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Economic Situation

Volume 930: debated on Wednesday 27 April 1977

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asked the Secretary of State for Scotland if he will issue a White Paper on the Scottish economy.


asked the Secretary of State for Scotland if he will make a statement on the prospects for the Scottish economy for the remainder of 1977.

I expect the broad pattern of recovery indicated by the United Kingdom forecasts that accompanied the Budget Statement to be reflected in Scotland. The return of confidence in sterling and the reduction in interest rates in the early part of 1977 are encouraging evidence of progress in the Government's economic strategy. I have no plans to issue a White Paper.

Will the Secretary of State at least carry out a survey to try to establish the effect of Budget measures, such as the increases in petrol and transport costs, on the Scottish economy? Is he aware of the dangerous effects of these increases on Scottish development particularly in rural areas?

The effect of the Budget as a whole on employment in Scotland, as elsewhere, will be to improve the position. I dare say that the House has been heartened by the fact that the unemployment figures have now dropped by 13,000 since the January 1977 peak.

I welcome the fact that the unemployment figures have dropped. But is the Secretary of State aware that in Scotland there are still 170,000 unemployed, as was disclosed yesterday? Does he recall that in eight weeks a substantial number of youngsters will he leaving schools in Scotland? Will he tell us what he thinks about their prospects of obtaining employment?

I certainly hope, as I am sure the House hopes, that we shall have a better record of employing school leavers this year than last year. The House also knows that it is not the practice for Ministers to make detailed forecasts of unemployment figures.

Taking the seasonally adjusted figures, to which we should pay most attention, this morning's figures show for the first time for a very long time that there has been a reduction. I shall not bank too much on that. However, I hope that this is the start of a process that will reduce figures that I have always said are far too high.

I welcome the assistance given to areas in dire straits which my right hon. Friend recently announced. However, is he aware that there is grave disquiet in the city of Aberdeen about the reduction to intermediate area status? Will he assure us that every effort will be made by the Scottish Office, or any Departments dealing with industry and employment, to ensure that new jobs are encouraged in Aberdeen? If the employment situation in Aberdeen continues to deteriorate over the next 12 months, will my right hon. Friend undertake to look again at the withdrawal of development area status from April next year?

Aberdeen's unemployment figures are below the United Kingdom average. We have to take that factor into account in terms of priorities and getting Government assistance to industry working most effectively. There are many forms of assistance still available to the Aberdeen area, because it is an intermediate area. It has not lost development or assisted area status completely. For example, selective assistance will still be available under the Industry Act 1972. We shall look sympathetically at any prospects for additional jobs in Aberdeen in terms of selective assistance where appropriate. There is no question of abandoning Aberdeen. This is an attempt to produce a better distribution of Government assistance in Scotland. I think that, generally speaking, although there is understandable disappointment in Aber- deen, that has been accepted throughout Scotland.

Is the Secretary of State aware that, although the unemployment figures for Aberdeen are low, there is great concern in some of the communities around Aberdeen which fall into the administrative area and which are affected by the change in development area status? Will he look at the problems of the smaller communities where there is still a need to attract industry? Does he also recognise the need to diversify industry in Aberdeen in order that it does not become too narrowly based on oil if we are to plan properly for future jobs in the Aberdeen area?

It would be foolish to abandon traditional industries in the Aberdeen area. The Government have no intention of doing that. We looked at the area as a whole. The hon. Gentleman will know that these schedulings are based on employment exchange areas. That is why this particular pattern has been adopted for Aberdeen. But it means that Peterhead, for example, which is also a thriving area, still remains a full development area although a number of other places near Aberdeen have been included in the reduction to intermediate area status.