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House of Commons

Tuesday 17 July 2001

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Foot and Mouth

2. Dr. Julian Lewis (New Forest, East): If she will make a statement on the impact of foot and mouth on tourism in Scotland. [2639]

6. Mr. A. J. Beith (Berwick-upon-Tweed): What steps she has taken to facilitate cross-border co-operation over the handling of the foot and mouth crisis. [2643]

The Minister of State, Scotland Office (Mr. George Foulkes): The impact of the foot and mouth outbreak has been severe in Scotland, as in the rest of the United Kingdom. There has, however, been active cross-border co-operation. The Scottish Executive have worked well with Whitehall Departments on both policy and operational aspects. All agencies, including the Scotland Office, have co-operated in getting across the message that Scotland is open for business.

Dr. Lewis: I am reassured by that response from the Secretary of State, but has he found in Scotland, as we have in the New Forest, that one effect of the crisis has been that many tourist centres and businesses that have never been closed have been shunned by people wrongly thinking that they were closed? Will he do everything in his power to advertise the fact that tourist centres in Scotland are not closed, in many cases never have been closed, and should be visited at every opportunity? The tourism industry—certainly in the New Forest, where foot and mouth did not even break out, and, I am sure, in Scotland—has been desperately hard hit.

Mr. Foulkes: The hon. Gentleman is right about everything except one point: I am only the Minister of State, not yet the Secretary of State.

The Secretary of State and I have been very active in promoting the fact that Scotland is open for business. My right hon. Friend went to the Trossachs, Loch Lomond and Ben Nevis very soon after the crisis began, to illustrate the fact that they were open. I went to Stirling castle and Stirling jail—[Interruption.] The old jail. I went to Culzean country park, and spoke to journalists in Brussels—[Hon. Members: "Oh."] That was my only overseas visit,

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apart from going to the Western Isles. I also met overseas journalists who came to Loch Lomond and other parts of Scotland. The Secretary of State and I, along with our colleagues in the Scottish Executive, will do everything that we can to get over the message that Scotland, like other parts of the UK, is very much open for business and welcomes tourists, wherever they come from.

Mr. Beith: Is the Minister aware that, whereas during earlier stages of the outbreak the Scottish Executive, as well as handling the crisis rather better than those in England did, were helpful to those of us who had to deal with problems on the English side of the border going into Scotland, there is now a limit on cross-border movements, so that farmers who have cattle in equivalent condition and want to send them to the abattoir in Ayr or Bathgate cannot do so, even though the limit seems to have no scientific basis? Will he arrange for civil servants of the two Administrations to talk to each other more, so that they can discuss the matter?

Mr. Foulkes: The civil servants of the two Administrations are in very close touch, on that and other matters. Indeed, my right hon. Friend the Secretary of State is to meet Rhona Brankin, the Minister responsible for such matters in the Scottish Executive, so there will be discussions at ministerial level later this afternoon. I am sure that my right hon. Friend will take on board the point that the right hon. Gentleman has raised.

Mr. Russell Brown (Dumfries): Will my hon. Friend listen sympathetically to the concerns of many hill sheep farmers whose markets have been closed off and closed down as a direct result of restrictions on animal movements designed to combat foot and mouth? Will he undertake to discuss with colleagues appropriate compensation arrangements?

Mr. Foulkes: My hon. Friend is right; we are certainly taking that on board. There is a huge problem with 3.5 million hill lambs, which must be dealt with in one way or another, because they will suffer if left on the hills during the winter. They can be slaughtered and go into cold storage, and farmers can receive compensation. Alternatively, we could eat more lamb. We are considering all the options. I attended an ad hoc meeting on the matter on Wednesday, and the Secretary of State is attending another later this afternoon. We are treating it as a matter of great urgency.

I know that some regard suggestions such as that we should eat more lamb as a bit of a joke, but this is a serious matter. Eating more lamb would certainly help to solve the problem and reduce the amount of compensation that we would have to pay.

Tony Worthington (Clydebank and Milngavie): May I draw my hon. Friend's attention to the approval in Europe of a procedure called alkaline hydrolysis at elevated temperature—he does not need to remember all that—which would get rid of the need for mass burial and rendering? A firm in my constituency holds the licence for such a procedure, which would have obviated many of the problems of foot and mouth, and dealt with BSE,

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too. Does my hon. Friend welcome the tremendous opportunity for a major manufacturing facility in Scotland to deal with such crises?

Mr. Foulkes: My hon. Friend has made that suggestion before, and it is one that we should take on board. I can assure him that there have been no new cases of foot and mouth in Scotland since 30 May. That is no cause for complacency, but things seem to be improving significantly. Cleaning and disinfecting of farms is well under way: we have already done more than half the infected farms in Scotland. The farms involved were in a small area around Dumfries and in parts of Galloway and the borders—the rest of Scotland was not affected. We have been trying to broadcast that message as widely as possible.

Single Currency

3. Mr. David Cameron (Witney): If she will make a statement about the involvement of the Scotland Office in preparing Government and businesses for the introduction of the euro. [2640]

The Secretary of State for Scotland (Mrs. Helen Liddell): I meet my right hon. Friend the Chancellor of the Exchequer to discuss that and a wide range of issues. In addition, I liaise closely with colleagues in the Scottish Executive who take forward euro preparations through the Scottish Euro Forum.

Mr. Cameron: Will the right hon. Lady be making a separate assessment of the Scottish economy in relation to the five economic tests? If so, how, when and where will it be published? If not, why not?

Mrs. Liddell: I will not be making a separate Scottish assessment.

Mr. John McFall (Dumbarton): Does the Secretary of State agree that it is important that businesses be aware of the euro and make preparations? The scotch whisky industry is a highly successful industry, achieving more than £2 billion of sales and securing more than 50,000 jobs. Would we not be hiding our heads if we failed to act responsibly and did not open up channels with such businesses?

Mrs. Liddell: My hon. Friend makes an important point. The introduction of notes and coins at the turn of this year will be important to Scottish business. My hon. Friend mentions the scotch whisky industry in particular, but 63 per cent. of Scotland's exports overall go to our European partners, and if businesses do not prepare for the introduction of the euro, opportunities will missed. The Department of Trade and Industry and other Government Departments have been actively encouraging businesses, especially small and medium-sized enterprises, to prepare for the introduction of the euro. Many think that that is simply a matter of implementing new systems, but the fact is that when 12 of the EU's member states are using the euro, price transparency and the competitiveness of Scottish business will be thrown into sharp relief.

Mr. Alex Salmond (Banff and Buchan): In the context of the Government's preparations for the introduction of

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the euro, will the Secretary of State estimate—to the nearest 10,000, say—how many fewer manufacturing jobs there are in Scotland now than when the Labour party took office in 1997? How many of the job losses does she attribute to the overvaluation of sterling against the euro, and how many to other Government policies?

Mrs. Liddell: The hon. Gentleman displays the flawed economics that he displayed during the general election campaign—as a result of which there are now more Scots in the Cabinet than on the Scottish National party Benches here. Let me point out that during the election campaign, he and other members of his party made it clear that they would rather tie the Scottish currency in an independent Scotland to the pound or to the euro. One of the reasons why his party lost the election so decisively was the flawed economics that he and his colleagues displayed. The Labour Government's policies have resulted in the lowest unemployment in Scotland for 25 years, and more Scots in employment now than for a generation.

Mr. Ian Davidson (Glasgow, Pollok): Does the Secretary of State accept that it would be utter madness for us to join the euro at the current rate of exchange? Does she agree that we require either a substantial devaluation of the pound or an appreciation of the euro before it would make sense even to consider joining? Is it not a fact that those who call for us to join the euro now, including those in the SNP, do not have Scottish industry's best interests at heart?

Mrs. Liddell: My hon. Friend makes an important point about the assessment we must make of whether to recommend to the people in a referendum that we should join the single currency. A key element is to ensure sustainable convergence, which is why the position adopted by the Government—making the assessment according to five economic tests set by the Chancellor—is the logical way forward. We must be certain that every decision about the single currency is taken in the best economic interests not only of Scotland, but of the whole United Kingdom. That is why our policy of prepare and decide is the best possible one.

Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale): Does the Secretary of State accept that Scottish farmers' businesses are being damaged by the continuing uncertainty about the euro? Given the Government's unwillingness to commit to a referendum on the single currency, will she at least give a commitment that full agrimonetary compensation will be paid to farmers this year? Will she explain what steps she is taking to ensure that there is a new scheme in place when the current one ends in 2002?

Mrs. Liddell: The hon. Gentleman is being misleading when he says that we will not commit to a referendum. We have made it clear that we will commit to a referendum. Indeed, the decision whether Britain should enter a single currency will be taken in the best interests of the Scottish, and British, economy. Far from the position of the Conservative party—later this afternoon, it will decide whether its leader will be someone who proposes that we should never enter a single currency, someone who proposes that perhaps we should enter a single currency, or someone who says, "Yes please, can

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we enter into a single currency right now?"—we shall make a decision based on the best prospects for the Scottish and the British economy.

As for agrimonetary compensation, the Government have gone to considerable lengths to ensure that there is adequate foot and mouth compensation for farmers, not just in general but in specifics. More subsidy is paid to farmers in the United Kingdom than to all other sections of our industry put together, because the farming community requires that—

Mr. Speaker: Order. That was a good full reply.

Mr. Iain Luke (Dundee, East): Does my right hon. Friend recognise that Europe is Scotland's largest export market, on which hundreds, indeed thousands, of jobs depend? Does not the sterile anti-euro stance of the Opposition puts those jobs in jeopardy?

Mrs. Liddell: My hon. Friend, from his considerable experience of such matters, makes an important point. What he says is accurate, and whenever we see the Opposition divided on the issue of Europe, we know that they do not have the interests of Scottish industry at heart, just as they do not have the interests of British industry at heart.

Mr. Dominic Grieve (Beaconsfield): I am sure that the right hon. Lady is familiar with the Chantrey Vellacott report, which says that the costs to the private sector in Scotland of joining the euro would be some £3 billion on a gross domestic product just in excess of £56 billion. No doubt she agrees that that is a substantial sum. Is it not the case that the longer the Government delay that decision, the higher those costs will be? That point has already been made to the right hon. Lady in a number of questions. If the Government are serious about the matter, is it not time that they came to a decision? Do they not risk incurring substantial costs for the Scottish economy which, at the end of the day, may have been wasted?

Mrs. Liddell: I wonder whether I am welcoming the hon. Gentleman to the Dispatch Box in his role as spokesman for Scotland for the last time. We expected his hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Duncan) to be at the Dispatch Box today. Indeed, we look forward to the next Scottish Grand Committee, when the hon. Member for Galloway and Upper Nithsdale may be the Front-Bench spokesman who opens for the Opposition, then becomes their Back-Bench representative, before resuming his Front-Bench role to close the debate.

As for the question asked by the hon. Member for Beaconsfield (Mr. Grieve), the Government will decide whether to recommend joining a single currency in a referendum based on this country's best economic interests, not on some ideological dancing on the head of a pin—which, it seems, would be the Opposition's position. Our recommendation will be in the best interests of the people, and the decision will be made by them.

Mr. Grieve: I had rather hoped to move on to another topic, but I think that I shall return to my original question. Does the right hon. Lady agree that the £3 billion of estimated cost to the Scottish economy that would be incurred by joining the euro will be increased

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the longer the decision is delayed, and that the money could well turn out to be wasted? Will she please answer that question now, rather than giving me an interesting and diverse explanation of who will be sitting where in the Scottish Grand Committee?

Mrs. Liddell: The illogicality of the hon. Gentleman's question beggars belief. If the wrong decision is taken about the interests of the people of this country, it will cost the economy considerably more, which is why the Government's position of assessing the five critical economic tests is right.

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