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6.21 pm

Mr. Russell Brown (Dumfries): I congratulate myhon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) and the Select Committee on their report. I am pleased that I am now a member of that Committee and I look forward to some enjoyable sessions.

Much of the report is relevant to my rural constituency in Dumfries and Galloway. Like the constituency of the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore), mine has seen many manufacturing job losses in the past couple of years. However, between1987 and 1997, it also saw a loss of some 2,500 manufacturing jobs.

When a rural area such as ours depends heavily on major companies such as Du Pont, Nestle and Elopak, it is only natural that, when they feel the pinch as a result of what is happening in other corners of the globe and have to make cuts, we feel it hard.

I am interested in the report's comments on clustering, which is important. Between 27 and 28 per cent. of Galloway is forested, so forestry is clearly one example of what we can do in our locality. In the past two years, the local enterprise company endeavoured to clear and prepare a site for an Austrian company. Some £3 million was invested in that, only for us to discover in February this year that the company no longer intended to come to the Lockerbie area.

However, I am pleased to say that another local firm has decided to take part of that site. I am looking forward to tomorrow when we are likely to hear of a £5 million investment on that site with the potential to create some 100 jobs during a three-year period. Initially, there will

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be forestry and sawmill work, which I gather will be developed into manufacturing. However, I will have more details about that tomorrow. I am delighted about that.

Let me dare to talk about the clustering of education. Dumfries is abuzz at the moment with the potential development of the Crichton site, providing campuses for Glasgow and Paisley universities and Dumfries and Galloway and Bell colleges. I look forward to the day when we can retain local young people by providing higher education opportunities on that site. We need to harness their academic ability and keep the locality vibrant.

My hon. Friend the Member for Shettleston mentioned transport, and I note that the hon. Member for Galloway and Upper Nithsdale (Mr. Morgan) is in the Chamber. The A75 is not just any old road; it is an important avenue for economic development in our area. The alternative road that leads to a ferry port is the A55 in north Wales, which has received six times as much investment. It is not surprising that people in south-west Scotland feel somewhat disfranchised. If we are to move forward and have genuine inward investment, we must ensure that the infrastructure is right.

Inward investment does not offer all the answers because my constituency is rural and our challenge is to create an outward-looking and prosperous local economy. We want proper indigenous investment as well as a small amount of inward investment. We want to make that part of Scotland a model for rural development.

6.26 pm

Mrs. Rosemary McKenna (Cumbernauld and Kilsyth): I also welcome the Select Committee's report. I was briefly a Committee member but I left before the inquiry began. I shall be brief because many of my colleagues want to speak and there is not much time.

I am keen to take part in the debate because I was a member of Scottish Enterprise from 1994 to 1997. I was involved in the discussions that led to its creation. Locate in Scotland is part of Scottish Enterprise. It is an important organisation, which has grown from strength to strength. I point out to the hon. Members for North Wiltshire (Mr. Gray) and for North Tayside (Mr. Swinney) that we are successful in attracting inward investment not only because of Locate in Scotland but because Scotland is very good at partnership working--that is demonstrated by the fact that we set up Locate in Scotland. The support of embassies throughout the world is crucial to attracting inward investment to Scotland. The increase in inward investment in the years to which the hon. Member for North Wiltshire referred was due to the creation of the single market and the work of Locate in Scotland. It is important to put that on record. Since 1997, there has been a substantial increase in inward investment of £2 billion, which has created 30,000 jobs in Scotland. The matter is complex.

I shall briefly consider the summary of the report's conclusions. Transport is vital. Anyone who is familiar with the route from Glasgow to the north of Scotland knows that the A80 through Cumbernauld is the biggest bottleneck in Scotland. Sorting that out is crucial to the development of good infrastructure. I agree with my hon.

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Friend the Member for Glasgow, Shettleston (Mr. Marshall) that we need the M74, but I believe that we need the M80 far more.

I do not understand the reason for the lack of investment in public transport between areas where there are jobs and areas of high unemployment, such as the constituency of my hon. Friend the Member for Shettleston. The transport links between those areas are poor, and we should examine that. More funds should be made available, but we must be careful because funds are also important to encouraging and developing indigenous industries. I would be more circumspect, and not simply demand more money for Locate in Scotland. The matter is more complex than that.

We want to be involved in the debate about the future of Locate in Scotland and Scottish Trade International. That leads us to the future of Scottish Enterprise. The Minister for Enterprise and Lifelong Learning in the Scottish Parliament--my hon. Friend the Member for Central Fife (Mr. McLeish)--has begun that important debate, which must be reasoned and based on knowledge and information.

Scottish Enterprise is a dynamic organisation that is always ready to move forward, as its chairman, Sir Ian Wood, showed when he gave evidence to the Committee; he agrees with the recommendation to link Locate in Scotland and the STI, although a lot of other issues have to be looked at. We have to move forward continually and my constituency of Cumbernauld and Kilsyth has been successful in attracting inward investment. Significant companies--from not only Japan, but Germany, France, Korea and the United States of America--have located there and recently a successful investment was made in a call centre by Morgan Stanley Dean Witter, creating sound financial sector jobs. That is a good example of how we can move forward.

Our jobcentre staff have shown tremendous commitment. They embraced the new deal from the beginning and took it forward, so much so that we have reduced youth unemployment in my constituency by 72 per cent. The overall reduction is 40 per cent., and we have to take that example to the rest of Scotland and use the information that it provides to take us forward. I agree with my hon. Friends the Members for Glasgow, Maryhill (Mrs. Fyfe) and for Shettleston: we need to use the skill and knowledge that has developed in successful areas to help the areas of Scotland where there is deep poverty. That is how to tackle social exclusion.

As my hon. Friend the Member for Dumbarton (Mr. McFall) said, we must recognise that the world economy is changing. For example, in the words of Alf Young in the 10 December edition of The Herald,

We have to accommodate all those changes and I believe that Scottish Enterprise has the will to take us forward. It is the right organisation to do so and will be very much involved in the debate, which is about what is best for the people of Scotland and sharing information in Scotland and in the rest of the United Kingdom. We should not follow a hysterical nationalist agenda.

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6.32 pm

Mr. Douglas Alexander (Paisley, South): With some trepidation, I rise to speak: I am not a member the august Scottish Affairs Committee, but I have been emboldened by the characteristically generous remarks of the hon. Member for North Tayside (Mr. Swinney). I pay tribute to my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), who is unfortunately not in his place, because I know that he has done a great deal of work on the Committee's report. I agree with its authors that this is a timely point at which to consider the whole issue of inward investment, given that it was prepared at such a critical juncture for our constitutional future.

The challenge for Members in all parts of the House at this point is to ensure that the new constitutional architecture is able to work to the advantage of the Scottish economy as a whole by successfully securing continued inward investment. I want to give the House a sense of the significance of inward investment to my constituency of Paisley, South: it is central to the Renfrewshire economy, of which my constituency is a part. From a Renfrewshire work force of 121,000, inward investors employ upwards of 13,000 people and 50 per cent. of all manufacturing jobs in Renfrewshire come from inward investors. I am proud to note that four significant inward investments have been made in Renfrewshire over the past few months, creating more than 1,000 new jobs.

Over recent years, Renfrewshire has attracted a range of major direct foreign investment, first in electronics and now in the developing call centre and internet sectors, which were discussed by my hon. Friend the Memberfor Dumbarton (Mr. McFall). They contribute to Renfrewshire's £5.4 billion of exports, which in turn make up more than 30 per cent. of Scotland's total manufactured exports. The importance of inward investment in not unique to the Renfrewshire economy. As the authors of the Select Committee report confirmed, inward investment is absolutely crucial to the manufacturing base of modern Scotland. The massive job losses suffered in manufacturing areas such as west central Scotland--of which Paisley, South is part--resulted in large measure from the two recessions in as many decades created by the previous Conservative Government. They have increased Scotland's reliance on inward investment over the past two decades.

As the report makes clear, the importance of foreign direct investment in the Scottish economy can hardly be overstated. There are now nearly 600 overseas-owned concerns in Scotland, providing some 80,000 jobs. Scottish Office evidence given to the Select Committee showed that emphasis was placed on the role of inward investment in helping to restructure Scotland's economy in the context of new, lighter manufacturing activities based on modern technology and scientific developments. For more than 20 years, the electronics industry--Compaq and IBM are close to my constituency--hasbeen the single most important industrial sector for manufacturing inward investment in Scotland.

The keys to our success in Scotland, in terms of electronics inward investment, are now well established. The rapid growth of the market for electronic products, allied to the presence of a critical mass of related electronics companies in west central Scotland--and,

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indeed, in parts of Fife--combined with high-skill labour markets, have produced attractive locations for inward investment by electronics firms.

In the face of evidence of the strength of our electronics sector, it is easy to lose sight of the fact that foreign investment now transcends electronics, and extends to a number of parts of the Scottish economy. Foreign companies are investing in sectors as diverse as food and drink, chemicals and petroleum products. As with the rest of the economy, the case for the centrality of inward investment in the Scottish economy is comprehensively made by the report.

One of the merits of the report is the effectiveness with which it counters the idea advanced by critics of inward investment that a crude choice can be made between an economy that supports inward investment, and an economy that encourages the growth of indigenous enterprises. That was brought home to me by evidence presented to the Committee by Renfrewshire council, which said that inward investors in my area were playing a key role as suppliers to incoming investors. I feel that such a relationship can be mutually beneficial, and can benefit every part of the economy.

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