the privilege to be in the Chair of that Committee.

At the beginning of my speech, I probably should have declared an interest as a Member of the Scottish Parliament. I apologise for not doing so.

At the Enterprise and Lifelong Learning Committee, I was pleased that we secured unanimity among all four parties on a thorough and robust report based on evidence taken over recent months on the issue of access by businesses to business support and advice in Scotland. I am sorry that the hon. Member for Maryhill is not present. She spoke about the Glasgow economy and the difficulty that some organisations experience in accessing business help.

An enormous number of organisations in the market provide business support advice. The report of the Enterprise and Lifelong Learning Committee refers to the range of organisations that are active in the Glasgow market offering such support. I am told that, if one turned on Radio Clyde and listened to the advertisements at any time of the day, one could find the telephone numbers of numerous organisations to contact for advice about business start-up.

That diversity must be tackled. There are far too many providers of such services, often competing for the same clients, and in many cases using the same sources of

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public money to provide those services. The losers in the process are the people who need the support to assist their business development. I am pleased by the extent of agreement that has been reached among the participants from the four political parties in that Committee in the Scottish Parliament, and by the positive response to the report that was published yesterday by the Minister for Enterprise and Lifelong Learning, the hon. Member for Central Fife (Mr. McLeish).

What is important is that we spark a debate on how to deliver services to meet the demands of those who most wish to make a contribution to the developing Scottish economy. We have started that process and I look forward to further debate and discussion on the subject. Business support and economic development are fundamental to the health of the Scottish economy.

The Select Committee's report heartily advances and develops the debate on a number of key aspects and subjects. We need to sustain an active presence in the area of inward investment to guarantee our stake in the global inward investment market. We must ensure that Scottish companies can deliver a strong presence on export markets and broaden the number of companies involved in the process.

Most of all, we must have a cohesive and effective economic development strategy that delivers for the Scottish people and creates the right economic climate. Any climate that has interest rates at the height that they are now, with the damage that that causes to the Scottish business sector, is something on which the Government should reflect quickly.


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