North Sea Oil and Gas Industry

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Scottish-UK Trade

Motion made, and Question proposed, That the Committee do now adjourn.—[Mr. McAvoy.]

1 pm

John Robertson (Glasgow, Anniesland): I am delighted to have secured this debate on a matter of great importance to Scotland's economy, the jobs of Scottish people and our relations with the rest of the United Kingdom.

I will start by saying how Scotland is presently doing within the UK, and then move on to the important area of Scotland's economic relations with England, Northern Ireland and Wales, taking more than a passing interest in Europe and the rest of the world.

The Scottish economy has weathered the global storm following 11 September. I am glad to say that manufacturing output is up and that the service industries are forging ahead. Perhaps the Minister of State will comment on the outlook for manufacturing and service industries. That prosperity is the direct result of the Chancellor's emphasis on creating a stable and robust economy. It is, however, also the result of Scotland's success in selling not only throughout Europe, but on its own doorstep in England, Wales and Northern Ireland.

Mr. David Stewart (Inverness, East, Nairn and Lochaber): Will my hon. Friend join me in welcoming both the freeze on whisky and, in particular, the stamps that have been put on it? That is good news for the export of whisky and for those among my constituents who work in distilleries.

John Robertson: It is certainly good news for people who live in my constituency, which has a large whisky bond within its boundaries.

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We have to realise that we are dealing with England, Wales and Northern Ireland. The most recent figures show that Scotland's biggest exports are construction and manufacturing. Some £10 billion of such exports go to the rest of the UK and more than £17 billion go to the rest of the world.

For many years, the UK has been seen from the United States as the gateway to Europe, and from Europe as the gateway to the United States. In more recent years, it has been seen as a gateway to both from the far east. For those reasons, the need for Scotland to work with other countries of the UK is self-evident.

In many other areas, however, such as distributive trades, transport and communication and financial services, we do our best trade on our doorstep. We export £2.8 billion of transport and communication services to the UK, while importing around £1.5 billion. However, our trade with the rest of the world is considerably less than that; we export £5.7 million of such services while importing £8.3 million.

A major industry in my constituency is shipbuilding, and I know that my hon. Friends will excuse me if I use it as an example, just for a change. As I have often said, the Clyde was the name in world shipbuilding, but sadly that is no longer the case. Hopefully it will be again, but if the nationalist parties have their way, the industry will decline and eventually disappear. The SNP policy of NATO withdrawal and independence from the rest of the UK would be the last nail in the coffin of a once proud industry.

In an independent Scotland, would we have a Scottish navy and Scottish shipbuilding? I think not. The only reason why we still have shipbuilding on the Clyde is thanks to Government and Ministry of Defence orders for ALSL ships, Type 45 destroyers and, hopefully, an aircraft carrier or two when next year's orders are placed. I know that my hon. Friend the Minister of State will do his best to deliver that order to the Clyde and I plead with him to try to achieve that.

It is no coincidence that the Scottish Nationalists have never won the Glasgow, Anniesland seat. The only time they came close was during the1978 by-election when my predecessor, Donald Dewar, won an historic victory and changed the face of Scottish politics.

Angus Robertson (Moray): Will the hon. Gentleman give way?

John Robertson: No. Perhaps the hon. Gentleman can wait until I have finished.

The SNP has never recovered or learned the lesson of how important ships are to the Clyde, Anniesland and Garscadden.

Angus Robertson: The hon. Gentleman made an interesting point about parties not winning seats. He is aware that my constituency of Moray has a great defence interest, notably at RAF Lossiemouth. I was intrigued that the Labour party did not have a

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candidate at the by-election and showed no commitment to the people of that town.

Earlier in the debate when discrimination against whisky was mentioned, the hon. Gentleman suggested, from a sedentary position, that he wanted it to continue. I should be grateful if he agreed that he said that and say whether discrimination within the UK is appropriate at a time when the single market in Europe makes trade easier everywhere.

John Robertson: I shall speak on my subject and not the hon. Gentleman's. My majority is much larger than his. I am sure that we shall get there eventually with candidates such as himself in that seat.

It is no coincidence that the Scottish Nationalists have never won the Anniesland seat, but it is important to say that there have been many successes. Our trade in financial services shows a similar picture. We export £1.8 billion to the UK while exporting £6.5 million to the rest of the world. Around 50 per cent. of Scotland's exports go to the rest of the UK and, on that basis, one third of Scotland's trade is with Europe. Furthermore, around 65 per cent. of Scotland's imports come from the rest of the UK.

Scottish business and industry are tightly interlinked with the economy of the entire United Kingdom, which is good news for enterprise, jobs and the socially excluded in Scotland, because the best way out of social exclusion is, as all Labour Members know, a job. Scotland is competing increasingly in the global market and Europe. Almost one third of our exports go to the EU. That success depends on us having a strong home market and by that I mean the United Kingdom.

International companies have looked to Scotland when setting up a base in the United Kingdom. Standard Life, one of Scotland's largest employers said:

    ''Being a market leader means thinking globally.''

Standard Life grew from a single office in Edinburgh in 1825 to have a strong presence throughout the United Kingdom and the Republic of Ireland, with offices in Europe, Asia and Canada. Furthermore, inward investment to Scotland is dependent on strong links with Europe, with more than 600 foreign-owned companies serving their European and global customers from bases in Scotland, including Compaq, NEC, IBM and Sun Microsystems.

It is all very well for the nationalist parties—the Scottish National party and the Scottish Socialist party are closely linked—to claim that a separate Scotland would make no difference. If we lost those markets, I doubt that either party would last more than one election. They should expand on what independence would mean for Scotland. Would it mean isolation? Would it mean high tax? Would it mean high unemployment? I believe that that is exactly what would it would mean.

In Westminster Hall recently, the hon. Member for Moray (Angus Robertson)he has left his seat—referred to how well the whisky industry was doing, but that it was being crippled by tax. However, when my right hon. Friend the Financial Secretary that there

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had been five years of no increase in tax for the industry, all we got was the usual whingeing from Opposition Members. It is obvious to me, and probably to everyone else, that the SNP has no idea or real knowledge of what balancing a budget really means. SNP Members think that we can increase taxes here and there and do everything for everyone. It is good to see that the Liberal Democrats, who were so cosy with them earlier, have gone away for an early lunch.

In my opinion, the enormous gamble suggested by Opposition parties—one I hope that we will never take—would not pay off for Scottish workers, such as my own constituents in Glasgow, Anniesland. We must not forget that nearly 290,000 Scottish jobs depend on exports to the European Union. Jobs in my constituency and throughout Scotland are at risk while the argument for independence persists. The nationalists' renewed drive for independence and separating Scotland from its nearest natural trading partners would have a disastrous consequence. [Interruption.] I hear the hon. Member for Perth (Annabelle Ewing). This is obviously something that she does not want to hear. I would love to hear her.

Annabelle Ewing (Perth): I was saying that perhaps the hon. Gentleman has heard of the European single market, and therefore his comments on our market and future relations with our neighbours south of the border seem rather curious.

John Robertson: I thank the hon. Lady for her intervention, which was up to her usual standard. If our natural partners in England, Wales and Northern Ireland are not part of the equation, the partnership with Europe will sadly go down the drain, along with her own prospects in the next general election.

Scotland has a structural defect when the United Kingdom is in balance. It has a balance without oil of £4.9 million, according to GERS. Perhaps I had better mention what GERS means. In this case, it means the Government expenditure and revenue survey, and not the Scottish cup winners. I just thought that I would get that in.

Before the hon. Member for Perth and her sidekick jump up and claim that Scotland runs an oil surplus, I should point out to them that that depends on the price of oil. My right hon. Friend the Secretary of State pointed out that fact to them earlier. If the price is low, we cannot bank on that sort of money. It would be a fool who tried to balance a budget on money that they do not know they are going to get. It is an absolute disaster that the SNP has chosen to ignore that companies thrive in Scotland because of our ties with the rest of the UK and our gateway status.

The hon. Member for North Tayside (Pete Wishart) has talked about 40 firms closing during the last year, and I felt that he had a point. Perhaps I can cheer him up and give him some good news. In the year 2000–01, Scotland attracted 101 new projects worth £463 million and created 13,000 jobs. North America provided 51 of those projects, but UK firms were responsible for 19, and European firms the other 19. That is good news, and I am sure that there is a lot more to come. In recent times, Rolls-Royce has

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confirmed that its new state-of-the-art manufacturing facility in Hillington will safeguard about 900 more jobs.

I would like to make one other comment about the whingeing that has gone on. My right hon. Friend the Secretary of State mentioned it clearly, but Opposition Members were not listening. John Swinney—or was it Sweeney? I cannot remember—said that it was time to stop whingeing for Scotland. We have seen precious little of a response to that from the nationalists or, for that matter, from their cosy colleagues today, the Liberals.

We have to ask whether companies would be coming to Scotland if Scotland were breaking away from the rest of the UK. The Scottish people will be voting next year on their future and, if Monday's opinion polls are correct, they will once again put a nail into the nationalists' coffin; a final nail, I hope.

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