HC Deb 07 July 1970 vol 803 cc624-34

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hawkins.]

10.0 p.m.

Mr. Robert Maclennan (Caithness and Sutherland)

I am very glad of the opportunity in this first Adjournment debate of the new Parliament to raise the problems of the regional development of a part of Scotland which seems susceptible to damage if its particular problems are not understood and acted upon by a Government genuinely committed to regional development. It is, of course, widely understood that the development of the Highlands of Scotland depends upon national policies pursued by the Government for the country as a whole and upon a general level of prosperity. Therefore, I should like to refer to what has already been said by the incoming Government in the last week about regional policy.

The Gracious Speech confirms the commitment to promoting an effective regional development policy, but, regrettably, when Ministers have been asked to explain their thinking on this, they have been unable to do so. When questioned directly, they have evaded the issue. This afternoon, I asked the Chief Secretary whether the Government proposed to use fiscal means to promote regional development. One might have thought that the Government had already made up their minds in view of the many assertions during the election about the imminent ending of the selective employment tax—a matter of particular importance and interest in the Highlands and Islands. But we were fobbed off with a promise that the Government's intentions would be revealed in due course.

We were also told, however—perhaps more significantly—by the Chancellor that he did not intend to introduce an autumn Budget, but he retained the right to concern himself on a continuing basis with demand management. He made it plain that there was no intention to alter taxation except in this respect. In other words, the Government have already ratted on their promise to remove selective employment tax at the first opportunity.

I use that strong language because, during the Finance Bill debates last year, I asked what the then Opposition meant by "removing selective employment tax at the earliest opportunity". I said that it was an open-ended commitment which would allow them to do little or nothing, or something, on any date they chose. The present Chancellor rebuked me then and said that he intended to remove it at once—as soon as his party came to office. This apparently is not to be done. Any changes in taxation in the autumn have simply to be for managing demand and not to relieve those parts of the country, such as the Highlands, which have felt the burden of the effects of the tax. This is an astonishing reversal of policy and of promises made by Conservative candidates in six constituencies in the Highlands during the election campaign.

That is not the only method of affecting the level of economic activity in the Highlands. We have had further evidence of the Government's lack of preparedness to take office, and this evidence has come in Answers to Questions in the last week.

One naturally does not expect an incoming Government to unfold all their policies within a week of taking office. However, hon. Gentlemen opposite made a number of commitments, promises and firm assertions of policy in the years before attaining office. It is right, therefore, for us to tax them not only for having failed to bring forward coherent policies during their admittedly short period in office but for apparently being prepared to throw into the melting pot the whole issue of regional development.

Yesterday I asked the Minister of Technology to give his view about the issue of industrial development certifi- cates. I asked whether the Government intended to operate I.D.Cs as restrictively as the previous Labour Government. I asked whether there was any intention to alter the criteria to ease up on the issue of development certificates in the already highly industrialised parts of the country? The right hon. Gentleman gave this astonishing reply: Industrial development certificates will continue to be freely available in the development and intermediate areas. Elsewhere, applications will be judged on their merits, taking account of the nature of the project and the needs and resources of the area concerned".—[OFFICIAL REPORT, 6th July, 1970; Vol. 803, c. 303.] If I read that Answer aright, it represents a sharp difference in emphasis from that of the Labour Government, who operated the I.D.C. policy most restrictively, so that any firm which required more than 10,000 sq. ft. of factory space found it virtually impossible to expand in already highly industrialised parts of the country.

This new commitment by the Minister of Technology allows an altogether wider set of considerations to apply. While I welcome the presence of the Under-Secretary on the Front Bench opposite, I trust that he appreciates that this new state of affairs will be viewed with some alarm in Scotland.

The hon. Gentleman might care to refer to the Report of the Select Committee on Scottish Affairs, a Committee of which he was a member. He will recall the considerable importance that was placed by every member of that Committee, including himself, on the strict refusal of I.D.C.s to firms seeking to expand or set up in industrialised parts of the country, and he will realise that this has been a concomitant part of the general economic policy.

Again, that is not the only other general consideration which gives rise to concern about the future regional policy of the Government. Yesterday I asked the Minister of Technology about the future of industrial development grants and his Answer likewise gives rise to anxiety. He reaffirmed that his Department was considering the whole question of the working of the present system. We knew that it was under review, and evidence of that fact was given to the Select Committee of which I have spoken. The right hon. Gentleman added that if there were anxieties on the part of particular firms, they might be cleared up if they wrote to him seeking clarification.

I hope that the hon. Member for Ayr (Mr. Younger), who has responsibility for development in Scotland, will draw to his right hon. Friend's attention, before this review is complete, the attitude of the C.B.I. in Scotland to the importance of continuing industrial development grants. I hope that he will point out to his right hon. Friend that there is virtual unanimity in Scotland that this is a more attractive way of assisting developing industry than what has been put forward as an alternative.

That is particularly true of the Highlands, where industry, for the most part, when it comes in, is not established industry returning large profits upon which taxation reliefs can be beneficial. Most of the companies which come in, as the hon. Gentleman well knows, are small and find it quite difficult to get themselves established, and are in need of cash grants which will enable them to carry through their early years of operation. Frankly, the abolition of this grant would be extremely damaging to the Highland economy as, I believe, to the economy of Scotland as a whole. I hope that the hon. Gentleman will fulfil his function of a Scottish Minister by passing on what I believe is the consensus of Scotch opinion on the matter.

But I think it right not to confine my remarks in a short debate to general considerations of regional policy—alarming as are some of the attitudes that have been expressed on the opposite benches to this question—but also to turn to the more specific question of the future of the Highlands and Islands Development Board—a body which the present Government took no delight in seeing set up, and which they opposed in the difficult early years of its operation, a body whose powers the Conservative Party sought to have curtailed before they were established, a body whose early operations were derided and scorned by members of the present Government on the grounds of financial incompetence, a body, confidence in which the Government sought to undermine from its earliest years, but a body which is now established in Scotland, and which, from its fourth Annual Report, which was published this last month, can be seen to have transformed both the economy of the Highland area and indeed, the attitude of the people living in the Highlands to the prospects and possibilities of development.

What has happened in the Highlands in the course of the last four years is that the people who are living there are no longer prepared to accept that the Highlands shall be the sporting playground of the rich. The friends of the hon. Gentleman who sit with him on the Treasury Bench, who have accustomed themselves to taking their holidays in the Highlands, will no longer be allowed to stand in the way of development in the North—

Mr. Hector Monro (Dumfries)

Really!

Mr. Maclennan

The hon. Gentleman may say "Really", but it just shows how little in touch he is. I speak with some experience of the problems, and I know that he represents a Border constituency, whose problems may be quite different, for all I know.

What is quite plain is that the Highlands and Islands Development Board is now established as a body with wide powers, and that it has made an important impact on the economy of the Highlands. It is important that these powers be backed up by a Secretary of State for Scotland who is willing to ensure not only that the Board has the financial powers but has backing in the use of its compulsory powers to acquire land, to interest itself directly in the establishment of appropriate industries, to follow up the initiative it has shown in considering the feasibility of directly setting up industries itself, as it has done in the case of the Shetland woollen industry, and in ensuring that the range of tools which it has for the job is always apt.

Much has been done, even in the course of the last four years, to adapt the Board to its tasks. I was fortunate in being able to pilot through Parliament a Bill to extend the range of its powers to enable it to have an equity shareholding in operations within the Highlands. But it may well be that the range of powers which the Board at present enjoys are inadequate to the immense task it has. I know that the Board has been pressing the Secretary of State to raise the limit on that sum of money which it can directly and of its own volition invest in enterprises in the Highlands from the present increased limit of £50,000 to a limit of £100,000. I hope that that is a proposal which the Secretary of State will look upon with some favour, because it is increasingly apparent that the kind of industry with which the Highland Board is having to deal includes industries which may require sums of that order to get them established. Like any other public authority its activities will be scrutinised by this House most carefully both through the Public Accounts Committee and through the normal parliamentary processes.

I also draw the attention of the hon. Gentleman to the recommendation of the Select Committee on Scottish Affairs of which he was a member and to which he assented when in Opposition, in Chapter IV, paragraph 27 of its Report, in which the Committee says: The Secretary of State maintained that the problems of the Highlands and Islands are unique …. We agree; and we think that the Board must have special powers to deal with them. We have some doubts whether the present 'edge' is in practice sufficient, and recommend that the question of increasing it should be further studied. This, as the hon. Gentleman will remember, was a reference to the special grants powers of the Highlands and Islands Development Board at present limited to £10,000 per project. It would be appropriate to ask that in replying tonight the hon. Gentleman should give some consideration to this point of view of the fact that he has already considered it, although not in a Ministerial capacity.

Apart from those two principal matters affecting the level of assistance which the Highlands and Islands Development Board is able to give to industry, there are a number of questions relating both to the personnel of the Board and to the management of the Board to which I think the incoming Government should pay some attention, and quite urgently. First, it is well known that the terms of contract of certain members of the Board will expire this autumn and there is a question of who their successors will be. That is something to be decided by the Secretary of State. I hope that he will bear in mind that his choice of personnel to be members of the Board will be subjected to close scrutiny. It is vitally important that he should choose people of the highest calibre with knowledge of the problems of the Highlands area and with radical views, prepared to stand up to the vested interests in the Highlands which in the past have shown themselves hostile to development. Those interests are still very much alive, as we have seen in opposition to the developments which have taken place at Invergordon. It is important that independent-minded people of radical persuasion should be at the head of the Board.

Another question which perhaps is of equal importance is more a matter for Board management and one on which it is important that the Board should be given some guidance at an early date. It concerns the assistance which the Board gives to smaller enterprises. It is not, of course, only the large schemes of the Invergordon type which will provide the anchor for the population in the Highlands which has been so successfully maintained at roughly the present level throughout the latter part of the 'sixties.

It is important that we utilise and develop our resources based upon local talents and initiatives and that we give help, not only to those who are able to raise finance through normal commercial channels—through ordinary banks and merchant banks—but also to those who, through their talents and their interest in remaining in the Highland area, have something to offer to the communities in which it is very difficult indeed to establish factories and major manufacturing industries. These are the people who are truly Highland people and who require assistance of a very special kind which the Board is eminently qualified to give them and for whom I think it must do perhaps a little more than it has been doing in the past.

With regard to the Board's overall strategy for the development of the Highlands, I have no doubt that the Board's general view that it is correct to have three major centres of industrial expansion—in Lochaber, on the Moray Firth, and in Caithness in what is called the Wick-Thurso access—is a broadly correct strategy, provided that it is not interpreted too narrowly and provided, for example, that the Moray Firth area is extended to include the eastern part of Sutherland in my constituency.

When in opposition, the right hon. Member for Moray and Nairn (Mr. Gordon Campbell) gave some verbal support to the notion that a bridge should be built across the Dornoch Firth. This seems to me to be one matter of high priority which the new Government would do well to examine with a real sense of urgency, because it relates directly to the question of the expansion of the Moray Firth area and the development of that area industrially into Sutherland.

I appreciate that the Under-Secretary cannot be expected tonight to answer all the points which I have raised, nor indeed to spell out in detail the view and attitude of the Government to Highland development. What I think it is fair to ask him is for an assertion that he at least will regard it as a major part of his duty as the Minister responsible for development in Scotland not to neglect the very special needs of that geographical half of Scotland in which a quarter-million people live—the Highlands and Islands.

10.23 p.m.

The Under-Secretary of State for Scotland (Mr. George Younger)

May I first congratulate the hon. Member for Caithness and Sutherland (Mr. Maclennan) on being successful in getting this debate so early in the life of this Parliament. I thank him particularly for his welcome to myself on my first appearance at the Dispatch Box in my new appointment. I greatly appreciate the fact that the hon. Gentleman has raised the important matter of the development of the Highlands and Islands at this stage. I am grateful to him for raising the various points that he did in his speech, and those which I do not manage to answer directly in the very few minutes which have been left to me tonight I will try to answer by writing to the hon. Gentleman later.

Before I cover some of the points raised by the hon. Gentleman, I want to refer to the general remarks he made on the subject of regional policy. The hon. Gentleman displayed remarkable skill in the old and famous art of making bricks without straw, because, having received in the Gracious Speech a very clear and firm statement of commitment by the new Government to a vigorous regional policy, the hon. Gentleman proceeded to explain to us why he thought that it was neither clear nor vigorous, and to damn it before he had even heard what was in it.

I therefore ask the hon. Gentleman to be a little more patient in future. After all, this is only the second day on which we have had Questions in this Parliament and only the fourth day of debate on the Gracious Speech. It was perhaps a little much to expect even a new Conservative Government to have done all the things that are required to be done to put regional policy right and to have abolished S.E.T. by the second day of Questions. The hon. Gentleman need have no cause for worry that this Government are as committed as any Government to a vigorous and effective regional policy. Indeed, we have been concerned in previous years that, in spite of the money that has been spent on regional policy, Scotland has been recording net losses of jobs rather than gains, which is what we would all like to see.

In the few minutes left to me may I move to the specific question of the Highlands and Islands Development Board. I accept what the hon. Gentleman said, that my new responsibility in connection with this Board is a most important part of the functions which I shall carry out and a most vital part of the general regional development policy affecting Scotland. I can assure him and, indeed, the Highlands and Islands Development Board that they will get every encouragement and support to do an even better job in the future for the Highlands than they have done in the past. I hope that he and they will accept this as a declaration of support to the Board from me and from my right hon. Friend the new Secretary of State.

The hon. Gentleman mentioned the question of the powers of the Board to support industries. He mentioned also the interesting remarks made in the Report of the Select Committee upon which he and I both sat, concerning the powers of the Board in connection with existing industrial enterprises. I can tell him that these consultations with the Board are in a fairly advanced stage following the suggestions made by the Select Committee and others, and I am hopeful that before long we shall reach agreement with the Board for such changes as may be agreed between us for improving the facilities which they can offer for incoming industry.

I am glad that we have had this early opportunity of a debate, and perhaps the hon. Gentleman was only too right in saying that I would have wished in a strange way that it would have been a little later in this Parliament that we had this debate, because I would then have been able to give a much fuller reply than I can give tonight.

One of the first things that we must consider is the membership of the Board itself. As the hon. Gentleman pointed out, the contracts of most of the members of the Board begin to run out at the end of August and we hope to make consultations as quickly as possible to establish what the future form of the Board and its personnel will be. I have no doubt that in these five years the Board has been able to catch the imagination of the Highlands and Islands and that it is now well-established as an effective organisation for Highland development. The new Board must retain and develop this image, and in considering appointments which will have to be made shortly our intention is to have a Board with as much experience and ability as possible in the different facets of the Board's work—industrial development, agriculture and fishing, tourism, etc. As I have said, we intend to support the Board effectively so that it can work even better in the future.

The second question we have to consider is the revision of the terms and arrangements under which the Board may give assistance to incoming industry. I mentioned that a moment ago. I have also had the opportunity in the past week to have a very short and informal meeting with the Chairman of the Board, and I am glad to say that I have succeeded in arranging provisionally to make my first official visit to meet the Board as a whole in Inverness on 30th July. I hope that on that occasion I shall receive the fullest views possible from all the Board members about their work and the needs which they feel they have in order to improve their work in the future. I hope that this will be a useful meeting in which I and the Board will be able to exchange views on what can be done most usefully to improve their work in the years to come.

The hon. Gentleman mentioned on several occasions the need for the recommendations of the Select Committee to be taken into account. I shall certainly take an opportunity at my meeting with the full Board to discuss particularly with them both the recommendations of the Select Committee and the discussions which the Select Committee had with the Chairman of the Board when it gave evidence to the Committee some time ago. I am sure that this at least is something useful which can come out of the long labours which the hon. Gentleman and I—

The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.