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Mr. Davies: Indeed. Many areas would have liked to be encompassed within the 1976 legislation, and now they will be. Urban areas are now encompassed within the measure, including the middle of some of our towns. Tredegar, Ebbw Vale, Merthyr and Port Talbot will all now be able to ask the Welsh Development Agency for assistance for their village halls, jazz festivals or drama festivals, because those are all functions that fall within the phrase "social development".
Mr. Gareth Thomas (Clwyd, West): I have been listening closely to my right hon. Friend's argument. I hope that he will forgive me for characterising certain parts of it as overly legalistic. Will he accept two points: first, that those concerned with the regeneration of communities appreciate that there is an artificial distinction to be drawn between economic and social development; and, secondly, that the main focus of the enhanced WDA will be economic development? It will be important for the new agency to be enabled to carry out incidental and ancillary functions, including social development in all areas, and remain intra vires, to use a legal term.
Mr. Davies: I am sorry if I am being legalistic, but there is nothing incidental about the phrase "social development". I suppose that it could have been made incidental when the Bill was drafted. Although my hon. Friend might not like to read those legal words, if he bends his mind to it, he might see that "social" is put on the same plain as "economic". It is not incidental in any way. Indeed, interventions by Liberal Democrat and Plaid Cymru Members--is the party still called Plaid Cymru?--show how much they value payments to young farmers' clubs, jazz festivals and village halls, which will now become available, if the funds exist, to anyone in Wales. My hon. Friend may think that a good thing, but this is a major change in the function and purpose of the WDA. When it was established under poor old Labour, it was concerned solely with wealth creation. Now it is moving into the social field.
Mr. Nigel Evans (Ribble Valley): Does not the right hon. Gentleman agree that changes could have been made to the WDA in the past, had it been thought necessary to include social development in its remit? There is social deprivation in Swansea, Neath, Port Talbot and parts of
Cardiff. If the changes are made, they will get in line along with the rural areas and argue for their fair share of the cake.
Mr. Davies: That is the point. I would not blame them for doing so. I take exception to my hon. Friend the Member for Clwyd, West (Mr. Thomas) chiding me for being legalistic. I am not being legalistic: dozens of voluntary associations will queue up with their tin cans outside the WDA and outside the assembly, because the proposal is a charter for voluntary associations. I do not know how many there are in Wales, but there are many. I tabled a question to my right hon. Friend the Secretary of State for Wales, asking him to list them. He did not know how many there were, but said that he would put a list in the Library. It has not arrived yet--I do not criticise him for that--but the list will be very long.
The Welsh are good at voluntary associations, and we have never had problems with social development--we are marvellous at it. Our problem has been with wealth creation. It is no good my hon. Friend chiding me for being legalistic. The Welsh economy is not the strongest in the United Kingdom. It may suffer considerable problems over the next year or two as a result of factors outside its control.
Mr. Bernard Jenkin (North Essex):
Monetary union.
Mr. Davies:
I do not even include that. Other, global factors could cause problems.
The Welsh economy needs wealth creation. Conservative Members may argue that the WDA was interventionist and old Labour, which believed that Governments should help with wealth creation. Such views are unfashionable these days, but that was the agency's purpose. We all agree with social development, but it is dangerous to mix it with wealth creation. That is my first point about the change to providing for social development.
I do not know where the money will come from. My hon. Friend the Minister might tell me that the WDA budget will be expanded, but if its purposes and functions increase and the sum of money provided stays the same, something will have to be cut, I do not know what. There will be considerable pressures on the WDA, from voluntary associations, for example. The WDA will be responsible to a democratic assembly, not to the Secretary of State, who will not have the economic powers that he holds at the moment.
Mr. Oliver Letwin (West Dorset):
Does the right hon. Gentleman agree that the Welsh Development Agency will still depend on the Secretary of State in one respect, that is, the extent of its borrowing powers?
Mr. Davies:
That may or may not be the case, but the budget will be determined by the assembly. We shall have an Athenian-type assembly that will want to obtain as much money as it can. If it can tell the WDA that its functions include building village halls, it will do so. There will be considerable pressure to cut back on economic development, as we shall all be pressing the WDA for money for social development.
It may be said that that is only incidental, and that there will be judicial reviews. I am sorry to talk about lawyers again. Sadly, local authorities are becoming fairly accustomed to people saying--understandably--"You have powers to help dyslexic children, or to provide speech therapy. You are not exercising those powers properly." They take local authorities to court on those grounds, but the courts usually say that, if there is no money, authorities cannot provide such facilities. That might well be the case with the WDA, but there will be pressure through the courts and the political system. I urge my hon. Friend the Minister to think again. It is perfectly possible to confine social development to the areas to which it is currently confined.
The other aspect that concerns me--in fact, the two aspects must be considered together--is the replacement of the word "industrial" with the word "business". I shall not be "old Labour" on this occasion, and say that we must keep the word "industrial". There is no great magic in a definition of the word, which has been used for centuries in Britain and France to cover all sorts of activity. I do not object to the change from "industrial" to "business"; indeed, I can see that it makes sense in the world we live in. What worries me is the extraordinary definition of "business" in schedule 10.
Paragraph 10(2) gives that definition. I welcome the fact that there is a definition, for a change, and I suppose that "business" is not an easy word to define. The draftsman starts perfectly sensibly, saying that "business"
The definition continues, however, with the words--in brackets--
I have asked myself what sort of organisation would conduct a business without a view to profit. I hate to mention it, but I suppose that the Welsh Rugby Union could be said to be conducting a business nowadays. It has sponsorship and money; it is engaged in business activities, but certainly not with a view to profit, on or off the rugby field. Some organisations could describe themselves as businesses, but without a view to profit.
Why on earth do we need that provision, given the purposes and effect of the WDA? The WDA is there to foster wealth creation. I am sorry if this is another "old Labour" view of the world, but what the Welsh economy needs is profit, and lots of it. Let us tax it by all means, but let us have it. We have very little of it; that is the problem.
Mr. Wigley:
My constituency contains a village co-operative called Antur Waunfawr, which is not geared to making profits. It employs people with learning
Mr. Davies:
That is a legitimate body, but my question is whether it should be mixed in with a body such as the WDA, whose ostensible purpose is to create wealth from a profit base in the Welsh economy. I understand that that is an old-fashioned view, but perhaps the legislation is a kind of third way--capitalism with a human face. The Welsh economy needs commerce, industry and professionals, all of them producing profit. There is always a place for the sort of community activity that the right hon. Gentleman mentions, and it is good to see it, but as I say, I question the sense of mixing it in with an economic powerhouse, which is what the WDA was supposed to be, although it will not be any more.
"includes any industrial, commercial or professional activities".
I do not object to that. Solicitors and accountants in Cardiff who will receive large fees from the WDA will now be able to obtain other forms of assistance from it. I do not object to "professional activities" in the modern world: wealth can be created through them.
"whether or not with a view to profit".
The draftsman clearly felt that a business is normally carried out with a view to profit, whether or not it achieves that profit--but not, it seems, in the new WDA. Profit does not really matter. It seems that someone engaging in a professional activity without a view to profit can now obtain money from the WDA. That is a strange and unnecessary extension of the functions and purposes of the agency.
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