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Private Sector Employment

Volume 448: debated on Tuesday 4 July 2006

The macro-economic stability delivered by this Government continues to benefit the whole of the United Kingdom, including Scotland. Scottish employment has hit a new record high with the private sector driving the expansion. There are 124,200 more people working in the private sector than there were in 1999, and every significant business survey suggests that private sector output and employment continued to grow over the year to date.

I am grateful to my right hon. Friend for pointing out how Scotland gains from its Union with the rest of the UK. Does he agree that those figures show how Scottish business would be put at risk if it were forced to endure four years with a destabilising referendum on breaking up the UK hanging over its head?

I find myself in complete agreement with my hon. Friend and, indeed, with the Fraser of Allander Institute’s study on exactly that question, which made clear the profound risks that other parties would choose to run with the very stability that has been the foundation of our sustained economic success under Labour since 1997.

Does the Secretary of State share my disappointment at last week’s announcement by Jabil that it will close production at Ayr by the end of 2007, with a loss of 217 jobs? Given his positive assessment of the Scottish economy, how optimistic is he that those who lose their job will be able to find alternative employment? What will the Government do to assist them in that matter?

Any job loss affecting any family, not just in Scotland but across the United Kingdom, is a tragedy, and we want to work effectively with the relevant agencies, particularly the Scottish Executive, to make sure that the requisite support is provided to anyone who finds themselves in those unfortunate circumstances. I am certainly happy to write to my hon. Friend about the specific instance that she cited, but she is right to acknowledge that that unfortunate loss of employment has taken place against a backdrop of sustained employment in recent years. The Royal Bank of Scotland, in its most recent study, on 12 June 2006, stated:

“On its own terms May was another strong month for Scotland…Employment growth continues apace on the back of the stable expansion, with net jobs growth for the 15th consecutive month.”

But sadly, the most discussed job creation scheme in the Labour party is not designed to tackle the problems raised by the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne), as it concerns the job prospects of the Chancellor of the Exchequer and his efforts to become the Prime Minister. Why are Scotland’s employment rates lower than those in Iceland, Denmark and Norway? Why is Scotland’s economic growth only a third of growth in Iceland, and half that in Ireland and Norway? On independence day, instead of aping old Tory arguments, can the Government explain why our neighbours are performing better with independence than Scotland, which is run from London under Labour?

I hardly know where to begin in responding to the political points that are notionally wrapped up in that question. First, I remind the hon. Gentleman that there has been sustained economic growth under Labour, which far exceeds anything that was achieved in 18 years of Conservative government, when two recessions were visited on Scotland. Secondly, we have a record of sustained economic growth in Scotland, which was not achieved to the same extent by previous Administrations. Finally, to respond to the hon. Gentleman’s point about the Chancellor’s record of economic stability, I direct him to any of the recent international studies that observe that the macro-economic framework established by the Chancellor of the Exchequer in 1997 is the foundation on which Scotland and the whole United Kingdom continue to enjoy such prosperity and jobs growth.

I have noticed that the Secretary of State is always keen to agree with the CBI when it supports his argument, but does he agree with the new head of the CBI, Richard Lambert, who said that the fact that the public sector in Scotland

“is noticeably larger than for the UK as a whole…is a constraint”

on the dynamic growth of the Scottish economy?

Candidly, I do not agree with that observation, for the following reasons. First, there is no direct correlation between the size of the public sector and the level of economic growth not just in Scotland but, indeed, in other European countries. For decades, Scandinavian countries, for example, have had a large public sector, along with high and sustained employment. Secondly, it is time that the Opposition left behind the rather tired and familiar argument of “Private sector, good; public sector, bad”. The recipe for modern economic success relies on effective research and development, along with effective vocational skills and education, all of which is contingent on the sustained economic investment in the public sector achieved under the Labour Government.