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Highlands and Islands Economy

Volume 508: debated on Wednesday 7 April 2010

1. What assessment he has made of the prospects for the economy of the highlands and islands in the next two years; and if he will make a statement. (325086)

Good morning, Mr. Speaker.

Real help provided by the UK Government since the start of the recession will ensure economic recovery is locked in and will allow the highlands and islands economy to prosper.

Would the Minister agree that it is highly ironic that at a time when the Government—with everyone’s support—are seeking through their commitment to offshore wind development, for example, to encourage major inward investment in manufacturing in the highland economy from firms such as KBR at Nigg, Her Majesty’s Revenue and Customs’ approach to small and medium-sized businesses is driving the likes of Highland Airways, Gaeltec on Skye and others to the wall with the result that the savings accruing to the public purse are more than wiped out by the additional costs of unemployment and all the other benefits that will have to be paid?

The right hon. Gentleman is wrong to say that the Inland Revenue has not been helpful to Scottish businesses given that its own business payment support service has helped more than 18,000 firms in Scotland, with deferred payments of tax totalling more than £300 million. That, I think, is one of the “real help” ways in which we have assisted small businesses. The package announced in this year’s Budget will give £2.5 billion to small businesses and includes a doubling of their investment allowances. We have a good track record in helping businesses and especially in helping growth in new jobs from which the highlands and islands, in particular, will benefit.

When I was a Northern Ireland Minister, I organised an 11-city tour of the United States to try to bring jobs and inward investment to Northern Ireland. Nationalists were involved in those visits, but they did not try to sell the message of trying to take Northern Ireland out of the United Kingdom. Might I suggest to my hon. Friend that she should draw that to the attention of those separatist Scottish National party Ministers from the Scottish Parliament, who are peddling separatism in the United States rather than trying to bring jobs to Scotland?

Yet again, my right hon. Friend gets to the heart of the matter. Tartan week should be a showcase for increasing our exports to the USA and increasing tourism. Instead, the SNP has characterised it by its own obsession with independence and its gripes, rather than promoting Scotland.

The highlands and islands economy has indeed been damaged by Labour’s many fuel tax hikes. The increased tax on cider has been scrapped; can we have the same again for fuel in the Hebrides, please? HMRC’s actions have pushed Highland Airways to the wall. As a result, people in Lewis and Harris are now having to wait until late afternoon before they get their newspapers. What will the Labour Government do to make amends for their actions?

The hon. Gentleman should look at the facts of the case. Sadly, Highland Airways had substantial trading difficulties and many more debts beyond that owing to HMRC. Unfortunately, a takeover was not possible at the last moment and the company went into liquidation, but I understand that the services to the Western Isles are being maintained by Loganair and other services are also being taken account of. We are working hard to help the employees of Highland Airways find new work under the PACE—partnership action for continuing employment—scheme. That is the best and most practical way in which we can help companies and businesses suffering from the recession.

The Minister’s answer to my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy) shows just how out of touch she and her ministerial colleagues have become. In the last two years, a quarter of corporate insolvencies in Scotland have been enforced by HMRC. Literally thousands of Scots have lost their jobs because the Chancellor of the Exchequer has been unable to translate his good intentions on managing HMRC into hard, effective action. Does not that embarrass the Minister even slightly?

The hon. Gentleman should remember that output in the highlands and islands has risen by 75 per cent. since the Labour Government were elected in 1997, and there are 220,000 more jobs in Scotland since we were elected in 1997. Through our real help to businesses, including the business support scheme, which I again point out has benefited more than 18,000 small businesses in Scotland, we have helped to keep people on the road and to get Scotland into recovery.

The Minister compares the number of jobs now with the number in 1997, but she seems to ignore the fact that, last year alone, 65,000 Scots lost their jobs as a result of this Government’s policies. The Government now turn around and offer us empty promises of 100,000 new jobs. They have always taken Scotland for granted; now they are just taking the mickey.

It is interesting to note that the unemployment rates in the hon. Gentleman’s constituency are among the lowest in the United Kingdom. That is because of Labour policies, which are creating jobs and supporting people through the recession. The future jobs fund has benefited more than 10,500 people in Scotland by helping them and keeping them close to the job market. It is because of the UK’s policies, taking the tough decisions that the Liberal Democrats would care to ignore, that we have got through this recession much quicker than they would have.