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Budget Strategy

Volume 982: debated on Wednesday 2 April 1980

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asked the Secretary of State for Scotland whether he will make a statement about the effects of the Budget on Scotland.

The Budget strategy, notably the specific measures to stimulate investment such as those relating to small firms, will be particularly useful in solving the problems of Scotland's economy.

How many thousands of jobs will be lost in Scotland as a result of the £400 million cut in public expenditure in Scotland? In view of the fact that these cuts will mean a decrease in essential services such as housing and education, a decrease in the number of jobs in both the public and private sector and a massive increase in rents and rates, does not the Secretary of State realise that the Budget spells absolute disaster for Scotland?

The greatest disaster for Scotland would be for inflation to get completely out of control as it was well on the way to being under the previous Government. There is no doubt that when public spending has to be reduced there is, in the short term, a reduction in employment. The hon. Gentleman should have thought of that when he was supporting the previous Government and allowing public expenditure to get right out of control.

What proposals has my right hon. Friend, and what action is he taking, to ensure that Scotland will benefit from the proposals for enterprise zones announced in the Budget?

As my hon. Friend may have noticed, two of the suggested sites are in Scotland. I am speedily consulting the local authorities concerned so that we may come to a decision as to which site will be the preferred one for Scotland. I am certain that it will be of great benefit.

How can the Secretary of State talk about encouraging investment in Scotland when high interest rates are having a savage effect on private investment and when the public expenditure White Paper, in relation to housing, envisages that at the end of the period covered by the White Paper housing investment in Scotland will be less than 50 per cent. of the target projected by the Labour Government? That will have serious consequences not only for those looking for homes in Scotland but also for the construction industry.

The right hon. Gentleman must take his own responsibility for that. The high interest rates, as he well knows, are not the desired policy of the Government. They are the result of inflation and public expenditure being allowed to get out of control. If the right hon. Gentleman had thought of these matters two years ago when he was making disastrous public expenditure decisions we would not be in this state now.