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House of Commons

Tuesday 8 February 2005

The House met at half-past Eleven o'clock


[Mr. Speaker in the Chair]


London Local Authorities and Transport for London Bill

Order for Second Reading read. To be read a Second time on Tuesday 22 February.

Oral Answers to Questions


The Secretary of State was asked—

Economic Strategy

1. Mr. Alex Salmond (Banff and Buchan) (SNP): What discussions he has had with the Scottish Executive on future economic strategy in Scotland. [213400]

The Secretary of State for Scotland (Mr. Alistair Darling): I have regular discussions on a range of matters with Scottish Executive Ministers.

Mr. Salmond: Has the Secretary of State seen the "Index of Success", published by the Federation of Small Businesses and prepared by Mr. John McLaren, the Labour party's former economic adviser? It shows Scotland as 10th out of 10 of the small countries in the survey, behind Switzerland, Iceland, Norway, Sweden, Finland, New Zealand, Austria, Denmark and Ireland. With the Tories saying that Scotland is unattractive and the Labour party's former economic adviser saying that we are bottom of the league, what is it about those other countries that makes them so successful—except that they are independent and Scotland is not?

Mr. Darling: As ever, the hon. Gentleman might do better to look at the detail of the report instead of making the usual wide-ranging assertions that do not bear close examination. That survey showed that Scotland has many good and attractive aspects, which is why, with the rest of the United Kingdom, it is enjoying a long period of sustained economic growth and low unemployment.

One point that the FSB report highlights, and the main factor that is holding Scotland back, is its poor health record. That is why the Scottish Executive is putting substantial sums into health and making the necessary reforms to improve our health. That is important.
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Yesterday, the hon. Gentleman claimed that he could set up some sort of fund to support Scotland from North sea oil.

Mr. Salmond: Like Norway.

Mr. Darling: The hon. Gentleman says, "Like Norway," but I am wondering what sort of fund it would be when it would have an annual shortfall of more than £4 billion, even if every single penny of North sea oil revenue were allocated to Scotland, which would be unlikely. [Interruption.] The fact is that the hon. Gentleman's economics do not add up. They did not add up when he was leader previously, and they do not add up now.

Mrs. Helen Liddell (Airdrie and Shotts) (Lab): Does my right hon. Friend agree that it is strange that those who purport to speak for Scotland spend their time talking it down? Rather, they should recognise the extent to which men and women in both the public and the private sector have succeeded in building a Scotland that can look forward to the future with confidence. Those who talk down Scotland talk down Scotland's people.

Mr. Darling: My right hon. Friend is right. The fact is that nationalist policies failed and were rejected by the electorate on each and every occasion when the hon. Gentleman led his party previously, and they will be rejected when he next leads it into an election. When people look around Scotland they see economic success, more people in work, more businesses, and expansion across the board because of the economic policies that are good not just for Scotland, but for the whole of the United Kingdom.

Mr. Peter Duncan (Galloway and Upper Nithsdale) (Con): The Secretary of State implores us to look at the detail, but that shows Scotland's relegation to 36th in the world league for competitiveness. Is he proud of that record in government?

Mr. Darling: If the hon. Gentleman looks at all the recent economic surveys of Scotland and the United Kingdom, he will see that they universally recognise Scotland as a good place in which to do business. When he comes to the Dispatch Box and looks over his shoulder to see all of two Conservative Members sitting in the Chamber today, he may want to reflect that part of his problem is the Conservatives' attitude to Scotland. Yesterday morning, his prominent Front-Bench colleague said on the radio:

Does that not speak volumes about just how out of touch the Conservative party is with Scotland?

Mr. Duncan: The simple fact is that Scotland's economy is not attracting or retaining the very best. The figures are indisputable, with gross domestic product growth consistently lagging behind the rest of the UK, at some 7 per cent. since 1995, business start-ups at only three quarters of the UK level, and manufacturing
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export levels continuing their seeming decline. What more will the Government do to redress that decline, and when will they sit up and take notice?

Mr. Darling: Rather like the hon. Gentleman who speaks for the nationalists, the hon. Gentleman who speaks for the Conservatives is selective in the statistics that he quotes. I notice that he did not actually repudiate what his Front-Bench colleague said yesterday—that the Tories believe that Scotland is not a very attractive place for people to go and live in. What about the fact that we are home to one of the biggest banks in the world? The Royal Bank of Scotland is building brand-new headquarters just outside Edinburgh, and we are home to numerous other financial institutions that are doing well, such as the Halifax Bank of Scotland. Even in manufacturing, where, yes, there have been difficulties because of the difficulties that face the electronics industry worldwide, there are successes to which we can point. The fact is that Scotland is now a very different place from the Scotland of the 1980s and 1990s, when there was record unemployment and a second generation of people were growing up with no work. The other thing that the hon. Gentleman should focus on is that the policies he advocates—£35 billion-worth of public spending cuts, with all the economic instability that would result—would take Scotland back to the past. No wonder the Conservatives are completely out of touch with modern Scotland. On present form, they are likely to remain that way for years to come.

Defence Industry

2. Mr. Bill Tynan (Hamilton, South) (Lab): What estimate he has made of the number of jobs in Scotland which are dependent upon the defence industry. [213401]

The Secretary of State for Scotland (Mr. Alistair Darling): The UK defence industry is very significant to the Scottish economy. The most recent figures suggest that an estimated 7,000 jobs in Scotland are directly related to Ministry of Defence equipment contracts, with a further 7,200 civilian personnel employed by the MOD and its agencies. Additionally, significant employment will be created indirectly by MOD activities in certain parts of Scotland.

Mr. Tynan: I thank my right hon. Friend for that comprehensive response. Does he accept that defence industry jobs are mostly high-skilled and high-tech, and give wonderful opportunities for apprenticeships for young men and women in Scotland? Has he made any assessment of the number of jobs that would be lost in Scotland if we decided to withdraw from NATO and our peacekeeping facilities around the world?

Mr. Darling: Withdrawing from NATO would not just be bad in terms of the UK's international obligations but—my hon. Friend is right—it would be devastating for the defence industry in Scotland. We know that the nationalists stand for the break-up of the British Army and the Royal Navy.

To take just one example, as was made clear yesterday, the Government want to proceed with the programme to build two large aircraft carriers. That will
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create jobs for more than 10,000 people in the United Kingdom—many of them at Govan and Rosyth, the MOD anticipates, provided that those yards come in with good bids. We expect that to be extremely important for Scotland. Withdrawing from NATO would be disastrous. So, too, would be the commitment by the Conservative party to cut £35 billion of public expenditure. That would be bound to cut defence procurement. We do not even have to speculate about that, as it is precisely what happened in the past when the Tories were last around, and allowed the resources available to the MOD to be run down because of their irresponsible economic attitude.

John Thurso (Caithness, Sutherland and Easter Ross) (LD): Does the Secretary of State accept that defence jobs are as important for the highlands as they are for the south of Scotland? Recently, there has been much press speculation that the announcement yesterday of a physical integrator contract for the future carrier vessel would be accompanied by announcement of the physical integration site. As that was not the case, will the right hon. Gentleman take this opportunity to assure the House, and my constituents in Nigg, that the criterion used for the selection of that site will be best value, and not, as the press suggested, a fix by the Treasury?

Mr. Darling: My right hon. Friend the Secretary of State for Defence will, I understand, be issuing a written statement in about 20 minutes' time. He will say that we anticipate that, subject to value for money, the carriers could be built at four sites in the UK—Govan, Portsmouth, Tyneside and Rosyth. That will have to be subject to value for money, as the hon. Gentleman will accept. I fully accept that defence jobs are important wherever they are, but the general point is that if we are to safeguard the defence jobs that we need, first, we should remain part of the United Kingdom, because there is no way that such jobs would go to Scotland if the Royal Navy were broken up, as the nationalists advocate. Secondly, it is essential to maintain levels of public investment, yet the Conservatives are on record saying that they want to cut public investment to the tune of £35 billion. If that happens there are bound to be casualties. Among them would be the Army and the Navy—and the hon. Member for Galloway and Upper Nithsdale (Mr. Duncan) has done nothing to refute that this morning.

Dr. Gavin Strang (Edinburgh, East and Musselburgh) (Lab): Will my right hon. Friend confirm that the announcement of tranche 2 for the Eurofighter Typhoon just before Christmas was a hugely important boost to BAE Systems Avionics in Edinburgh, a provider of high quality jobs? Against that background, it was disappointing that the company announced 190 redundancies. Will my right hon. Friend encourage the Secretary of State for Defence, in his discussions with BAE Systems, to ask the company to minimise those redundancies and ensure that they are voluntary?

Mr. Darling: I share my right hon. Friend's concern about the job losses announced in relation to some restructuring at BAE Systems, and I hope that the company will do everything it can to try to ensure
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the future employment of everyone concerned. He will also be aware of the fact that the Department of Trade and Industry has asked the Office of Fair Trading to look at the proposed sale of some of that business to an Italian company, but I very much hope that we can do everything possible to maintain those jobs, because they are very high-skilled, and the people who work in the industry have served Scotland and the industry very well.

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