The Economy

Mike Weir Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Mike Weir (Angus) (SNP)]

I am pleased to be able to make a short contribution and, hopefully, offer a Scottish perspective on the argument. It will come as no surprise to most in the Chamber that the Scottish National party does not support the general economic policy of the coalition Government, who have now announced that austerity will continue until at least 2018, and possibly well beyond. On Sunday, the ever-cheerful Secretary of State for Business, Innovation and Skills was warning of a triple-dip recession.

Whatever Labour might be saying now, we also remember that prior to the 2010 general election the then Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said that the Labour Government, if re-elected, would impose cuts that would be deeper and tougher than those imposed by the Conservative Administration led by Mrs Thatcher. With that in mind, would the economic situation we find ourselves in be any different had Labour retained power? Somehow I doubt it, despite their sound and fury today.

We take a much more different tack on how to tackle the situation. History shows us that ever-deeper austerity will not lead us out of the current mess. We need to invest for the future and ensure that there is capital investment to create work for firms and for individuals and to put money back into local economies. The First Minister of Scotland was the first to advocate such a policy when the financial crisis hit us, and the Scottish Government have pursued that policy within the bounds of their powers under the devolution settlement.

Indeed, since 2008 the Scottish Government have written to the UK Government at least eight times to call for more capital investment, and there have been four joint calls for that with the devolved Administrations in Wales and Northern Ireland. In November 2008, the First Minister announced that £100 million would be brought forward to invest in tackling the housing crisis, which had been caused by years of under-investment by previous Administrations. The Scottish Government have pursued that enlightened policy despite the fact that the capital budget available to them has been cut by 33% over the last few years.

The one piece of good news in the autumn statement was the Chancellor’s partial conversion to investment, as shown by the news of new capital investment. Scotland will receive around £330 million of that to allow the Scottish Government to proceed with some of the projects that are ready to go. It is not sufficient, but it is a start and I welcomed it when it was announced. However, had the Chancellor taken those steps earlier, we might have been able to avoid the double-dip recession that the UK has suffered.

The Scottish Government have been doing everything in their power to kick-start the Scottish economy. In February, they announced a capital spending package of £380 million until 2015 focused on housing, health, digital and maintenance programmes.

[Anas Sarwar (Glasgow Central) (Lab)]

Can the hon. Gentleman confirm whether the capital housing budget has been increased or decreased under the Scottish Government?

[Mr Weir]

The Scottish Government have been putting more and more money into capital investment. [Interruption.] It has not been decreasing. They have been putting money into capital investments that matter, despite the overall budget from Westminster having been cut.

The Scottish Government have been taking the action that the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), called for earlier. In June, they announced a £105 million package of investment for so-called shovel-ready projects. Conventional capital investment has been boosted by a £2.5 billion pipeline of infrastructure projects that is being delivered through the non-profit distributing model. The Scottish Government recognised long before the current Chancellor did that the model of private participation in infrastructure was fundamentally flawed, although Labour does not seem to have cottoned on to that yet. A total of £700 million has been switched from the resource to the capital budget to support capital investment. The Scottish Government are supporting a range of innovative finance initiatives such as the National Housing Trust.

It appears from what he said this afternoon that even the former Chancellor has changed his original views and now supports the increase in capital expenditure on infrastructure, although that has not prevented his Labour colleagues in Scotland from continually attacking it; such is the way of politics, I suppose. Indeed, their leader has announced a cuts commission—an initiative whose only backers appear to be their friends in the Better Together campaign, the Conservatives.

[Mr MacNeil]

Has my hon. Friend noticed, as I have, that the main cheerleaders for Labour in Scotland’s cuts are the Tories in Wales, who welcome them on board with the same ideological baggage?

[Mr Weir]

My hon. Friend makes a good point. The Conservatives in Scotland have also supported the cuts commission, so it appears that they are all cutters together rather than better together.

The SNP Government in Scotland have been very active in ensuring that we rebalance our economy with investment in new green initiatives. The Government down here often talk about that, but we have seen little evidence of it. Indeed, the proposals in the Energy Bill give cause for concern about the way in which this Government look at green investment and whether there is to be investment in new green energy or whether the Treasury is winning the battle and we are going down a different route.

This is important to Scotland because the renewables industries now support more than 11,000 jobs in Scotland, and that figure is growing. There have been significant investments in green energy. Gamesa chose Leith for its new UK offshore wind manufacturing plant, which will create up to 800 jobs. Burcote Wind has announced plans for a £l billion investment creating up to 600 new jobs. Global Energy Group has announced that Nigg skills academy will deliver training for up to 3,000 people over three years. Scottish Power has announced the creation of 300 skilled jobs as part of a £5 billion investment in Scotland’s grid, and it is also investing £6.5 million in grass-roots skills development.

[Anas Sarwar]

The hon. Gentleman is talking about all this fantastic new investment which is happening in Scotland within the United Kingdom. Would that still be the case if Scotland were an independent country? What would corporation tax be in an independent country—20%, 15%, or the current level?

[Mr Weir]

The hon. Gentleman cannot tell me what corporation tax will be here next year, never mind what it will be in Scotland in a few years’ time. This investment is taking place. He and his party keep saying that the referendum is causing uncertainty, but all this investment is coming in now. People are investing in Scotland despite the scaremongering from the Labour party. I ask him to consider this: the real barrier to investment in the UK is not uncertainty about a referendum in Scotland but uncertainty about the referendum on Europe that Government Members and increasingly people in his party are pushing for.

[Anas Sarwar]

Will the hon. Gentleman give way?

[Mr Weir]

No, I have already given way enough.

There is uncertainty in politics and uncertainty on Europe, but in Scotland we are pressing ahead. Despite all the scaremongering from Better Together, investment is still going on. Most recently, Areva announced a substantial investment in wind. Beyond renewables, Diageo has made significant investments in the whisky industry. A great deal of investment is going on. They are coming to Scotland because it is a good place to do business and because it has a Government who are pushing forward and taking the steps necessary to create an environment to build up an economy that makes sure that there is work, that puts money into local firms and local economies and that puts people back in work. Those are the important things that people care about and that is what the Scottish Government are doing—that is why they are so successful—rather than following the austerity model, which seems to be the only thing that this House can talk about.

That has all been done with the limited powers of devolution and without the key economic levers of power that would allow the Scottish Government to do even more. That will change when Scotland votes for independence in 2014 and we will unlock the real opportunities to build a better Scotland, rather than be locked into the austerity agenda of the UK parties.