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Mr. Jenkin: On a point of order, Mr. Deputy Speaker. From his comments, it appears that the hon. Member for Banff and Buchan (Mr. Salmond) has been furnished with a crucial document relevant to the debate by the Scottish Office--an official document that is not available to other hon. Members. For the benefit of proper debate, will you consider a short adjournment so that we can be given that document? In view of the number of hon. Members who want to speak in the debate, will you seek an undertaking from the Government that they will give us the document, so that the debate can continue uninterrupted?
Mr. Salmond: Further to that point of order, Mr. Deputy Speaker. I regret that the hon. Member for North Essex (Mr. Jenkin) misleads the House. I most certainly was not furnished with the document to which he refers by any Department. I was asking the Government about its bona fides and if they would put it in the Library. I am not responsible for the Conservative party's lack of information sources.
Mr. Deputy Speaker (Sir Alan Haselhurst): The Chair is not responsible for information provided for the House. That is the responsibility of Ministers. We shall no doubt hear from the Minister in due course.
11.49 am
Mr. David Chidgey (Eastleigh): I congratulate the hon. Member for Eccles (Mr. Stewart) on his most informative maiden speech. What a shame it is that he threw his other
speeches away. He could have placed them in the Library for hon. Members' enjoyment. Perhaps we can look forward to that in future.
There is a danger of the United Kingdom's success in attracting inward investment leading to a sense of complacency. We could spend all day discussing the squabbles between Scotland, Wales and the English regions about how investment grants are distributed, but that would be a distraction because the game is moving on. We have only to consider recent events in Korea to realise that.
We take great pride in the fact that we have attracted about two thirds of Korean global investment in the past three years, amounting to about £6.75 billion. But the bubble can burst as easily as it swells. Time does not allow me to go through the three disasters that we face; suffice it to say that some 6,000 jobs that we thought we had in Scotland, Wales and the north-west seem to be substantially at risk, with about £2 billion worth of investment now cancelled, delayed or in doubt. That affects the whole of the United Kingdom, not just one area.
The major threat to inward investment is not just the volatility of the Asian economies, but the growing competition for that investment from other parts of the world, particularly eastern Europe. For instance, the state incentives now on offer for inward investment in the Czech republic in some cases amount to funding 50 per cent. of a project. Compared with that, the sort of inducement that the United Kingdom can offer through Government grants is paltry.
Pursuing an international auction on ever greater financial inducements leads us up a blind alley. It is essential that we understand that financial inducements are only part of the equation. Potential long-term investors are more concerned about the quality and skills of the work force, the modern management techniques available, and the efficiency and productivity from which their investments will benefit. Turf wars between Scotland, Wales and the English regions are a bit of a smokescreen. The claims and counterclaims on financial packages that are available in Scotland or Wales compared with the English regions only undermine our overall inward investment performance.
I welcome the introduction of a concordat by the Department of Trade and Industry to resolve such differences and arguments, but it is essential to clarify the DTI's role in that. I hope that the Minister will do so today. What is the precise difference between the DTI vetting projects and the DTI vetoing projects? That is a question of semantics that I have yet to get to the bottom of.
The concordat should not become an excuse for smothering initiative in national and regional agencies. It must not introduce centralised, bureaucratic control from Whitehall. It must not be used as a way of delaying decisions through DTI interference in potential projects. It must not be allowed to breed indifference to the needs of Britain's potential and prospective clients.
Inward investment is a complex and varied process.For example, green-field development projects--new factories and manufacturing plants, the projects on which all the wrangling seems to concentrate--represent only some 5 per cent. of total inward investment in the UK. As Neil Hood from Strathclyde university has pointed out, the vast bulk of inward investment is through
mergers, acquisitions and alliances--projects which are not necessarily mobile and certainly not necessarily contestable by different regions of the UK.
Inward investment decisions are made on a range of issues. They can be summed up as bringing value for money to the financial investor. Financial assistance is only part of that process. It will be highly damaging if the concordat results in a rigid formula based solely on financial assistance and ignores the importance of all the other factors which will vary from one region to another.
Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale):
It is sensible that we should have discussions around the UK and achieve a concordat between the different nations and regions, but does my hon. Friend agree that there should be no dumbing down of the process with the high quality work being done by agencies such as Locate in Scotland being reduced to some lowest common denominator to suit the DTI?
I take the point made by the hon. Member for Banff and Buchan (Mr. Salmond) that it is completely inappropriate to seek a concordat in advance of a Scottish Parliament, to which the issues will be devolved and which must form its own view. In due course, when that Parliament is up and running, it should enter as a full partner into any concordat that is reached.
Mr. Chidgey:
My hon. Friend makes a telling point. It is vital that we do not dumb down the process but learn from best practice.
Dr. Liam Fox (Woodspring):
Does the hon. Gentleman accept that when the DTI talks about co-ordination it is Whitehall-speak for the dead hand of Treasury involvement?
Mr. Chidgey:
I am surprised to find myself agreeing with the hon. Gentleman. It is vital--I hope that the Minister will respond to this--that we should use the DTI to boost best practice rather than to constrain and stifle it. The concordat's key role will be to promote best practice. As the hon. Member for Banff and Buchan (Mr. Salmond) said, Locate in Scotland has set high standards in diligent and patient company tracking. Again, Neil Hood's words are relevant. The Northern Development Company and the West Midlands development agency have all had major successes from which other regions can learn. The DTI has a crucial role to play in ensuring that best practice is promoted throughout the regions.
Today's announcement of the establishment of the regional development agencies is a good starting point. I welcome the Government's view that the RDAs should not be creatures of local and central government, but the Government must show that they mean what they say, because neither should the RDAs be glorified property managers.
The United Kingdom has lost out within the EU by not having strong, powerful and properly resourced regional organisations that can attract inward investment from the EU and provide the matching funds that such projects require. In that context, the RDAs' long-term success depends on adequate funds. I am disappointed that at present there seems to be no such provision. They need adequate funds and to be able to provide much more economic development stimulation than most regions
have managed so far. It is far more important to direct Government assistance not to up-front grants but to inward investment projects which add further value to the economy in research, design and development.
A key role of the RDAs will be to foster value for money for investors. RDAs could and should play a major part in creating that added value in their areas. RDAs need an overarching role with the training and enterprise councils in tackling skill shortages. We do not want a return to that appalling and failed programme of training for work which was merely a device for massaging the unemployment statistics and added little to communities' skill base.
Mr. Michael Fallon (Sevenoaks):
I congratulate the hon. Member for Eccles (Mr. Stewart) on finally making his maiden speech. As he explained, it was through no fault of his own that he was unable to do so until this morning. He paid a generous tribute to his predecessor who is well remembered and well respected on both sides of the House. He gave us an interesting tour d'horizon of Eccles and, perhaps, a glimpse of a streak of independent-mindedness when he referred to the need to maintain the present level of benefits. I hope that that streak of independent-mindedness does not lead him too quickly on to the list prepared by the Minister without Portfolio, but we shall watch his progress with interest.
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