Orders of the Day — Scottish Development Agency Bill

Part of the debate – in the House of Commons at 7:32 pm on 29th October 1987.

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Photo of Mr Archy Kirkwood Mr Archy Kirkwood , Roxburgh and Berwickshire 7:32 pm, 29th October 1987

The debate is very interesting for several reasons. We have heard speeches from the hon. Members for Darlington (Mr. Fallon) and for Stockport (Mr. Favell), who were not present for the earlier part of the debate. I make no complaint about that as, in my opinion, the amount of criticism that English Members receive for not religiously attending Scottish debates is overdone. The speeches made by both those two hon. Members this evening are significant because they make the Government's Front Bench declared position even more difficult to sustain.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) made the important point that there is a potential crisis of confidence within the SDA, as a result of the Government's equivocation about its future. The contributions made by Conservative Members this evening will serve only to heighten that uncertainty and anxiety. If there is an ascendant tendency in the Conservative party and throughout the United Kingdom, the hon. Member for Darlington is more in tune with that tendency, which is making progress, than is the Minister of State. The lack of enthusiasm with which the Minister opened the debate was also commented upon.

There is a need to pose the question whether the SDA will survive during the next five years the new thrust of the coming men who have taken control of the upper echelons of the Conservative party — [Interruption.] The hon. Member for Cannock and Burntwood (Mr. Howarth) makes an intervention from a sedentary position. I look forward to his comments because he is another of the same tendency, although he has relatives in my constituency who are wonderful people. That does not absolve him from advertising in his register of special interests a predeliction for denationalisation and contracting out—which is significant in itself.

If these are the young men who are the future of the Conservative party, the SDA is right to be anxious about its own future.

The hon. Member for Stockport made a very bad speech. I do not often say that about hon. Members' speeches, but I think that that speech will read very ill in the Official Report. He may have left the Chamber to go and correct it. If so, we are grateful for small mercies.

The hon. Gentleman, and other hon. Members, must be careful about using statistics as holy writ as they appear to have been doing. Of course an argument can be made from the official figures on those in work and claiming benefit that, while the Scottish trends are bad, they do not compare all that unfairly with some in other parts of the United Kingdom. However, the bald statistics of unemployment are not in themselves a conclusive indicator to take when we are discussing the need for action on industrial regeneration and development. Social factors and environmental conditions are just as appropriate and important. We all know of localised areas, hidden within the national figures, which show Scotland as the worst affected in Europe—indeed, the European Community explicitly recognises that. However, Conservative Members may not recognise the special remit and important role of the SDA in environmental work and land reclamation.

For those reasons, as much as any others, we deeply resent the gratuitous attacks made by English Members. If we were debating Teesside, or even the leafy suburbs of Stockport, I would not glory in telling hon. Members representing those areas that they were better off than we are in Scotland. I hope I would appreciate that they, too, have problems, and seek to get together to solve them as best we can.

It is perfectly legitimate for the people of Scotland to give a higher priority to industrial development and regeneration. If we had a Scottish assembly—in which case the hon. Member for Cannock and Burntwood would not be trammelled with Scottish business in this House —we would give such matters much higher priority. I accept that the public purse is not unlimited, but we would make it a priority to achieve industrial and environmental regeneration in Scotland—certainly if we had the kind of assembly that we feel is necessary to meet the needs of our time. The tone of the debate took an unfortunate turn when English Members contributed. I say that not because they are English, but because they are ignorant.

Other hon. Members have said that we should acknowledge that the agency is in new hands. Let me therefore refer to Ian Robertson, the new chief executive, and Professor Neil Hood, the director of Locate in Scotland. We wish them well in their new functions in future. In my view, if the agency did not exist in Scotland, we should have to take steps to create it.

This debate is principally about financial allocations and limitations. However, it is not only about money, but about the style and approach adopted by the agency since 1975. Its present approach is based on partnership, and that sits comfortably with my party's political philosophy. I appreciate that one of the things that have bedevilled the SDA since its inception is the changing economic climate. Plainly, that has a bearing on what it does. However, there has also been a change in political climate. There have been speeches on the Left-wing side of the argument, such as that from the hon. Member for Dunfermline, West (Mr. Douglas), who clearly wanted a much more interventionist agency. That received the inevitable knee-jerk or Pavlovian response from the Conservative Benches that this was unfettered Socialism and therefore, by definition and in principle, to be rejected out of hand. Conversely, the Minister of State, when he opened the debate, talked about the free engine of capitalism, which was his perception of what the agency should be doing. That in turn was rejected by Labour Members as out of hand.

It may be said that this is a typical Liberal position, but I believe that there is a very positive and sensible intermediate stage. Indeed, the agency has adopted such an approach in practice, and it has patently been successful. A sensible measure of partnership provides a balance between public funds and private money. However, such a partnership is important for more than just economic reasons. Those of us with constituencies north of the border have all witnessed how the SDA can provide a focus for all sorts of different agencies—voluntary organisations, statutory bodies, such as the Historic Buildings Council for Scotland, local authorities and, indeed, individual entrepreneurs. It can come in and seize the opportunity to crystallise a development as no other agency or organisation easily could. I think that the style of partnership achieved by the agency is splendid. It should be promoted and built upon.

The flexible. innovatory and pump-priming role that the SDA has had since 1975 gives it the opportunity to make an impact over wide areas of interest which are of crucial importance to the economic life of Scotland. They include the key functions of creating jobs and dealing with urban decay. The Prime Minister, trailing her handbag around the urban wastelands of Britain, has got it substantially wrong—as experience has proved—if she believes that every £1 of public money can be expected to generate £10 of private investment. We have seen from the SDA's operations in the Leith project and many others that, while it is true that public money can seed private investment, substantial urban regeneration cannot possibly be taken on with such a ratio. If the Prime Minister expects the SDA to deliver on that basis, she will almost certainly be disappointed.

I was sorry that the Minister of State did not say a bit more, as he had the opportunity to do, about the support for indigenous companies. When we are discussing job creation and the eradication of urban decay, indigenous companies can become rather lost in the argument about introducing new companies and inward investment. One of my most positive experiences in my previous incarnation as a solicitor was helping to set up a community business. No hon. Member has said anything about community businesses, but the SDA has played a positive role in seeding and promoting such businesses. Community businesses are non-profit-making charitable trusts, companies limited by guarantee, which provide jobs from within the ranks of the unemployed. Again, such enterprises need to be seeded by professionals who can give a lead. However, I believe that there is a great future, and unrealised potential, especially in urban areas, for the development of community businesses.

I began by talking about job creation and urban decay because I recognise that the main burden of work must fall in those areas. However, it would be silly of me not to acknowledge — especially representing the constituency that I represent — that vast tracts of Scotland suffer from problems which, which they may not be of the same magnitude in relative terms are no less great for that. Substantial problems face those who live in rural areas.

There is confusion about the provision of assistance in the Minister of State's own part of Scotland. The south-west and the south-east of Scotland, as he knows, are not covered by the Highlands and Islands Development Board or by the SDA. The focus of its activities lies in the central industrial belt. Rural areas such as Galloway and Upper Nithsdale and Roxburgh and Berwickshire are not development areas and are in limbo. Earlier in the debate the hon. Member for Dumfries (Sir H. Monro) argued in favour of the establishment of a rural development fund. My hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) made the same point. It is essential to increase the agency's funds, if for no other reason than to seed more rural initiatives.

We have had the benefit of DRAW and PRIDE, but such initiatives have come and gone, and there is uncertainty whether the outstanding schemes that are on the Minister's desk will be approved. I join other right hon. and hon Members in asking the Minister to make a statement about that tonight. If he does not, it will be remiss of him and it will cause a great deal of anger among those who are still waiting for the go-ahead for their projects.

With a modest amount of money there is a great deal of scope for the SDA to provide rural development in Galloway and Upper Nithsdale as well as in Roxburgh and Berwickshire. It could, for example, promote small businesses and tourism, in conjunction with the Scottish Tourist Board. It could also engage in land renewal projects, of which there are many at planning stage waiting for finance.

The Minister referred to the fact that the SDA will be very much involved in engineering and food processing. Local authorities and many other people in rural areas realise that there is much to be gained from the processing of agricultural produce in rural areas instead of sending it to industrial areas to be processed. That could generate considerable wealth for rural areas. If that is true of agricultural produce, it is also true of fish processing. The fish-catching industry continues to experience difficulties, but in my constituency, elsewhere along the coast of eastern Scotland and in the islands there is a massive potential for the development of the fish-processing industry. The injection of a modest amount of Government money could lead to the creation of wealth within those areas.

The regional council in the Borders has found that industrial building has been gradually siphoned off and withdrawn since its industrial development status was withdrawn. It has now to rely exclusively on private investment to meet that need. Rural initiatives that are set up and established by the SDA cannot be maintained by the local authorities, because they do not have sufficient money. The right hon. Member for Glasgow, Govan (Mr. Millan) said that the cuts in the rate support grant had had a major bearing on such initiatives.

Furthermore, the SDA cannot take properly into account all the social factors. That puts areas such as my own and the Minister's constituency at a disadvantage. There are many land renewal schemes, such as that in Hawick. If additional funds could be made available to the SDA, such ambitious but modest plans would transform the biggest town in my constituency. When rural development status was taken away from my area in 1984, it thought that it would continue to enjoy some priority of funding from the SDA, but it does not now think that it enjoys that status.

The key question is whether the SDA's potential is being fully realised. The debate about whether Government funding of the agency is increasing or decreasing is, to an extent, academic. I am on the side of the hon. Member for Garscadden. There is a great deal of confusion about this, and if the Minister could clarify the position it would be helpful.

A point that has not been mentioned so far is that the SDA appears to be under a great deal of pressure to realise its assets in order to make up the shortfall in its budget. That, if true, is a short-term policy and ties in with what I said earlier: that when its assets are sold off the SDA's very future existence will be in doubt.

I reinforce the point that was made earlier about the uncertainty that has been caused by the current review of regional aid. According to the Chancellor of the Exchequer, during the next five years the Government will have a great deal of money to spend, but we shall have to wait for another two and a half hours to find out whether or not his forecast has changed. The injection of sensible—not extravagant—amounts of public money over the next five years would provide us with the opportunity to tackle unemployment in Scotland and to support the new industries that are needed to regenerate our environment and restructure and modernise our economy. I am in no doubt that the result of a moderate but continuous increase in funding would lead to significant progress being made in all these areas.