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Mr. Speaker : Order. I order the hon. Member for Tayside, North (Mr. Walker) to resume his seat. I call Mr. Secretary Rifkind. 4.53 pm

Mr. Rifkind : I beg to move, That the Bill be now read a Second time.

The House will be pleased to be able to consider the more tranquil matter of this Bill, with the major proposals that it incorporates for the Scottish economy. The Bill has been described as perhaps the single most important measure affecting Scotland. [Interruption.] I ask Opposition Members to wait a moment. It has been described not only by me but by the Scottish Trades Union Congress as the single most important measure-- [Interruption.] Before he goes too far, I refer the hon. Member for Glasgow, Garscadden (Mr. Dewar) to the remarks of the STUC. It describes the Government's proposals as "The most significant institutional reforms within the fields of both training and economic development to be suggested since the establishment of the Manpower Services Commission in 1974 and the Scottish Development Agency in 1975."

Therefore, I was modest in my description of the significance of the Bill, because the STUC and its members clearly think that its significance is even greater.

There are three major aspects of the Bill for Scottish Enterprise, any one of which would be of profound importance to the Scottish economy. First, it provides for the combination of the Scottish Development Agency and the Training Commission into a new body to be known as Scottish Enterprise--a powerful body with substantial resources, which will provide an integrated approach of a type that has not been seen before.

Secondly, the Bill provides for the transfer of responsibility for training in Scotland from Sheffield to Edinburgh, and from the Department of Employment to the Scottish Office. Thirdly, it provides for many of the responsibilities that in the past have been carried out by either the SDA or the Training Commission to be delivered in future by new private sector- led enterprise

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companies in each of the various regions of Scotland, both in lowland Scotland, and, through Highlands and Islands Enterprise, in the Highlands and Islands of Scotland.

Without qualification, any one of the three proposals would amount to a major contribution to the economic future of Scotland. Brought together, they justify the joint judgment of myself and the STUC about their profound significance. They are not only profoundly important. What is significant and, perhaps, unprecedented for such wide-ranging measures is the enormous support that they have received virtually throughout Scotland.

In response to their White Paper, the Government received more than 420 contributions from various organisations, bodies and others concerned with the future of the Scottish economy. Of those 420 responses, no fewer than 403 did not depart from the central recommendations of the White Paper. Only 17 out of 420 disagreed with the basic proposition in the White Paper for the integration of training in the SDA and the creation of Scottish Enterprise. It is a disappointment but, perhaps, not surprising that in that lonely group of 17 was to be found Her Majesty's Opposition, the Labour party. We have found that the Labour party, with no significant or noticeable support from any major organisation in Scotland, stands in lonely isolation opposed to the Bill. The hon. Member for Garscadden sits sulking in his tent, without any support from significant bodies in Scotland. [Interruption.] If the hon. Gentleman and his hon. Friends think that I am exaggerating, I ask them to reflect on the views of many organisations in Scotland. I shall not refer to all those that might be seen in some way as antipathetic to the views of the Labour party. Let me concentrate on those which are the traditional allies and supporters of the Labour party and which the hon. Member for Garscadden in the past has never hesitated to quote as endorsing his view and welcoming his support. For example, Mr. Campbell Christie, the general secretary of the STUC, who has not only identified the STUC with the proposals but who was present at the launching of them, said on 31 August last year : "First of all can I say that from the trade union movement's point of view we very much welcome the integration of training and economic development as envisaged in Scottish Enterprise' and we look forward to the partnership arrangement that the Secretary of State and others have talked about this morning and participating in it."

We find that the Scottish Council of Voluntary Organisations "notes with approval the remit for Scottish Enterprise" and

"endorses the case for devolving to a Scottish base the administration of the training and job creation functions and integrating them with the economic development functions already directed from a Scottish base."

The Convention of Scottish Local Authorities said in its response to the Government's proposals :

"The general objective, set out in the White Paper on Scottish Enterprise, to integrate the Government's support for training and for enterprise creation is welcomed by the convention."

The Church and Nation Committee of the General Assembly of the Church of Scotland stated :

"The Committee welcomes in broad terms the proposals set out in the Government's White Paper Scottish Enterprise' and, in particular, the fact that Scotland is to be given special treatment to suit her own needs. The Committee also welcomes the proposal to bring together training and enterprise functions which will benefit greatly from being inter-related."

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In view of the Opposition amendment and the opposition of the hon. Member for Garscadden to the central thrust of our proposals, I challenge the hon. Gentleman to say what support he has from elsewhere in Scotland for the Labour party's lonely position on the measure. I challenge him to name one other organisation of substance or body of importance in Scotland that supports the Opposition's view, which is derived from their narrow partisan position of opposing for its own sake and not on the merits of the proposals.

Mr. Dick Douglas (Dunfermline, West) : The Secretary of State is obviously replying carefully and legalistically to a wide range of arguments. There is great merit in annotating those who support him. If we study carefully the words that people are using to support the legislation, it is clear that they are talking about the interrelationship of the investment and training functions. The danger is that in the Bill those functions are not interrelated, but fused. That is the problem that the Secretary of State, in operation, must address. It is not the interrelationship but the bureaucratic fusion of those functions ; it is not only the devolving to Scotland but the local aspects as well.

That is a bureaucratic and operational problem that the Bill does not address. The dangers exist and the Labour party is right to draw attention to the fact that those two functions should be more disinterrelated to avoid the danger of fusion and to benefit the Scottish economy.

Mr. Rifkind : The hon. Gentleman may be describing the position of the Labour party, but I hope that he will have the honesty to admit that that view does not have the support of any other significant organisation in Scotland, on either side of the industrial scene. I note that he accepts that.

It is an unusual phenomenon for the Secretary of State for Scotland, in the present Administration, to be quoting in support of his proposals the STUC, COSLA and the Church and Nation Committee of the General Assembly of the Church of Scotland. I should usually be nervous about support coming from those quarters. I should be grateful to the hon. Gentleman for pledging the Labour party's opposition as that will reassure some of my hon. Friends that the Government are continuing on the right path.

Mr. Donald Dewar (Glasgow, Garscadden) rose--

Mr. Rifkind : I shall happily give way to the hon. Gentleman. I hope that he can tell us who else supports the Labour party's view.

Mr. Dewar : I shall make my own speech in my own time. If the right hon. and learned Gentleman puts such store on the advice given to him by those organisations, why has he accepted their general blessing but repudiated almost every one of the specific pieces of advice that they have given him?

Mr. Rifkind : That simply is not true. There have been a number of extremely useful contributions and suggestions from the STUC, COSLA and other organisations, some of which we have accepted. I have not the slightest doubt that, as the Bill is debated in the weeks to come, there will be constructive suggestions from a variety of organisations. I hope that the Labour party will

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be included in them. If it moves away from its emotional, pigheaded reaction to measures and its partisan political view, and instead addresses the contents of the Bill, I have no doubt that the consensus that currently includes the rest of Scotland might be extended also to include the Labour party.

Dr. Norman A. Godman (Greenock and Port Glasgow) : I wish to ask a question relating to clause 1(b), which talks of a body to be known as Highlands and Islands Enterprise, which shall have the general functions of

"preparing, concerting, promoting, assisting and undertaking measures for the economic and social development of the Highlands and Islands."

Where does the tourist industry stand with regard to that part of the clause? The right hon. and learned Gentleman will recall that the Select Committee on Trade and Industry called for a United Kingdom body for the tourist industry. Will he assure the House that, under the Bill, the Scottish tourist industry and board will remain autonomous bodies for the next two years?

Mr. Rifkind : I very much hope that they will remain autonomous bodies for longer than that. The Government have no proposals to limit the autonomy of the Scottish Tourist Board. The Bill will not have any effect on that matter.

The central thrust of the Bill is the integration of training and the Scottish Development Agency into a new body to be called Scottish Enterprise. I shall explain why the Government and a wide spectrum of Scottish opinion believe that to be highly desirable. The first and most obvious reason--and one that industry has pointed to--is the desirability of a single door for industry with regard to business support and training. It is always easier and more simple for those who are to benefit from the support that is given by Government if they can go to a single organisation or body to identify what is available and come to a conclusion as to the extent that such a body can assist with their economic opportunities. The integration of the two organisations has much to commend it, rather than a continuation of parallel organisations each seeking to help industry in a different but interrelated way.

Secondly, it is wrong to imply that training is other than another form of investment. Training is a form of investment and, in that sense, is similar to the general work that the Scottish Development Agency and the Highlands and Islands Development Board have done for a number of years. If we wish to continue the strategic involvement of such an organisation, working with the Scottish Office, to carry out its duties, those matters should operate in an integrated way. It is that integration that has been most commended by all the organisations that I have mentioned and also by the CBI in Scotland, the Scottish Council (Development and Industry), Scottish Business in the Community and various other organisations.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : Will my right hon. Friend-- [Interruption.] Does the right hon. and learned Gentleman agree that the infrastructure, particularly transport services, is vital for industrial development? He may be aware of the distressing news today that British Rail plans to discontinue direct services from Stranraer via Girvan and Ayr to the south of England. That will cause great harm and difficulties for industrialists not only in my constituency but in the constituencies of the right hon.

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Member for Ayr (Mr. Younger) and the Minister of State, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang). My colleagues and myself, along with some Conservative Members, will be meeting British Rail officials next week to ask them to reconsider the matter. Will the Secretary of State join us in that campaign to persuade British Rail to reconsider that unwise decision that will be detrimental to industrial development in the south-west of Scotland?

Mr. Rifkind : My friendship with the hon. Gentleman goes back 20 years and I take no offence at his initial form of address. We are all disappointed by any proposal to limit or reduce British Rail services in any part of Scotland. There will be an opportunity for the reasons that British Rail has put forward to be considered and for a conclusion to be reached on whether they have substance. There will also be opportunities for comments and representations to be made to British Rail. The announcement was made only today, and it is clearly necessary for the ideas behind it to be properly examined. The thrust of the proposals is the integration of the SDA and training. I have given the reasons why, in my view and the view of virtually all those who have commented on it apart from the Opposition, the integration of the SDA and training makes great sense.

The second main ingredient is the transfer of responsibility for training from Sheffield to Edinburgh and from the Department of Employment to the Scottish Office. It is a profound change because it involves the transfer not only of policy responsibility, but of the resources that have previously been the responsibility of the Department of Employment. That is of great significance. The need for it flows from several different reasons. First, if there is an integrated body called Scottish Enterprise, through which new enterprise companies are to be established, it obviously makes sense for those companies to be answerable to one line of response and to one Government Department. To have a split of responsibility in an integrated body answering to two Government Departments simultaneously would not have made sense or have been wise. Therefore, the Government came to the conclusion, which has been well received, that this is a sensible change.

In addition, it is a Scottish solution to meet Scottish needs. The Scottish Development Agency has no exact parallel south of the border. If it is to continue with its important role of business support, environmental improvement and other works--it is the Government's intention that it should--it is sensible and desirable that that economic activity should be linked to the work of the Training Agency in Scotland, which is comparable and interrelated. Therefore, it makes sense that the Scottish Office, which is already an industrial and economic Department, should have an enhanced role.

Mr. Tony Worthington (Clydebank and Milngavie) : The Secretary of State referred to the transfer of control for training to Edinburgh. Do the provisions mean that the Secretary of State will be able to give up the employment training scheme unilaterally?

Mr. Rifkind : I made it clear at the beginning of the debate that it is in the interests of youngsters and others in Scotland that the qualifications that they obtain should help them to gain employment either in Scotland or

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elsewhere in the United Kingdom. The same applies to my colleagues in the Department of Employment, the Welsh Office and the Northern Ireland Office.

In response to the hon. Gentleman's specific point, the Government have a United Kingdom training policy--of that there can be no doubt. Indeed, it is something of which Her Majesty's Opposition also approve. In the unlikely event of my wishing to promote completely different training policies in Scotland from those applied elsewhere in the kingdom, it would obviously be necessary for me to get the approval of my colleagues before moving in that direction. That goes for any Department at any time. However, I cannot think of a more undesirable course on which to embark. It would mean that the qualifications of youngsters in Scotland would be of little help to them in obtaining employment in other parts of the kingdom. Mr. John McAllion (Dundee, East) rose --

Mr. Rifkind : Perhaps I may finish this point. It is important that the training policy should be applied with sufficient local flexibility and sensitivity and I am grateful to the hon. Member for Clydebank and Milngavie (Mr. Worthington) for leading me on to the third major ingredient of this part of the Bill.

I should have thought that Her Majesty's Opposition, with their professed belief in decentralisation and devolution, would enthusiastically endorse the creation of enterprise companies instead of carping and criticising. For the first time, we shall have the opportunity to create in each region of Scotland enterprise companies that will have the responsibility for delivering not only the training responsibilities of the Training Agency in Scotland, but much of the business support responsibilities of the Scottish Development Agency and the Highlands and Islands Development Board. In delivering those local services, we envisage significant flexibility that will enable those companies to adapt to the way in which such policies are implemented, in response to the needs of the locality.

Mr. Archy Kirkwood (Roxburgh and Berwickshire) : On the Secretary of State's point about decentralising local enterprise companies, we in the rural areas of Scotland have some legitimate concerns because the present provisions have guaranteed a relatively stable and systematic standard throughout Scotland, which has served the rural areas just as well as the urban areas. Although I understand that the problems in urban areas can sometimes be greater, I am concerned about the demands and requirements that will be placed on those who are expected to participate in the local enterprise companies in rural areas. Those people will have to travel long distances for little reward, which is asking a great deal unless the Government can come up with real resources and a real package of support to make it worth while for local business men to become involved in rural areas.

Mr. Rifkind : With all due respect, I advise the hon. Gentleman to contact the enterprise trusts and business community in his constituency and in his own part of Scotland. If he does, he will find that there is already enormous interest from the rural areas in Scotland. There is not the slightest sign of any lack of response. Quite the opposite--the Government have been enormously delighted not only by the number of people coming forward, but by the calibre of those wishing to be identified

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with enterprise companies. That applies in the rural areas as well as in the more industrial parts of Scotland. We can already say with confidence that attracting people of calibre in sufficient numbers to carry out the responsibilities of the enterprise companies will not be a problem. Indeed, far more such people are already coming forward than can be accommodated within the framework of the proposals. Mr. Alistair Darling (Edinburgh, Central) rose --

Mr. Rifkind : If the hon. Gentleman will allow me to continue for a little while, I am sure that I shall find it possible to give way to him in due course. I wish to get on with my speech because I can see that many hon. Members wish to take part in the debate--

Dr. Jeremy Bray (Motherwell, South) rose --

Mr. Rifkind : Very well, I give way to the hon. Member for Motherwell, South (Dr. Bray).

Dr. Bray : Although the point about local participation may be impressive in principle, is the Secretary of State aware that there is a great variation in the quality of people coming forward in the different industrial areas? In Lanarkshire, for instance, the biggest employer, British Steel, is not taking part and another major international company has nominated its property manager. Generally, Lanarkshire will not have a first division board.

Mr. Rifkind : The hon. Gentleman must be responsible for his own comments on that. The people who have been mentioned to me as being interested in taking part in Lanarkshire and in other areas include a number of important persons within the local economy. However, the hon. Gentleman is entitled to his own view.

The importance of the enterprise companies flows from the following facts. First, when training was introduced some years ago in the early 1980s, it was at a time of mass unemployment and inevitably the method of training that was applied was relatively unsophisticated. Over the years, the training has become more sophisticated, and with falling unemployment those who are seeking and obtaining training, whether they be youngsters or older persons, are in a much stronger position to obtain employment thereafter. With the demographic changes that are already taking place in Scotland, which will lead to a massive reduction in the number of school leavers in the next few years, the need to have a training system and a business support system that is more tailored to the requirements of each locality in Scotland is greater than ever.

The simple fact is that the economic, training and business support needs of the north-east of Scotland are not necessarily the same as those of Glasgow. The needs of Edinburgh are not necessarily the same as those of Dumfries and Galloway, and those of the Borders are not necessarily the same as those of Lanarkshire or Dumbarton. Only by a system of effective decentralisation can one hope to meet such requirements.

Mr. Darling rose --

Mr. Rifkind : Perhaps I may continue this point. It is of great significance that the Scottish Development Agency was already in the process--it has been doing this for some

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time--of decentralising to its own employees in various parts of Scotland the administrative responsibility for implementing a number of the schemes for which it is responsible. We are taking that process an important stage further and devolving and decentralising responsibility not simply to the officials of the SDA, but to the local community--primarily to the local business and industrial community, but also to those from other sections of the community who have an interest in the economic development of the locality. That is profoundly different from what we have ever had in Scotland. It has been widely welcomed by both sides of industry and I repeat that it is a matter of great sadness that, for reasons that have not yet been properly articulated, the Labour party seems unable to identify with the view that is so widely held.

Mr. Darling : I am grateful to the Secretary of State for giving way. Perhaps I can tell him why there is some concern. I am all in favour of decentralisation, but I am not in favour of decentralising decision- making to one narrow category of people such as business men. The old town of Edinburgh has been targeted by the SDA, mainly because it wants to see more tourism there. However, people living in the old town are concerned that, through the local boards, business men may identify gap sites from which they individually and their companies could profit, and those business men may then use the umbrella of the power and prestige of their enterprise boards to acquire and free that land and then, lo and behold, their own companies may buy up the land and make a profit from it. My fear is that the boards could be used as stalking horses for individual business men because there is no countervailing balance provided by the local community to any meaningful extent.

Mr. Rifkind : Those are interesting points. However, the hon. Gentleman's proper response should be the more constructive approach of the STUC, COSLA and others who have commented on these matters. Some of them have expressed similar concerns to those of the hon. Gentleman, but that has not stopped them welcoming the broad thrust of the Bill. They have said that they welcome the thrust of what the Government are doing, although that could be improved in certain ways, but irrespective of whether it is improved, it is far better to have the Bill in its present form than not at all. That is the fundamental difference between the Labour party and the rest of Scotland on the issue. The Labour party would be well advised to raise those matters of detailed concern as the Bill goes through the House. Scottish opinion finds it difficult to understand why those are being used as a perceived justification for opposition to all the proposals.

Sir Nicholas Fairbairn (Perth and Kinross) : My right hon. and learned Friend might observe to the hon. Member for Edinburgh, Central (Mr. Darling) that the new town of Edinburgh was built by the enlightenment of business men and its prosperity lies on it.

Mr. Rifkind : My hon. and learned Friend is entirely correct and the inheritance that enterprise has given to the modern grandeurs of Scotland can hardly be exaggerated.

I have commented primarily on the position in Scotland as a whole. However, the position in the Highlands and Islands is comparable and there has been a great welcome for the Government's proposals throughout the Highlands and Islands. In our consultative document we put various

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proposals to Highlands and Islands opinion, including a continuation of the status quo or the proposals now referred to as Highlands and Islands Enterprise. It was clear that the overwhelming weight of opinion supported the proposal for an integrated approach, giving to the successor body to the Highlands and Islands Development Board comparable powers to those exercised by Scottish Enterprise. In putting forward the proposals, we do not wish to imply any criticism of the SDA or the HIDB. I say without qualification that their role and contribution to Scotland during the past years since their creation has been of profound significance and importance. The HIDB--which this year celebrates its 25th aniversary--has operated through a period of profound change to the well- being of the Highlands. When we think of the history of depopulation in the Highlands, it is of enormous encouragement that since 1971 the population of the Highlands and Islands has increased by 25,000, or 8 per cent. The HIDB is entitled to credit in contributing towards that.

Mr. Alex Salmond (Banff and Buchan) : Will the Secretary of State confirm that his endorsement of the past record of the Scottish Development Agency is not shared by the progenitor of the Scottish Enterprise scheme, Mr. Bill Hughes, the vice-chairman of the Scottish Conservative party, who has made some sweeping attacks on the performance of the Scottish Development Agency?

Mr. Rifkind : Bill Hughes is perfectly able to speak for himself, but at least he has remained in the Conservative party, unlike some of those in the Scottish National party who take a different view from the hon. Member for Banff and Buchan (Mr. Salmond).

The Government's views are quite simple : the SDA, particularly with the changes introduced to its powers after 1979, has made a sterling contribution to Scotland's well-being, which is why combining the SDA's present responsibilities with those of the Training Agency will strengthen its future contribution. I say categorically--because this is a matter that has given rise to some concern--that we have every intention that the SDA will continue with its strategic responsibilities to the wider Scottish economy. There is to be no change to inward investment as a result of the proposals and Locate in Scotland will continue, as at present, to co- ordinate with the Industry Department for Scotland and Scottish Enterprise.

Mr. George Robertson (Hamilton) : The Secretary of State referred to the value of the Scottish Development Agency. I served as a board member of the SDA in its initial period. It has had 14 years to build up considerable success. The SDA has a good track record and an identifiable image. Why has the Secretary of State resisted the advice given by all the organisations that he has prayed in aid in his speech and decided that the name, Scottish Development Agency, should now disappear?

Mr. Rifkind : The SDA made it clear that it did not take any exception to the proposed name, Scottish Enterprise. If we create a new body, combining two quite separate organisations to come into existence at a time when enterprise companies are also being created with a profoundly new role to play, this constitutes a new start. There is no question about that and the SDA has been the first to acknowledge it. I do not attach enormous

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importance to nomenclature. When we have a new organisation with new powers and responsibilities, it makes sense to reflect that in the organisation's title. I was pleased that in its representations the SDA made it clear that it had no objection to that proposal. Part I of the Bill deals with Scottish Enterprise and Highlands and Islands Enterprise. Clause I establishes the two bodies and gives them general functions in economic development, environmental improvement, training, and, in the case of Highlands and Islands Enterprise, social development. It also gives effect to schedule 1 which provides for the constitutions, proceedings and staffing of the two bodies. Clause 2 enlarges on their training functions, while clauses 3 and 4 make further provision as to the functions for the two bodies. Clauses 5 and 6 make particular provision for the two bodies' functions for the improvement of the environment and derelict land.

Clauses 7 to 13 provide for the powers that the two bodies may exercise in carrying out their functions. As I have said, they include the full powers of their predecessors. Restrictions on some of those powers are set out in clause 12 : again, the restrictions are no greater than those which were placed on the predecessor bodies. Clause 13 enables me to give the two bodies directions, following consultations with them. Clauses 14, 15 and 16 make various provisions with regard to the two bodies' training functions. They cover such matters as payments equivalent to industrial injuries benefit in approximate cases, the treatment of disabled ex-service men and women, and the prevention of sexual or racial discrimination.

Clause 17 allows the two bodies to delegate their functions and powers to others. It will be principally through this provision that local enterprise companies will be able to carry out functions under contract to the two bodies. Certain functions and powers are excluded from delegation. The hon. Member for Clydebank and Milngavie might now have read the Bill, compared to when he made his previous comments, and if so he will realise that the powers of delegation do not include compulsory acquisition of, and entry to, land and powers to obtain information. Clause 18 allows local authorities and new town development corporations to act as agents for the two bodies. Clause 19 defines the two bodies' areas of operation and clauses 20 and 21, together with schedule 3, make provision for the transfer of property, rights and liabilities to the two bodies from their predecessors. Clauses 22, 23 and 24 make provision for the financing of the two bodies.

Mr. Worthington : I concede that derelict land is excluded from delegated powers. However, I made another point about planning permission, which is referred to in clause 5. Under the Bill, that is not excluded.

Mr. Rifkind : Enterprise companies will not be public bodies. They will be private sector companies, with the same legal position as any other such company. It flows from that that they can have no involvement in the planning process, any more than any other planning application. If the hon. Gentleman will not accept my word for it, perhaps he will accept the advice that he is clearly now receiving from the hon. Member for Garscadden, which I suspect is identical in content and conclusion as mine.

Mr. Dewar : But I draw a different conclusion.

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Mr. Rifkind : I look forward to the interpretation of the hon. Member for Garscadden in due course.

Clauses 25 and 26 make provisions concerning the two bodies' powers of entry on to Crown land and the service of documents. Clause 27 provides for the two bodies to furnish the Secretary of State with accounts and annual reports, and for the statements of account to be examined and certified by the Comptroller and Auditor General before being laid before Parliament. Clause 28 restricts Scottish Enterprise's involvement with the media industry, while enabling it to advertise in connection with its investment functions without requiring authorisation under the Financial Services Act 1986. Finally, clause 29 makes provision for the registration of agreements made by the two bodies with landowners.

Let me deal now with provisions in the Bill for the Scottish new town development corporations. As the House is well aware, there are five new towns in Scotland and the oldest, East Kilbride, was designated in 1947, and the youngest, Irvine, in 1966. The main objectives in creating them were to assist the dispersal of industry and population from overcrowded inner-city areas, especially Glasgow, and to provide locations for economic expansion.

Development corporations have provided good quality housing and new industrial infrastructure for post-war Britain and have encouraged economic and environmental development. Scottish new town residents have responded well to changing technology, demonstrating their flexibility and capacity to adapt to the needs of the market place. Firms that have set up in the new towns have grown and prospered. The Scottish new towns continue to make a contribution to the economic and social well-being of Scotland and the United Kingdom. The aim of the New Towns Act 1946 was to attain thriving, balanced communities that would ultimately be able to stand on their own feet, and be treated in the same way and have the same status as any other town. The Bill is necessary to bring the new town programme in Scotland to its completion. The Government have always made it clear that new towns should not continue to be distinguished from other towns by the perpetual presence of special public sector support and our policy will enable the new towns to become self-sufficient communities.

Our proposals, on which we have consulted at length and in considerable detail, are similar to the arrangments that have operated for the English new towns, but there are significant differences. For example, we have concluded against having a residuary body for Scotland, but there is scope under the proposals for the transfer of corporation assets to a range of bodies, including Scottish Enterprise and Scottish Homes, to the extent that the assets have not already been disposed of to other parties before dissolution of the corporations takes place.

The present statutory provisions governing the transfer of corporation undertakings and their wind-up and dissolution are contained in sections 35 and 36 of the New Towns (Scotland) Act 1968, but they are inadequate and out of date. New provision is required and I shall now describe briefly the relevant provisions in the Bill.

Mr. Tam Dalyell (Linlithgow) : My hon. Friend the Member for Livingston (Mr. Cook) is a member of the Standing Committee considering the National Health Service and Community Care Bill. Who will do the

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valuations of the properties, and how will the Property Services Agency fit into the new schemes of Scottish Enterprise?

Mr. Rifkind : The corporations have traditionally been responsible for their own valuations and that may be an appropriate way of dealing with the matter. But there are recognised and

well-established procedures for the valuation of public sector assets.

On the relationship between new towns and Scottish Enterprise, as the hon. Gentleman will be aware, there are proposals for the creation--

Mr. Dalyell : I asked about the relationship between the Property Services Agency and property holdings and the new Scottish Enterpise. I asked that partly because, with my hon. Friend the Member for Dumbarton (Mr. McFall), I am involved in considering the Property Services Agency and Crown Suppliers Bill in Committee.

Mr. Rifkind : I am grateful to the hon. Gentleman for clarifying the question, but I am not sure that I can clarify the answer. If the hon. Gentleman will allow me, I shall have the matter involving the PSA looked into and my hon. Friend the Minister of State may be able to deal with it when he replies.

Clause 30 amends the provisions in sections 36 and 36A of the New Towns (Scotland) Act 1968 relating to the procedures for the wind-up and dissolution of the development corporations. It also provides for individual wind-up orders to be made, allowing maximum flexibility in determining when a development corporation should begin the wind-up process. It extends the scope for development corporations to dispose of their property, rights and liabilities and provides for their transfer after a wind-up order has been made. It also empowers the Secretary of State to relieve, by making grants, any financial burden that is imposed by the transfer of corporations' property. The Bill also contains new financial provisions affecting the development corporations. The new town development corporations have always been financed mainly by borrowing. The original expectation was that corporations would incur revenue deficits in their early years, which would be met by borrowing. It was also expected that development of the new towns would create sufficient surplus in time to repay that borrowing. Those assumptions were largely fulfilled for the first generation of new towns. However, it became evident in the early 1980s that in general they would be unlikely ever to generate sufficient surpluses to service and repay their accumulated debt. To remedy that, the Government in 1985 took powers in England and Wales under the New Towns and Urban Development Corporations Act to carry out a reconstruction of the debt of the English and Welsh new towns. That Act also introduced new financial arrangements in the form of grant for the provision of facilities that could not be expected to pay for themselves. Therefore, clause 31 provides for financial reconstruction of the Scottish corporations, and clause 32 provides for the payment of grant to meet the cost of essential infrastructure provisions that cannot be financed by borrowing.

Clauses 33 to 37, and schedules 4 and 5 to which they give effect, contain the necessary supplementary, miscellaneous and general provisions of the Bill.

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In conclusion, let me comment on the local enterprise companies to which I referred. They are crucial to the proposals that are before the House and we have been enormously encouraged by the enthusiastic response that has already made itself known throughout Scotland. Already we have 11 applications from the lowlands of Scotland and a further six from the Highlands and Islands, and I understand that in every other part of Scotland proposals for consortia, which will be put to the Government, are already at an advanced stage of preparation.

Mr. Kirkwood : I am grateful to the Secretary of State for allowing me to intervene a second time, but why was the opportunity not taken to impose a social as well as an economic requirement on the new local enterprise companies operating outside the old Highlands and Islands Development Board area? As the House knows, a social requirement has been imposed on the Highlands area, but there is still no social requirement south of the Highlands and Islands.

Mr. Rifkind : We have replicated the traditional role of the Highlands and Islands Development Board. The fact that the Scottish Development Agency, when it was created in 1975, was not given a social role, unlike the HIDB, was the result of a recognition at that time, which is still relevant, that the particular needs of the Highlands and Islands are distinct from the rest of Scotland. That is reflected in the current legislation.

It is important to remember that the local enterprise companies can be established without the need for primary legislation. They are private sector companies that do not require statute, so they can come into existence at any time. If, as we expect, they come into existence over the next few months, any contractual relationship that they enter into will be not with Scottish Enterprise, which will not yet have come into existence, but with the Scottish Development Agency and the Training Agency in the first instance, but that will be temporary.

Mr. Ernie Ross (Dundee, West) : Will the Secretary of State explain the difference between the arrangements in Scotland and those in England and Wales? He will know that the initial impetus for the change in the delivery of training came from the experience in the United States. He will also know that in England and Wales the Secretary of State for Employment is imposing performance contracts on each training and enterprise council. A performance contract will require a guaranteed placement of trainees before payment is made. Will those same performance contracts be imposed by local enterprise companies on providers of training?

Mr. Rifkind : I advise the hon. Gentleman not to exaggerate the relevance of the experience of the United States to the proposals. Naturally, one is interested in the experience of any part of the world, but essentially we have been influenced by the needs of the Scottish economy and our perception of what would be most appropriate and relevant to the Scottish requirement.

The hon. Gentleman asked about a comparison with TECs in England. There are some similarities, but the differences are even more profound. The role of the enterprise companies will be far wider than those of TECs in England, which will be restricted to training. In Scotland, enterprise companies will also have the

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significant role of business support and development, representing some 80 per cent. of the projects presently carried out by the Scottish Development Agency. In addition to that, there is no counterpart to Scottish Enterprise. Essentially, the relationship will be contractual and it will be necessary over the next few months to work out the precise details of how that contractual relationship will operate. In many respects, it may be similar to that in England and Wales, but not necessarily so. It will be accommodated to meet the specific requirements in the various parts of Scotland.

Mr. Adam Ingram (East Kilbride) : Will the Secretary of State confirm that he intends to set a maximum number of 12 persons to serve on each local enterprise board? Only four of those places will be allocated to local authorities. Lanarkshire has five district councils, as well as Strathclyde regional council, covered by one local enterprise board. Will the Secretary of State further confirm that he has instructed the managing director of East Kilbride development corporation to serve as a public sector representative on that board? If that is so, how can all those local authorities make an input into the running of the local enterprise company in Lanarkshire?

Mr. Rifkind : The hon. Gentleman seems to be suggesting that we have instructed the general manager of East Kilbride development corporation, but that is not so. The Secretary of State will have no power to determine who serves a local enterprise company. I repeat that local enterprise companies will be private sector companies, and nothing in the Bill or in any other provision enables the Government to determine their composition. We have said that we shall be prepared to enter into contractual relations with enterprise companies that are private sector-led, with broadly the proportion of private sector involvement of the type that has been mentioned. However, we shall not be identifying precisely the individuals who should serve on enterprise boards or in enterprise companies--other than in Scottish Enterprise itself.

Several Hon. Members rose --

Mr. Rifkind : I have given way many times during my remarks, but I shall not do so again as I know that other hon. Members wish to participate.

The central theme of the Bill is a devolution--if one wishes to use that word--or a decentralisation of responsibility from Sheffield to Edinburgh, from the Department of Employment to the Scottish Office, and from the centre of Scotland to each of its regions and local communities. It is one of the great ironies that the Labour party has for the past few years been droning on about its belief in the principle of devolution and decentralisation but is now presenting itself as the only body of significance in Scotland that opposes a Bill that provides for major decentralisation and devolution of power both to Scotland and within Scotland.

The hon. Member for Garscadden may tell the House that he is opposed not to the Bill's broad principles but to its detail--and the hon. Member for Fife, Central (Mr. McLeish) nods his head vigorously. The hon. Member for Garscadden has long been a Member of Parliament and will be aware, even if the hon. Member for Fife, Central is not, that if one supports the broad principles of a Bill but disagrees with its details, one does not oppose it on Second

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