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10.12 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): I start by congratulating the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on instigating this debate, and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) for joining him in raising the important issue of the economic crisis in the borders and the question of economic development in that area and in north Northumberland. They have described the difficulties faced by the area most eloquently and pungently. Thanks to their previous representations and those of the local communities, which has resulted in a large postbag, the Government are very much aware of the problems.
I assure the House of the Government's continuing commitment to the borders and their awareness of the economic difficulties that the area faces. My right hon. Friend the Secretary of State for Scotland visited the borders on 2 and 3 November to hear at first hand about the problems and about the plans to strengthen the local economy. I have just returned from a visit to the borders, where I spoke to local people about their concerns, and about ways to improve the economic situation in the area.
There can be no doubt that the jobs lost at Dawson International and Viasystems mean that the area is facing difficult times. I fully sympathise with those made
redundant by both firms, and I know that many small businesses are concerned that their own future is uncertain as a result.
I can assure the House that the Government did everything possible to save the jobs that have been lost. In particular, my noble Friend Lord Macdonald tried repeatedly to engage Viasystems in discussions about securing the future of the Galashiels and Selkirk plants, but, sadly, the company was not interested. I note that hon. Members are in discussion with the Secretary of State about the background to those events, and I am sure that those discussions will continue.
On 2 July, the Minister for Trade, my hon. Friend the Member for Cunninghame, North (Mr. Wilson), announced the Government's initial response to the job losses at Dawson International and the difficulties at Viasystems. The package included further funding of£1 million for Scottish Borders Enterprise, and the establishment of a rural inward investment team by Locate in Scotland to try to help areas such as the borders.
The Employment Service also moved quickly to establish rapid reaction teams when the closure of the Viasystems plants was announced. Those teams have been working hard to provide advice and assistance to those facing redundancy, and so far they have been successful in securing employment for 50 former Viasystems employees, and more than 900 have been put forward to prospective employers by the Employment Service. I also understand that 70 more former Viasystems employees have also found jobs without using the services of the rapid reaction teams.
Those initial actions show the seriousness of the Government's reaction to developments in the borders. The hon. Member for Roxburgh and Berwickshire asked that the Government stand ready to help Scottish Borders council in various projects that it is trying to develop. I can tell him that we stand ready to grant additional capital consent to the council for a specific project that is currently under discussion, if the company involved decides to go ahead with a proposed expansion.
The Government are very aware of the need to work in partnership with the local authority and the local enterprise company to deal with the economic problems in the area, not only immediately but in the longer term. At the end of August, my noble Friend the Minister who has responsibility for business and industry announced the establishment of the borders working party, which is chaired by a senior official in the Scottish Office, and is building on the useful work that the council and Scottish Borders Enterprise have done to try to deal with the problems in the area.
Although the core membership of the working party is made up of officials from the Scottish Office, Scottish Borders Enterprise and the council, the working party is also drawing on the experience and expertise of other local bodies as necessary.
The working party has met three times so far--most recently last week--and is developing initiatives to address short-term and longer-term economic problems. I can assure hon. Members that the working party is very aware of the need to press ahead with its work, and that it is doing so.
Hon. Members asked for details of an action plan for economic regeneration in the borders. I am sure that they will appreciate that some of the opportunities being
pursued by the working party will inevitably take time to develop, and of course many of them are also commercially confidential at this stage, so I cannot give any details to the House without endangering the projects.
I realise that, because of the need for commercial confidentiality, it may appear to people in the borders that not much is happening, and that that must be frustrating, but I can assure them that the members of the working party are pursuing any opportunity that has a realistic chance of bringing new investment to the borders.
There is, in particular, a clear need to broaden the company and sectoral base of the borders to promote longer-term sustainability. To that end, the working party will be drawing on work in progress on an economic strategy for the longer-term future of the borders and, separately, on training needs.
The hon. Member for Tweeddale, Ettrick and Lauderdale asked when that interim report would be available. It is hoped that the borders working party will produce an interim report on its work around the end of this month. I hope very much that it will include some positive news for the area, as well as outlining a strategy for tackling the long-term economic challenges facing the area. We are committed to our on-going support for the work of the working party.
Hon. Members also asked about assisted area status for the borders. As they will know, the existing pattern of assisted areas across Great Britain is currently under review. The Government have invited views from a wide range of bodies, including local authorities, local enterprise companies and business, on the factors that should be taken into account in selecting areas for a new assisted areas map that will come into effect from January 2000.
I am aware that the Scottish Borders council has responded to that consultation exercise, pointing out the problems facing the area, and putting forward its case for priority when the new map is drawn up. I am sure that the House will appreciate that I cannot comment on the merits of individual areas before the review is completed, but it is clear that the present economic difficulties in the borders will demand serious consideration when decisions are taken on the coverage of the new map.
Hon. Members also raised the concerns of people in the borders about continued access to European structural funds--which was also the subject of our recent meeting. Those concerns were also raised with me yesterday in the borders, and I have heard similar concerns expressed in many other areas across Scotland. The Government's priority is a wider European Union, offering new business opportunities to firms in the United Kingdom, and I hope that borders firms will be at the forefront of those taking advantage of these opportunities.
To achieve a wider European Union, it is important to recognise the needs of acceding states, and balance the benefits brought by a wider union with the needs of areas within the United Kingdom, such as the borders. The safety net proposal to limit to one third the reduction in the population eligible for the new objective 2 compared with the current United Kingdom objective 2 and 5b eligibility will help us to balance those needs.
I have been impressed and encouraged by the collective and corporate approach taken by Scottish agencies, including local authorities, in making Scotland's case to
the Commission. We will continue to press hard in Brussels to make sure that all the relevant parts of Scotland have the best chance of securing future European structural funds. I can also give the hon. Gentleman the assurance he seeks about investigating any potential underspend under objective 5b, although he will acknowledge that that potential will remain uncertain in the near future.
The Government recognise the particular difficulties that rural areas face in attracting inward investment, and that is why we decided to set up a rural inward investment team within Locate in Scotland. The team's role will be to seek out and pursue opportunities for inward investment projects that might be particularly suitable for location in rural areas.
Locate in Scotland will be able to do only a limited amount at its own hand, and will rely heavily on the trust, co-operation and creative approach of local agencies. It will also look to the local enterprise companies for much of its information on genuine local strengths. I know that members of the team have already had initial meetings with the chief executive of Scottish Borders Enterprise. Although I hope that the team will be successful in attracting more investment to rural areas, obviously its task will not be easy, and it would be wrong to expect over-dramatic results initially.
Hon. Members kindly mentioned last week's announcement of Government approval for the new A7 bypass in Hawick. The scheme will transfer traffic, which passes through the town when travelling along the A7, on to a new inner relief road. The scheme represents another example of strong partnership between the Scottish Office and Scottish Borders council, which will share the costs of the relief road. Obviously, the bypass will boost the economic potential of Hawick, but it will also benefit the borders as a whole by improving travelling times on the A7.
Mention was made of the potential for rail developments in the borders. When I was in the borders recently, I heard representations about the reopening of the Waverley line through the borders. I recognise that that project is widely supported by many throughout the area. I am aware of the plans promoted by Borders Future Transport for the line to be reinstated in three phases. The first phase is a freight-only line, and is being taken forward by means of private legislation procedure. Similar parliamentary powers will be need for the other phases.
The Scottish Office is in regular contact with Borders Future Transport about phase 1. Subject to parliamentary consideration, it is anticipated that Borders Future Transport will submit a formal application for freight facilities grant assistance to the Scottish Office. When that is done, it will be given every consideration.
The Scottish Office can also consider providing help for major transport improvements under section 56 of the Transport Act 1968, subject to the availability of funds.
The right hon. Member for Berwick-upon-Tweed expressed concern about the difficulties of the Scottish borders, and pointed out that those difficulties were shared by north Northumberland. I am aware that economic changes seldom respect administrative boundaries. I am also aware that the right hon. Gentleman is a member of the Berwick regeneration task force, which brings together local interests withthe Government office for the north-east, and a
representative of Scottish borders council. It is important that that partnership stretches across the border to ensure an integrated approach, and I can give the right hon. Gentleman the assurance he sought on co-operation with Scottish agencies as appropriate.
The right hon. Member mentioned the A1. He knows that it is being considered as part of the strategic roads review, and he will therefore understand that I can say nothing that might anticipate the review's outcome.
I hope that I have been able to convey the Government's determination to tackle the issues raised tonight by working in partnership with Scottish Borders
council, with Scottish Borders Enterprise, with local businesses and--most important--with the local people. I hope that the steps outlined tonight and those in the pipeline from the working party will prove successful in promoting economic regeneration so that we have a long-term and thriving business sector in the borders; and that that can form the basis of long-term thriving communities in the borders and in north Northumberland.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Ten o'clock.
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