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In that regard, I want to make a few remarks to take forward the comments the hon. Gentleman concluded with.

The hon. Gentleman talked about economic development in its broadest sense and about the interconnected nature of what makes an economy work. It did my Merseyside heart good to hear him talk about the vital importance of ports to our infrastructure. That is not a glamorous thing to say—when we talk about infrastructure, people often think of big bits of railway—but ports are vital, in this country and others. However, I want to restrict my remarks to aspects of job creation that relate to the work DFID does and to the work I think it should do more of. In that regard, I have a few comments to make and some questions to put to the Minister.

I think we all start from the assumption that private sector growth is a good thing. It is especially good if it represents a structural shift in a country’s ability to feed its population and to take care of itself. In that regard, the hon. Gentleman’s comments about infrastructure capital expenditure are vital. However, although private sector growth is necessary, it is not sufficient in itself for development to occur. People in a poor country will have greater freedom only if other conditions are fulfilled.

Does growth help the poorest? For those in work that is vulnerable, there is a clear link between the insecurity and threats a country faces and the extent to which economic growth helps those closest to the bottom. It stands to reason that those who do not have much to live for would risk their lives by engaging in military combat. The more we can do to give people the possibility to develop themselves and their families, the safer the world will be.

Does growth reduce inequality? Not necessarily. However, we must surely seek to ensure it does, if we are to have a fairer and more just world. In that regard, it is important that we see no return to aid conditionality—to the old days of aid as a byword for helping so-called British companies do business in other countries. I am afraid there has been a slightly worrying return to language referring to the UK as an aid superpower, as if our international development work with other countries is purely about self-interest, rather than an enlightened self-interest that reflects the virtues of being on a more even playing field with others.

Does growth involve the diaspora? Okay, DFID has done some work with FTSE 100 companies, but what about businesses in this country owned by people from poor countries in Africa and elsewhere?

My final condition in terms of determining whether private sector growth is good enough to bring about true development relates to environmental sustainability. If infrastructure investment is done in the right way, it can be absolutely crucial—solar farms have been mentioned. The world can choose whether to grow in a way that is healthy; some of the mood music from parts of the Government has been less than positive about the green agenda. I would not dream of using the kind of words that have been used about it, but I am sure the Minister knows what I am referring to.

To conclude, I have some specific questions. On job creation, the Minister will realise there is a serious risk of deadweight loss if projects that work with the private

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sector create jobs that would have been created anyway. What research is DFID undertaking to ensure that any investment in or for the private sector is genuinely additional and does not simply move jobs geographically or recreate ones that would have been created anyway?

Secondly, what policies is DFID pursuing to help meet the decent work indicators in the millennium development goals? It is clear that we need to reduce the number of people who are working and in poverty and, specifically, that we need to help young people and women. Half the world’s labour force is in vulnerable employment, so the agenda could not be bigger. Leading on from that, in how many DFID projects with the private sector does the Department monitor the quality, quantity and precariousness of the work created?

The Dutch Government require private sector use of their development funds to adhere to OECD guidelines for multinationals, including on industrial rights and workers’ rights. I would be grateful if the Minister commented on whether we intend to adopt the same standards as the Netherlands.

I would be grateful if the Minister told us whether there is any move in DFID to reconsider the short-sighted decision taken earlier in this Parliament to de-fund the International Labour Organisation. In some of the work I have done on the situation of garment workers in Bangladesh, the contribution made by the ILO’s advice and work has been irreplaceable, but the Government have decided on behalf of the nation to de-fund that organisation. Of course, the Minister may respond by saying that DFID Bangladesh has worked with the ILO, but that is not the same as the contribution we used to make to it. Will the Government reverse that short-sighted decision?

To conclude, I congratulate the hon. Gentleman again on raising this issue, which is vital to poor people who work hard and earn little, wherever they may be, as well as to the broader security of the world.

3.17 pm

The Parliamentary Under-Secretary of State for International Development (Lynne Featherstone): What a pleasure it is to serve under your unexpected chairmanship this afternoon, Mr Hollobone. You are a very welcome replacement. Thank you for enabling us to continue with the debate.

I thank my hon. Friend the Member for Stafford (Jeremy Lefroy) for securing such an important debate. In his opening remarks, he said he had just returned from Liberia and Sierra Leone, which listed unemployment as their biggest challenge, and DFID also believes that is the case. Jobs are at the core of international development, and I very much welcome the opportunity to discuss the issue. I am aware of my hon. Friend’s vast experience and great knowledge in this field—it is much greater than my own—which comes from his personal experience of living in Africa and being involved in business for many years.

I hope many of the points in my speech will address some of the issues that have been raised. If we have time, I will try to address some of the more specific points that have been raised. When we ask people in the UK or in a developing country what they want, the desire for a good job is normally one of the top things on their list—that is not rocket science. A job will allow

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them to work their way out of poverty, to provide opportunities for their families and to build for a better future. I always think that having something to do and somewhere to go every day is also good for keeping a person whole in mind and body.

Since I became a DFID Minister, there is something that has struck me about virtually all the African countries I have visited—and I have been to Africa perhaps 20 times now. Driving up the road—if there is one—at certain times of day, one can see that many young men are sitting at the roadside without anything to do. That is a reminder of something that has already been raised in the debate: how important and necessary work is and how much work is missing.

I want to highlight the scale of the challenge in developing countries. Most of the 600 million new jobs needed globally by 2020 for the growing working-age population are needed in developing countries, but at the moment only 15% of people in low-income countries in Africa have what we would call a proper job. There are 900 million people in developing countries who are working but who, as my hon. Friend the Member for Stafford said, are doing vulnerable self-employed work and living in poverty. They engage in subsistence farming and so on. Most people in developing countries have a job of some sort, but it is mostly in unproductive subsistence work that may even be unsafe.

To address those issues in the terms in which DFID thinks about jobs, we need modern, formal sectors to grow and to create better jobs. We need people who work in subsistence agriculture or unproductive household businesses to be able to earn a better living. I have visited some impressive projects to intensify and maximise the produce of small agricultural plots. Avoiding the loss of produce in getting it to market is one way to do that, but I also remember a market in Zambia where we had arranged for people selling seeds and market produce to meet small subsistence farmers to exchange knowledge of the best seeds and how to plant. There was a product to make cows grow, so that people could get them to market in two and a half years instead of seven. I did not ask what was in it; nevertheless, someone with one cow could triple their income with that product. Many of these people are in marginalised rural areas or cities, poorly connected to markets for their labour. They lack the right mix of skills, finance, land and information to enable them to find a job. My hon. Friend the Member for Stafford also talked about getting goods to market, the skills needed to get a job, access to finance, surety of land tenure and information about how to maximise produce.

We also need to address serious inequality in who gets job opportunities. Women are less likely to participate in the labour force and are more likely to be in unpaid or vulnerable work. Young people—and there are many in developing countries—also fare badly, which often poses a risk to social cohesion. That is not just unfair and dangerous; it is inefficient and represents a huge potential loss to developing economies. Changing this jobs picture requires economic development and transformation, much of which will be led by the private sector. People need the opportunity to earn more. For many, that will mean getting better incomes in agriculture, but over time—indeed, already and increasingly—

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the bulk of new jobs will come from higher-income opportunities in services and manufacturing, as has happened in every country that has successfully developed.

DFID’s work on economic development and jobs involves, first, getting the international system right; secondly, getting private sector growth going; and, thirdly—an absolute priority for me—ensuring that growth is broad-based and inclusive, in particular for girls and women. One example is the recent trade facilitation agreement reached in Bali, which will be instrumental in reducing the barriers to trade, helping to integrate developing countries into global trade flows and promoting jobs and investment. We are also pushing for productive jobs to feature prominently in the goals and targets of the post-2015 agenda, which is essential if we are to reach zero poverty by 2030. Our multilateral partners are also well placed to deliver on the jobs agenda and are upping their game. The UK-backed International Finance Corporation global SME finance initiative aims to provide at least 1 million new jobs and financing to 200,000 small and medium-sized enterprises. Access to finance is crucial, and I have just been in Mozambique, where I launched access to finance for women in SMEs. It is a crucial stage.

The World Bank Group has put job creation and economic development at the centre of its plans to achieve its goal of increasing shared prosperity and the income that accrues to the poorest 40% in each country. We are engaging closely with the bank on that. Across Government, the UK is also working to improve economic and trade relations. Our recently launched high-level partnerships for prosperity will improve trade between the UK and Angola, Côte d’Ivoire, Ghana, Mozambique and Tanzania—indeed, my hon. Friend the Member for Stafford mentioned the recent trip there by the Secretary of State.

Driving economic development and jobs is not only the most effective way to reduce poverty in developing countries; it is also in the interest of the UK. The hon. Member for Wirral South (Alison McGovern) raised the question of tied aid, and I assure her that there is no question of that. It is against the law and not appropriate. However, when we let contracts in open competition, a UK business will often win. That, however, can only be a compliment to British business and its ability to make the successful bid. There is no favouritism: the process happens on the open market and such contracts are always let competitively.

It is in the interest of the UK to build our future trading partners. Africa has a growth rate that we in the UK can only envy and there is phenomenal wealth lying beneath its ground. The challenge with extractive industries is to spread the benefits widely, as my hon. Friend the Member for Stafford said. One reason for the work we do on value chains and supply chains in extractives, and in the surrounding geographical area, is to try to link the economic benefit to the country. We also give technical support and assistance with the original contract negotiations, so that the country benefits from its own wealth, rather than other countries or the elites of that country.

Improving job prospects in developing countries, particularly for young people, reduces the chance of conflict. The recent awful case of the abduction of girls in northern Nigeria seems to have gone from the media pages, but it has not stopped being on our mind at

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DFID or the Foreign and Commonwealth Office. Part of the issue in the area where Boko Haram flourishes is that young men have nothing to do. I am looking at programmes to develop skills and jobs in that area, as possible diversionary tactics, which would also be very beneficial.

Many businesses in the UK are looking to Africa and Asia and seeing the markets of the future. Businesses see value in engaging with DFID and the rest of Government and they in turn have much to offer the countries that they choose to invest in. Interestingly enough, the business advisers to DFID’s advisory board have strongly called for exactly what my hon. Friend the Member for Stafford was talking about: the development of appropriate skills and education. There is a willingness to invest in countries and create jobs where the climate is stable enough, but there is also a need for skills, so that businesses do not have to import their own staff. A company that wants to open in many parts of a country needs to be able to use staff from the country in question to run branches, co-ordinate things and see to the logistics.

Our spending programmes create jobs in developing countries in a number of ways. The Commonwealth Development Corporation, the UK’s development finance institution, is having a huge impact on job creation in Africa and Asia. It is remarkable. In 2013, CDC’s 1,300 investee companies directly employed over 1 million people. That is a hugely successful rate.

Jeremy Lefroy: The Minister is absolutely right to point that out. I would further like to congratulate CDC; I understand that last year saw the highest level of investment by CDC in its history. That is a welcome sign of the success of the Government’s opening of CDC’s mandate, to include direct investment in businesses again, as well as investment in funds, and concentrating on low-income countries rather than spreading out through middle-income countries.

Lynne Featherstone: My hon. Friend makes an excellent intervention. CDC has gone from strength to strength. Not that long ago there were some question marks over it, but it has moved well away from that. As he says, because it works in the most fragile, conflict-affected and poorest of countries, its success is all the more remarkable. It has created more than 68,000 new jobs.

Alison McGovern: On that point, would the Minister be so good as to respond to my question about deadweight loss and what research DFID is undertaking to ensure that none of those new jobs represents such loss?

Lynne Featherstone: I will respond to the hon. Lady in a moment on the issue of deadweight loss.

Moving on from CDC, in the long term, the key to mass job creation is improving the environment for domestic and other businesses to invest and grow. DFID is focused on these long-term determinants of job growth.

David Simpson: As we believe that these projects and job creation are very important, does the Minister agree that we cannot overestimate the number of jobs that

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need to be created? I believe the figure is 95 million over the remainder of this decade, so time is of the essence. We need to move on this issue.

Lynne Featherstone: The hon. Gentleman is obviously right. We work in that direction and we are working as fast as we can to enable job creation to happen. I have covered a number of things, but part of what DFID does is on the enabling environment for investment and therefore job creation, whether that means cutting the time it takes to get goods across a border from four weeks to one day, or help with filling in forms or how long it takes to start a business—all the things that are very off-putting to investors. We are working on all fronts.

I do not know whether those hon. Members present have ever eaten in Nando’s, for example, but I was in Mozambique, where Nando’s exclusively grows its peri-peri peppers. It is a labour-intensive process, with massive work for smallholdings, done to a very high standard—because the standards, both of the product and how people work, are very important to DFID and the British Government—which means huge job creation. It is a win-win for the country, the company and the individuals who are being taught and looked after while they grow peri-peri peppers—and I can highly recommend peri-peri chicken.

DFID currently supports more than 60 programmes with specific targets to provide economic assets to girls and women in developing countries. We have set ourselves a target of helping 18 million women to access financial services and 4.5 million women to strengthen their property rights by 2015. Both will have a fundamental impact on the job prospects of the women involved by improving their control over assets and finance.

For some women in work, the conditions remain unacceptable. The UK is supporting the International Trade Centre to work with Governments and customs authorities in east Africa to improve conditions for female informal traders, who face harassment and extortion at borders—the example often given is someone who starts with 12 eggs and, by the time they pay off all the people who have to be paid off, has about three eggs left to sell. That is a common, everyday kind of factor.

The Department is also scaling up its work on education and skills—an important point that my hon. Friend the Member for Stafford raised—to make sure that skills are relevant to people’s changing opportunities and that the private sector is involved in designing, delivering and financing them. We are also increasing our work on infrastructure—my hon. Friend talked about power and transport—and thinking afresh about urbanisation, in order to create more and more productive jobs.

Jeremy Lefroy: My hon. Friend is making some extremely important points. One issue that I did not refer to directly in my speech—but which relates specifically to skills—is the great need for additional skills in, for instance, the health and education sectors, which are themselves financed through the development of the economy, the payment of taxes and so on. The hon. Member for Wirral South, who speaks for the Opposition, and I were both keen to see the International Development Committee look into health system strengthening. I am glad to see that that inquiry has now taken place. One of the things that I think will emerge from it is the enormous

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number of job opportunities for people at all skill levels in the health and education sectors, but of course those sectors have to be financed and the finance comes from the growth of the private sector.

Lynne Featherstone: That is absolutely the case. There are some benign circles that we need to get going in, for example, higher education in developing countries, because skills in health and education need to be supplied locally. We need to up the quality of teaching and professionals in the health service. Indeed, that is how we are moving forward, and I believe I will be giving evidence to the IDC on health system strengthening. The need is great, because the numbers are enormous and those jobs must be filled by training individuals within countries and not “borrowing” them, as has happened in the past.

As for monitoring and evaluating DFID’s work, we are scaling up efforts to monitor and evaluate the impact of our work on economic development. Some areas of this agenda, such as job creation, investment and trade, are quite complex to measure. The International Finance Corporation’s “Let’s Work” initiative, which DFID, CDC and the Private Infrastructure Development Group engage with, is working to develop an agreed approach to estimating the impact of private sector infrastructure interventions on job creation. DFID funded the IFC’s study in 2013 of the private sector and jobs, and a whole chapter is devoted to the difficult issue of measuring net additional job creation. Measuring it exactly is one of the challenges, but it is our ambition both to measure it and to ensure that the jobs being created are additional and would not have been created in any case.

Under the economic development scale-up, we are looking to increase the relevance of education and skills for the changing job market, as I have said. That goes for foundational skills and technical skills, so that skills taught in school and technical training institutes have to be right and join up what is needed for industry in the country with the skills that are available. New interventions for marginalised groups in rural and urban areas provide combinations of interventions, such as entrepreneurship skills and finance and innovative business models—we are trying to create another benign circle. I have visited some of the larger pilot entrepreneur skills awareness training projects, where an inspirational speaker talks to 700 or 800 young people at a time, who all seem absolutely fired up and up for going out and becoming entrepreneurs in their own right. It is very exciting work.

My hon. Friend the Member for Stafford mentioned power. The Public-Private Infrastructure Advisory Facility is delivering technical assistance to unlock private investment in developing countries and the EU is investing in the EU-Africa Infrastructure Trust Fund.

As for ports, in Mombasa in Kenya we are helping to tackle problems with port management to improve trade and regional integration. Most importantly, of course, as Mozambique’s ports develop, the corridors that will open up to neighbouring landlocked countries will be incredibly valuable, both to those countries and the ports themselves.

As for work, I hear what the hon. Member for Wirral South, my opposite number, was saying. I can assure her that I go to the International Labour Organisation

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every three months and I work closely with the unions. They have raised the issue of our stopping their funding many times with me. However, as I have explained, we work in different ways. We are working with them on a project on trafficking in Asia and we have given £4.8 million to an ILO programme to improve working conditions in the readymade garment sector in Bangladesh. That was launched in October to help to conduct safety inspections of the 1,500 factories that are not covered by existing initiatives and to help the victims of the disaster.

In a similar field, the trade and global value chains initiative encourages buyers, factories and workers to work together to improve productivity and working conditions. Our overarching message and narrative on working conditions—in all businesses and in all ways, and with Governments—is that they should be good and professional. It is no good a Department such as DFID not caring about standards; we care very much about standards and responsible business. We encourage companies to respect voluntary global standards, which improve labour standards and reduce harmful working practices. We provide funding and support that strengthens mechanisms that ensure that companies comply with their commitments on labour standards and working practices, such as the ethical trading initiative. We have also funded and supported the extension to the global fair trade system and are building evidence about its impact on wages and working conditions.

As for ensuring that poor people are not being excluded from any newly developed markets, which obviously is important, we support inclusive growth, benefiting women and girls in particular. That is an essential pillar of DFID’s economic development strategic framework. Although occasionally one sees “economic development” written in a report, it is always meant to read “inclusive economic development”. There is no point developing a country if the process is not inclusive, because if it leaves people behind, it will simply repeat the worst mistakes that have been made in other parts of the world. I am pleased that the overarching principle of the high-level panel report on the post-2015 agenda is exactly that. “Leave no one behind” is the most important message.

In conclusion, I thank my hon. Friend the Member for Stafford, who covered the issues and subjects in better detail, perhaps, even than myself. I think all hon. Members would say that we are all committed to the creation of useful employment and work and the improvement of subsistence work and agriculture. That is important, right across the developing world, because if we do not do it right, we will be guilty of leaving many people behind. Ultimately, it is in our own interests—in the country’s and everyone’s interests—that we get this right and support the developing world in the creation of the right sort of jobs, the right environment and the right economy.

Mr Philip Hollobone (in the Chair): I thank all hon. Members who contributed to this important debate. I now suspend the sitting until 4 pm, or earlier if both the Member whose debate it is and the Minister responding arrive earlier.

3.42 pm

Sitting suspended.

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Out of Town Supermarkets

3.57 pm

Mr Philip Hollobone (in the Chair): This topic is very important in the constituency of Kettering, and I am sure it is very important in Southport. We are about to find out why.

John Pugh (Southport) (LD): I thought this debate might be of particular interest to you, Mr Hollobone, and I am delighted to see you in the Chair, as I am sure that quietly, at least, you will make your presence felt. The hon. Member for Rochdale (Simon Danczuk), a fellow member of the Communities and Local Government Committee, is here as well and he probably has concerns similar to mine. There are other Members who, recognising that this is a half-hour debate, have not deigned to turn up. None the less, they have precisely the same sort of issues in their constituencies as we do in Southport. These are not just Southport issues, but issues that affect people in general.

Town centres are a big political issue for the Government—DCLG Ministers have a lot of programmes afoot to revitalise and re-energise them—and for MPs, because nearly every Member has a substantial town centre in their constituency that they wish to see preserved, and full of life and vitality. Constituents routinely bring up the issue of town centres when they observe empty shops and some of the current dereliction.

Essentially, therefore, we are all on the same page. The Government want a revitalised high street, and we all, whether we are MPs, the Government or constituents, want to see community life pursued via the high street and the range of activities that take place there. That might involve some activities that are problematic, such as betting, but it usually involves shops, retail, businesses, cafés, restaurants and an awful lot of nail bars. It is extraordinary; I am not sure why they have grown up in such abundance, but it is all part of the way and purpose of ordinary British life, if I can put it like that.

We are also keen to see independent retail thrive, because there is a danger, even if retail were at its most vibrant, that every town centre will end up looking similar, with the same shops and offers but without any of the interesting and intriguing breakthrough companies that one can see when visiting a new place. I think we all acknowledge that such desires imply some form of restraint on out of town development—the characteristic sheds and tarmac that exist on the edge of pretty much every substantial town and elsewhere. If that is our ambition, the reality seems to indicate that we are far from achieving it.

My speech relies extensively on the Association of Convenience Stores report, “Retail Planning Decisions under the NPPF”. In that document and others, the association demonstrates that some of the prime retail movers—the supermarkets—are expanding more rapidly than ever in out of town developments, despite the various noises made by the Government and the apparent planning restraints.

If we actually believe that town centres are vital and that out of town development should be restrained, why does planning policy not deliver on those aims? After all, planning policy in that direction is well established. One has to go back to 1996, which, looking around the

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room, I think was before any of us were actually in Parliament, to find the advent of the “town centre first” policy. If we examine how it is panning out at the moment, we see that its effect is arguably weakening, supermarkets are becoming ever better at getting their own way and out of town retail is proceeding pretty well unabated despite everyone’s efforts.

How is that happening? A case must now always be made for out of town development, but the big retail movers, by which I largely mean the supermarkets, are pretty good at stating their case in a variety of clever ways. One is to minimise the impact of what they are doing. They typically say that their plans will have a limited effect on the town centre or that a new project will have an impact largely on the existing sheds in an out of town development. Such a case often carries weight in front of the planning committees of the land. However, the claims are not borne out by the figures. Monitoring of the post-hoc effects of various developments shows that the effect is greater and more significant on town centres than was initially claimed and that out of town developments experience a lesser effect.

When arguing for out of town development, big retail movers also tend to exaggerate the jobs benefit. A planning application for a project launch will often talk about the huge number of jobs, often in the hundreds, that will be created. However, that number is not a net figure and does not analyse the quality of jobs provided. The number does not state whether the jobs are part-time or casual or whether they will ultimately be replaced by automatic checkouts as systems become ever more mechanised. The manner in which such cases are put forward is extraordinarily effective and plausible, but they should not be taken as credible in the long run if the after-effects are monitored against the projections, which is rare.

Simon Danczuk (Rochdale) (Lab): Does the hon. Gentleman agree that the Association of Convenience Stores research suggests that the situation has worsened since the introduction of the national planning policy framework, which calls into question the effectiveness of the “town centre first” policy?

John Pugh: That case is extraordinarily well argued in the document. The ACS is obviously an interested lobbyer, but it has undertaken effective monitoring, which the Government have not done, of what happens after the event compared with what applicants say when planning permission is applied for.

When applying for such permission, supermarkets go armed with persuasive, expert consultants, planners and researchers and can offer a view of the whole retail environment that the council hearing the application cannot really judge for itself, because planning departments are, by and large, severely under-resourced. The lack of resources is due to local authority cuts, but planning departments have never been particularly well resourced and are often short of independent data, which costs money. They are also unable to face up to the costs of refusal, leading to an expensive appeal process. Planning departments across the land are hurrying to get housing figures in place, but they are not doing much work, number-crunching or thinking about the retail environments that they often strive to protect.

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Ultimately, planning departments are also vulnerable to what I was going to call “bribery”, although I do not want to use that word because individual bribery is not involved. However, a supermarket wanting to get its way, whatever the effect on the town centre, will normally present its case by suggesting that, due to some attractive agreement under section 106 of the Town and Country Planning Act 1990, something that the council wants, such as a traffic development, can be delivered as part and parcel of a new development. On one side is the threat of an expensive appeal and on the other is the bribe that granting permission may lead to some benefit that the council may not be able to accommodate through its own resources. That is generally what the monitoring of such developments shows.

I ask the Government to undertake some of their own monitoring, because two Government policies are not sitting together well at the moment. The national planning policy framework is leading to a weakening of the “town centre first” policy, but Ministers in the Department for Communities and Local Government are emphatic that that is their policy and are putting lots of energy into it, suggesting how it can be improved, engaging Mary Portas and so on.

A key element in the process is the mechanism that is supposed to be used to decide whether an out of town development should go ahead: the sequential test. Essentially, it is a question put to the supermarket or other developer that asks whether there could be a better in-town development that would have the same effect. Why should they go out of town when in town offers the same opportunity?

In the hands of developers, however, the question becomes rather trickier than it might first seem. Developers tend to say that there may be sites worth considering in the town centre, but that it is most unlikely that those sites will allow the replication of the format that they intend for out of town developments—town centre sites may be a possibility, but are not what they want. When that argument is pursued, a planning committee will often become nervous and find itself on unsteady ground.

As an illustration, I will describe the situation in Southport, about which hon. Members may or may not know. Southport’s attraction as a town that visitors come to and enjoy themselves in is probably based on two things. First, there is a leisure offer from the seaside environment and all that comes with it. Secondly—this is part of its enduring appeal—Southport has a distinctive retail environment. We have a long main street called Lord street, which is uncharacteristically stocked with shops along one side only. It is known widely in the north-west, if not further afield. Some even say that it inspired Napoleon III to construct the Champs-Elysées in Paris, which may be slightly exaggerated, but it is a distinctive retail environment none the less. In many retail environments, malls and town centres, one could be knocked unconscious and brought round in another and not notice the difference, but the distinctive smaller shop units of Lord street, with their canopies and Victorian charm, are part of what gets people to Southport in the first place.

In the downturn, the retail offer in Southport has, frankly, worsened. There is less retail and more shops are empty—13% of all shops in the town centre are now vacant. There is also less quality retail; some of the shops are not of the quality of years gone by. There are charity shops in Lord street now; they simply would not

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have got through the planning committee years ago. We have seen, as every town has, the withdrawal of the big chains, which have folded up and moved elsewhere, and there has been a general loss of independent shops, whether because of the economic environment, rates or high rent. We also have a series of absentee shop owners in Southport, who are not aware that the economic climate has worsened and are charging unrealistic rents.

Like every town centre, we have responded to that situation. Every town centre needs to get smarter. We need to look hard at click and collect, and we are reviewing parking. Recently, we set up a business improvement district. If possible, would the Minister take a message about that away from the debate? At the moment, the business improvement district is awaiting proper authorisation by the Minister’s colleagues in the DCLG. The council tells me it has not received a prompt response that would enable it to go ahead and develop the bid or allow the bid to go live. If the Minister would address that in passing or make inquiries about the correspondence with Sefton council on that issue, I would be grateful.

The actions I mentioned are things that we can all do and that Southport has done. What we definitely do not need in the town centre is reduced footfall. That is the prospect at the moment, however, because of a large application on the part of Sainsbury’s. If I detain Members a little longer to tell them more about the specific environment, they will understand the burden of my complaint. We have supermarkets in our town centre. We have a Morrison’s, a smaller Sainsbury’s, an Asda on the edge of the town centre, which was forced to be in that place—Asda wished to go elsewhere—a Food at M&S in the Marks and Spencer, and a big out of town Tesco.

Our problem at the moment is characteristic of the problems aired in the ACS report: Sainsbury’s wants to follow Tesco out of town. Retail studies have shown that there is unmet need, based on figures of overtrading—we can argue about those one way or the other, but let us accept them for the moment—and that we could do with another 4,000 square metres of retail food space. Sainsbury’s is proposing to build an establishment of 10,000 square metres, knocking down an existing Homebase to build a superstore.

There is a town centre plan that favours protecting the town centre, but to me it does not look robust or strong enough to prevent the demand for a very large superstore right on the edge of town. That development, in my view, would be detrimental to the life and vitality of the town centre, and ultimately to Lord street and the economy of Southport as a whole.

At this point, a planner would ask Sainsbury’s—or whichever company it might be—whether there was a site nearer to hand. This particular case illustrates perfectly my earlier point about how supermarkets react, because in fact there is: there is an old Morrison’s store vacated when Morrison’s merged with Safeway. There is a big council car park opposite it and a multi-storey car park above it, so there is no issue with parking. It has desperate owners, who want to rent it, and short-term tenants who will not stay there for long. It has been vacant for the bulk of the past 10 years, and is an attractive site for anybody who wants another supermarket in town. It is ripe for development, but presumably, in its infinite wisdom, Sainsbury’s thought that it would prefer to go outside and that it had a case for doing so.

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In a case like that one, there is a vacant supermarket that the applicant will not use and a proposed out of town development that could be corrosive for the town centre. If such a case can get through a planning committee, we have what is almost a classic illustration of the techniques that, according to the ACS, are used right across the land.

Julian Sturdy (York Outer) (Con): The hon. Gentleman is making a strong argument, and the case he is making about his own constituency reminds me of an issue in mine. Does he agree that we need local authorities to have detailed retail impact assessments in place, so that the impact of supermarket developments can be properly assessed, threshold levels can be defined and future sites identified? That way, local authorities would have at their disposal tools that they could use to refuse applications if appropriate and to defend appeals against what can be quite strong opposition from supermarkets, which have a lot of financial capability at their disposal.

John Pugh: The hon. Gentleman is absolutely right. The onus is on local town planners and councils to have a positive view of where their town is going, which aligns with what is commercially possible. I thoroughly endorse what he has said. To some extent, the problem for councils at the moment is that they are concerned—and the Minister is pleased about this—about finding forward-looking plans apropos housing, but are sometimes leaving retail and the commercial community to sort themselves out. They will not do so to everybody’s satisfaction.

Going back to the situation that I am confronting, I am certain that Sainsbury’s has thought about the sequential test—it is not so stupid as to put in an application and not think about whether that test will apply. But it must be fairly confident that if the test does apply, and even if there is a site available nearby in the centre of the town with adjoining car parking, which has previously been a supermarket and is bigger than the site it currently has, the sequential test will still not be an obstacle. Supermarkets do not waste their time when putting in applications. If that is the case, the sequential test is very weak indeed.

I have no grudge against Sainsbury’s—I am a Sainsbury’s shopper myself—but on a negative note, from where I am standing, it seems happy to destroy the Lord street environment; it must know it will have a severe impact there. That ultimately means that it is happy to destroy part of the town’s visitor base to get its own way. I do not blame Sainsbury’s for wanting to get its own way. In an article on the PoliticsHome website today, I compared supermarkets to the mafia. Now, they are clearly not as bad as the mafia—nobody gets killed—but the analogy works in a way, because they do the same sort of things. They make a promise, sometimes, of a development that the council will like alongside a development that the council is less happy about. They have the threat of the appeal. They do all sorts of community-minded things, such as having charity collections and so on. They carve up territory between themselves, bully their suppliers and have huge and deep-rooted political connections.

Supermarkets are pretty good at getting their own way and are pretty single-minded, but the outcomes they want are connected purely to their bottom lines.

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Now, I am not judging that; I do not expect commercial organisations to be automatically or naturally philanthropic. They do some good things, such as having recycling centres, making good environmental noises and all that sort of stuff. However, the one thing they will not do if they do not have to is care about town centres. I am not judging that—it is the way they are—but I think it is the Government’s job to manage that issue. We cannot have thriving town centres and gung-ho out of town developments. Even if the public think that is the optimum outcome, it is not possible.

Simon Danczuk: I have had many happy times in Southport over the years and I commend the town to others. What would the people of Southport conclude if they were consulted? What would be their preference?

John Pugh: That would depend on how the choice was offered. Sainsbury’s and other supermarkets carry out consultation among nearby residents. If people are asked whether they want a large supermarket nearby with every conceivable object they could ever wish to buy, they will say yes. If they are then asked whether they would like to walk round a town full of shops that are empty because no one goes there any more, or told that if they do not have a car they could not do any shopping, they will say no. The public may not always be as aware as we should be about the knock-on consequences of one development on another. I hope that the Government are, and that the Minister is, and I hope that he can give me some comfort that there is a rational solution to the problem.

4.19 pm

The Parliamentary Under-Secretary of State for Communities and Local Government (Nick Boles): It is a great pleasure to serve under your chairmanship in this important debate, Mr Hollobone. I congratulate my hon. Friend the Member for Southport (John Pugh) on securing it, on a subject that is obviously and evidently of great personal interest to him.

You will understand, Mr Hollobone, my anguish and dismay at having to admit that I do not agree with much of what my hon. Friend said. Coalition is strange and curious and I suspect that many of us—not least, I suspect, my hon. Friend—have at times found it trying, but it works best when we admit to some differences in starting points while nevertheless hopefully being able to reach consensus on how to move forward. It is with what I believe is my hon. Friend’s starting point that I am in greatest disagreement.

I am firmly of the view that supermarkets have been a powerful force for social and economic good in this country for the past 50 years. I am firmly of the view that people on modest incomes around the country, in his constituency of Southport and in mine of Grantham and Stamford, have the opportunity to buy a range of quality food and other items that were unaffordable or unavailable to all but the very rich when I was growing up, and probably when my hon. Friend was growing up.

John Pugh: I think the supermarkets, like coal mines, have been extraordinarily good for the country as a whole and an excellent development. My argument is not for or against supermarkets, but about their placing in a commercial environment. Just as a coal mine is a

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good thing, one does not necessarily want one nearby. A supermarket may be an excellent thing, but one wants it in the centre of town.

Nick Boles: I wish I could accept that that is what my hon. Friend was saying. He accused supermarkets of behaving like the mafia, and talked of them bribing and threatening. When he said supermarkets may do good, he then mentioned recycling as if the provision of high-quality, low-cost products to people on low incomes is not in itself a good thing, and employing thousands of people on flexible time scales that fit in with family life is not a good thing. I profoundly disagree with that characterisation of supermarkets.

Nevertheless, I am in agreement with my hon. Friend, as is Government policy, that it is important to find a way to encourage and promote development of new supermarkets to fulfil a vital and much appreciated need and the equally strong desire to preserve the range, vitality and diversity of retail uses in thriving town centres. That is the difficult balance that Government policy, as he observed, throughout the last Government and the present one—

4.23 pm

Sitting suspended for a Division in the House.

4.36 pm

On resuming—

Mr Philip Hollobone (in the Chair): We all got back rather more quickly than I thought, so I will ask the Minister to resume his remarks.

Nick Boles: Mr Hollobone, I feel that the Almighty perhaps felt that I was becoming a little too intemperate in my comments. I am sure that coalition harmony will now break out and that we can work out where we agree.

Although my hon. Friend the Member for Southport and I seem to have a different general attitude to the role that supermarkets have played in our society, we do not, nevertheless, disagree on other things, not least because I represent the three market towns of Grantham, Stamford and Bourne, which face similar challenges in their town centres. I want to make sure that independent retailers in their town centres can thrive, that new ventures can come in, set up and be successful, and that we do not end up with hollowed-out town centres, with thriving supermarkets outside.

I am grateful to my hon. Friend for acknowledging that the “town centre first” policy is a long-standing one. I believe the previous Conservative Government brought it in towards the end of their time in office, and the Labour Government maintained it through their long period in office. It is maintained in the national planning policy framework, having simply been translated from the much greater bulk of previous planning policies, but with no dilution of its content—certainly in terms of policy intent, words or their legal import.

My hon. Friend suggests that, despite the inclusion of the “town centre first” policy, the sequential test and the requirement for an impact assessment on any proposed out of town development, more such developments seem to get through first, than is intended by the

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Government under the policy, and secondly, than was the case before. That is an interesting claim, and he referred to the report commissioned by the Association of Convenience Stores. He is right to acknowledge that the association—this is entirely proper—is a lobby group that represents its members and that commissions and publishes reports that advance their cause, but he is also right to say that it has taken the trouble to see what has in fact happened.

It is a reasonable challenge to the Government to look closely at that report and to ask ourselves whether it looks in a complete way at all the evidence. In addition, does it judge what the counterfactual would be? I say that because, without wanting to comment on the proposal that has been made in my hon. Friend’s town or on any other particular proposal, I can imagine that, in the teeth of a deep and long recession, planning authorities may well have been more swayed by arguments highlighting the number of jobs created by new supermarket developments than they might have been inclined to be during the boom times towards the middle and end of the last decade or, indeed, before. It is entirely proper for planning authorities to weigh up the relative worth of very different impacts, but that balance of judgment may shift back as, hopefully, the economy continues to improve and conditions within the retail sector gradually improve.

Although I accept my hon. Friend’s point on the level of vacancies in his town centre, it is not bad compared with some other places. I have high vacancies in one of my town centres, in Grantham, but in the past few months the figure has fallen significantly. All the landlords of small retail units in my town centres are saying that things have been picking up in the past few months, so I hope that is a sign that things are beginning to return, which may shift the balance of thinking in local authorities.

Simon Danczuk rose—

Nick Boles: I am, of course, very happy to give way to a member of the Select Committee who owns an important local convenience shop.

Simon Danczuk: I declare my interest. I get the impression that the Minister agrees that approvals for out of town supermarkets appear to be accelerating, but does he not share my concern that approvals are being given but supermarkets are not necessarily being built? That is leaving some town centres in limbo because developers will not go in after approvals have been granted.

Nick Boles: No one is wilier than the hon. Gentleman at putting words in my mouth that I did not say. For the record, I make it clear that I do not accept that the rate of approvals for out of town developments has gone up. We will look at the evidence that has been presented, and he is perfectly right to suggest that we should draw our own conclusions. I was not aware of the problem to which he refers, but we would all be interested to look at any evidence he has—systematic evidence, rather than episodic cases.

The three parties represented in this debate agree on the “town centre first” policy, and we all agree it is important that the sequential test is properly done and maintained, and that planning authorities should feel confident in making decisions on particular applications

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in accordance with what the sequential test and the impact assessment tell them about the effect of a potential out of town development on the vitality of a town centre. We hope and believe that planning authorities will have that confidence in the future.

I offer a small olive branch to my hon. Friend the Member for Southport by saying that I would be delighted to find out from the Minister in the responsible Department what is holding up the response to Southport’s businesses improvement district application and do anything I can to urge a swifter response than has been received to date.

John Pugh: I thank the Minister. I assure him that, despite my forensic character of expression from time to time, there is little that divides us on the main principle.

Nick Boles: On that note, I have nothing further to add. Coalition harmony has broken out once again.

Mr Philip Hollobone (in the Chair): Thank you very much to all those who took part in that important debate for Southport.

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Trade and Investment in Scotland

4.43 pm

Mr William Bain (Glasgow North East) (Lab): It is a pleasure to serve under your chairmanship once again, Mr Hollobone.

I begin by praising the contribution that exporters of services and manufactured goods in Scotland make to our economy and the jobs that they sustain and support. Scotland, as part of the United Kingdom, is an open economy that is welcoming to investment from overseas, but it is also self-confident in expanding its role as a source of exports. When I speak to manufacturers in my constituency, whether Promat, engaged in exporting construction materials to the US and the rest of the EU, or Gaia-Wind, the fastest growing small or medium-sized enterprise in Scotland and the eighth-fastest growing SME in the UK, I see for myself the potential that exists in our country to rebalance our economy as a trading powerhouse and to rebuild our jobs market to grow the construction and skilled manufacturing sectors that suffered hugely in the global downturn from 2008.

I pay tribute to the continuing role that the Scottish Food and Drink Federation plays in growing our export markets. The industry has an annual export turnover exceeding £5.4 billion, employs nearly one in four of the Scottish work force and sustains 1,200 businesses. Four fifths of that contribution was made by whisky exports, which generated £4.3 billion for the Scottish economy last year, with 140 million cases of whisky exported to 200 markets across the globe. There is a good story to tell about how, against the odds in recent years, Scottish manufacturing exports have been an economic success story, growing by 1.9% last year.

Notwithstanding that, whether it is in Piketty symposia in the Houses of Parliament or on the doorsteps of Blackhill, Springburn, Robroyston or Roystonhill in my constituency last weekend, the message is the same: something is wrong in our economy. It is not working as it should, as is shown by its failure to return the effort that people put in at work to their pay cheques at the end of the week or month, and the insecure nature of the jobs that are being generated.

The UK’s balance of trade position, when compared with key EU and non-EU trading partners, has worsened in the past year, with strong performance in financial and other services offset by a weakening in the position on goods. There are important lessons to learn on improving the support that the Government provide to exporters, as well as on the need for certainty about Britain’s place in the world, principally through the pivotal role we play as a member state of the European Union, but also in the decision that people in Scotland will make in just over 90 days’ time: whether or not to remain part of the United Kingdom. I will address each of those in turn.

The most recent economic commentary released by the Fraser of Allander Institute identifies an unbalanced recovery as one of the key threats to the recovery being sustained in Scotland. It confirms that household consumption, through a decline in the savings ratio and the bundling on of more private debt, is driving a large portion of GDP growth. Business investment remains patchy and the prospects for export growth are mixed. Even allowing for the summer’s disruption at Grangemouth,

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net trade made a negative contribution to Scottish GDP last year in comparison with 2012. With the pound appreciating in value and demand in the eurozone remaining weak, it is clear that the Government, through UK Trade & Investment, should be doing more and working more proactively with small and medium-sized companies to help expand their export markets.

The Fraser of Allander Institute also finds that investment spending stagnated in Scotland in 2012 and 2013. Although confidence among small businesses in Scotland is rising, and the intent to invest more is evident, that is not yet translating into actual higher investment by firms in new plant machinery, research or technology, which are all required if we are to end a low productivity crisis in the Scottish economy. Many exporting manufacturers find access to finance remains among the biggest impediments to expanding their businesses. In a recent round table on finance, to which I contributed, Professor John Kay put forward the argument that since 2008 the pipelines in the financial system by which capital can be invested for productive economic purposes have not been functioning as they should.

We have seen one rabbit after another pulled out of the hat by the Chancellor, but we do not see investment actually rising. If we are to match the record on long-term investment enjoyed by countries like South Korea and Germany, we need to adopt some of their thinking about the pipelines needed to boost investment. The Government should be reforming our banking sector to create a proper infrastructure investment bank, modelled on the successful KfW in Germany, or similar institutions in South Korea and the US, and capable of financing long-term productive business investment. It should draw on the example of the Sparkassen in Germany to create regional banks focused on lending to small and medium-sized enterprises. It is only by constructing proper pipelines for capital that we will we see a long-term expansion in private sector business investment for Scotland and the United Kingdom.

Scotland is second only to London within the UK in its attractiveness for inward investment, but Ernst & Young’s latest survey found that the number of jobs created in the past year was lower than the year before, principally in manufacturing. There is more that this Government and the Scottish Government should be doing together to improve Scotland’s position, particularly in relation to inward investment from emerging economies.

As well as the skills of our work force, among the most important reasons for our strong position on inward investment is our membership of two connected, successful single markets: the United Kingdom and the European Union. Our membership of the EU sustains nearly 4 million jobs in the UK, according to the latest assessment by the CBI, and provides access to and influence over a single market of 500 million people. Our exporters would benefit from a successfully negotiated transatlantic trade and investment partnership because of our position at the heart of Europe. When the Prime Minister launches his increasingly unsuccessful short-term forays into EU diplomacy, for all the short-term defeats that he suffers, he puts at jeopardy long-term investment into this country because of weak leadership on Britain’s opportunities and our destiny within Europe.

Similarly, Scotland at the heart of a reformed United Kingdom is good for our exporters and best for investment. Nearly 340,000 people in Scotland are employed by

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companies based outside Scotland. Exporters benefit from an unrivalled network of diplomatic and trade links with the United Kingdom, with 270 diplomatic outlets and 169 for trade, compared with only 70 to 90 envisaged by the Scottish Government in their White Paper for independence.

We also enjoy the strength of 29 votes on the Council of the EU, required to drive the changes in fisheries policy that will benefit the fishing industry in Scotland, and we are able to shape decisions on international institutions from the G7 to the World Trade Organisation. WTO membership matters hugely to our exporters, because it guarantees low or no-tariff trade with 170 countries—no ifs, no buts and no need to negotiate individual bilateral trade agreements.

Just imagine if there were a yes vote in September. What would the practical consequences be? If it wanted to be in the EU, Scotland would have to adopt a different currency, creating an immediate barrier to trade and investment from the United Kingdom. The potential loss of hard-won VAT exemptions and zero ratings on food, children’s clothing and books, as part of the conditions for joining the EU as a new member state, would create further barriers for Scottish exporters and investors from elsewhere in these islands. A 1% fall in exports by Scotland to the rest of the UK equates to £450 million in reduced sales.

Scotland would have to replicate, at great cost, institutions that we currently share with people across these islands, adding costs for businesses protecting intellectual property, to provide just one example. Scotland would have to reapply for membership of the World Trade Organisation. The shortest recorded period for entry was Kyrgyzstan, at just under three years to conclude its chapters of agreement. An independent Scottish Government would have to negotiate its way back into the WTO, while our competitors used that period of uncertainty to promote their own domestic products against ours. What would tariffs applied by some of our major non-EU markets to Scottish goods in the period we were outside the WTO mean for jobs in our exporting industries in Scotland?

If we want the best future for exports and investment in Scotland, we are strongest within the United Kingdom and the European Union. If we make the right decision in September and follow long-term policies to boost exports, Scotland can have a prosperous future that will bring the fruits of economic growth to all its people.

Mr Philip Hollobone (in the Chair): I understand that the Minister has flown back from Scotland especially for the debate. He will be delighted to know that he has 20 minutes for his response and the debate will finish no later than 5.15.

4.55 pm

The Parliamentary Under-Secretary of State for Scotland (David Mundell): It is a pleasure to serve under your chairmanship, Mr Hollobone. I know from your frequent appearances at Scottish questions that you take a keen interest in Scotland. I congratulate the hon. Member for Glasgow North East (Mr Bain) on securing the debate, on an important subject. The Government’s policy on trade and investment is a key building block of our growth strategy, and that holds as true for

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Scotland as it does for the whole UK. I noted the hon. Gentleman’s comments on access to finance and will convey them to my colleagues in the Department for Business, Innovation and Skills and the Treasury. I share his concerns about what a yes vote would mean for our membership of the EU and will touch on that later.

When it comes to international trade and investment, as part of the United Kingdom Scottish businesses currently enjoy the best of both worlds—the local expertise of the Scottish Government’s trade and investment agency Scottish Development International, plus the international reach and reputation of the UK and UK Trade & Investment. In Scotland, UKTI works closely with Scottish Development International, which delivers trade services on the ground to local Scottish businesses and organisations. Scottish companies have access to both UKTI services and those provided by SDI. As part of our commitment to ensure that that close working relationship continues to deliver the best for Scottish exporters, in autumn 2012 the then Secretary of State for Scotland asked Brian Wilson, the former Scotland Office Minister, to conduct an independent review of support for Scottish exporting. His report was published last month.

The Wilson report identified many of the positives for business that come from Scotland’s being part of the UK, including the value that Scottish businesses place on the work of SDI and UKTI as a whole. The report suggests, however, that all agencies offering support to exporters need to work together better to deliver a seamless service to businesses, if they are to maximise success. The Government will study the recommendations to help us consider how best to do that. That is part of the UK Government’s continuous work to get the best from the services that they provide to business.

Of course, within the UK we currently benefit from a fully integrated open market. As the Wilson report says,

“it is critical to Scotland’s exporters—including those who currently sell to the rest of the United Kingdom—that their interests, such as having a fully integrated regulatory system and being border-free, are at the forefront of that debate.”

The UK Government have this week delivered to every household in Scotland a booklet entitled, “What staying in the United Kingdom means for Scotland”. There are sections headed, “By staying in the United Kingdom, Scotland’s public services are more affordable” and “By staying in the United Kingdom, your money is safe and goes further.” In the section entitled, “By staying in the United Kingdom, Scotland has a strong voice in the world”, we summarise something highlighted in the Wilson report:

“Companies based in Scotland have access to UKTI’s network of more than 1,200 staff”—

in 169 offices—

“in over 100 overseas markets working to support UK businesses. This is part of the UK’s wider diplomatic and consular network of over 220 locations, which also is able to help UK businesses, including those from Scotland”.

The Scottish Government propose a much smaller network, a third of the size that the UK currently has. That would be a major decrease in the presence and impact overseas that Scotland exerts as part of the UK. Yet they suggest that independence will be good for

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Scotland’s voice in the world. In their passion for independence, SNP leaders will say anything to make it sound easy, but as I am sure the Scottish people know, if it sounds too good to be true, it usually turns out to be so.

Last year, UKTI helped almost 2,000 firms in Scotland to export. Let us take one example. Exports are vital to the success of Scotland’s impressive food and drink sector, which the hon. Gentleman rightly highlighted. Cutting overseas support on this great scale would be a backward step for that industry. Together we can sell our products and services to the world more effectively against international competition. UKTI also works closely with UK Export Finance, which makes doing business overseas both more accessible and safer for Scottish firms by offering trade finance and insurance in case an overseas partner defaults. The Scottish Government have no plans to match that service, despite the fact that it can help to reduce the risk for Scottish firms as they do business overseas by spreading the risk across the broad shoulders of the United Kingdom.

On inward investment, UKTI promotes the whole of the UK overseas to potential foreign investors. That is another example of Scotland getting the best of both worlds, because, in addition, the Scottish Government and SDI promote the individual benefits of Scotland. UKTI helped to land three quarters of the inward investment projects that generated 13,500 jobs in Scotland last year. Our GREAT campaign has contributed to that, promoting businesses, tourism and education in Scotland, Wales, England and Northern Ireland. We are looking to make that work even more successful by making the most of the international focus that will be on the hon. Gentleman’s city for the Commonwealth games this summer.

The UK Government are working both with the Scottish Government on a joint international business conference to be held during the games period and through the British business house, to be based in Glasgow city chambers. As the hon. Gentleman knows, that is a very impressive venue, and we are most grateful to the leader and members of Glasgow city council for their support of that venture. UKTI will be using those events to promote and support British businesses, both in Scotland and across the whole UK.

Looking at trade policy more widely, in the spirit of Adam Smith, we can use our influence to push for free trade in the wider world. I noted carefully the hon. Gentleman’s comments about the WTO. I did not know about the minimum period that it had taken a new member to enter that organisation and I am very glad that he got that on the record, because, as he knows, those of us taking part in debates in Scotland about separation are often told that everything will happen seamlessly and automatically. To have a tangible example is most helpful.

The UK is using its global reach to lower market barriers and promote Scottish produce overseas. Whisky is a prime example. The UK is working to open markets and reduce tariffs on Scotch all around the world. Last year, we worked with the whisky industry to bring down barriers in 12 countries. As the chief executive of the Scotch Whisky Association said in its annual review,

“we rely on effective support from government in our overseas markets...The Scottish Government White Paper envisages a network

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of 70 to 90 overseas missions, but we export to around 200 markets. A diplomatic network with the necessary geographic footprint, expertise, and influence...will continue to be essential.”

As the hon. Gentleman said, a particular concern of the Scotch whisky industry is the status of the agreements currently in place, particularly with countries such as India and China. What would the status of those agreements be in the hiatus period between Scottish independence and Scotland’s full membership of the EU, or would they have to be negotiated from scratch? That is of significant concern to the industry and, as with so many aspects of the independence debate, no answers are forthcoming from those who propose separation.

An independent Scottish state would face tough choices about its international priorities. It would be a lengthy, expensive process for Scotland to set up its own diplomatic, consular, trade and other international services— a support structure the UK already has in place—to work for its businesses and nationals all over the world. The argument is not whether Scotland could do so in due course; no doubt it could. The argument at the heart of our referendum campaign is whether it would be better for Scotland to do so or to continue to work in the effective way provided by the UK’s diplomatic, consular and trading arrangements.

The most recent economic analysis shows that Scotland’s economic recovery as part of the UK is going strong. The Fraser of Allander Institute notes that the Scottish economy has been growing for seven consecutive quarters and that the growth rate rose at 1.6% throughout 2013, while the Scottish ITEM Club has revised its forecast

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for Scottish economic growth upwards by 0.7 percentage points and now expects the Scottish economy to grow by 2.4% this year.

As the hon. Gentleman will know, in the past the Scottish Government have placed a lot of weight on exporting to China and on the views of the Chinese Government. Recently, however, they do not seem to be so much in agreement with the Chinese Government, perhaps because the Chinese Premier, when asked about the referendum on his visit to the United Kingdom, said that he wanted a “united United Kingdom”. I think that that sums it up well. He is the latest in an ever-growing list of world leaders who have made it clear how much rests on the referendum.

We want the best for Scotland. The Government and the people of England, Wales and Northern Ireland believe that Scotland is better off in the UK and that the UK is better off with Scotland in it. We do not need to go through a painful separation. As a United Kingdom, we have the best of both worlds, working together to help international trade and investment in Scotland to thrive. For many of the reasons that the hon. Gentleman has set out in this important debate, we wish and need to remain together. That is why, for reasons of international trade as well as a host of others, I will be urging my fellow Scots to say “No thanks” on 18 September.

Question put and agreed to.

5.8 pm

Sitting adjourned.