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The Economy and Welfare Reform

As the hon. Gentleman knows, the only opinion poll that we have had thus far for the 2007 Scottish elections, taken by YouGov, which accurately forecast in the same poll the result of the general election in Scotland, showed the Scottish national party not in second place, but in first place. I am not claiming that one opinion poll two years before an election means certain victory, but I am saying that we are in with a fighting chance. I know that secretly the hon. Gentleman and some of his colleagues wish us well as we look forward to that Scottish election. May I say to Scottish Labour Members in particular that I was interested in the argument that the Chancellor had defied his critics, and that every time doom and gloom was forecast, he came up trumps once again. I see him back on the Treasury Bench. When I tried to intervene earlier I merely intended to ask who carries the responsibility for the three quarterly downturns that there have been in the Scottish economy since the Chancellor took office. I was struck by how much of the Labour party election campaign claimed the credit for 50 consecutive quarters of UK economic growth. I wondered whether it followed that responsibility would be taken by the Chancellor for the three quarters of downturn in the Scottish economy since 1997. I tabled a parliamentary question on the matter just before the election, and received a charming letter back from the Treasury, saying that the Chancellor wanted me to know that it was more appropriate for the Secretary of State for Scotland to provide a written answer to the parliamentary question about negative growth. I am not aware what economic powers the Secretary of State for Scotland is meant to have to carry responsibility for the disappointing performance of the Scottish economy, and for the fact that Scotland currently has the highest unemployment rate of any nation in the United Kingdom and the lowest growth rate of any country in Europe. One of my predecessors, the late Bob Boothby who represented East Aberdeenshire, once described the Secretary of State for Scotland as the scullery-maid of the Cabinet, in the sense that he had to clean up the mess left by other Ministers. It now seems that the present Secretary of State for Scotland has to carry the responsibility that should properly belong to the Chancellor of the Exchequer. During the election campaign I did not see much evidence of the economic miracle that the Chancellor claims. I saw a fine factory about to close in Scalpaigh in the Western Isles, or Na h-Eileanan an Iar—I have been practising the Gaelic name for the constituency. In many ways the proportionate impact on that small fragile community is as great as the industrial story that emerged during the campaign about the closure of Rover in the midlands, as are the closures in the defence and food industries in the constituency of my hon. Friend the Member for Moray (Angus Robertson). A hundred thousand manufacturing jobs have been lost in Scotland since 1997. I know that some people think that manufacturing is not the basis of a modern economy. If we glance at the balance of payments, we are entitled to be concerned about the demise of so much manufacturing industry. That process of closures continues apace around Scotland. In the past few days in the north of Scotland we have seen Norfrost go into receivership. For the past 30 years it has been a beacon defying gravity, producing high quality fridge freezers from Caithness. We have seen large scale redundancies at R B Farquar in Huntley, with production being moved to a facility in the Czech Republic. We have seen the closure of the buying headquarters of Aberness in Aberdeen and its move to a more central location. In each of those closures or redundancies, we see pressures bearing down on much of the industrial economy in Scotland. My question to the Chancellor on the Queen’s Speech is how the economic policy will combat the pressure on transport costs felt by a company such as Norfrost. Where are the measures that will improve the competitive position and allow our economy to compete with the developing economies in Europe? With the centralisation of buying processes, which affect so much of the retail chain, what protection is offered and what thought is being given to the fragility and vulnerability of marginal and remote economies? I want to turn in closing to the subject of energy, because I believe part of the answer to the questions that I have just posed is to maximise the benefit from resource economics. I saw in The Times today that I was not the only person who was thinking about energy. It says:"““Hovering half a mile above the English countryside last month, David Willetts began to wonder where the Government’s energy plans were heading. As he looked down from the Conservatives’ campaign helicopter, he ‘suddenly began to see how many wind farms there are cropping up all over the place, sometimes in rather beautiful places’.””" Now that the hon. Member for Havant (Mr. Willetts) is applying his formidable brain power to the question, I hope to have some support for the proposals that I have been putting forward. First, there is the proposal to maximise the potential of Scotland’s offshore alternative energy resources—25 per cent. of Europe’s wind potential; 25 per cent. of the tidal potential and perhaps 10 per cent. of the wave potential. Secondly, we should not discriminate against that vast base of future energy by charging £20 a kilowatt to connect to the grid in the north of Scotland, while in this part of the kingdom the subsidy is something approaching £10 a kilowatt. If we are trying to reinforce the prosperity of places such as Scotland, and perhaps answer young Mr. Peppitt’s questions on fairness, which should apply to every part of the kingdom, we should not discriminate against the potential of Scotland—having won the natural lottery twice, and having bankrolled the present Chancellor and his predecessor’s economic plans, when the Chancellor this year is now looking at £10 billion of oil revenues flooding in to his Exchequer—to lead Europe in the exploitation of renewable power as we have done in other energies.