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Economic Situation

Volume 932: debated on Wednesday 25 May 1977

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15.

asked the Secretary of State for Scotland if he will make a statement on the economic prospects in Scotland.

As in the United Kingdom as a whole, economic growth in Scotland is expected to be concentrated in manufacturing industry with exports and investment providing the main impetus. It is therefore encouraging to note that the April CBI survey for Scotland showed a sharp improvement in investment intentions from January, and also a buoyant export prospect.

When does the Minister expect seasonally adjusted unemployment to improve? Will he take into account some of the island areas, where the economies are being severely eroded by recent increases in freight costs? On a more topical note, it is likely that power supplies in Scotland for industry and domestic users will be disrupted because of the present strikes.

The economies of the Islands were considered by the House not so many weeks ago when we discussed the charges of the Scottish Transport Group. In discussing these charges it is important to bear in mind the contribution that the Government have made and the consideration that the Scottish Transport Group gave to the carrying of freight to the Islands. It is also important to remember the substantial contribution that the Highlands and Islands Development Board is making in the Highlands and Islands and the number of important initiatives that it has announced over the past few years.

It would be wrong for me to make any public comment about the dispute now taking place. I trust that the hon. Gentleman will accept from me that the Government are conscious of the problem, as are the agencies involved in bringing the dispute to a successful conclusion.

Is my hon. Friend aware that the economy in Aberdeen is buoyant because of oil-related industry, but that there is a structural decline in non-oil-related industry in Aberdeen and the surrounding areas? Is my hon. Friend aware that he will come under increasing pressure to change his mind and to keep Aberdeen a development area? In the meantime, will he give an assurance that any application for assistance that comes forward will be acted upon speedily and that there will be no delay?

I know how disappointed my hon. Friend was about our decision. However, I hope that he will appreciate that if we were to make every area within the country a development area, or a special development area, such status would be of no value. We decided to downgrade Aberdeen in the hope that by so doing we should be able to upgrade, for example, Dundee, Cumnock, Arbroath and Kilbirnie. Aberdeen still enjoys the considerable benefits that flow from intermediate status. I can give my hon. Friend the assurance that any application that comes to me for selective financial assistance will be considered quickly and favourably.

Does the hon. Gentleman agree with his right hon. Friend the Chancellor of the Exchequer that a strong currency is to be preferred to a weak currency in terms of economic growth? Does not the hon. Gentleman agree that the economic growth of Scotland would be better promoted by a strong Scots pound and a self-governing Scotland than by being tied to the weak United Kingdom pound?

I have heard this notion floated by the hon. Gentleman on previous occasions and I have heard it quoted by a number of his hon. Friends. With great respect, I have never thought of the hon. Gentleman as an expert on banking matters. I have listened with considerable care to the attitude of the Scottish banks. To put not too fine a point on it, they regard the hon. Gentleman's essays into this area as a load of rubbish.

Has my hon. Friend noticed that, far from the hon. Gentleman being regarded as a financial expert, the banks and every other financial institution regard the hon. Gentleman's views with contempt? They hailed as proof of their case the most recent publication entitled "Scotland 1980", which, they claim, has blown a complete hole in the SNP's case.

To revert to more serious matters, is my hon. Friend aware that there is still great anxiety in my area about the future of Drax B? Now that the promise has been given by the Prime Minister that the order for the Drax B power station will take place, will my hon. Friend stress to my right hon. Friend that it is speed that is now required if we are to avoid any lay-offs?

I know of my hon. Friend's concern about Drax B. He has come with other to see me about it on a number of occasions during the past few months. I can assure him that the Government are giving it the speediest consideration. I think that my hon. Friend knows that there are difficulties. However, we still hope to make an announcement as quickly as possible.

When will the Government take a lesson from Norway and insist that a decent percentage of oil-related jobs and orders come to Scottish manufacturers?

There are already between 55,000 and 65,000 people employed in Scotland, either directly or indirectly, in the exploration and exploitation of the oil in the North Sea. In Glasgow, which, for the benefit of the hon. Gentleman, is in Scotland, we have the Offshore Supplies Office, which indicates to all concerned the advantages of using Scottish firms wherever possible.

Are we to understand from the answer to Question No. 2 that the proposals and discussions on the foundry in Central Scotland have not reached Ministers' desks and have not been discussed by Ministers?

If the hon. Gentleman has a particular point in mind, I shall be happy to consider it if he writes to me or tables a Question.