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Manufacturing

3. Jim Sheridan (West Renfrewshire) (Lab): What steps he is taking to promote manufacturing in Scotland. [174427]

The Secretary of State for Scotland (Mr. Alistair Darling): The Scotland Office will continue to work with the Scottish Executive and a wide range of manufacturing interests on initiatives such as the Scottish manufacturing steering group.

Jim Sheridan : I thank my right hon. Friend for that response. Does he agree with me, and with the Scottish trade union movement, that if Scottish manufacturing is to stay ahead of the field we need further investment in not only research and development but employee training? Will he use his good offices to ensure that the
 
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private sector companies that come to Scotland are encouraged to use all the excellent teaching facilities that we have in Scotland?

Mr. Darling: My hon. Friend is quite right. There are many parts of Scotland now where unemployment has fallen so much that there are concerns about getting the right number of skilled people to go and work. Yesterday I was in Dumfries and Galloway, and the Conservative spokesman for Scotland, the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan), might like to know that unemployment has fallen by 50 per cent. in his constituency since the general election—although he was saying the other day that the Government have not made a difference. My hon. Friend the Member for West Renfrewshire (Jim Sheridan) is quite right, and there are good examples in his constituency of private sector companies working in close collaboration with higher education institutions. We want to encourage that, because it is absolutely essential.

Mr. Peter Duncan (Galloway and Upper Nithsdale) (Con): How content is the Secretary of State with the fact that manufacturing and other businesses in Scotland pay business rates some 7 per cent. higher than businesses in England and Wales? Speaking hypothetically, and saying that he was to be the next Chancellor of the Exchequer, what more does he think could be done to help businesses to grow by reducing business burdens?

Mr. Darling: The policy for rates rests with the Scottish Executive, who have put in place a number of measures to reduce the rates burden that Scottish businesses face. The hon. Gentleman is quite right to say that we need to look all the time at whether we can improve the situation and reduce burdens. The Government are committed to that, but one of the best things that we have done for Scottish business is to create a strong, stable economy with low interest rates. The result is low unemployment and lower debts, and we do not have the problems that the previous Conservative Government encountered.

We also need to ensure that we create the right sort of environment in which businesses can thrive. It is interesting that more and more of the recent studies that have been published—although it is true that they do not all paint the same picture—contain a sense of optimism that Scottish business has good prospects under this Government and under the Scottish Executive.

Mr. Duncan: But the Secretary of State has missed one simple policy that could be delivered from right here at Westminster. Has he not heard the voices from across the manufacturing sector that point out the crippling effect that high fuel prices are having on competitiveness, and the resulting disincentive for operations in Scotland, where distances from the factory gate to the customer are often at their greatest? His right hon. Friend the Prime Minister entirely ducked that question last week. Will the Secretary of State now join the chorus of voices calling for the deferring of the fuel tax increase planned for September?

Mr. Darling: No. As the Prime Minister said here last week, the primary reason why fuel prices are going up is
 
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that the economies in China and America are growing, and people are restocking. That is why prices have gone up. If the hon. Gentleman does not believe me, why does he not have a word with the shadow Chancellor, who said almost exactly the same thing only a few days earlier? While he is speaking to the shadow Chancellor, the hon. Gentleman might want to have a further word with him because, at the weekend, the shadow Chancellor was revealed to be calling for even more massive cuts in public expenditure. They would amount to nearly half the Scottish Executive budget, which would have a profound adverse effect on the Scottish economy.

Mr. Duncan: One day, just for once, the Scotland Office will stand up for Scottish interests instead of letting us down. Two months ago, at this Question Time, the Secretary of State told me that he was

favour of "whatever the Government" want to do. When will he make a stand on behalf of the Scottish manufacturing industry? Is it not time for him to meet the current Chancellor, in Loch Fyne or elsewhere, to demand that he reverse the fuel tax increase planned for September? When will he put Scotland's interests first, instead of the Labour party's?

Mr. Darling: The hon. Gentleman is not very good, is he? I suggest that he reflect on this simple fact: since 1997, unemployment in his constituency has fallen by 50 per cent. Why is that? It is because the economy has been growing year on year. That is why more people are in work. This Government, during the past few years, have introduced a range of measures that are helping Scottish business. As I have said to the hon. Gentleman, our biggest single achievement has been to create an economy, and the right environment, in which small businesses can grow. All that would be wrecked if the Tory party got back in, because of the policies that it is advocating—not just because it would slash public expenditure but because of the instability that would be created by the policies that the shadow Chancellor is promoting.

Rachel Squire (Dunfermline, West) (Lab): Does my right hon. Friend agree that naval and maritime work at Rosyth dockyard, the Clyde yards and elsewhere in Scotland represents a core part of Scotland's manufacturing skills? Does he also agree that work on the current naval fleet and on the future aircraft carriers is vital in securing a future for Rosyth and elsewhere? Will he use his full persuasive powers to ensure that Rosyth and Scotland get a major share of naval work, and that the core base of manufacturing skills are kept in that area?

Mr. Darling: My hon. Friend is right: defence work is very important not just to the general public sector jobs in Scotland to which I referred, but to construction. She will know that the Ministry of Defence is currently examining the way in which the contracts to build the two new aircraft carriers will be dealt with. Those discussions continue, but my hon. Friend can rest
 
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assured that we are very aware of the importance of those contracts—and, indeed, of others—not just to Rosyth but to the Scottish economy generally.

Mr. Alex Salmond (Banff and Buchan) (SNP): On the subject of manufacturing jobs on the Clyde, has the Secretary of State seen the allegations of Mr. Martin Sixsmith, supported by evidence from GEC, to the effect that the Govan yard was saved in 1999 as a result of a deal through which the Government suspended their competition policy in return for favourable publicity in an election campaign? Now that the future of Govan to some extent—and Scotstoun to a great extent—is once again uncertain, will the Secretary of State give details of exactly what he is doing to secure those vital jobs, without the incentive of an election campaign in Scotland to concentrate his mind? And will he specifically confirm or deny—

Mr. Speaker: Order. That question is far too long.

Mr. Darling: Listening to the hon. Gentleman, one would almost think that he is sorry that jobs on the Clyde were saved. He might want to reflect on the fact that, if he were returned to power, there would be no Royal Navy, no orders for ships and no jobs on the Clyde. That would be the price of the Scottish National party.

BP

4. Mr. Michael Connarty (Falkirk, East) (Lab): What meetings he has attended to discuss the impact on Scotland of BP's decision to dispose of its olefins and derivatives business. [174428]

The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire): Scotland Office officials have kept in close contact with BP regarding the impact of their decision. My right hon. Friend and I have not taken part in any meetings.

Mr. Connarty : I am very grateful to the Scotland Office for the interest that it has shown in the management of BP. However, a strategy group meets every Friday in the plant, consisting of full-time officials and workers' representatives from the Transport and General Workers Union, the engineering workers' union and the GMB. As my hon. Friend knows, that plant has suffered more than 1,000 job losses in the past couple of years. The strategy group believes that the productivity gains that were made and the synergies that were gained by losing those jobs are about to be thrown away, should the chemicals plant be split off from the rest of the complex. Will the Secretary of State meet the trade union representatives to hear their business case for keeping the olefins plant as part of the entire complex, and run by BP workers for the benefit of the Scottish economy? Indeed, that could even be to the benefit of the new company that might be floated off in future.

Mrs. McGuire: My hon. Friend is a great advocate of the petrochemical industry not only in his own constituency but across the United Kingdom, and I welcome his comments. He will of course appreciate
 
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that ultimately, this is a commercial decision by the company, but either my right hon. Friend the Secretary of State or I would be delighted to meet him and a delegation of trade union leaders to hear their business case, which could be an alternative to the case made by BP.


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