Orders of the Day — Scottish Development Agency Bill

Part of the debate – in the House of Commons at 1:06 am on 21st October 1987.

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Photo of Mr Bill Walker Mr Bill Walker , North Tayside 1:06 am, 21st October 1987

I welcome your protection from these interventions, Madam Deputy Speaker.

The control of inflation, the reduction in taxation and the reduction in local and national borrowing, linked to measures which change attitudes — measures such as privatisation, with the necessary ingredient of employee shareholding—do much more to stimulate investment and create jobs than agencies such as the SDA. Equally, I believe that, if we must have such an agency, it is nonsense to operate it within a regional aid policy which is determined by lines drawn on a map, instead of targeting the aid, such as it is, on individual industries, firms or sections of industry where there is real need.

I can give an example of why I believe that the Scottish Development Agency and regional aid are nonsense. Recently British Aerospace set up a flying training school at Prestwick. I welcome that. I do not welcome the fact that the school is heavily subsidised with public funds, so that it can offer much enhanced wages and pass on much increased costs to potential customers. That would not matter if it was the only flying training school in Scotland, but when another flying training school which has been in operation for 50 years has its business opportunities substantially diminished, and many of its employees enticed away by heavily subsidised wages, it is the economics of the madhouse. It is not useful either to Air Service Training, which is the 50-year-old school in my constituency, or to British Aerospace at Prestwick because it creates completely false economic circumstances at Prestwick and adverse economic circumstances in Perth. That cannot be sensible or logical in the long term. By pricing the training of overseas students out of the Scottish market, instead of having two flying training schools in Scotland we will end up with none because they cannot get customers.

The other danger is that the future of the 50-year-old school is put at risk because the opposition is enticing away its best employees and then pricing it out of the market, because to continue training the school must bring in new people, who must be offered the inflated salaries which are boosted by the grant-aided assistance.

The Government must also examine carefully the activities of the SDA in Dundee. I have no objection to the Dundee waterfront being improved, and I support anything that will improve that city, but it is incredible that the waterfront project will contain many retail units when Dundee already has relatively recent developments at Wellgate and Overgate, both of which will be put substantially at risk if the waterfront project goes ahead as presented.