I beg to move, That the Bill be now read a Second time.
The purpose of the Bill, as effected by clause 1, is to increase the statutory financial limit for the Scottish Development Agency from the present level of £700 million to £1,200 million. The agency's financial limit was last raised by the Industry Act 1981, when it was expected that the new limit would remain in place until 1989. Because of a revision in the method of calculating what constitutes grant-in-aid, however, it is now estimated that the financial limit will be reached by the end of the present financial year. It is therefore necessary to raise the limit so that the agency's activities are uninterrupted.
Under section 13 of the Scottish Development Agency Act 1975 a number of items count towards the agency's financial limit. First, there are the agency's general external borrowings—mainly out of the National Loans Fund but covering other borrowing by subsidiary companies. Secondly, the limit includes agency guarantees and Treasury guarantees. Thirdly, there are overseas borrowings from, for example, the European Coal and Steel Community and the European Investment Bank. Finally, the largest item comprises payments from the Secretary of State, consisting of grant-in-aid less administrative expenses, plus public dividend capital issues.
As is customary when seeking parliamentary approval for increasing a financial limit, we propose to set a new limit which should suffice for around five years ahead. I therefore propose that the limit should be raised to £1,200 million.
Under the Scottish Development Agency Act 1975 the agency has the principal purposes of furthering the economic development of Scotland, improving its international competitiveness and improving its environment. These it accomplishes through a variety of functions, including the provision of finance, premises, business advice and counselling, sectoral advice, redevelopment of land and property and bringing derelict land back into use. A recent review of the agency carried out by the Scottish Office and the Treasury concluded that in its first 10 years it had made a substantial and positive impact on Scotland's economy and environment. Agency investments from 1981 to 1985 have created additional output of £275 million per annum and a total of about 10,000 jobs.