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Business Support

3. Mr. Desmond Browne (Kilmarnock and Loudoun): What level of support the Scottish Enterprise network is giving to indigenous companies, with particular reference to small and medium businesses. [45572]

The Minister for Education and Industry, Scottish Office (Mr. Brian Wilson): Scottish Enterprise's budget for 1997-98 amounted to £466 million and supported programmes predominantly aimed at assisting indigenous small and medium enterprises. Scottish Enterprise resources devoted to foreign direct investment during the same period amounted to £40.2 million.

Mr. Browne: I thank my hon. Friend for that reply. I welcome the recent initiative to support and set targets for the survival of small businesses. My recent experience of campaigning for whisky jobs in my constituency has led me to the conclusion that the best results are obtained when the local enterprise companies work in partnership with the local authority, the local work force and the

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private sector. Will my hon. Friend consider putting in place, or encouraging, mechanisms to ensure the delivery of that initiative through local partnerships?

Mr. Wilson: My hon. Friend is right: partnership is the way forward in each area on all aspects of economic development. Our strategy directions to Scottish Enterprise, Highlands and Islands Enterprise and the network are to work closely with local authorities and other partners to get a coherent approach in every area. As my hon. Friend says, we have increased the target for new business start-ups in Scotland to 10,000 a year, which is building on the existing strategy for the development of small and medium enterprises. We think that that is achievable and partnership is the way forward.

On his initial point, I congratulate my hon. Friend on the excellent campaign that was strongly based on partnership and effectively defended whisky jobs in Kilmarnock. Unfortunately, an equally well-run campaign was not so effective in the short term in Dumbarton. Last night, with my hon. Friend the Member for Dumbarton (Mr. McFall) and all the partners to which my hon. Friend referred, I had a meeting to find out how the problem could be remedied so that we can deal with the proposed J and B closure, which is to take effect in 2000. We will achieve that through partnership.

Mrs. Eleanor Laing (Epping Forest): The Minister likes to appear to be the friend of small businesses, as he has just said. How can he possibly expect us or the people of Scotland to believe that he wants to defend small businesses when he and his colleagues continue to defend the irregular practices of direct labour organisations that provide unfair competition to small businesses in their area, and Ministers refuse to take action against them?

Mr. Wilson: As a former small business man, I do not expect the hon. Lady to accept anything I say. However, I draw a distinction between that and expecting the people of Scotland to accept what I say.

Mr. Brian H. Donohoe (Cunninghame, South): The Minister will be aware of today's announcement of 250 job losses at Volvo bus in Irvine. He may not be aware that, last week, 40 redundancies were announced at Phoenix Cables and that, next week, there may be 600 job losses at Digital in Irvine. Can he give us some indication of what should be done in the Irvine area? Does he remember that when the previous Administration wound up the development corporation, I predicted that, rather than attention being focused on job attraction, such events would become the norm?

Mr. Wilson: The Volvo decision does not take effect until 2000 and involves an international restructuring. The initial loss of jobs will be in Germany and in Austria. I hope that measures can be put in place before then and that market conditions will be such that the job losses may not happen in Irvine in 2000, although there are difficulties there.

I do not join my hon. Friend in pre-empting the announcement by Digital Compaq. Everyone knows that the company is restructuring world wide, but we should wait for the outcome of that. In the spirit of my reply to my hon. Friend the Member for Kilmarnock and Loudoun (Mr. Browne), we must work together wherever there are

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job losses and for whatever reasons they happen to ensure that damage is limited in the short term and that new measures are taken to bring new jobs in the longer term.

East Ayrshire

4. Miss Julie Kirkbride (Bromsgrove): What representations he has received on the conduct of East Ayrshire local authority. [45573]

The Secretary of State for Scotland (Mr. Donald Dewar): May I first apologise for the absence of the Under-Secretary, my hon. Friend the Member for Western Isles (Mr. Macdonald), who would normally have answered this question? He has been dispatched--very willingly--to France to represent the Government at the Morocco game. I hope that the hon. Lady will join me in congratulating Craig Brown and the team on their achievements so far. [Hon. Members: "Hear, hear!] I think those shouts were a little more hearty on our side than on the other. There is something of an air of disappointment on the Opposition Benches this afternoon--with which, of course, I sympathise. The Scottish team has done well and we are proud of it. Our thoughts are with it as we look forward to what we hope will be a famous victory.

I have received a number of representations on East Ayrshire and I expect to receive today the council's response to the statutory notice served on it relating to the performance of its direct labour organisations.

Miss Kirkbride: We, too, would like to congratulate the Scottish team and wish it well for tonight's match. However, we wish that Labour local government in Scotland could perform as well and as effectively. The situation in East Ayrshire is testimony to the fact that sleaze is rife in Labour local government in Scotland. When will the Secretary of State maintain the Prime Minister's dictum that for members of the Labour party it should be one strike and then out? When will he tackle the problems of local government in Scotland? When will he set up a proper public inquiry to deal with gross misuse of public money?

Mr. Dewar: I take the situation in East Ayrshire very seriously, but I must caution the hon. Lady against jumping to conclusions. Sleaze is an unfortunate choice of word. On the face of it, there has clearly been a total collapse of financial control and management control.

Miss Kirkbride: Only that?

Mr. Dewar: Yes. Sleaze suggests dishonesty and personal corruption. If I were to accuse the hon. Lady-- I stress that I do not--of sleaze, the authorities of the House would take a poor view. Perhaps she should consider waiting until she knows all the facts before she makes a rather pejorative judgment.

East Ayrshire is a serious matter. That is why I have, unprecedentedly, used my statutory powers to call on the local authority to provide information and a forward plan. I assure the House that I shall not hesitate to use my powers, which are extensive, if I am not totally satisfied that the matter is being put right and that any shortcomings and failures are being rooted out.

Ms Sandra Osborne (Ayr): I welcome the Secretary of State's swift and decisive action on the current

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problems. It is vital to the future of local government in Scotland, as will be the deliberations of the McIntosh commission, which is currently consulting on relations between local government and the Scottish Parliament. Does my right hon. Friend agree that we should take no lessons from the Tories about local government in Scotland? They spent 18 years trying to undermine and destroy it, culminating in their disastrous local government reorganisation, which was executed purely for party political reasons.

Mr. Dewar: I agree with much of what my hon. Friend said. The important thing is to get the matter put right. If there is one thought that should unite the House it is that properly funded and organised, effective local government is an important part of our democratic structure. I suspect that Tory Members are a little more confident on this matter because they do not control one council in Scotland. That gives them a gung-ho approach. I hope that they will take the matter seriously and support the effective actions that we are taking. In case they become too complacent, the word Westminster should be at least whispered.

Mr. Andrew Welsh (Angus): Has the Secretary of State noticed that for value for money, efficiency and high-quality services, the top three mainland authorities are all Scottish National party controlled? Should he not recommend them as models of best practice to the inefficient, poorly run Labour authorities that have brought the whole Scottish local government system into disrepute?

Mr. Dewar: I take efficiency very seriously. The best defence for local government is efficient local government and effective delivery of local services. I looked with interest at the table to which the hon. Gentleman referred. I noticed that the important characteristic was not which political party was in control but the catchment area and make-up of authorities. Smaller, rural authorities tended to do well. To use one illustration, I think that there are about 10,000 public sector houses in Angus; in Glasgow, there are 100,000. A different scale and range of services have to be provided. I am becoming ungracious in my old age, but before the hon. Gentleman takes off to polish his halo I should tell him that Perth and Kinross direct maintenance department is running a deficit for the second year running--this year, it is £650,000.

Mr. Jim Murphy (Eastwood): Events in East Ayrshire and North Lanarkshire and the Grampian police fraud squad investigation into Moray council concern all hon. Members. I congratulate my right hon. Friend on his prompt response to many of those concerns. In the longer term, what thought has he given to changing the structure of local government in Scotland to bring about the direct election of mayors or provosts? If it is good enough for London, it is good enough for the towns and cities of Scotland. The big advantage that they would have over London is that Jeffrey Archer would never be a candidate.

Mr. Dewar: That is a vision of danger which I never share with my hon. Friend, but I shall think about it seriously tonight. He makes an important and fair point. Anyone looking around local government will agree that there is an atmosphere of change. Many people in

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local government are thinking about such problems. The McIntosh commission is in session, and on its agenda will be electoral voting systems, the possibility of electing leadership of the sort mentioned and the introduction of a cabinet system. There are many ways to change the internal dynamics of local government. I look forward to the report of the McIntosh commission and taking forward an agenda for change that will benefit local government and reassure those who rely on its services.

Dr. Liam Fox (Woodspring): Will the Secretary of State guarantee that no council tax payer in East Ayrshire or North Lanarkshire will pay any extra money this year or next as a direct result of the wrongdoings of his councillors?

Mr. Dewar: I cannot give such a simplistic assurance. If I did, the hon. Gentleman would be the first to question its practicality or propriety. We will consider the situation. We are waiting for the report of the Accounts Commission for Scotland. Today, we will receive the replies to the statutory request from the councils, which we must consider. It would be foolhardy and misleading for me to say that there will not be problems in meeting the gap that has appeared in the finances of the departments concerned. There are a number of ways and time scales over which that can be done.

Dr. Fox: It is clear from the Secretary of State's response that he is unwilling or unable to protect taxpayers from the malpractice or incompetence of Labour councillors. He is unable to protect Labour Members from deselection by members of the Blairite tendency and, indeed, unable to protect himself from the whispering campaign against him in his party in Scotland. As the senior Labour figure in Scotland, what responsibility does he take for that shambles?

Mr. Dewar: I believe in political accountability, and I am taking energetic action on that matter. I would be prepared to have a serious discussion with the hon. Gentleman about that, but, judging by the irrelevancies, that he dragged into his previous remarks, he is not interested in serious political debate.

Dr. Norman A. Godman (Greenock and Inverclyde): I am delighted to say that my wife is on the list of candidates--and no way is she a Blairite.

When can we expect to receive the McIntosh report? Is there not a pressing need for local government reform? If a different electoral system is good enough for the Scottish Parliament, surely we should introduce a different system for the election of local authority representatives which ignores the rather strange idea of elected provosts.

Mr. Dewar: That will clearly be an interesting debate. We want the McIntosh commission to have time to do its job properly. I do not rule out the possibility of an early report, perhaps on a limited number of issues, but legislation may be a matter for the Scottish Parliament, which fast approaches.

I congratulate my hon. Friend's wife on being on the list. I am looking forward to having dinner with her and my hon. Friend on Saturday night.

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