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that the Government, too, are anxious about homelessness. It is in the major cities, and especially in the pressure areas of London and the south-east, that homelessness presents the most serious difficulties.None the less, I can understand councils elsewhere being worried about the problem of homelessness, especially where families with young children are involved. I applaud those councils who are prepared to use their expertise and their imagination in tackling it. I commend Wakefield's record in avoiding the need to house families in bed-and-breakfast accommodation. I know that Wakefield is keen to see more hostel accommodation provided and is prepared to work with the housing association movement to achieve that end. Nor is it only with hostels that housing associations can help. This year has seen the Housing Corporation's resources increase yet again ; and they are expected to continue to do so for some time. My hon. Friend the Minister for Housing and Planning recently announced that the corporation's gross expenditure for 1993-94 is expected to exceed £2 billion, a 65 per cent. increase over the current year.
Local authorities have, for some time, been encouraged to adopt a more entrepreneurial and enabling role towards housing provision. With their ability to offer financial assistance to private landlords, including housing associations, and their capacity to assemble land for housing purposes, local authorities have an unrivalled opportunity to influence the future of housing in their area. Housing associations are now even better placed than ever before to make a significant contribution to meeting the needs of the homeless. To do this they can obtain assistance from local authorities, in the form of cheap or free land or through grants of one sort or another, with funding from the Housing Corporation and from their own sources of private sector finance.
The Housing Corporation recently announced its intention that 50 per cent. of the general needs housing developments which it funds should be targeted to dealing with homelessness problems. Together, the housing
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association movement and well managed and go -ahead local housing authorities should be capable of filling any gap left by the main private rented and owner occupied sectors. In this respect, I commend Wakefield for the positive way in which it took on the task of supporting a housing association in maintaining former British Coal properties in productive use.Another problem that Wakefield has consistently drawn to our attention is the condition of its private sector stock. There is no doubt that, although not facing the worst problems in the region, the council has to deal with some difficult problems. In this area, the new renovation grants system should be welcomed. The complexities and restrictions of the old system have been swept aside. A test of resources now helps to ensure that grants are targeted to those people most in need of assistance.
Wakefield has also expressed concern about the problems that the council faces because of the high demand for renovation grants which local authorities are under a duty to pay where an applicant is an owner-occupier living in unfit property. The council has applied to the Department for a supplementary credit approval to assist it in finding the resources to pay such grants. That bid, together with those from other authorities, is currently being assessed and a decision will be taken as soon as possible.
Wakefield is also at the forefront of activity in the new area renewal categories and should be applauded for its willingness to take on the task of preparing and declaring the Smawthorne area. It is worth noting here that the council received an undertaking from the Department to provide resource cover of up to £555,000 subject to the relevant works being undertaken.
I am pleased to see Wakefield's initiative in setting up its housing aid service, which will be of inestimable value to the public and to the council.
The opportunities for a committed local authority such as Wakefield to use its expertise should enable it to meet the needs of all those who must look for social rented accommodation in the area.
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Scotch Whisky (Excise Duty)
1 pm
Mr. Bill Walker (Tayside, North) : The House will know that my interest in Scotch whisky is purely a constituency interest and that, as a teetotal Member of Parliament, I am motivated largely by my recognition of the fact that the Scotch whisky industry is Scotland's premier exporting industry. Unlike oil and gas, whisky is not finite. The barley, the grain and the water are all renewable. The skills and the knowledge of how to produce the whisky are passed on from generation to generation. If we husband the resources and maintain the quality, provided we do not foul the market, this marvellous wealth and job-creating product will continue for ever.
I welcome my hon. Friend the Member for Chislehurst (Mr. Sims), who is adviser to the Scotch Whisky Association ; and I also welcome my hon. Friend the Member for Eastwood (Mr. Stewart), the
Under-Secretary of State, to the Front Bench. I know that he, like me, has taken a long-standing interest in the well-being of the Scotch whisky industry. I have already made a contribution towards maintaining the quality. The Scotch Whisky Act 1988 was the result of my private Member's Bill. I now look to the Government to play their part to ensure that this wealth-creating product has a continuing European and worldwide growth share of the drinks market. That market is as much a fashion market, and taxation and local conditions can have a massive impact on spending patterns and habits.
When the Conservatives came to office in 1979, the Scotch whisky industry was in a parlous state. Stocks were high, distilleries were being closed and the bottling and blending plants were on short time. Sensible taxation policies changed all that and today, the industry is reopening distilleries, bottling and blending plants are busy and stocks are far more in balance. The industry thanks the Government for their sensible taxation policy.
I welcome the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) to the Opposition Front Bench, where he should have been years ago. As a Conservative Member, I have to be an optimist. I am optimistic that Ministers will listen carefully to what I have to say and that, as in previous years, they will respond positively to my proposals. It is, after all, in their interests as well as in the interests of the people of Scotland that the Scotch whisky industry should continue to prosper. Why do I say that?
The Treasury benefits each year to the tune of more than £1,000 million, which is made up of £750 million in excise duty and about £250 million in value added tax. The contribution of Scotch to the Treasury is equivalent to almost £20 for every individual in the United Kingdom.
It is interesting to note that the United Kingdom is the second largest market in the world for Scotch whisky. That is important to us. However, in contrast to its overseas competitors, Scotch whisky is penalised in its own home market by an inequitable tax regime that discriminates against it and other spirits in favour of wine and beer.
It would be an understatement to say that the Scotch whisky industry was extremely disappointed by the 1990 Budget decision to widen the already substantial excise duty discrimination against spirits in favour of wine and beer. The industry and Scottish Members of all parties had
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understood that the Government accepted the justice of the case for seeking a change in the United Kingdom's structure of excise duties. The Scotch whisky industry is no lame duck industry with special pleadings and in need of a prop. It is an export success industry which exports more than 90 per cent. of everything produced amounting to £1,500 million worth of exports. It is unquestionably one of the United Kingdom's winners. Consequently, it makes no sense to its export efforts to weaken its important home markets.It is in the national interest to introduce a structure of excise duties under which all alcoholic drinks are taxed at the same rate per degree of alcohol. The industry and I recognise that such a system cannot be introduced overnight. However, could not the differentials in the duty on different drinks be phased in over a period of, say, three years?
Why do we need to act now? I hope that my hon. Friend the Minister will think carefully before she replies and will accept the logic of the case. I ask her to bear in mind the compelling arguments for the reforms that I am proposing. I believe that it is in the national interest to end discrimination against an industry that makes such a major contribution to this country's economic prosperity through employment, corporate strength, Exchequer revenues and export earnings.
About 16,000 people are directly employed in the production of Scotch, and 95 per cent. of the jobs are in Scotland. Many of those jobs are in constituencies such as mine, a large rural constituency. The industry also supports many other jobs in related sectors such as retailing, transport and tourism and in the many activities that supply inputs to production like bottling, distribution and marketing, which involve farming, engineering, glass production, construction, packaging, advertising and many other services.
Scotch whisky contributes to the corporate strength of the United Kingdom drinks industry as a core element of some of the United Kingdom's largest companies. Three of the four largest drinks companies in the world-- Guinness, Allied Lyons and Grand Metropolitan--are British-owned, and more than 120 United Kingdom companies are producers or traders of Scotch whisky.
As I said earlier, the industry contributes more than £1,000 million to Exchequer revenues. I only wish that every other industry could contribute so handsomely to the Exchequer's coffers. In the year to July 1990, Scotch exports were valued at more than £1,500 million. Scotch whisky is sold in every country that permits its import, and I wish that that could be said of all British products. In value terms, it is the United Kingdom's fifth largest manufacturing export, and it is the largest export to the important market of Japan, earning more than 5 per cent., of the total value of United Kingdom exports to that country. In that regard, I thank my right hon. and hon. Friends on the Government Front Bench for their magnificent efforts in recent years to improve the market in Japan. Scotch exports make a major contribution to the United Kingdom's balance of trade. The trading account on alcoholic drinks products shows a trading surplus that is entirely due to Scotch. Indeed, 98 per cent. of our wine consumption is imported, producing an annual trading deficit of £760 million. Surprisingly--as a teetotaller, I was certainly surprised--we also have a deficit on trade in beer.
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Scotch whisky alone is responsible for turning a trading deficit of £867 million on other alcoholic drinks into an overall surplus in the United Kingdom's interest of over £400 million. The export earnings of Scotch per employee are £80,000, which is four times that of the engineering and manufacturing industries, eight times that produced by those in the food, drink and tobacco industries, and more than twice that produced by chemicals and man-made fibres. In contrast to its export success, Scotch has faced intensive competition in its own domestic market in the United Kingdom, especially from imported wine. This is where excise duty really bites. Scotch whisky's share of domestic expenditure on alcoholic beverages is falling and has been falling for many years. A major contributory factor is that Scotch carries much higher excise duties in a market where the general level of excise duties is high by the standards of other countries. Domestic sales of Scotch are stagnant and have never recovered from the sharp falls of the early 1980s when there was an almost 18 per cent. drop over five years. In the first six months of 1990, home sales of Scotch were down by 2.5 per cent. compared with the same period last year.The decline of Scotch and other spirits in the domestic market is associated with an increase in the share taken by wine. Beer's share of the total consumer expenditure has been stable for some time. The consumer of a typical glass measure of Scotch pays nearly double the excise duty of the consumer ordering a glass of wine or half a pint of beer. In that example, all consume the same volume of alcohol. It is no wonder that consumers and customers switch their expenditure away from spirits.
The tax structures of many member states of the European Community have the opposite effect to the structures of the United Kingdom. Of the six EEC states which have wine as their main product, five have no tax at all on their home product, and the sixth, France, imposes a duty which is equivalent to about 1p per litre. All six countries, except Greece with no alcohol duty, impose a duty on spirits, thus benefiting home production against imports. As a result, the present United Kingdom tax structure makes any future moves towards harmonisation or approximation much more difficult for Scotch whisky within the European Community.
I remind my hon. Friend that, for the United Kingdom alone among European Community countries, the spirits industry is of predominant significance. If we get it wrong and adversely affect the Scotch whisky industry, the political consequences for our party in Scotland cannot be overstated. We could be described almost as a unique species in Scotland. I tell people that I am a minority of a minority, being a Scottish Conservative Member of Parliament.
In a letter dated 20 July 1989 to my hon. Friend the Member for Stirling (Mr. Forsyth), the Chief Secretary to the Treasury wrote : "The existing duty system allows the Chancellor the opportunity to take account of changes in the economic conditions affecting each of the drinks industries in setting duty rates."
I only wish that the evidence supported that claim.
Wine, which is not a United Kingdom-based industry, is taking an increasing share of the United Kingdom's drinks market. As I said earlier, beer's share is static. Only spirits have experienced both a reduced market share and a decline in the real price of the product. It is not possible
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for the Exchequer to squeeze more excise duty out of the Scotch whisky industry, as it cannot sustain its present market share while facing competition from other cheaper drinks bearing a much lower rate of duty. I welcome my hon. Friend the Member for Eastwood to the Front Bench. This shows the interest that Scotch whisky has for Scottish Members--of course, I mean the industry, not the product. The 1988 family expenditure survey shows that beer and spirits drinkers have a similar income distribution, while wine drinkers are more concentrated in the high-income groups. That is a significant and important fact. I am saying in a roundabout way that those people can afford to pay more. If equity is the objective, taxes should be raised on wine relative to those on spirits and beer.What are the social considerations? As I said, I am a teetotaller. I have campaigned actively on alcohol-related health problems, drink-driving and anti-social behaviour, including under-age drinking. I believe, as does the Royal College of Psychiatrists, that
"it is the alcohol content which matters--rather than the unique qualities of a particular drink. The widespread belief--that only spirits drinkers become alcoholics--is quite without foundation.' I understand from a parliamentary answer that, in England and Wales, 90 per cent. of drink- related road accidents are caused by people drinking beer. Social considerations demand that all alcoholic drinks are treated equitably and there can be no justification for discriminating against spirits. After all, if someone is stopped while driving a car and is tested, the police are not interested in what he has been drinking ; they are concerned with the alcohol content of the blood. That should be the same measure for taxation. All the evidence suggests that, for social reasons, all drinks should be taxed at the same rate per degree of alcohol content. It is in the national interest that we should cease discriminating against Scotch whisky. It encourages imports of wine and has an adverse affect on the balance of trade. It encourages emulation by overseas Governments. Indeed, recently in Japan the director-general of the Scotch Whisky Association was invited to explain to the Ministry of Finance why the Japanese Government should not follow the United Kingdom Government's example and discriminate against Scotch whisky. The Institute of Fiscal Studies recently recommended that all alcoholic drinks should be taxked at the same rate per degree of alcohol content. Therefore, it is not just the Scotch whisky industry. Scotch Whisky Association or me making these comments. The institute calculated--this pleases me no end--that equalising rates of duty per unit of alcohol at the present rate for spirits and the rates for all drinks would raise excise duty by 14 per cent. and that VAT revenue would increase by almost 3 per cent. To anyone who is interested in getting funds into the Government's coffers, that must be a good way of going about it, because it is an indirect tax, of which Conservative Members approve.
Another important benefit of levelling up taxes is that it would reduce wine imports. Using customs and excise drinks equation estimates of elasticity of demand for wine, the Institute of Fiscal Studies estimates that wine imports would fall by more than £200 million per annum. That could only be good for the balance of payments.
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Taxing all drinks at the same rate per unit of alcohol content would be administratively easy to operate. It would also improve United Kingdom employment prospects, reduce the distortion of consumer choice and discourage emulation of United Kingdom practices overseas. The time for tax reform is long overdue. There is no conceivable interest that provides any rational basis for continuing discrimination against the Scotch whisky industry.I have made my contribution by ensuring that the quality and quantity of alcohol in Scotch cannot be diluted. I look now to the Government to take the measures necessary to create an environment and tax regime in which this industry--Scotland's premier exporting industry and one of the United Kingdom's main exporters--will continue to provide massive revenues for the Treasury, huge exports and, from a constituency point of view, continuing employment.
I welcome the opportunity to place on record my views about this important and fundamental industry in Scotland. It would not be overstating the case to say that Scotch is recognised worldwide as unique. It can be obtained from only one country in the world, and it is up to us to protect it.
Mr. Frank Dobson (Holborn and St. Pancras) : On a point of order, Mr. Deputy Speaker. I am reluctant to iterrupt this important debate, but, as you will know, Mr. Speaker has ruled that Members of Parliament may not be denied access to Downing street. My hon. Friend the Member for Newham, North-West (Mr. Banks) and I had arranged to present a letter setting out the concern of ourselves and others about the rundown state of the health service in London and, in particular, the problems at Great Ormond Street hospital for sick children. We had arranged to be there at 1 o'clock with a number of other people and we were denied access. We eventually discovered that we had been denied access not by the police, who are only doing the job that they have been asked to do, but by the Government's public relations managers, because they are waiting until it is convenient for the Prime Minister to be filmed receiving his Christmas turkey. Since Mr. Speaker has ruled that hon. Members may not be denied access to No. 10 Downing street, I should be grateful if you would take this up with the appropriate authorities.
Mr. Deputy Speaker (Mr. Harold Walker) : I was not aware that Mr. Speaker had so ruled, but I would not dream of questioning what the hon. Gentleman has said. No doubt his point will be drawn to the Prime Minister's attention.
While I am on my feet, I draw the House's attention to the fact that these half-hour Adjournment debates on the occasion of the Christmas Adjournment should be so arranged as to allow the Minister adequate time to reply. I regret that the Minister's time to reply to the debate has been curtailed.
1.22 pm
The Minister of State, Treasury (Mrs. Gillian Shephard) : I congratulate my hon. Friend the Member for Tayside, North (Mr. Walker) on initiating this debate on Scotch whisky at an appropriate and festive time of year.
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I congratulate him on being such an excellent advocate for a product that he does not even enjoy. I am in the same position as my hon. Friend, but, like him, I can appreciate that it is a fine, high-quality product of which we should all be proud.Obviously, the Government fully recognise the valuable contribution made by the Scotch whisky industry to exports. The industry is to be congratulated on its magnificent achievement of exporting 85 per cent. of its total production, resulting in about £1.5 billion of income. It has emerged from the difficult years of the mid-1980s strengthened and invigorated largely, although not entirely--there has been Government help--by its own effort in marketing and targeting. I am delighted to note that some distilleries that had been mothballed for some years have successfully reopened.
The burden of my hon. Friend's debate has been the question of taxation of whisky but, in passing, I should like to mention some ways in which the Government should helped the Scotch whisky industry over the past 10 years.
It is fair to say that the duty ratio in relation to alcohol content between spirits and beer and wine has fallen from 2.8:1 to 1.7:1 and the tax on a normal bottle of whisky has fallen from some 80 per cent. of the retail price in 1980 to 66 per cent. today. Taking inflation into account during the period May 1979 to April 1990, the duty on spirits has fallen by some 27 per cent. in real terms, while that on beer has risen by 19 per cent. I understand my hon. Friend's concern about the interaction between the duty on wine and beer on the one hand and spirits on the other. I hope that he will accept that such movement as there has been has been positive and in favour of whisky.
My hon. Friend was right to mention his successful private Member's Bill, which is now the Scotch Whisky Act 1988. It enshrines the traditional method of producing Scotch whisky and its maturation in oak casks. He will accept that the Government took the lead in Brussels on the European Community spirits drinks regulations, which came into force last December and ensures that the name and quality of Scotch whisky is protected throughout the Community. The regulation defines the minimum alcoholic strength as 40 per cent. alcohol by volume and ensures that only whisky distilled in Scotland can use the name Scotch whisky.
The Government were instrumental in opening up the Japanese market and reducing the discriminatory duties against Scotch whisky there. We are continuing efforts to remove restrictions on imports of Scotch to Korea and Taiwan. Both markets have great potential. We are fully aware of the general concern to liberalise the Taiwan market for imported spirits and we give support wherever possible. We shall continue to co-operate with the Scotch Whisky Association in certification procedures to prevent counterfeiting and look-alikes. My hon. Friend mentioned the 10 per cent. duty increase in the last Budget. I must point out that it was the first duty increase on spirits since 1985, in contrast to beer, wine and cider, the duty on which was increased in 1988. The duty on spirits in real terms has fallen by 27 per cent. in the past 10 years. I feel constrained to mention cider because I have Gaymers in my constituency and I want to go home safely at the end of the debate.
The burden of my hon. Friend's argument has been the question of unitary taxation. He argued that all alcoholic drinks should be taxed strictly according to their alcohol
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content. I have paid careful attention to his views. As he rightly says, we must not lose sight of the fact that the basic purpose of alcoholic drinks duties--sometimes it is overlooked, but not by my hon. Friend--is to raise revenue for the Government. In the past financial year, those duties brought in nearly £4.5 billion. To achieve that, successive Governments have set out to collect revenue from various drinks rather than from alcohol as such.I was amused when my hon. Friend quoted our right hon. and learned Friend the Chief Secretary to the Treasury. I am obliged to tell my hon. Friend that the present flexible structure allows my right hon. Friend the Chancellor of the Exchequer to take market and industrial factors into account. For example, sparkling wine, which is often regarded as a luxury product, has traditionally been taxed at a higher rate than still wine of the same alcoholic strength. Similarly, cider, which is of the same strength or stronger than average beer, is taxed at a lower rate. To link duties on the basis of alcoholic strength would limit the Chancellor's room for manoeuvre and produce a major upheaval in the market place.
I note that my hon. Friend suggests that time should be taken to look at this and that if such changes were considered they could be phased in over some years. I can assure him that those questions will be considered most carefully by my right hon. Friend the Chancellor in the run-up to next year's Budget. My hon. Friend will not expect me to give any more undertakings now.
My hon. Friend mentioned the European Community. The Government's attitude to centrally imposed tax harmonisation is well known. Such harmonisation as is necessary should come about as a result of the operation of market forces. We have consistently said that member states should be free to set their own rates of duty, in the light of their own fiscal, social and other policies. I believe that my hon. Friend agrees, because part of his argument is that the Government should take into account the interests of the Scotch whisky industry in setting its own duty policies. His comments about the European Community will be taken into account when discussions get under way. I assure my hon. Friend that I listened most carefully to his remarks, which were preceded by my meeting with the Scotch Whisky Association. Clearly that industry is vital to Scotland, and I assure my hon. Friend that the Government will ensure that, just as we have protected its interests in the past, we shall do so in future.
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A77 and M77, Ayrshire
1.30 pm
Mr. William McKelvey (Kilmarnock and Loudoun) : I am grateful for this opportunity to address the House, and perhaps I should explain that my elevation to the Opposition Dispatch Box was self-appointed. It is not the first time that that has happened. I took a leaf out of the book of Mr. Deputy Speaker, my right hon. Friend the Member for Doncaster, Central (Mr. Walker), who did the same thing in 1971--and look how he got on.
Perhaps I may first comment that the debate we have just had on the Scotch whisky industry was important for the whole of Scotland. I value greatly the work of the hon. Member for Tayside, North (Mr. Walker) in respect of that industry, because I have a big constituency interest in it--and I enjoy a dram.
This debate concerns the Ayr road route to the A77 and M77 link, and the decline that will occur in Ayrshire's economy if that project is not put back on schedule and started at the proper time in 1991. I shall summarise the economic issues associated with the A77 extension, concentrating on four main areas. They are the regional perspective, the Ayrshire perspective, the reasons for the 30-month delay in commencing that project and the risk of further slippage if the road building programme is in any way delayed.
The regional perspective and the economic arguments for immediate commencement of the Ayr route are multifactorial, but it is possible to isolate the key and undisputed reason for elevating the Ayr road route to the top of both the Strathclyde regional council and Scottish Development Council road building programmes. There is no doubt that the scheme offers the highest rate of return of all the strategic road schemes in the trunk road programme.
In the cost-benefit analysis undertaken by the Scottish Development Department, the Ayr route recorded a present net value of benefits totalling £236 million on low traffic growth predictions and of £462 million on high traffic growth predictions. A breakdown of the total benefit indicates an evaluation of time savings ranging between £278 million and £500 million, and accident cost savings of between £10.5 million and £14.6 million--to say nothing of the anxiety and distress that can be alleviated by reducing accidents.
The regional economic case was summarised succinctly in the region's application for European regional development funding, which cites the following criteria for progressing the route :
"The Ayr road route would be a major improvement to the strategic road network within the Strathclyde region. It would provide a bypass through heavily congested routes to the south side of Glasgow, and has a vital role in improving links between Glasgow and Ayrshire. It would provide a new fast route between Glasgow and the Ayrshire towns of Ayr, Prestwick, Irving --via the A71, Kilmarnock, and the external communications links of Prestwick airport and Stranraer. It would reduce excess costs to markets served by Prestwick airport and would offer major benefits to Ayrshire in linking it firmly to the national Scottish road network. Improved access to and egress from Ayrshire would open up the potential for inward investment and would encourage small to medium sized enterprise development by opening up new areas, and should have a positive impact on tourism and leisure development."
Thus, the region has proposed a sound economic case to support the Ayr road route in terms of the cost-benefit
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analysis ; improvement of the regional strategic road network ; strengthening of transport links of the metropolitan heart ; improvement of external communication links ; and the widening of economic development opportunities for Ayrshire. Those are all important issues at a time when we hear that the recession, which is now biting in England, is likely to start in Scotland.From a local, Ayrshire, perspective, the economic arguments can be developed even further by examining the benefits that the extension and upgrading of the Ayr road route will have on the existing industrial and commercial base. The savings in anticipated journey times for industry occasioned by the upgrading and the extension of the A77 have been estimated at between 35 and 47 per cent. in off-peak conditions and between 40 and 53 per cent. during peak conditions.
Clearly, the impact that that will have transportation and distribution costs, lead times, improved freight movement times, local supply sourcing, delivery times and inventories will be considerable. From a human resource perspective, the shorter commuting times will widen the scope for Ayrshire firms to draw from the professional and skilled labour pool offered by the city of Glasgow.
The rapid upgrading and extension of the Ayr route is critical to remove the current relative remoteness of Ayrshire from the national motorway network. It will also improve the competitiveness of firms that are already established there.
In recent years, much has been made of the opportunities that are to be derived from the removal of trade barriers in Europe. We are constantly reminded by the Government and asked whether we are ready for the opportunities of 1992, when those barriers are removed. Unless Ayrshire benefits from an increase in infrastructural investment, we shall be on the periphery--or even beyond--of European markets. Already there is a perceived danger that the
peripheralisation associated with the future of the rail network, and an anticipation that the east coast mainline will become the preferred rail route south to London, and to continental Europe for freight services, will be intensified if strategic planning and implementation of an improved road infrastructure is not adhered to, on time, in Ayrshire. We have a right to demand that that scenario is avoided at all costs.
I know that the Minister is familiar with the arguments presented thus far, and I should like to consider the reasons why we now face a further delay of 30 months in the programming of a road, which was originally proposed in 1965, and was probably started by the Romans, if they got to that area.
Both the regional council and the Scottish Office accept and indeed promote the economic justification for the scheme and both have professed a commitment to it. Why, then, is there a 30-month delay? Two weeks ago the new Secretary of State for Scotland announced a £9 million cut in spending on Scotland's roads and transport programme for 1991-92. Clearly, that will substantiate the region's claim that the delay has been occasioned entirely by inadequate total capital allocations.
However, it is on the issue of allocation of resources between competing schemes that the region's commitment to the progression of the Ayr road must be questioned closely. Indeed, in transportation policy and programming
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procedures, the region set a precedent during the 1990-95 cycle by proposing a capital programme comprising its base programme, and a new departure--to add a supplementary programme of expenditure which consisted of additional expenditure identified by the director of roads, over and above that contained in the 1990-95 financial plan. The director of roads' view is that this expenditure has a higher priority than some schemes contained in the base programme--and evidently the Ayr road route. The rationale for affording the supplementary programme greater priority than named schemes within the base programme has to be questioned closely. In case the Minister is unfamiliar with the supplementary expenditure programme, it is categorised as follows :"M8 Pavement Reconstruction Renfrew/Baillieston
M8 Upgrading of Capacity
(a) Drumbeck Connection Improvement
(b) Charing Cross-East of Townhead
Bridge Assessment/Strengthening Replacement, Bridge Refurbishment, Car Park Refurbishment, Town Centre Programme, Public Transport Development Study.
That is the priority given by Strathclyde region to its programme. We shall have to go there and question its representatives very closely. To be fair, I do not think that it gave adequate or, indeed, any consideration to the problems that would face Ayrshire once the priorities were changed.
The prioritisation of expenditure, as well as the capital allocation aspect, has led to the delay in the extension of the upgrading of the A77. A report by the region's chief executive, entitled "Transport Strategy and Capital Programme Review", dated August 1989, has warned :
"Although the TPP Sub-Committee has yet to consider these supplementary bids in detail, it is clear at this stage that if the Council's capital allocations are not increased substantially, then it will be necessary to delay and/or delete a number of named schemes included in the Programme".
The consequential delay for Ayrshire goes further than the A77. In addition to that delay, the A71 improvement at East Holmes has been delayed by 24 months ; the Dalry bypass on the A737 has been delayed by 23 months ; Doon Bridge, Dalmellington B741 has been delayed by 12 months ; the Irvine south approach road bridge has been delayed by 24 months ; the Newmilns relief road A71 has been delayed by 24 months ; and the Dalry realignment has been delayed by eight months. Let us compare the cost of the supplementary programme--£73 million--with the total cost of the Ayr road route, which is some £55 million. The region's claim that the delay is a direct consequence of inadequate capital allocations from central Government becomes somewhat less convincing in the light of those figures. Nevertheless, it has a case. The Secretary of State for Scotland has announced a £9 million cut in the road programme for 1991-92 ; two days before, the former Secretary of State--now Secretary of State for Transport--was able to announce £1 billion additional expenditure on the M25, which is more than we have spent on our roads in Scotland for a decade. Let us address the question why the director of roads in Strathclyde region has prioritised the supplementary expenditure programme- -a prioritisation that was subsequently ratified by the transportation TPP sub-committee, full committee and full council by acceptance of proposed minimum and priority programmes. According to the evaluation, capacity enhancement, repairs to the M8 through Glasgow and, indeed, work on
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the bridge refurbishment and assessment have a greater call on available resources than the Ayr road route and other schemes that are now subject to delay. Obviously, we all consider the work to be done on the bridge essential. We should be finding a way of obtaining additional money, either from the Chancellor of the Exchequer or from Europe.Although we in Ayrshire accept that there will always be interests competing for capital allocations, we cannot afford to accept that, merely for that reason, the Ayr road route--the largest single scheme in the capital programme, which was as yet uncommitted--should be targeted for a further 30-month delay. The introduction of a supplemen-tary programme, described in the document as
"containing those elements of expenditure felt to be necessary but which cannot all be accommodated within present indications of available resources",
and the elevation of that programme to the detriment of the Ayr road route, merit further explanation from the region. It will be pressed for that information.
On 9 December, Kilmarnock and Loudoun district council organised a meeting of all Ayrshire district authorities plus the district of Eastwood. Eastwood has a very strong claim for the upgrading of the road, because of the environmental difficulties that it creates with heavy traffic. For Ayrshire authorities to agree on anything is unique, but for the hon. Member for Eastwood (Mr. Stewart), other Members of Parliament, councillors and representatives of trade and industry to be of one mind underlines the importance of Ayrshire's unanimity. We agreed that the civic heads of all the authorities should meet Charlie Grey and Malcolm Waugh to press our case for reconsideration of the matter by Strathclyde regional council. The British Road Federation kindly wrote to me and said that it was delighted to note that this debate was to be held. Richard Diment, the deputy director, commissioned a report from Transport Action Scotland. I have here the brief prepared by Maureen Orde. Another excellent brief was prepared for me by Miss Jacqueline Cullen, the economic development officer of Kilmarnock. I congratulate her on its contents.
Transport Action Scotland represents all types of road users, including freight-carrying organisations. It has been worried for a long time about the shortcomings of the road system serving Ayrshire. The A77 and the A78 are the most important trunk routes. They link the area to Glasgow and the north. The A76/A75 forms the main trunk route south from Ayrshire to the A74/M74. It is particularly concerned about the delay in implementing the A77 road route, despite the Secretary of State's approval for the scheme, following the public inquiry in 1988.
The existing A77 on the south side of Glasgow is completely inadequate for the huge amount of traffic that it is forced to carry. The problems are exacerbated when drivers reach those sections of the road that are nearest the city centre. Traffic volumes range from 15, 500 vehicles a day south of Newton Mearns to as many as 27,500 vehicles a day on the section south of Nether Auldhouse road, which gives access to the M77 at Dumbreck junction. That colossal volume of traffic has to go through the constituency of the hon. Member for Eastwood before it reaches the motorway. The effect on the environment is completely unacceptable.
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I am glad to see that the hon. Member for Eastwood is nodding. I am grateful for his support, although I realise that his ministerial responsibilities prevent him from speaking today. I have been grateful for his support in the past. I shall hope that I continue to have his support--if not from the Dispatch Box, perhaps spiritually. The road network in Ayrshire is of the utmost importance. Strathclyde regional council advised us to meet the Minister and ask him for more money. I am sure that the Minister realises that early in the new year we shall apply to him for more money. I hope that he will provide us with the opportunity to press the case further if, by now, he has not fully understood the importance of the Ayrshire road route to the economy of the west of Scotland.1.48 pm
The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton) : I congratulate the hon. Member for Kilmarnock anLoudoun (Mr. McKelvey) on his elevation to the Opposition Front Bench for this important debate and on the able and persuasive way in which he has presented the case on behalf of Kilmarnock and Loudoun. I fully agree with the hon. Member that the improvement of road links between Glasgow and south-west Scotland should have high priority. At present, traffic between Glasgow and Kilmarnock encounters a bottleneck between the M8 and the start of the four-lane A77 at Newton Mearns. I am well aware, from the representations that have been made to me by the hon. Member and by my hon. Friend the Member for Eastwood (Mr. Stewart) and from visiting both Kilmarnock and Eastwood, of the delays that can occur. I fully appreciate the costs of these delays.
It may be helpful if I consider first the strategic significance of the Ayr road route scheme--that is, the link proposed between the end of the M77 spur at Dumbreck, off the M8 in Glasgow--the north end of the proposed road --and the A77 at Malletsheugh south of Newton Mearns.
The major emphasis of the Scottish Office's trunk road programme is to improve the key inter-urban roads in Scotland. Our priorities are to complete the central Scotland motorway network and to press ahead with the upgrading of the A74 to motorway. Funding for trunk roads has been increased substantially to meet those objectives. Two years ago, we spent £90 million on new trunk road construction. This year, we have allocated £130 million. The overall total is £200 million, but, as the hon. Gentleman pointed out, a considerable portion must be spent on road safety, on strengthening bridges and on similar activities. The results of that increase in expenditure are clear. Two years ago, we had no motorway schemes in progress. Next year, we shall have six major schemes under construction, all in the central belt of Scotland.
A key to our progress has been our partnership with Strathclyde regional council. It is vital that the trunk and key principal road network in and around Glasgow is upgraded coherently. The jointly funded M80 Stepps bypass is now under construction. Tenders have been invited for a design-and- construct contract for the jointly funded M8 St. James interchange. We have jointly promoted the Ayr road route through a public local inquiry.
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I am pleased to repeat to the hon. Member for Kilmarnock and Loudoun that the emphasis that we place on the completion of the central Scotland motorway network includes high priority for the construction of the Ayr road route. This will provide an important strategic link in the network. Indeed, when complete, there will be continuous motorway, dual-carriageway and single four-lane carriageway link to Ayr from Edinburgh and Glasgow.The hon. Member for Kilmarnock and Loudoun and my hon. Friend the Member for Eastwood will be interested in the two longer-term improvements that are planned for the trunk road south of Malletsheugh. These will upgrade the remaining four-lane single-carriageway section of the road to dual carriageway. The necessary design work and statutory procedures for the schemes are being progressed by Strathclyde regional council, which is acting as our agents for the project. Our programme is to complete the preparatory work for the section between Fenwick and the B764 Eaglesham road during 1992. The remaining length from the B764 to Malletsheugh is expected to be ready during the following year. Thereafter, start dates will be decided on the basis of the available resources and priorities at the time. Final decisions on starts are taken annually each March for the year ahead.
We recognise the importance of all these schemes. In considering allocations to Strathclyde regional council, therefore, and in drawing up the trunk road programme, we have given high priority to the funding necessary to construct the new Ayr road route. The new road from Dumbreck to Malletsheugh comes in two sections. First, within the Glasgow city boundary--from the end of the M77 to Darnley--the new road would be a local road constructed by Strathclyde regional council. Outside the city boundary, from Darnley southwards to Malletsheugh, the new link would be a trunk road. However, the two sections of the road have to be co-ordinated. It would make no sense for one section of the road to end in the middle of a field at Darnley, without the other to meet it.
Within Glasgow, and on the outskirts of the city, the A77 is mainly single carriageway. It carries large volumes of local, long-distance and commuter traffic. I am aware that current volumes of traffic in south-west Glasgow cause extensive congestion for considerable periods of the day. The new road will provide substantial benefits to through traffic by reducing delays, will benefit local traffic by easing congestion and will improve road safety by reducing road-user conflicts. The scheme benefits are sufficient to provide, as the hon. Gentleman rightly suggested, a high economic return on investment. The Scottish Office has said that it will be prepared to proceed with the trunk road section when Strathclyde regional council constructs the new local road. Indeed, as the greater part of the route is Strathclyde's, we cannot move on the trunk road portion until it has let contracts. The key, therefore, to whether the new route proceeds is its willingness to devote resources to its part of the new link.
With that point in mind, in our capital allocations to Strathclyde regional council for 1990-91, we added £5.2 million to the provisional figure previously notified. Strathclyde's allocation was therefore increased to £73.6 million. That increase included £2.7 million on the
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