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Economic Prospects

Volume 940: debated on Wednesday 30 November 1977

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13.

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

The policies pursued by the Government have greatly improved the country's financial position and reduced inflation, thereby removing a major obstacle to increased growth and investment. This improvement will benefit the Scottish economy, as will the measures announced by my right hon. Friend the Chancellor of the Exchequer on 26th October.

Is the right hon. Gentleman not ashamed that following a party campaign on the basis of "Back to work with Labour" we now have more than 15 unemployed for every vacant job? After a major improvement in Scotland's relative position between 1973 and February 1976, why should the prospects have been declining so sharply over the past 12 months?

The prospects have not been declining so sharply. The present position is very much more favourable than the situation that we inherited in March 1974.

No doubt the right hon. Gentleman has seen the optimistic forecasts for growth in the United Kingdom that were published this morning. Will he give us an indication of his forecasts for the growth rate of Scotland next year?

I should not like to give precise figures, but I make the general point that the growth rate in Scotland, taken over a period of years, has been slightly more favourable than in the United Kingdom as a whole. I should expect that to continue. The important thing is to get the United Kingdom economy basically right, and that is what the Government are working at.

Does my right hon. Friend agree that the report issued by the National Institute shows extremely favourable trends but suggests that the most repressive factor is the Government's own monetary policy, especially the increase in the minimum borrowing rate a week ago? Surely it is now necessary to lose that Treasury-dominated policy. Above all, it is surely necessary to restore the public expenditure cuts, which are perhaps the main repressive factor holding back recovery in Scotland.

I do not think that I would accept my hon. Friend's interpretation of the state of the economy at the moment, but it is true that the National Institute's report, which was published today, indicates the favourable changes that have taken place in the economy over the past couple of years.

As for the minimum lending rate, it is slightly higher than it was but at 7 per cent. it compares favourably with the figure that I recollect we had in March 1974, when the Labour Government took over. At that time I recollect that it was 12½ per cent.

As a member of the only party that has consistently opposed public expenditure cuts, may I tell the Secretary of State that both he and the Conservative Opposition should stop being hypocritical? Does the right hon. Gentleman accept that if Scotland had access to the oil revenues, which are now running at £1,000 million a year, we should have no economic problems?

Economically speaking, what the hon. Gentleman has said is a complete absurdity.