Scottish Economy

John Lamont Excerpts

Wednesday 27th June 2018 Westminster Hall

[Ged Killen]

I thank the hon. Gentleman for his point. We have a serious issue with how we expect to finance public spending in Scotland, and I will come on to that later.

Unfortunately, the story is the same when we turn to productivity. While the productivity puzzle on these islands has been a problem for both Scotland and the rest of the UK, the most recent figures show that in Scotland the puzzle is even more complex, and while UK productivity has risen by 0.7%, trend productivity in Scotland is zero. On key indicators for growing our economy and making our workers more productive, the SNP Government have an even poorer track record than the UK Government. That means that the country is not reaching its full potential, and the average person’s wages are being squeezed more and more. In the real world, in terms of how far towards the end of the month people’s pay reaches, when it comes to buying food, paying bills and socialising, the average Scot is worse off now than they were 10 years ago and is doing worse than the UK average.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

The hon. Gentleman makes a point about take-home pay and how much workers have in their pay packets, but when the SNP and Scottish Parliament announced their “Nat Tax”, his Labour colleagues in the Scottish Parliament argued that it did not go high enough. They wanted to take greater taxes off the hard-working Scots. How can he complain about how much people are taking home in their pay packets, when he wants to increase tax and take more money out of those pay packets?

[Ged Killen]

I thank the hon. Gentleman for his comments; I know we have very different views on tax and spend, and I do not think we will resolve them here.

To add to all that, Scotland is more unequal than ever. The wealth disparity means that the average household would need to save every penny of their income for 43 years to enter the top 10% of wealthiest Scots. A failure to increase wages, build more houses or spread wealth means that the most significant factor in determining whether a person will own their own home or secure a top-tier job is not their skills and talents, but who their parents are and where they live. A Scotland where circumstances of birth will take people further than their skills and talents is not the kind of country we should aspire to be, but that is the situation we find ourselves in.

Despite those facts, the vision put forward by our governing parties is not for the radical transformation that is clearly needed. On one side, one of Scotland’s Governments supports a damaging Brexit policy that will cut the ties of Scotland and the rest of the UK to the EU’s internal markets and the customs union. The Fraser of Allander Institute has modelled that with each degree of separation from those two tenets of the EU, Scotland will be more and more damaged. Scotland faces being between 2% and 5% worse off in GDP terms as a result of this Tory Brexit, while in the worst of cases, under a no-deal Brexit, in which we default to World Trade Organisation rules, wage growth will go into reverse, the economy will shrink and, most worryingly, Scotland’s successful food and drinks exporting industry could suffer as much as a 26% reduction in trade.

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[Danielle Rowley]

I thank the hon. Lady for her intervention. I absolutely agree that education is a fundamental part of growing industry in Scotland.

The collapse of Crummock in my constituency is just the latest example of the deep problems surrounding the financial health and stability of the Scottish construction industry.

[John Lamont]

The hon. Lady is speaking very well about the economic challenges that Scotland faces. Does she agree that those challenges would be turned into complete misery for the people of Scotland if the SNP had its way and ripped Scotland out of the United Kingdom?

[Danielle Rowley]

I thank the hon. Gentleman for his intervention. He will know that I would agree with that.

To focus on the construction industry, the collapse of Crummock is just one of many that we have seen recently, with many job losses, in Scotland. The closure of large employers such as Crummock will have a significant impact on local economies. A number of suppliers and service providers have spoken to me about their worries. A small electrical company and those providing cleaning services have expressed to me concerns about the future of their businesses following Crummock’s closure. Such closures reflect the failure of an economic strategy that is over-reliant on free-market forces, as well as an absence of joined-up Government policy and action, especially in public procurement.

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[Drew Hendry]

I disagree, and so do many businesses that I interact with in the highlands on a daily basis.

Production efficiency in the oil sector has risen for the fifth consecutive year, reaching 74% in 2017, demonstrating sustained efficiency improvements and maximising the economic recovery. Oil & Gas UK’s “Business Outlook for 2018” shows growth in investment and a further 5% increase in the forecast production for that year. Recent industry announcements about BP’s successful working discoveries in the Capercaillie and Achmelvich wells and Shell’s redevelopment of the Penguins field demonstrate the investment potential that the UK fields still hold. Over the next decade our oil and gas sector can capitalise on the decommissioning market, which is forecast to reach £17 billion; but that is only if the right decisions on investment are made.

[John Lamont]

The hon. Gentleman points out the challenges for the oil and gas sector, but on Monday when the Scottish Affairs Committee was taking evidence on the sector in Aberdeen, we heard people saying they wanted fracking to be expanded in Scotland. Does he support the industry in making that call?

[Drew Hendry]

I certainly do not support fracking. I do not believe that a country as rich in natural resources and renewable energy as we are—and indeed one with the oil and gas industry that we have at the moment—needs to go for fracking. I absolutely support the ban on fracking in Scotland. [Hon. Members: “There is no ban!”] There is a ban in Scotland. As to an effective ban, a court ruled in the past week that that is the case: fracking cannot go ahead in Scotland under the current situation.