Orders of the Day — Scottish Development Agency Bill

Part of the debate – in the House of Commons at 12:40 am on 21st October 1987.

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Photo of Charles Kennedy Charles Kennedy , Ross and Cromarty and Skye 12:40 am, 21st October 1987

Despite the low key introduction that the Minister gave to the debate—given what was to follow from the Benches behind him it may have been appropriate — it is important to place on the record the fact that the SDA, along with bodies such as the Highlands and Islands Development Board, is a successful example of the blending of public and private cash. Before we hear too much about how the Thatcherite revolution has changed the course of history. it must be recalled that a Labour Government introduced the SDA. The Conservative Government, despite their policies, have continued to support the blend of the public sector attracting private sector finance.

The Minister, particularly in his role at the Scottish Office, would be well advised to give slightly more unequivocal support to the SDA than the tone of his contribution suggested, not least for two reasons. First, the SDA has operated against a background of uncertainty that was caused by the Treasury review. We should congratulate the SDA on coming through that review with flying colours. Secondly, the Secretary of State for Scotland, to his credit, had to fight a political battle shortly after being appointed when the eyes of the Treasury were cast towards the profits from the enterprises in which the SDA and the HIDB had invested. The fact that the SDA, with backing from the Scottish Office, was successful in that instance should be welcomed.

The Bill is welcome because it recognises the continuing role of the SDA and it has allowed its borrowing to be increased. However, without wishing to be churlish, it must be recorded that the borrowing requirement of the SDA may be increased by this legislation but, as the hon. Member for Glasgow, Garscadden (Mr. Dewar) and others have said, the direct contribution from the Scottish Office to the SDA has decreased. Whatever the Minister may say in trying to justify the argument that he was putting forward earlier, I hope that he will agree with the objective analysis of the SDA accounts carried out by the House of Commons Library. They show that in 1985–86 the grant was about £91·5 million, but by 1986 it had gone down to £87 million. Therefore, in real terms the amount of funding that the Scottish Office is giving the SDA is declining. Against a background of Scottish industrial decline, that can only be severely damaging, particularly to those parts of the Scottish economy that have suffered most in recent times.

In addition to the uncertainty of recent times and the fact that the Government commitment to the SDA is on a downward path there is a further nagging anxiety which concerns the draft proposals now with the European Commission which are liable, in the spring of next year, to be submitted to the Council of Ministers. Given the restructuring of the Community budget and the enlargement of the Community as a trading market between now and 1992, the proposals will remove a substantial part of Scotland from eligibility for full regional support. That will be damaging to the SDA's activities and will mean that major infrastructure projects cannot go ahead.