HC Deb 04 August 1971 vol 822 cc1554-7
5. Mr. Russell Johnston

asked the Secretary of State for Scotland what further consideration he has given to providing the Highlands and Islands Development Board with financial incentive differential to attract industry as was recommended by the Select Committee on Scottish Affairs in 1970.

The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office (Mr. Alick Buchanan-Smith)

Since the Select Committee reported there have been several discussions with the Board about the industrial incentives available in the Highlands and Islands. These have been increased during this period, and the present differential seems to me reasonable.

Mr. Johnston

Surely the hon. Gentleman will admit, as the Select Committee on Scottish Affairs established, that the differential is not enough to make any difference to an investment decision for a company in the Highlands? If the Government believe in the development of the Highlands, especially at a time when unemployment is higher than for 20 years, the hon. Gentleman must act now to change the situation or the Highlands will again be the tail-end Charlie at the time of recession.

Mr. Buchanan-Smith

We believe in development in the Highlands. I hope that the hon. Gentleman will not ignore the improvements that have been made in incentives since the Select Committee's Report. There have been improvements in building grants and in loans for advance factories. I assure the hon. Gentleman that the matter is under discussion with the Board, and that we shall keep the position under review.

Mr. Maclennan

Is the hon. Gentleman not aware that the economic collapse in West Central Scotland in particular and the measures taken to attract industry there, such as the creation of a special development area, make it all the more difficult for the Highlands and Islands Development Board to attract industry to the Highlands? Is he not aware, also, that the miserable measures which he has taken since the Select Committee reported are completely inadequate to attract new manufacturing industry to the Highlands?

Mr. Buchanan-Smith

I am sorry that the hon. Gentleman is ungrateful for what has been done for the Highlands. I ask him to bear two points in mind. The special incentives given to other areas decrease the differential by a certain amount, but the hon. Gentleman must remember that the kind of industry which the Highlands attract is not necessarily the same as that attracted to the central area. Second, despite what is happening in central Scotland, and the help that is given there, the Highland area enjoys special advantages in loans and grant assistance.

15. Mr. Gray

asked the Secretary of State for Scotland how much money was approved by the Highlands and Islands Development Board in grants and loans in the first quarter of 1971; and how this figure compares with the corresponding periods in 1969 and 1970.

Mr. Buchanan-Smith

In the first quarter of 1971 the Board approved grants and loans amounting to £490,266. The figures for the same quarter in 1970 and 1969 are £372,194 and £194,000.

Mr. Gray

I thank my hon. Friend for those figures, which entirely contradict some of the suggestions by hon. Members opposite that the Board is sleeping. He will know, of course, that a great amount of these loans and grants have gone to help with the increase in tourist accommodation, but, unfortunately, this is still much below what is required in the Highlands. Would he consult his right hon. Friend so that necessary legislation may be introduced to provide grants to people buying large old houses and improving them? At present, these grants are not available because they are not building additional rooms. This is very important in the Highlands.

Mr. Buchanan-Smith

I am grateful to my hon. Friend for the first part of his supplementary question. The figures that I have announced are an increase of over £100,000 on the past year. I certainly take note of what he said in the second part of his question.

Mr. Maclennan

Is the hon. Gentleman aware that the real need in the Highlands is for an increase in the number of jobs in manufacturing industries, and that this is where the new Board seems to be less successful than its predecessor?

Mr. Buchanan-Smith

Equally, what the hon. Member must realise is that, while one wants to see more jobs in Scotland—more jobs in relation to the money spent—it is particularly encouraging, in the face of the legacy of economic stagnation that his party left behind when they left office, that in the first quarter of this year the Board found so many projects which were worth approving.

Dr. Miller

Is this sum outwith any sums which might be spent by the Highlands and Islands Development Board in purchasing land for public ownership in Scotland, or is it included in this amount?

Mr. Buchanan-Smith

The answer is quite simple. These are grants and loans approved for projects in the Highlands or for individuals coming to help with those projects. I do not think that that supplementary has anything at all to do with this Question.

16. Mr. MacArthur

asked the Secretary of State for Scotland what discussions he has held with the Highlands and Islands Development Board regarding the effect of recent tax changes on the prosperity of Highland counties.

Mr. Gordon Campbell

None, but I am satisfied that the effects will be beneficial.

Mr. MacArthur

Is my right hon. Friend aware that my estimate is that the selective employment tax has cost the Highland counties over £10 million? Surely the Board welcomes the progressive removal of this burden, which has taken out £2 million more than the Board's splendid work has put in.

Mr. Campbell

I believe that my hon. Friend has already received information from the Chancellor of the Exchequer on his first point. The halving of S.E.T. and the announcement that it will be abolished in two years has been greeted with great relief by the Highlands, an area which probably suffered from it more than any other part of Britain.

Mr. Maclennan

Is the right hon. Gentleman not prepared to rebut the nonsensical figures of his hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur)? Is he unaware that more than twice the amount which has been alleged to have been collected in S.E.T. was spent on one project in Invergorden alone and that, since the abolition of investment grants, the Highlands have seen no new major industry coming in at all? What is the right hon. Gentleman doing to build on the foundations laid by the previous Government to build up manufacturing industry in the Moray Firth area?

Mr. Campbell

If the hon. Gentleman was listening to a reply just now, he will have heard that the increase in the amount of grant and loan given in the first quarter of 1971 represented a considerable increase on the amounts which the Highlands and Islands Development Board had given out for new projects in the same period in the previous two years.