House of Commons Hansard Debates for 9 Jan 1990

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Reading but seeks to amend it during the later stages of its progress through the House. That is the view taken by others in Scotland who have some reservations about the detail of the Bill. I say in a spirit of friendliness to the hon. Member for Garscadden that in recent weeks he has been very critical of the Scottish National party for seeming to ignore, for narrow reasons of party political advantage, real Scottish interests. The hon. Member for Garscadden has warned and advised, with all the authority that he can muster, that political parties that seek to give prominence to narrow partisan advantage rather than to identify wider Scottish interests are doomed to failure, rejection and contempt.

I repeat that the hon. Member for Garscadden cannot call on his traditional friends and allies for support. He cannot call on the trade unions, local authorities, or even the Committee on Church and Nation--which must make him, on this issue if not on others, one of the loneliest men in Scotland. Knowing him to be a man whose nature is of the essence sweet, reasonable and conciliatory, I have no doubt that after due consideration, and after examining all the pluses and minuses, and subject to all the necessary reservations, caveats and recommendations, the hon. Member for Garscadden will end up endorsing the Bill. If he does not, he will be repudiating the interests of the people of Scotland and something that the whole of Scotland is anxious to see implemented as soon as possible.

5.54 pm

Mr. Donald Dewar (Glasgow, Garscadden) : I beg to move, to leave out from "That" to the end of the Question and to insert instead thereof :

"This House declines to give a Second Reading to the Enterprise and New Towns (Scotland) Bill because it fails to provide the right framework for rebuilding the Scottish economy and to make proper provision for a true partnership between the private sector, local authorities, trade unions and the wider community and threatens the central strengths of the Scottish Development Agency and the Highlands and Islands Development Board ; and because it fails to guarantee the financial support required for economic resurgence and to ensure that control of training policy is given to Scotland ; deplores the absence of any guarantee that when New Town Development Corporations are wound up, tenants will have the choice of landlord and tenure that they want ; fears the loss of the momentum generated by the Corporations ; and believes that the interests of the residents will not be put first in the disposal of New Town assets." Apparently I have entered the Chamber naked, at least in the mind of the Secretary of State for Scotland. I suppose that I ought to be grateful that at least he did not descend to describing me as an honest politician, which he does when in a particularly uncharitable mood. I unrepentingly move the reasoned amendment in my name and the names of my right hon. and hon. Friends. It is a little harsh of the Secretary of State to describe me as being harsh and pigheaded, and as someone who spends most of his time sulking in a tent. My commitment to the open air life certainly does not run to an enthusiasm for tents.

I accept of course that enterprise and new towns have a number of factors in common. One of them is their rather unlikely linking in the Bill, which raises for both rather more questions than it answers. The Bill blissfully disposes of new towns in three clauses that are tagged to the end of it. They deal with winding up and disposal in a brief outline of statutory powers and enabling legislation

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which advances very little the knowledge of those whose lives are tied up in the new towns, and which offers little more than "The Scottish New Towns : The Way Ahead", which was published last July. The Secretary of State must be aware that that document gave rise to many fears and questions.

The legislation is an anticlimax in respect of new towns, which attaches special significance to the Committee stage--when I hope that Ministers will be a great deal more forthcoming about the way in which winding-up will be effected and the disposal of assets tackled. I accept that winding- up must come. We have always accepted that new towns were there to do a job and that at some point they would form part of the normal administration in Scotland. I pay tribute to the development corporations, to their staff, and above all to the people living in new towns. The vitality and drive that they contribute have undoubtedly made new towns a significant success story.

In Committee, we shall want to probe several matters of concern in the minds of almost everyone in Scotland, including the district councils within which new towns are contained, those involved with the development corporations, and those living in the new towns themselves. One concern is how the new towns will be able to maintain their economic momentum during the winding-up period. We shall want to know more about the role of the local enterprise companies, which we are told will be profit driven and have a normal share structure, articles of association, and a board of directors.

The company will be a normal commercial animal, yet it will inherit a residue of public functions during an important but perhaps destabilised period. We shall want to know more about the relationship between Scottish Enterprise and the companies that will operate in each new town area, local authorities, and the local development boards. There will be a complex mosaic of interlocking responsibilities, and having examined the Bill and the other documentation that has been presented, I have reached the conclusion that a great deal more information must be produced before the House should be asked to put the Bill on to the statute book.

We want to know on what basis assets which, as every right hon. and hon. Member knows, have been generated and developed in the public sector will be valued and sold. We do not want to find that the public sector or even the local development corporation is left with an unattractive residue that it cannot flog off at some figure to other parts of the commercial world. We want to know much more than is revealed by the bare bones of the Bill.

The final point, and I apologise that I have had to make these remarks fairly quickly, is one that the Secretary of State knows balks large in the debate in the new towns at the moment--the future of the housing stock. I do not want to be unfair, and I accept that the Bill does not rule out the possibility of a wide range of choice to individual tenants at the time of winding up. There are saving references to local authorities, but I hope that there will be rather more than that. There are also references to a number of other organisations and possible recipients of the new towns' assets and the housing stock.

In Committee we shall want to convince the Government that they must go considerably further, and that they must give a full range of choice to individual tenants before, and at the point, of winding-up.

The Minister must be aware that in almost every test of public opinion, and in every investigation carried out by

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opinion polls, whether they are organised by a new town corporation such as East Kilbride or by the Government, it is clear that there is at least a significant block of tenants in the new towns who are interested in becoming district council tenants when they have to make a choice. In East Kilbride some 70 per cent. showed that preference. In the Government's inquiry, when asked what they would like now, 63 per cent. of tenants opted for the district council, and when they were asked the more hypothetical question of what they would opt for at the time of winding up, the figure dropped to 47 per cent. That may represent a significant shift in opinion, but it still represents a massive number of people whose choice must be respected. Compare that with the preference for Scottish Homes which some 4 to 5 per cent. opted for, or for private landlords, which only 1 per cent., dropping to something unquantifiable, opted for, and one begins to see that it is important that we make provision for a transfer to district councils, as that is the choice of the individual tenants. It makes a mockery of choice if it exists only if it is exercised as the Secretary of State wishes. The range of options must be comprehensive. I hope that I am giving the Secretary of State fair notice that we shall return to this subject in Committee with energy and persistence.

I do not think that the Secretary of State will object to my quoting one other opinion outwith the Labour party or the new towns themselves, as I think that it is fairly representative. I know of no evidence to show that any organisation does not back my basic case at the moment. I shall quote the Scottish Consumer Council's view on the subject. Peter Gibson, its director, says :

"It would be a surprising vote of no confidence in the attractiveness to tenants of potential new landlords, whether housing associations, co-ops, building societies or new housing trusts set up by development corporation employees, if the government were not to allow district councils to compete on equal terms."

That is a fair way of putting it, and it is in the language of the new Conservative party, and it will no doubt appeal to the hon. Member for Stirling (Mr. Forsyth) who is so influential in the counsels of the Scottish Office. I hope that we shall have no trouble and that in Committee we will find that we are pushing at an open door.

There is largely a deafening silence in the Bill on the subject of Scottish Enterprise and Highlands and Islands Enterprise. The Bill says absolutely nothing about the local enterprise companies. I recognise that the Secretary of State said that they do not need a statutory base, but, as he has described them as the heart of the matter, lying at the centre of the scheme, it makes it more difficult to take a balanced look at Scottish Enterprise or Highlands and Islands Enterprise. That is particularly puzzling to me, because I had an exchange with the hon. Member for Stirling recently on television, in which I predicted that there would be problems controlling the enterprise companies' budgets because of the balance of power between Scottish Enterprise and the constituent companies operating in the area. I was told, in a very nebby way by the Secretary of State, who sounded just like an Edinburgh advocate patronising a Glasgow solicitor, that I clearly had not read the Bill. I have read it with enormous care, but I have found no word, or scrape of the pen, about those issues. I wish that he would be more accurate with his abuse in future, and not put us in this difficult position.

I recognise that the Government were running hard to catch up with what was already happening when they drafted the Bill. The lack of available information

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reinforces the impression of muddle and confusion and I believe that a sense of direction is lacking. As I have said consistently from the beginning of this debate, we are not convinced about the structure that the Government are commending in Scottish Enterprise. We welcome unreservedly the fact that there should be a Scottish training agency--I will return to its powers in a moment--but we are not convinced that it has to be behind one door of the Scottish Development Agency. Of course there are links, there has to be interaction and co-operation--I concede that--but it need not necessarily be with the same management structure.

Let us consider the SDA and the HIDB. They have succeeded because they are tight, professional organisations with short lines of communication and with an integrated operation from the top to the bottom. They are the opposite of what is now being proposed in many ways. Those enterprise functions--the supporting of excellence, the use of pump priming funds from the public purse--and all the work of business advice and promotion with which the SDA and the HIDB are associated are very important, but I do not think that they require the same sort of management structure as that needed to organise the hundreds of outlets that provide on-the-ground training, whether employment training, the youth training scheme or some other form. That is not necessarily a happy marriage.

I remember that the Secretary of State said in a Scottish Grand Committee debate that, of course there would have to be a compromise. The structure that he again referred to today that the SDA has evolved for its own purposes and its present range of

responsibilities will be torn up and another substituted. That shows that, given its traditional role, it is not only a compromise but one that it would not have wanted.

I am not ashamed to stand alone on this issue, although I do not think that I do. I accept that the weight of institutional response probably welcomes the present proposals more than I do. I do not know why the Secretary of State should think that it is dishonourable to stand and argue for what is right--he has made a lifetime career of it. I find it extraordinary.

My impression is that much of the support started with a nod to the general structure but, when one reads the documents, one discovers that that support was heavily qualified. At times it has broken into private grief. Peter Carmichael is one man who speaks for many people in the SDA and he is an interesting witness. In the Glasgow Herald on July 14 last year, Dr. Carmichael, who is the ex-director of the SDA in Scotland, talked about the break-up of the Scottish Development Agency and the weakening of an organisation dedicated to help Scotland expand its economy. He went on :

"I fear for any real strategic business development in Scotland at the national level".

He may have put it in somewhat populist terms in that article, but I believe that he reflected the genuine private unhappiness that anyone who has talked to those involved during the past few months will be aware of.

I admit that this is anecdotal, but the Glasgow Herald of 30 October carried a report that emanated from the international forum held by the Scottish Council (Development and Industry). The article said that the area away from the forum floor was buzzing with comment and that reflected a powerful unofficial agenda and widespread concern that the planned changes would damage

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Scotland's present development, and usher in a system that is incapable of delivering what is promised for it. That is my experience : when people are pushed into corners and asked what they really think, the doubts start to emerge in a pronounced and urgent fashion.

Mr. Rifkind : The response that is already emerging from people anxious to play a part in the proposed consortia belies the hon. Gentleman's analysis. I hope that at some stage he will tell us whether the Opposition believe in decentralising major powers to enterprise companies. I am aware of his reservations about their proposed composition, but I should like him to make clear whether he believes that such companies should exist at all. If he does, I hope that he will appreciate that, if training and the Scottish Development Agency are not integrated, local enterprise companies will have the extraordinarily unattractive responsibility of entering into contractual relations with two entirely separate Government agencies. For that reason, among others, both sides of industry have opposed such arrangements, and have said that an integrated agency would be infinitely more desirable.

Mr. Dewar : I understand the points that the Secretary of State has made. It seems that we shall have some interesting debates in Committee. The Opposition are heavily committed to a genuinely devolved structure, but we are not convinced that the Scottish Enterprise companies will constitute the best way of carrying out such wide-ranging duties, or that they will be properly composed for such a task.

I do not want to make too much of the issue of the one-door approach. Let me say in passing, however, that if my suggestion that we retain a development agency and set up a Scottish training agency is such arrant bunkum as the Secretary of State seemed to suggest, he must have some very interesting conversations with his right hon. Friend the Secretary of State for Wales. As he will remember, his right hon. Friend has decided to retain the Welsh Development Agency and to have a Welsh training agency as well, for exactly the reasons that I have advanced.

I do not deny for a moment that this is a matter for genuine debate ; none the less, to suggest that anyone whose ideas differ from those of the right hon. and learned Gentleman is unrepresentative, or has taken leave of his senses, is to advance a view that the Secretary of State for Wales would find extremely interesting.

Mr. Rifkind : I am content for the hon. Gentleman to promote himself as representative of Welsh opinion, as long as he is happy to concede that I am representative of Scottish opinion.

Mr. Dewar : I do not believe in arguing the impossible, and on this occasion I shall decline the Secretary of State's invitation. I believe that there is something of a political motive behind some of the current restructuring. I too remember the attack launched by Mr. Bill Hughes, referred to earlier by the hon. Member for Banff and Buchan (Mr. Salmond). Let me quote from it :

"The SDA has done nothing for Scottish business. It is one big bureaucracy and it hasn't delivered the goods. The best thing about it is its PR organisation."

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In fairness to Mr. Hughes, I should record that he told me that he had been speaking specifically about the SDA's policy on small businesses--although his reservations were stated in terms rather too wide to make that defence entirely convincing.

I believe that the aim is to remove the SDA--both the name and the organisation itself--because it is a constant, unacceptable reminder of a considerable success for the public sector. It represents a distinctly Scottish approach to partnership, which I believe should be retained but which we are in danger of sacrificing.

We shall want to look carefully at the local enterprise companies, both in the Highlands and in the SDA area. For me, they are a largely unknown quantity. We are told that we are to hand over vast powers to the private sector, which will have almost a semi-autonomous fiefdom to administer--all of it based on a narrow ridge of between eight and 12 board members in the SDA area, and between six and 12 in the Highlands and Islands. That must leave little room for trade unions, local authorities and indeed the wider community, whose members ought to be able to make an enormous contribution but will be left to struggle in through the side door.

To understand my doubts, the Secretary of State need only consult his own original White Paper on Scottish Enterprise. A much-quoted passage from paragraph 3 referred to the research carried out for the then Training Commission, which showed that

"less than one in three of those employers asked had a training plan and even fewer had training targets for their labour force. Less than half of the workforce covered by the survey received any training at all in 1986- 87."

Of course we need the important input from the commercial and industrial sectors, but we should not hand them exclusive jurisdiction when they have not even shown enough interest to plan their work force requirements. How can we assume that they will make an excellent job of other people's?

I know about the recent interviews and press publicity concerning the consortia. I do not make too much of the fact that Miss Kay Stratton was involved, as I do not know how influential she was in the evolution of the scheme ; what strikes me as important is that she is from the Department of Employment, and was, I believe, a personal adviser to the late lamented Secretary of State. I do not know whether she holds the same position with his successor. Then there was Mr. Brian Wolfson, chairman of Wembley Stadium--which did not, in my view, make him a particularly relevant or sympathetic figure. I know that the Secretary of State will wish to remind me that others too were involved : there were, for instance, Sir David Nickson and Alistair Mair of the CBI, whose dislike of devolution is a source of constant wonder to me. He must feel very uncomfortable while helping to preside over what, if the Secretary of State is correct, constitutes an element of devolution.

There was also my old school companion, Mr. Angus Grossart : I think that the House will wish to congratulate him on his recent award of a CBE, clearly well earned. I note that one of his first tasks was to interview Sir Michael Herries, a figure not unknown to the right hon. Member for Ayr (Mr. Younger). I gained some amusement from the idea of a very junior member of the Royal Bank of Scotland board interviewing its chairman to find out whether he was a fit and proper person to run an enterprise

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company. It was probably quite a testing little exchange, but I think that it was testing for Mr. Grossart rather than for Sir Michael.

I am entirely prepared to accept that many people are allowing their names to go forward, although some of them may be guid familiar and guid predictable. I note that Sir Norman Macfarlane has had to be slapped down by the Minister of State because, in his capacity as chairman-designate of the Glasgow company, he suggested that his bailiwick--I use the term advisedly--should include Bearsden and Eastwood. I am indebted to the Glasgow Herald for the information that he suggested half jokingly that the new company should be called "Glasgow Corporation" : clearly he has ambitions to become the Pat Lally of Scottish Enterprise.

Then--surprise, surprise--there was Ian Wood of the John Wood Group, and Sir Charles Fraser, who I understand will head the operation in Edinburgh. I had a quick look in the most recent edition of "The Directory of Directors", and discovered that he currently holds 48 directorships. If we add Scottish Enterprise, he will have 49, one for each Labour Member--a splendid idea.

I do not want to make too much of the matter, but I feel that there will be problems over the time and commitment that such people will be required to give Scottish Enterprise. Although I do not doubt that they will set out with the best of intentions, there is a danger that the arrangements will degenerate into a board meeting once a month, and the equivalent of a report to non-executive directors. I also fear that the consultants will have a field day. No doubt Conran Roche and Peat, Marwick, McLintock are already hard at work, and they will be followed by many others.

As my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) will probably point out later in the debate, it is likely that a raft or horde of sub-contractors will all be asking for the right to provide places, and any real innovation and control will be extremely loose.

Sir Donald McCallum of the Scottish Council (Development and Industry) voiced his worry about fragmentation in a speech on 8 December. Many others have made the point that the dangers are real and genuine. There is a danger that the enterprise companies will become very much hyped by their considerable powers. We understand that they will be able to spend up to £250,000 on projects. That is the glitzy side of the job. They will also be able to compete by trying to attract major developments, such as the 14,000 jobs being created in Renfrew and yet another national stadium which has been offered to Paisley only in the last week or so. I foresee that competition of that kind will lead to fragmentation.

The Secretary of State must provide information in Committee about the contracts that are to be made with Scottish Enterprise, which are to last for three years. In my television exchanges with the Secretary of State, I asked him whether the budgets would be controlled or monitored by Scottish Enterprise. I was told that I was mistaken, and that there would only be contracts. I accept that, but I want to know how the contract will be monitored. Will there be sanctions for non-performance? Can the contract be broken and taken away? I do not know the answers to those questions. Before we hand over to a self-selecting and largely self-appointed group of business men a public budget which, according to the Government, could in some areas be as high as £70 million

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or £80 million, we are entitled to know a great deal more about it. For obvious reasons, it will not be a short Committee stage. The Scottish Office will have to tell us how independent Scottish Enterprise will be of the Scottish Office. Very real restrictions concerning training, economic powers and directions are written into a number of clauses. Those restrictions may already be enshrined in the 1975 legislation and are being repeated in the Bill. We shall want to know how the powers will be exercised.

We shall also want to know how independent of the Department of Employment the Scottish Office will be when it comes to training. I gather from the Secretary of State's rather evasive answers today that the Department of Employment will be very much the dominating partner. Most of the Scottish Enterprise companies will simply be implementing established Government policy, which will be overseen by a national task force, in which Sir David Nickson is bivouacked as a nominal and token Scot.

If the Secretary of State thinks that I am the only one who has these worries, I intend to bother him with the views of one of those who enthusiastically supported the concept--Mr. Hamish Morrison of the Scottish Council (Development and Industry). According to a report in The Scotsman, he said :

"Now we have this Scottish Enterprise model. Is it really going to be a decision-making body in its own right? Or is it going to be a retailer for schemes that are devised somewhere else according to different perceptions?"

According to The Scotsman :

"Mr. Morrison said that he believed that the devolution of training proposed was more apparent than real and that Scottish Enterprise would be no more than a cheerleader for nationally constructed schemes."

He may be right. If so, it puts a different complexion on what the Secretary of State told us.

I do not intend to labour the resources issue. We shall have a go at it in Committee. We are told that about £500 million will be available for the whole shooting match. It is an impressive figure, but it is a standstill budget, an amalgamation of the status quo. I want to know whether the Secretary of State can do better than that. I remember, because I always listen with attention to the Secretary of State, that when he appeared with Mr. Jonathan Dimbleby in "On the Record" he gave a clear hint that a good deal more money would be available than simply an amalgamation of existing budgets. We should like to know what, when and how much. I am not encouraged by the explanatory and financial memorandum to the Bill, which refers to the financial implications as being broadly equivalent to what they are at present. It is not a pledge which gets the pulse racing. We want devolution, but we do not want a pretence at devolution to be paraded before the people of Scotland. Devolution must mean some form of democratic control. At the very least, it must mean a genuine measure of community involvement. I am not convinced that either of those conditions has been met. The very opposite is the case. Something is fundamentally wrong with the proposal. It creates a new establishment that is narrowly based and unrepresentative. I do not doubt the genuine interest of those who are volunteering, but they are setting out on an uncertain course towards ill-defined objectives. I cannot get out of my head the phrases in the original White Paper about putting the employers into the driving seat and

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giving them a sense of ownership. I am not in the business of doing that. I want a genuine partnership and genuine co- operative effort. When I consider the pressures that lie ahead, and the shake-up and shake-out that may come after 1992, I see that ministerial confidence about the proposal will be no great shield against economic reality. Only a week or so ago, the National Westminster bank suggested that during the next five years an ever greater gap would open up between the economy of Scotland and the rest of the United Kingdom. Scotland's share of United Kingdom output has declined over the last 32 years. I use that period because I do not want to be accused of partisan politics. In 1988, it was down 8.2 per cent. Our share of employment is below our population ratio. If we had been able to maintain our share throughout that period, another 200,000 people in Scotland would be in employment.

Despite all that has been said, our economy has been in decline relative to the United Kingdom and relative, even more markedly, to Europe. So long as that is the position, it is not right to set out a path that is going in the wrong direction.

Of course we shall encourage people to make what they can of the scheme. It would be silly and Luddite to do otherwise. There is no question of boycotts, or of trying to hold back, or of putting a spoke in the wheel of any enterprise company. However, it would be wrong and irresponsible not to state our reservations. I do not believe that the scheme is a quantum leap, to quote the Secretary of State, or that it will banish the spectre of high unemployment, or that it will make the Scottish economy a leader in Europe. It has been launched on the wrong basis. It has been based to some extent on ideology and political calculation. It does not provide the right structure and it is not the most hopeful way to harness the full range of Scotland's talents. That is why the Opposition cannot support it.

6.17 pm

Mr. George Younger (Ayr) : My Scottish colleagues may be somewhat surprised if I begin by saying that it is enormously refreshing to see the hon. Member for Garscadden (Mr. Dewar) still in splendid form. He does not seem to have lost any of it. I cannot, however, agree with his conclusion. He has done his best to justify the lonely position that my right hon. and learned Friend the Secretary of State for Scotland described him as holding. All that he has said amounts to an enormous agenda for asking questions in Committee and examining the Bill throughout its passage, but he has said nothing that would remotely justify hon. Members in voting against the principle of the Bill.

The hon. Gentleman did not succeed in making a convincing case. The more he tried to make it, the more it appeared that the vast majority of people in Scotland, including all those who were instanced by my right hon. and learned Friend, are right to say not that they approve every detail in the Bill but that its general thrust is right. Many of its provisions have been awaited for a long time by those who are concerned with the Scottish economy, but they had to wait until my right hon. and learned Friend succeeded in finding the means to put them into effect.

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Mr. Ernie Ross : The right hon. Gentleman, who has been responsible for the defence of the country, among other things, over the last few years must find it difficult again to assimilate the Scottish mentality. The Scottish people say that they want training to be under the control of Scottish agencies but that there ought to be a division between training and the very good and progressive role that is played by the Scottish Development Agency. The Secretary of State failed to refer to that honest assessment.

Mr. Younger : I understand the hon. Gentleman's point, but I am certainly not trying to get back into the Scottish mentality as I never left it. Our attitude has to be guided by the judgment of hon. Members on both sides of the House as to what will best bring together the various energies and enthusiasms of the Scottish industrial community to help better development and training. The hon. Member for Garscadden's comments can be summed up by saying that he is strongly in favour of devolution, provided that nothing is devolved to anyone.

I start by welcoming particularly strongly the fact that at long last the training function for Scottish industry will be clearly the responsibility of the Scottish Office and the Secretary of State for Scotland. That is not to criticise the great efforts that have been made in recent years, including the degree of devolution of responsibility that has been achieved. The utmost good will has been shown and great efforts have been made to tailor the training effort to the needs of Scottish particularities, but it has not got as far as we had hoped. Now that we have a United Kingdom training policy with its Scottish component properly situated in the Scottish Office under the control of the Secretary of State --a member of the Cabinet of course--we have achieved the desire of many people in the Scottish economy. It comes at an appropriate time. At no time has the improvement of training, the widening of its scope and a change in attitude towards training been needed more than now.

Despite all that has been done in recent years to transform training--and the situation is completely different from what it was even 10 years ago-- as a nation we still do not really identify or understand the cultural importance of training to our jobs. To some extent, we are still a nation of amateurs who admire the person who can get by and tend to look sideways at the person who is so meticulously trained for what he does that he works really efficiently and methodically all the time. That is a matter of our national attitude which goes way back in history. A closer relationship between the Scottish community and the organisation of training will be a quantum leap, as my right hon. and learned Friend suggested, and will certainly represent a major shift in attitude of everyone in the Scottish economy to the importance of training. Training is overwhelmingly important. No business, large or small, can afford to continue its operations without paying close attention to training. Even the smallest firm has to find a way of taking part in it and making sure that its training is of the highest standard. I should like to pay tribute to Bill Hughes for the way in which he produced the scheme and catalysed it into what my right hon. and learned Friend has put into the Bill. Of course it has widespread support throughout Scotland. That is quite remarkable and is a great encouragement to those involved in it. I am sure that when they get down to work they will be backed up with a wide range of support.

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Much of the debate so far has been concerned with the local enterprise companies. My right hon. and learned Friend had a very good point when he made it clear that if one does not approve of the idea of enterprise companies, certainly in the Scottish context--I do not know anything about the Welsh context which has been mentioned--one has to explain why it would seem sensible to continue the divide between industrial development and promotion generally and training, which is such a vital part of it. Over the years perceptions of training, the ability to provide training and the quality of training have steadily taken a more important role in industrial promotion, and particularly in attracting industry from outside Scotland. It is taking an even more important role now as in many cases industries which are trying to find a place to settle find that the real barrier is not sites, because sites are available, or finance, because there is finance, including grants in some areas, to back them up ; the limiting factor is almost always the availability of skilled labour. That is very much the case today even in areas of high unemployment. On that score, the local enterprise companies will bring together promotion and training and that should be undertaken by local business people.

The hon. Member for Garscadden is among those who are dubious about control of the scheme being in the hands of local people who have been selected from local areas in Scotland. One of the great secrets about the success of the SDA has been the extraordinary efforts that it has made--very successfully--to involve in its work every sort of other body, interest, people, units and firms. In recent years, it would never have made such remarkable achievements by being a public enterprise authority only and trying to do things from above. It has achieved them overwhelmingly in co- operation with local authorities and private enterprise.

It is an extraordinarily good time to make such a change, to look at the enormous successes in the past few years, and to look to the future for the changes that may be needed to do even better. Of course there are still numerous problems in our economy. Of course there are still parts of Scotland where unemployment is higher than it should be. The main reason for that is that the people who are unemployed are not being trained effectively. That is not their fault ; it is our fault over many years.

However, irrespective of that, the Scottish economy is incomparably different and incomparably better than it has been in the past. It has a better record on growth and productivity. It has one of the best records in the United Kingdom for the earnings of people in employment. There are increasing numbers of people in employment in Scotland. For most of the past year there has been the largest ever number of people at work in Scotland.

All those factors suggest that the Scottish economy is in a very good state. That is the overwhelming impression one gets from talking with Scottish business people running large and small businesses throughout the country. The CBI, the Scottish Council (Development and Industry) and many further afield have confirmed that the current climate for business in Scotland is very good, and that optimism and confidence are high throughout Scotland. It is sad and unfortunate that, because that has not had anything like the presentation that it ought to have had, many people in Scotland do not feel the remarkable pride that they should take in a Scottish economy which has been doing extremely well compared with most others in Europe.

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I do not think that we should give the Bill a Second Reading today without referring to the record of the SDA and the HIDB. Although I hope that many of their functions and people will continue for a long time in future under a new name if the Bill is passed, nevertheless it is still a good opportunity to look at the achievements of the SDA.

The general format of the SDA changed quite substantially in the early 1980s and was brought into a much more private enterprise context. Some criticised that as a retrograde step and thought that it would not do so well as a result, but quite the reverse has been the case. We should pay a warm tribute to it for the immense efforts that it made to change the context in which it did its business. It moved from its offices in Glasgow into the community to join not only private enterprise, which was an extremely important part of its work, but local authorities, regional authorities and district councils. Many people who work for the SDA can speak of the difficulties that they had in persuading some local authorities to co-operate with them, but they succeeded in getting that message across and many people and local authorities in Scotland have been thoroughly converted to the fact that they can do effective business with the SDA. There is no better example of that than the city of Glasgow. This is its year of culture, but that is something smaller than the enormous transformation in the fabric, spirit and everything that has gone on in Glasgow for the past few years. Overwhelmingly the SDA has not only contributed but has taken the initiative. Perhaps it was essential for somebody to do that, but all the big initiatives in Glasgow had their origins in the SDA, such as the exhibition centre, which undoubtedly was a private enterprise organisation but which was initiated by the SDA and for which it arranged funding from local authorities and the private sector.

There is no question but that the cement that held together the four different components of the Glasgow area eastern renewal and made it so enormously successful was the SDA. It offered its officials, skills and diplomatic skills and held them together in a way that nothing else could have done. It also had to give leadership on the environment to convince people whose sights understandably were set solely on the main objective ; but that main objective of a better Glasgow with more jobs and better industries would not have been achieved unless the SDA had first put right the environment. Some of the worst eyesores in Glasgow were cleared up. The SDA introduced private housing into areas that needed, and got, a lift, and many parts of Glasgow are a monument to that. Although it did not have much to do with it, one can add to that the enormous boom in housing association activity in Glasgow. Much local enthusiasm was harnessed and driven by local people, which led to many marvellous homes of great quality and remarkably improved the appearance of the city in recent years.

Mrs. Maria Fyfe (Glasgow, Maryhill) : Notwithstanding the enormous improvements in housing in Glasgow, including housing association housing which has recently been built in my constituency in particular, the massive problem of unemployment remains. Of the 20 worst constituencies for unemployment in Britain, no fewer than eight are in Glasgow. How will enterprise companies provide training when jobs are not available?

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Mr. Younger : I respect the hon. Lady's feelings, and I am sure that I would share them were I in her position, but it does nothing for Glasgow not to recognise its enormous achievements. Unless we recognise what has been done, why it has been done and by whom, it is most unlikely that we shall be able effectively to tackle the next stage of solving the worst problems. As the hon. Lady rightly said, there is still much to be done in Glasgow, but it is no good turning our backs on what has been done and belittling it. One should be proud of it, and I believe that Glasgow is ; that certainly is the impression that one gets from talking to anyone in it.

Mrs. Fyfe : On a point of order, Mr. Speaker. I draw the right hon. Gentleman's attention to what I said at the beginning of my intervention. If he reads Hansard tomorrow, he will find that I acknowledged the improvements in housing in Glasgow. Far from ignoring them, I acknowledged them at the beginning of my intervention.

Mr. Younger : I do not dispute that, but I urge the hon. Lady to do more to solve the remaining problems and not to pretend that many have not already been solved. There may be lessons in that that we can all learn.

Mr. Mike Watson (Glasgow, Central) : The right hon. Gentleman said that we should recognise what has been done. I am prepared to recognise the role of the SDA in the Glasgow eastern area renewal--the so-called GEAR project--but he failed to mention the role of Glasgow district council and Strathclyde regional council, which was vital to the success of that project. With that in mind, will he impress on Ministers that local authorities have a vital role to play in Scottish Enterprise?

Mr. Younger : I emphasised that the SDA has been very successful in working with local authorities, and I pay tribute to it for that. It is unnecessary to suggest to my right hon. and learned Friend that local authorities have a vital role to play in Scottish Enterprise because he acknowledged that in his speech. The hon. Gentleman and I agree on that.

In Glasgow, the St. Enoch centre and the garden festival were enormously influenced by the SDA. We should pay a great tribute to Sir Robin Duthie and George Matthesson, who did much for the SDA over the years, and all the staff who worked with them.

I am sure that the hon. Member for Dundee, West (Mr. Ross) is anxious for me to mention that the transformation in Dundee has been no less remarkable than that in Glasgow. Anyone who has not visited Dundee for 10 years would hardly know what city he was in if he did so today. That has been achieved with the enormous co-operation of the local authorities, people with interests in Dundee and private enterprise, but the catalyst was the SDA, and no one can take that away from it. I hope that in Committee--I know that my right hon. and learned Friend the Secretary of State believes this- -we shall ensure that the skills and expertise that the SDA has used so effectively are carried through as much as possible into the new organisation and given a new opportunity to flower.

In the interests of time, I have not dealt with the Highlands and Islands Development Board. It has achieved many successes and I have no doubt that its work is equally appreciated in the Highlands.

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I must also mention the leg-up scheme--a strangely named scheme--which was the brainchild of the SDA. It has been used in many smaller communities throughout Scotland. As hon. Members will know, the catalyst for it was the SDA and much of the money was private, but one brought about the success of the other. It was a great success story, and I hope that Sir David Nickson, whom we wish every success in his work, will be able to capitalise on it.

The key element in much of the success of the SDA has been the skill and dedication of its staff. They are impressive people of great ability, and we must never take them for granted. There are two things that we must not take for granted when talking about them. First--I know that my right hon. and learned Friend will probably have difficulties with his colleagues and the Treasury on this--we must ensure that we pay what is necessary to get the best people to run the technical side of Scottish Enterprise, as we had with the SDA. I know from my colleagues that it is difficult to obtain agreement for that, but it is vital.

Secondly, we shall not keep the best people to do the jobs--even if we pay them as we should--if they do not feel that they are working in a team in which their peers are of similar quality. These people are mobile and very much in demand. I am sure that Sir David Nickson wants the teams working in Scottish Enterprise to be of as high a quality as those who have worked with such success in the SDA. I agreed with the hon. Member for Garscadden when he said that the Scottish new towns were a remarkable Scottish success story. They have always been different from the new towns south of the border. In most cases, they have been outstandingly successful. Over the past seven years, no less than 40 per cent. of inward investment by value has been attracted to our new towns. I know from visiting many overseas companies which were thinking of coming to Scotland that one could talk as much as one liked--and I did--about the opportunities everywhere in Scotland but that there was an enormously strong pull from the new towns because companies liked what they saw there. Some of the lessons have spread beyond the new towns and other areas have benefited. The achievement of 40 per cent. by value is impressive and over 30 per cent. of jobs has been provided by the new towns. The hon. Member for Garscadden touched on that lesson.

Mr. Ingram : The right hon. Gentleman will remember that when he was Secretary of State for Scotland he issued a policy statement on the housing aspects of the new towns. He said :

"Once the winding up process begins housing still held by a corporation will be transferred as soon as practicable to the District Council within whose boundaries the town is situated." It was not long ago that he made that statement, but I assume that he has changed his mind as he now supports the Government's policy. What has caused him to change his mind? Does he accept that it should at least be an option for the tenants of development corporations to choose the district council if all the houses are not to be transferred to the same district council?

Mr. Younger : I appreciate that, but, having read the Bill carefully, I believe that it contains that option. The hon. Member for Garscadden also said that he assumed from the Bill that those possibilities were not ruled out. People

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will be able to exercise choice. I do not know how practical it will be for each householder to exercise a different preference from his neighbour, but I am sure that my hon. Friend the Minister will be able to tell us what options are in the Bill. I assume that tenants will have options and that is certainly in keeping with the enormous change that has taken place in Scottish attitudes to homes in the past few years. That is especially true of the new towns. More than 50 per cent. of people in the new towns have elected to become home owners, which shows a remarkable change of attitude in the past 10 years.

I have now spoken for long enough and I am grateful to the House for listening to me. The whole House should support the Bill and I hope that the hon. Member for Garscadden will think hard before he votes against the principle of the Bill. He has every right to try to alter it in Committee, and I am sure that he will try to do so, but there are no grounds for voting against the principle of the Bill. The Bill is another Scottish first and comes at a time when the Scottish economy is a pillar or success in western Europe. The Bill has a wide measure of support among the people of Scotland, as is shown by business people and others who have expressed their views. 6.43 pm

Mr. Norman Hogg (Cumbernauld and Kilsyth) : I shall not follow closely the speech of the right hon. Member for Ayr (Mr. Younger). He made a fairly substantial speech and clearly he is setting out his stall, as it were, to become Leader of the House of Lords. I am sorry to say that he will be disappointed because he will be shadow Leader for the Conservatives in the House of Lords. However, he has made such a good case for the new towns this afternoon that I intend to submit his name to the Committee of Selection so that he can be selected for the Standing Committee and can give us a hand in making the case for the new towns. I hope that I shall be appointed to that Standing Committee.

I shall not say a great deal in detail about the proposals that apply to Scottish Enterprise, and Highlands and Islands Enterprise, but will confine my remarks to the new towns. In Committee I shall, of course, play my part in debating the other important matters. My first interest in the new towns arose in 1967 when I was appointed a district officer for the National and Local Government Officers Association. My first job there was to deal with a problem in Cumbernauld. I was surprised 12 years later to discover that I was Member of Parliament for that new town. Throughout my 23 years' association with Cumbernauld and the other new towns, I have never doubted the mertis of the new town idea. Like the right hon. Member for Ayr, I believe that their record speaks for itself. I am proud of that, because new towns were set up by the 1945 Labour Government. They are a distinctly Socialist idea--and a very successful one at that.

At the end of the war, the great cities of Glasgow and Edinburgh had serious housing, social and environmental problems. It was clear that solutions could not be found within the context of those great cities and that there had to be another way forward. The new towns were one of the solutions. They offered green field sites, quality housing, jobs and a planned environment. The development corporations were instruments of economic intervention and no one can deny their success in that respect. I remember the right hon. Member for Ayr telling me in

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