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Scottish Enterprise Bill
Order for Third Reading read.
8.27 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald): I beg to move, That the Bill be now read the Third time.
Section 25(2) of the Enterprise and New Towns (Scotland) Act 1990 places a financial limit upon Scottish Enterprise. The purpose of the Bill, as hon. Members who have followed its progress will know, is to increase the financial limit from the present level of £3,000 million to £4,000 million. In addition, it removes the provision enabling the Secretary of State to increase the limit further by statutory instrument.
Scottish Enterprise will reach the current limit in June. The Bill is required to allow it to continue to operate until March 2001. Thereafter, the Scottish Parliament will decide on the funding arrangements of Scottish Enterprise.
Mr. Oliver Letwin (West Dorset):
The Bill is brief, and the Minister has made a brief speech. With his usual engaging manner, he sought to lull us into a sufficient sense of insensibility so that we would not wish to contribute at length. I certainly do not intend to detain the House for long, but some points need to be raised.
Our deliberations on the Bill have, surprisingly, occasioned some interesting debate. We have considered the question whether the agency to which it refers--Scottish Enterprise--is itself efficient. More importantly, we have considered whether the House, under the proposals for devolution enacted in the Scotland Act 1998, ought to continue to have a role of oversight in relation to the expenditure by that agency, given that the great part of its funding will come from the United Kingdom taxpayer.
I do not wish to rehearse again those arguments which have been amply rehearsed on Second Reading and in Committee. The Minister has been a kind of gentle Ozymandias throughout, asking us, in effect, to make our arguments, but not to press them to the point where he needs to tell us politely to disappear. However, in the course of that debate, we have become increasingly aware of another problem to which we have not yet alluded and, before we leave this subject, it needs to be aired.
Scottish Enterprise is not alone--there are otheragencies like it around the United Kingdom. The Welsh Development Agency--the so-called economic powerhouse of Wales--is a prime example. In due course, there may be more agencies seeking to attract investment to a region or a country within the UK. It is to the great advantage of the UK as a whole if investment that would not otherwise come arrives under circumstances where that investment is drawn from outside the UK, where it would otherwise not have arrived in the UK but would have gone outside, or where it simply would not otherwise have been made. The same applies in the case of jobs.
Alas, that is not the only kind of activity in which regional or country-based development agencies need necessarily act. They may engage--nothing in their constitution prevents them from doing so--in a bidding war against one another to try to draw investment, and hence jobs, from one part of the UK to another. That is not a problem that afflicts Scottish Enterprise in particular. Nothing about Scottish Enterprise gives rise to the fear that it may seek to engage in such activity, but Scottish Enterprise has that ability. By raising its financial limit this evening, as we shall eventually do, we shall increase, rather than reduce, that ability.
Under normal circumstances--certainly under circumstances that would have obtained before the Scotland Act 1998 and its sister legislation in Wales and Northern Ireland--that potential problem would have existed anyway. Since the enactment of that legislation, that problem has increased and taken on a new character, which this Third Reading provides the House with an opportunity to ponder. Let us imagine the circumstances in reverse: that, in due course, the Government were to introduce parallel legislation in respect of agencies for the English regions. Let us suppose that those English regions were to use taxpayers' funds to engage in a bidding war to draw investment and jobs away from Scotland into the English regions.
Dr. Norman A. Godman (Greenock and Inverclyde):
Or into Wales and Northern Ireland.
Mr. Letwin:
Or let us suppose that the Welsh Development Agency or a similar agency in Northern Ireland were to engage in the same activity, which is already possible. It would then be quite reasonable for people in Scotland to object on the basis that they were partly funding an agency that was drawing jobs and investment away from them. People in other parts of the United Kingdom could harbour similar feelings if, benefiting from this legislation, Scottish Enterprise were to engage in the same activity.
I hope that the House will note that I am specifically not making an argument that is derogatory about Scottish Enterprise and its management, nor do I suggest that there is an asymmetry between the way in which people in Scotland would act or respond, and the way in which people in other parts of the Kingdom would act or respond. On the contrary, I am talking about rational behaviour and attitudes on the part of people throughout the Kingdom. It is a fact of life that no one likes to have some of their money used, via the Consolidated Fund, to fund an agency to take jobs and investment away from their patch in the United Kingdom.
Following devolution, that pattern could all too easily be exploited, in particular by nationalists. If a party wanted to destabilise the United Kingdom and to play on the rational fears that I have described, it could all too easily use the fact that a development agency such as Scottish Enterprise or one in another part of the kingdom is dragging jobs and investment from its part--the part that the nationalists in question happen to defend and to believe should be separate--to another.
Mr. Tam Dalyell (Linlithgow):
Not "could"--such a party certainly will. It is human nature.
Mr. Letwin:
The hon. Gentleman is probably right, as he often is, but I hope that he will note that I am trying
My concern is to make it abundantly clear that I am not trying to arouse or to inflame sentiments. On the contrary, I am trying to assuage. I am trying to put the case in as calm a way as I can to make it clear that we have a collective problem that should be faced by people from all parts of the kingdom who wish the United Kingdom to remain intact.
Of course I recognise honourably that some hon. Members present do not wish the UK to remain intact. They will welcome any mechanism that enables the United Kingdom more rapidly to descend into tension.
Mr. Andrew Lansley (South Cambridgeshire):
I am following what my hon. Friend says with care. He will be more familiar with the passage of the Bill than I am, but have the Government at any stage during its passage in the House or in Committee published or presented to the House or Committee a concordat--which, I understand, should occur--between Scotland, Wales and the regions of England about the circumstances in which particularly regional selective assistance is to be made available?
Mr. Letwin:
The short answer is, of course, no. As my hon. Friend will know, the whole question of concordats is extremely vexed. None of us knows what the juridical status of the administrative contracts between--
Mr. Deputy Speaker (Mr. Michael J. Martin):
Order. The terms of the Bill are narrow. We are talking about increasing the borrowing powers of Scottish Enterprise, so we should not go into the powers that a new Parliament in Edinburgh, or any other devolved Parliament might have. We must stick to the Bill before us.
Mr. Letwin:
Absolutely, Mr. Deputy Speaker. It is true that, under the Bill, the financial limit for Scottish Enterprise having been increased, its ability--were it to choose to do so--to engage in the activities that I have described will increase. That would have to be restricted via a concordat, I think, unless it were restricted by Act of Parliament.
During the debates on the Bill, the Minister has not advanced any suggestion that the Bill should be amended to introduce a mechanism to restrict the activities of Scottish Enterprise in drawing away investment.
Mr. Deputy Speaker:
Order. We have now come to Third Reading. The hon. Gentleman had opportunities to table amendments in Committee. He could also have tabled what are known as probing amendments. It is not for me to tell him what his job is, but we have landed at the Third Reading of the Bill, which is very narrow. He must keep to the terms of the Third Reading of the Bill.
Mr. Letwin:
Of course, Mr. Deputy Speaker.
Mr. Lansley:
On a point of order, Mr. Deputy Speaker. May I seek your guidance? In considering whether we should give the Bill a Third Reading, I must also consider whether there is to be a concordat between Scotland,
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