Commons Sitting of 25 June 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  FRASERBURGH HARBOUR ORDER CONFIRMATION BILL
  Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  FOREIGN AND COMMONWEALTH AFFAIRS

    European Security and Co-operation
    Mr. Sproatasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest progress on the CSCE.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): This matter was considered by the Foreign Ministers at their meeting in Luxembourg yesterday. They issued the following statement:
    "The Foreign Ministers of the Nine are willing to complete the work of the conference as soon as possible. Taking into account the substantial progress accomplished on numerous subjects, they think that it is now both desirable and feasible to complete the negotiations in Geneva so that the third phase can take place in Helsinki by the end of July.
    The realisation of this hope depends on all delegations as hitherto accelerating their work and their efforts so that general agreement may be reached on all outstanding questions. The Nine, for their part, are ready to make every effort to contribute to this end."
    Mr. Sproat: I thank the right hon. Gentleman for that reply. Although believing myself that the balance of advantage lies just with the West in these talks, and congratulating the right hon. Gentleman and his Department on the skilful contribution they have made to these talks may I ask him to confirm that any result-
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    ing documents will in no way whatsoever give new approval or recognition in international law to frontiers emerging as a result of the Second World War? Will he also say how confident he is that the principles of non-intervention set out in Basket I will be regarded by the Soviet Union as superior to the Brezhnev doctrine?
    Mr. Callaghan: I am grateful to the hon. Gentleman for what he said. The documents will be political and not legal documents, but they will have considerable significance, even though they are political documents.
    As to non-intervention, there has been a great deal of discussion about the phraseology of these matters, and I hope that the hon. Gentleman will find it satisfactory when he sees the final version. I should not like to pronounce on the exact legal status, except in the context of what I have already said.
    Mr. Eldon Griffiths: I am grateful to the Foreign Secretary for making what is an important statement about the progress of this conference. Surely he appreciates that the House needs and wants to know——
    Mr. Speaker: Order. The hon. Member must ask a question.
    Mr. Griffiths: I was about to ask: will the right hon. Gentleman take an opportunity, before any final agreement is reached in Helsinki, to provide the House with a good deal more information, so that we may discuss this important matter, which could transform the political and, indeed, the security scene of Europe, if, as we all hope, it is successful?
    Mr. Callaghan: The documents are in a state of final preparation but are by no means completed. They then have to be officially translated, and the work will take a great deal of time. I shall try to lay them before the House as quickly as possible. They are all bound to be completed before we go to Helsinki.

    Cyprus
    Mr. Atkinsonasked the Secretary of State for Foreign and Commonwealth Affairs what further progress has been made towards a political settlement based on the independence, sovereignty, territorial integrity and non-alignment of the

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    Republic of Cyprus and towards the further aims outlined in Command Paper No. 6066, paragraphs 10 and 11; and if he will make a statement.
    Mr. James Callaghan: Her Majesty's Government continue to support the inter-communal talks under the good offices of the United Nations Secretary General, a third round of which is due to take place in Vienna on 24th July. As my right hon. Friend the Minister of State told the House on 10th June, the Commonwealth Committee has not yet met, but is expected to do so in July.
    Mr. Atkinson: Does the Foreign Secretary agree that the continuing presence of about 38,000 Turkish troops and the creation of a permanent Turkish State in Cyprus is in direct defiance of the United Nations' decision? Does he further agree that there is now a need for additional initiatives outside the third round of the opening talks in Vienna? Is it not the responsibility of our own Government, as a guarantor nation, now to seek further sanctions, and does my right hon. Friend not agree that when a nation is in defiance of a United Nations' decision, the only sanction available to the world is the imposition of an arms embargo or an economic embargo upon that nation until it conforms to the decision? Will the Foreign Secretary therefore now consider the whole business of imposing an arms embargo or an economic embargo upon Turkey until that nation conforms to the United Nations' decision?
    Mr. Callaghan: There is no doubt that the terms of the United Nations' resolution have not been carried out. That has been consistently stated. Her Majesty's Government's position on the Turkish Federated State of Cyprus is quite clear. We do not recognise it, nor has it claimed recognition as an independent State.
    As to how we enforce compliance with the United Nations' resolution, that is a matter of opinion. My hon. Friend seems to think that an arms embargo and a trade embargo would do that. I have no evidence at all that either measure would be successful, except to increase the stubbornness of the Turks.
    Mr. Bryant Godman Irvine: Will the Foreign Secretary say what he has been
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    able to do to protect Briish residents in Cyprus and their property there? Will he say, further, what he has been able to do about the property there of those normally resident not in Cyprus but in the United Kingdom?
    Mr. Callaghan: There is a later Question about that matter. Perhaps the hon. Gentleman will ask his supplementary question then.
    Mr. Brittanasked the Secretary of State for Foreign and Commonwealth Affairs whether he will now make a statement on the compensation of British citizens for loss of or damage to their property in Cyprus.
    Mr. Wallasked the Secretary of State for Foreign and Commonwealth Affairs what representations have been made to the Turkish Government about damage to the property of British subjects in Cyprus, and with what effect.
    The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): I would refer the hon. Gentleman to the reply which I gave to the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) on 11 th June and my hon. Friend's reply to my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Jeger) on 18th June.
    I am now able to inform the House that as the result of the ministerial talks held in Ankara and Brussels last month, further contacts took place earlier this month in London between British and Turkish officials on the claims of British subjects and the counter-claims of the Turkish-Cypriots. There have also been recent discussions in Nicosia between the leader of the Turkish-Cypriot community and the British High Commissioner on the subject of claims. Her Majesty's Government will continue to do all they possibly can to ensure that the interests of British citizens are satisfactorily resolved.
    Mr. Brittan: I welcome that answer. As the Turkish Foreign Minister told the Minister of State as long ago as 22nd May that his consideration of this question would be tempered by what he described as a sense of justice, may I ask whether the Minister of State accepts that there will be some disappointment at the fact

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    that there have not yet been practical proposals for the recompense of British citizens? Will the right hon. Gentleman remind the Turkish Foreign Minister that if he is inspired by a sense of justice, justice delayed is justice denied?
    Mr. Hattersley: I have a good deal of sympathy with what the hon. Gentleman says. However, I must tell the hon. Gentleman that when I met the Turkish Foreign Minister in Ankara some weeks ago, there was a first genuine sign of hope that the problems of the British citizens concerned would be resolved. I was impressed by the determination and sincerity with which the Turkish Foreign Minister promised to make some progress in this matter. We can only hope that the progress which I am sure will come about, will come about speedily, because that is an absolute necessity.
    Mr. Wall: Will the right hon. Gentleman remind the Turkish Government that Turkey has many friends in this country but that their friendship is under certain strains due to the delay in settling the legitimate claims of elderly British people in Cyprus—a delay which has now continued for far too long?
    Mr. Hattersley: I made exactly that point to the Turkish Foreign Minister five weeks ago. I told him not only that Parliamentary pressure was growing irresistible but that it was pressure with which I wholly sympathised. I think that he understood that point very well.
    Mr. Hooson: The right hon. Gentleman is impressed by the attitude of the Turkish Foreign Minister, but has any practical progress been made in these talks? Has there been any discussion of practical proposals for compensation?
    Mr. Hattersley: There has been some practical progress, although certainly not as much as one would wish. However, the fact that early this week and late last week there was discussion as a result of Turkish emissaries being sent to London is in itself a sign of progress. I cannot pretend that there are figures or numbers that I can yet offer to the House as a Turkish offer, but the conversations have begun, and that is progress.
    Sir D. Walker-Smith: May I, too, ask the right hon. Gentleman to accept my congratulations on the progress achieved
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    and on the terms of his answer to my previous question, to which he referred? May I now ask him whether, in principle, the Turkish Government accept liability, subject to the proof of damage and matters of quantum in each case?
    Mr. Hattersley: No, Sir, not entirely. The Turkish Government, as represented by its Foreign Secretary when I met him five weeks ago, acknowledged the statement as I described it. The Turkish Foreign Secretary said that he understood that there were problems involved not simply in allocating blame but also in deciding which authority was the legal authority on which responsibility had to lie. But the fact that the Turkish Government sent a representative to Britain is an indication that they want to play a practical part in meeting the needs. When I saw the Turkish Foreign Minister he said that in terms of money he knew that they could not be met by the Government of Cyprus but would have to be provided by another source. I assumed that to mean—and I hope it to mean—the Government of Turkey.

    Middle East
    Mr. David Watkinsasked the Secretary of State for Foreign and Commonwealth affairs what consultations are currently taking place between himself and Dr. Kissinger designed to secure a permanent peace settlement in the Middle East.
    Mr. Leslie Huckfieldasked the Secretary of State for Foreign and Commonwealth Affairs what recent discussions he has had with the United States Secretary of State about the Middle East; and if he will make a statement.
    Mr. James Callaghan: Dr. Kissinger and I are in constant touch through diplomatic channels concerning the Middle East. We last discussed the subject in person when we met on 30th May. We continue to encourage the United States to play a major rôle in the search for a just and lasting settlement.
    Mr. Watkins: In these consultations will my right hon. Friend stress that one at least amongst the many major factors in this situation is that the State of Israel should define the borders within which she constantly tells the world she wishes

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    to live in peace but which so far she has refused to delineate?
    Mr. Callaghan: That is a question of timing. Obviously that moment will come, but I doubt whether this is the right psychological moment to press Israel to take a definitive step of that kind. There is much more prospect of another round of negotiations on a limited basis providing a lessening of further tension.
    Mr. Huckfield: Will my right hon. Friend bear in mind that the State of Israel has already withdrawn some troops from Sinai and stands fully prepared to discuss the future of the Gidi and Mitla Passes, and is willing to engage in further discussions on the political status of the West Bank, possibly as part of a wider confederation? Will my right hon. Friend bear in mind also the need to keep the momentum of the present initiative going, and will he stress to Secretary of State Kissinger that he endorses all that he is doing to encourage that momentum?
    Mr. Callaghan: I agree with the last part of my hon. Friend's question about the need to keep the momentum going. If, as he says, Israel is willing to consider the matters that he has enumerated, there is some prospect of a further step towards peace.
    Mr. Walters: Quite apart from his conversations with Dr. Kissinger, has the Foreign Secretary been able to discuss this matter with his EEC colleagues in Luxembourg, and does he accept that, now that the referendum is over, Middle East countries are expecting Britain and France to take the lead in formulating an independent European policy and perhaps an independent European initiative in the area?
    Mr. Callaghan: Over the past few weeks I have had discussions with Mr. Rabin, Mr. Allon and Mr. Fahmi, the Foreign Minister of Egypt, and Mr. Khaddam, the foreign Minister of Syria. We touched on these matters in Luxembourg yesterday, but we did not go into them in depth, although I remind the hon. Gentleman that a meeting of experts took place in Cairo on the Euro-Arab dialogue on Monday 15th June. We can all construct further initiatives. There is no difficulty about that. The problem is to ensure that the initiatives now taking place come to sucessful fruition.
    Mr. Faulds: In my right hon. Friend's consideration of the Middle East problem will he bear in mind that the stage-by-stage process favoured by Israel and the United States merely serves, both in the passage of time and in Israel's expansionist settlements, to consolidate Israel's occupation of Arab territory? Many of us are becoming increasingly unprepared to accept this and would welcome a speedy move to Geneva, at which both Britain and France should be represented, in response to Arab requests.
    Mr. Callaghan: That is a partial statement of the situation which I do not wholly accept. There are great merits in a step-by-step approach when there is no complete trust between the two sides and when an intermediary such as the United States is playing its part. I believe that this is still the best way forward. It services the cause of peace rather than any individual State in the area.
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs if, in order to encourage the current Middle East peace negotiations, he will prohibit the proposed arms supply to Egypt and future arms supplies to Israel, and take the initiative for a joint embargo on arms supplied to both sides in the Middle East by Great Britain, the United States of America, the Union of Soviet Socialist Republics and France.
    Mr. James Callaghan: No, Sir; an effective agreement on some measures of arms limitation in the Middle East is likely to be possible only with the support of the parties to the dispute and in the context of a general settlement.
    Mr. Allaun: I understand that our explanation is that we want to maintain the military balance. Has not the same argument been used as an excuse by arms exporters for a century, with fatal results? Whatever the cost to Britain in lost exports, would not it be far, far less than the cost to Britain and to all mankind of a third world war, resulting from the escalation of the resumption of fighting in the Middle East?
    Mr. Callaghan: The answer to the last part of my hon. Friend's question is, "Yes, it would". No one wants a third world war. As regards the first part of my hon. Friend's question, arms exporters

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    may send arms only under licence, and the British Government have laid down a clear policy on these matters, to which we adhere. But the situation at the moment is that if Britain did not meet minimum requests from these countries, not only would these countries themselves feel that Britain was unwilling to assist; they would turn elsewhere, and perhaps to quarters to which my hon. Friend would not wish them to turn.
    Mr. Goodhart: Can the right hon. Gentleman think of any agreement controlling the supply of arms in the Middle East or anywhere else which has not been immediately broken by the Communist countries concerned, almost as soon as it has been signed?
    Mr. Callaghan: The USSR is playing a restrained rôle in the Middle East at present. In those circumstances, I do not wish to engage in a propaganda battle with her.
    Mr. Corbett: Will my right hon. Friend think again about his answer to my hon. Friend the Member for Salford, East (Mr. Allaun) and accept that, if the four countries named in the Question agreed not to supply arms to the nations in the Middle East, at least the attempt might be worth while? If they do not have the means with which to wage war it makes the waging of war unlikely, if not impossible.
    Mr. Callaghan: That is an ideal situation, but I live in a world of reality, and there is not the faintest chance of that being achieved.
    Mr. Leslie Huckfield: Does my right hon. Friend recognise that the Secretary of State for Defence has been extremely skilful at concealing some of the details of the reported arms deal with Egypt? If the reports of a £450 million arms deal are true, bearing in mind the present initiatives being undertaken by my right hon. Friend the Secretary of State, is not this the wrong moment at which to be selling arms, and is not the amount too large?
    Mr. Callaghan: The answer to all three questions is "No".
    Mr. Aitkenasked the Secretary of State for Foreign and Commonwealth
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    Affairs if he will seek to pay an official visit to the Middle East.
    Mr. James Callaghan: I have accepted invitations to pay official visits to Egypt and to Syria. No dates have yet been fixed.
    Mr. Aitken: Is the Foreign Secretary aware that that is a most welcome reply, but that he has a lot of ground to catch up when he visits the Middle East, because he is the only Foreign Minister from a major Power in the Western World not to have been to the Middle East in either 1974 or 1975—a record which compares unfavourably with the active visits by other Foreign Ministers? When he makes these visits, will the right hon. Gentleman please reassure people that Britain does not want to opt out of peace making in the Middle East?
    Mr. Callaghan: The hon. Gentleman forgets that, with remarkable prescience, I went to the Middle East in the weeks before I became Foreign Minister in 1974, and returned from there on the day that the right hon. Member for Sidcup (Mr. Heath) declared a General Election, having had conversations with President Sadat, Israeli leaders and many others, so that there was no great need to return, quite apart from the fact that we have had two General Elections. I do not complain about this. We are fortunate in being a staging post, which means that leaders of Arab countries as well as leaders of Israel frequently come through London. I imagine that if we were to do an arithmetical totting up, for what it is worth—it would not be worth very much—I probably would be found to have had more contact with Arab leaders than have many other Foreign Ministers.
    Mr. Roy Hughes: Does the Foreign Secretary agree that despite all the wheelings and dealings that are taking place—with which I would not necessarily disagree—the crux of the situation in the Middle East is that the Palestinians have been displaced from their homeland? Does he agree that in any future settlement it is their interests and their welfare which must he given the first consideration?
    Mr. Callaghan: There is no doubt that the future of the Palestinians is one of the very difficult matters that will have

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    to be settled if there is to be an overall peace settlement. That is one reason why there is still much to commend a step-by-step approach, although there is also no doubt that some people want a return to negotiations in Geneva. However, despite public protestations about the desire of a return to Geneva, I am not at all sure that those protestations are matched by private desires.
    Mr. Eldon Griffiths: Does the Foreign Secretary not agree that my hon. Friend the Member for Thanet East (Mr. Aitken), has a point? I appreciate that the right hon. Gentleman has been heavily involved in European negotiations, and I realise also that other Ministers have been to the Middle East. I believe, from personal experience, that a visit by the Foreign Secretary at this time would be opportune and would assist in the development of our trade and diplomatic efforts in the Middle East.
    Mr. Callaghan: I recognise that. As I said in my original answer, I have accepted invitations to pay official visits to Egypt and Syria, and I have other areas in mind to visit. The hon. Gentleman will also know that there are many other problems also which are engaging our attention from day to day.
    Mr. Hooson: Does the Foreign Secretary have any intention of meeting the leaders of the Palestinian Liberation Organisation? It appears that that organisation is the key to the whole situation, and it would be as well to have direct consultations and talks with it.
    Mr. Callaghan: The leaders of the Palestinian Liberation Organisation have not yet recognised the existence of the State of Israel. In those circumstances, I find it difficult to meet them.

    South Africa (Iron and Steel Corporation)
    Mr. Canavanasked the Secretary of State for Foreign and Commonwealth Affairs how many complaints he has received on behalf of British citizens resident in South Africa about the activities of the Iron and Steel Corporation of South Africa.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Edward Rowlands)Five such cases
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    have come to the notice of our consular posts in South Africa.
    Mr. Canavan: Can nothing be done about this corporation placing in the British Press misleading advertisements which depict South Africa as a land flowing with milk and honey and which lure British workers to that country with paid passages and promises of housing for their families? These workers often find themselves stranded in South Africa, and then Members of Parliament are obliged to ask the Foreign Office to assist in bringing them back to Britain, to their families. Can nothing be done to stop the further exploitation of labour by this racialist régime?
    Mr. Rowlands: British workers going to South Africa should be cautious in their approaches, especially to some of the advertisements, which in some cases could be misleading over matters of overtime and conditions of work. On the practical action that we can take when problems arise in South Africa, the staff of our posts in South Africa keep a close watch on these matters. The recently appointed First Secretary will shortly be visiting the area where a number of our immigrants work and will discuss a number of matters with them.
    Mr. Ian Lloyd: Has the time not arrived when the Foreign Secretary should remind some of his colleagues that British governmental responsibility for the actions of a State-controlled South African-governed corporation ended in 1909, and that if British citizens have complaints against such a corporation, the proper address to which such complaints should be sent is the Minister for Industry in South Africa?
    Mr. Rowlands: I do not think that any British Government or consular post in South Africa can wash its hands of the problems which may arise with British citizens.

    Non-Proliferation Treaty
    Mr. Robin F. Cookasked the Secretary of State for Foreign and Commonwealth Affairs if he will now make a statement on the result of the Non-Proliferation Treaty Review Conference.
    Mr. Hattersley: The most important achievement of the conference was the adoption by consensus of a Final Declara-

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    tion, copies of which have been placed in the Library. I believe that the support shown for this constructive declaration demonstrates the will of the great majority of Governments to increase the effectiveness of this vitally important treaty and will encourage non-parties to join.
    Mr. Cook: I am grateful to my hon. Friend for depositing that declaration. Does he agree that it indicates that no real progress has been made towards further restriction of the proliferation of nuclear technology? Will he reconsider the opposition expressed by the British Government at the review conference to the proposal that the sale of nuclear technology should be restricted to parties to the Non-Proliferation Treaty and to the proposal that the reprocessing of nuclear fuel should be placed under international control? What view did the Government express to the Government of West Germany at the recent London talks on the proposed contract with the Government of Brazil, which will give that country a nuclear weapon capability, although it has consistently refused to sign the Non-Proliferation Treaty?
    Mr. Hattersley: I cannot accept the desirability of changing the position we took at the conference, nor can I accept that the disappointments at that conference were as great as my hon. Friend supposes. The joint declaration shows some progress, which we should all welcome.
    The hon. Member will have to give me notice of the second part of his question.

    Southern Africa
    Mr. Gouldasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make known to the United States of America Her Majesty's Government's views on the situation in southern Africa.
    Mr. James Callaghan: Full opportunity is always taken of my regular contacts with the United States' Government to explain Her Majesty's Government's views of southern Africa.
    Mr. Gould: Will my right hon. Friend try to ensure that when the issue again comes before the Security Council, South Africa will not be protected from the
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    consequences of its illegal occupation of Namibia by the combined vetoes of the United States and the United Kingdom?
    Mr. Callaghan: I should never want to use a veto, but, on the other hand, the language that is used in resolutions must also be acceptable to Her Majesty's Government. On this occasion, despite the great work that had gone into securing a constructive resolution, this was overturned at the last minute and I was not prepared to instruct our delegate to vote for it.
    Mr. Blaker: Now that Mozambique has become independent, is the Foreign Secretary in a position to give the House more information about his intention regarding aid to that country, in the context of the imposition of sanctions against Rhodesia? Will he confirm that if this is his intention, such aid should be firmly in the context of a United Nations' resolution? How does he envisage that the quantum of such aid should be assessed?
    Mr. Callaghan: As I have explained on previous occasions, this matter will, first, have to be discussed with the new Mozambique Government, which took office only yesterday or today. Following the Commonwealth Prime Ministers' Conference, we should prefer the initiative to be taken through the United Nations, and that is what we shall work for. On the other hand, I should not rule out bilateral aid if that seemed to be the only way of assisting.
    Mr. Hooley: Is my right hon. Friend aware that I have studied with some care the exact text of the resolution which the British Government vetoed? Is he aware that the text was absolutely consonant with Labour Party policy as it has been expressed over many years?
    Mr. Callaghan: No, Sir, I am not aware of anything of the sort. The resolution proposed was unreasonable and extreme. It sought to make a determination under Chapter 7 of the United Nations Charter, which would have paved the way for a whole range of actions that we believe would have been unjustified.

    Law of the Sea Conference
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth

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    Affairs what discussions have taken place, since the end of the Geneva session of the Law of the Sea Conference, with the chairman of the Committee of 77; and whether he will make a statement.
    Mr. Hattersley: Since the Geneva session ended on 9th May, we have been examining the single negotiating texts produced by the chairmen of the main committees. We shall be having extensive consultations on these with other States, including members of the Group of 77, before the next session of the conference.
    Mr. Knox: Will the Minister discuss with Mr. Evensen the concept of the exclusive economic zone? Will he also discuss the compatibility of this with the concept that the sea-bed should be the common heritage of mankind?
    Mr. Hattersley: We should be hoping for too much if we believed that much progress could be made at this conference without the acceptance of some of the general principles of the economic zone. I understand that within that concept there have to be understandings about sharing the revenues that might come from it, and free passage among, upon and above it. Therefore, the British representative at the discussions to which the hon. Gentleman referred will bear all these points in mind.
    Mr. McNamara: Is my right hon. Friend aware of the impatience felt in many of the fishing areas over the failure to come to some concrete decisions about fishing and economic zones? This is causing great distress. People do not know what investment to put into the industry. When shall we be told something definite for them?
    Mr. Hattersley: I understand the problem that has been created, not least because of the progress of the Law of the Sea Conference and the need to carry out parallel discussions on the common fisheries policy with the EEC. The combination of those two negotiations is causing a good deal of uncertainty. My hon. Friend will understand that an international negotiation of the sort that has been taking place in Geneva, and before that in Carácas, is bound to take some time. If it is to succeed, it needs to have the support of many nations with many
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    different interests. That can be achieved only over a long period.
    Mr. Henderson: Is the right hon. Gentleman in a position to tell the House about the recent talks which his right hon. Friend had with the Norwegian Foreign Minister and the Icelandic Prime Minister on the desire of those countries to increase their fishing limits? Is he able to say whether he is putting forward proposals whereby our limits can be increased at the same time, on the basis of mutual co-operation and understanding with them?
    Mr. Hattersley: Our obligation is to conclude with our partners and friends a successful Law of the Sea Conference and to make sure that the common fisheries policy of the EEC meets the needs of our own fishermen. We are pursuing that end. I do not think that the revelation of negotiations with individual countries would help that.
    Mr. Wall: Is the right hon. Gentleman aware of the growing pressure among fishing industries of many nations towards demanding united action for a 200-mile EEZ? In view of the slowness of the Law of the Sea Conference and with the very difficult questions of international law it has to determine, will the right hon. Gentleman consider an interim decision on this matter?
    Mr. Hattersley: It is important that no decisions or arbitrary unilateral actions are taken before the outcome of the main considerations. We have made it clear that we would not contemplate taking a decision or making statements which were in conflict with international law. It is important that the entire thing be done as a package rather than individual items being pursued.

    Mozambique
    Mr. Dalyellasked the Secretary of State for Foreign and Commonwealth Affairs what consultations he has had with the Government of Brazil on aid to the new Government of Mozambique.
    Mr. Rowlands: None, Sir, although my right hon. Friend the Minister of State, when recently in Brazil, took the opportunity to exchange views with the Brazilian Government on recent developments in Africa.
    Mr. Dalyell: What will be on the agenda when Mr. da Silveira comes here in October?
    Mr. Rowlands: As my right hon. Friend has just said, the particular need of aid for Mozambique is a question that we wish the independent Government of Mozambique to determine and discuss with all parties. We hope that it will form part of a United Nations programme.
    Mr. Hurd: May I press the Minister on the answer given to my hon. Friend the Member for Blackpool, South (Mr. Blaker)? The Secretary of State told us that there have been preliminary contacts with the Frelimo authorities before independence. What scale of sums was discussed as the possible British contribution? Would this be at the expense of existing foreign aid commitments which might be less purely political in origin?
    Mr. Rowlands: It is difficult to make an assessment at present. There have been no detailed discussions, either bilaterally or internationally, about the degree of aid to Mozambique at present.

    Mr. Tindemans (Visit)
    Mr. Watkinsonasked the Secretary of State for Foreign and Commonwealth Affairs when he expects Mr. Leo Tindemans to make a visit to the United Kingdom.
    Mr. Hattersley: Mr. Tindemans will visit the United Kingdom from 29th June to 2nd July. He will have talks with my right hon. Friend the Prime Minister, with my right hon. Friend the Foreign and Commonwealth Secretary and with other Ministers and will also meet representatives of opinion outside the Government.
    Mr. Watkinson: How will Mr. Tindemans be going about meeting other elements of opinion in Britain besides Ministers? Are the Government to have formal or informal talks on this matter? Will my right hon. Friend consider having a debate on the subject of political union in Europe while Mr. Tindemans is here?
    Mr. Hattersley: The subject of a debate must be one for my right hon. Friend the Leader of the House. As to whether the talks will be formal or informal, I think that the assurance for
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    which my hon. Friend asks is the assurance that the talks in which we take part will not result in commitments by the Government. I certainly give him that assurance without qualification.
    Regarding Mr. Tindemans' conversations with people outside the Government, the position is that his programme is being determined by and organised by the Belgian Embassy in London. I understand that as part of that programme the Belgian Ambassador has arranged already for Mr. Tindemans to visit Scotland and Wales, and to call on representatives of the major political parties.
    Mr. Eldon Griffiths: Is the right hon. Gentleman aware that Mr. Tindemans has already sought discussions with the Leader of the Opposition and has been made very welcome and assured that these discussions will be very full and frank?
    Mr. Hattersley: Extraordinarily enough, I included the right hon. Lady the Leader of the Opposition among the major political parties.

    Namibia
    Mr. Hooleyasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the policy of Her Majesty's Government concerning the future of Namibia, in the light of the expiration of the deadline set by the Security Council for South African withdrawal from Namibia.
    Mr. James Callaghan: Our policy concerning the future of Namibia remains as I stated it in this House on 4th December last. Our position in the Security Council was explained in answer to my hon. Friend's Question on 18th June and again earlier this afternoon.
    Mr. Hooley: Will it continue to be the policy of Her Majesty's Government to give diplomatic aid and comfort to South Africa by vetoing in the Security Council and voting against in the General Assembly of the United Nations, resolutions designed to bring pressure on South Africa to give up Namibia?
    Mr. Callaghan: That is clearly not the case. As I explained earlier, it depends on the nature of the resolution. We have made it quite clear to South Africa that we regard her occupation of Namibia as unlawful. We have indicated

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    to South Africa that she should withdraw, and we are having very friendly conversations with SWAPO, and, indeed, are giving it aid. None of these matters can give very much comfort to South Africa, to use my hon. Friend's words, but whether we should declare that this is a threat to peace, with all the consequences that that entails under Chapter 7, is a different matter. Another resolution which could have been equally effective could have got past without a veto.
    Mr. Townsend: Arising from his meeting with the President of SWAPO on 11th June, will the Foreign Secretary say exactly what is the extent of the educational assistance being given to SWAPO and what is the Government's intention about such assistance in the future?
    Mr. Callaghan: I should require notice to be able to give a detailed reply, but I am quite certain that we are giving £35,000 to assist young men, and perhaps women, from that country to come here to study. Subject to the approval of my right hon. Friend the Minister for Overseas Development, I am willing to increase that sum in order that we may have a trained cadre of people available to help in Namibia when the time for the freedom of that country arrives.

  EUROPEAN COMMUNITY

    Referendum
    Mr. George Gardinerasked the Secretary of State for Foreign and Commonwealth Affairs what arrangements he has made for the supply of information to the public on EEC matters following the referendum result.
    Mr. Hattersley: The special arrangements made during the referendum campaign have been terminated, but the arrangements which existed previously will of course continue.
    Mr. Gardiner: Does the right hon. Gentleman recognise that there is now likely to be a growing public demand for information on EEC matters—a demand which cannot be properly met by the Commission's own information offices? Does he accept that there is therefore a responsibility on the Government to provide more authoritative information on the Community's aims and
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    objectives, particularly within the Council of Ministers? To that end, would it not be helpful if Ministers made more frequent statements to the House on what they are doing, have done or are proposing to do, within the Council?
    Mr. Hattersley: There is a very comprehensive system of statements, debates. White Papers and other matters which has been agreed by the House as a result of a previous report and which the Leader of the House announced some months ago as part of our intention of making sure that the House is informed about Community matters. I shall be making such a statement later this afternoon. I think that the way the country has to be informed on progress in the EEC is through debates, questions and procedures in this House, and I am sure that we have given adequate opportunity for those debates and other procedures to be carried out.
    Mrs. Bain: Will the right hon. Gentleman undertake to publish a White Paper to explain to the people of Scotland the full implications of EEC membership? Will he refer particularly to the future of the steel, fishing and agriculture industries and of the Scottish Assembly and the Scottish Development Agency? Will he confirm or deny the validity of guarantees given to the people of Scotland on these issues by the pro-European campaign during the referendum?
    Mr. Hattersley: I think that the hon. Member is making her speech three weeks late. It would be unchivalrous of me to remind her of the votes in Scotland as a result of the previous speeches that she made. I do not commit the Government to producing a specific White Paper on the subjects she referred to, but the Government are obliged to produce periodic White Papers on progress within the EEC and I have no doubt that these subjects will be touched on there.
    Mr. Roy Hughes: Does my right hon. Friend agree that the EEC draft proposals should be readily available to the public, particularly through Her Majesty's Stationery Office? Is he aware that the Paymaster-General has already given an assurance to the House that steps are in hand to achieve this end? What progress has been made?
    Mr. Hattersley: I cannot, offhand, give my hon. Friend new information about draft proposals being available to the public through the usual sources, but no doubt he will recall that they are made available as quickly as possible in the House. I can only reiterate my answer to the first question. The real obligations of parliamentary scrutiny are to make sure that this House is aware of what goes on and to give hon. Members the opportunity of publicising their views on these matters. That we have promised to do.

    Foreign Policy
    Mr. Hurdasked the Secretary of State for Foreign and Commonwealth Affairs what recent progress has been made in working out a common foreign policy for the member States of the EEC.
    Mr. James Callaghan: There is a growing wish among member States of the European Community to use the political co-operation machinery to work for common positions on foreign policy. Member States now regularly discuss international events as they occur. There has been continuing close co-operation on the Conference on Security and Co-operation in Europe, on the Euro-Arab dialogue, on the problems of the Middle East and Cyprus, and on developments in Portugal, Latin America and Africa.
    Mr. Hurd: I thank the Foreign Secretary for that reply. Does he not feel that the foreign policy differences which exist between members of the Community are now differences of emphasis and not of fundamentals? Would it not be possible to go beyond the machinery for co-operation which the right hon. Gentleman has described and make a strenuous effort now to get a concerted policy across the board?
    Mr. Callaghan: If we were to try to get a concerted policy across the board we should encounter a lot of difficulties. It is better that we should foresee what is likely to happen in these situations and work out common positions, rather than adopt an abstract group of principles from which, when the strain is applied, we should probably depart.
    Mr. Spearing: Does my right hon. Friend agree that further co-ordination of foreign policies of member States
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    might have implications for the overseas aid policies of at least some of those nations? Will he confirm that the proposal to give the Foreign Secretary and the Minister of Overseas Development similar powers in respect of these functions has nothing to do with the proposals for the co-ordination of the foreign policies of member States.
    Mr. Callaghan: I had never thought of that matter until my hon. Friend suggested it. He is quite right in saying that the discussion of the aid programmes and the fact that Britain is the largest member of the Commonwealth and carries with it about 30 other Commonwealth countries into these discussions, is transforming Community debates on aid to the developing countries. Those factors are giving these debates a greater sense of urgency and relevance, and I hope that they will produce more aid.
    Mr. Powell: Will the right hon. Gentleman lay before the House or otherwise publish the evidently important speech that he made yesterday in the Council of Foreign Ministers, of which what appear to be extracts have appeared in the Press?
    Mr. Callaghan: If that is the wish of the House I shall be delighted to do so. I shall certainly put a copy of the speech in the Library. I do not rate its importance as being above that.

    Treaty of Rome
    Mr. Cryerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make representations that Articles 92 and 93 of the Treaty of Rome should be applied with a high degree of flexibility.
    Mr. Hattersley: Our objectives on the retention of those powers needed to pursue effective regional and industrial policies were satisfactorily achieved in renegotiation, but I can assure my hon. Friend that we would make representations if they seemed necessary.
    Mr. Cryer: Does my right hon. Friend accept that it is frequently the task of a Labour Government to distort competition, contrary to the terms of those Articles? Will he attempt to ensure that the Labour Government are free to apply their policies towards industry without interference by the Commissioners, who,

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    as he knows, are not subject to the right of veto in this respect?
    Mr. Hattersley: It is important to approach Community policy and the policy of the Labour Party not as matters of semantics but as matters of reality. I have no doubt that a Labour Government would be able to do what they wished within the Treaty of Rome and within the Community.
    Mr. Crawford: Will the right hon. Gentleman give a categorical assurance that the EEC will have no control over the constitution, financial powers and autonomy of the Scottish Development Agency?
    Mr. Hattersley: I think that I can give that assurance, but I am reluctant to give an assurance as total as that on any occasion without suitable notice. If I cannot give such an assurance I shall gladly write to the hon. Member about it, and if I am wrong I have no doubt that he will publish my refutation of my own answer.

    European Parliament
    Mr. Gryllsasked the Secretary of State for Foreign and Commonwealth Affairs what is the policy of the EEC on direct elections to the European Parliament; and what communications he has had with the Council of Ministers on this subject since the referendum.
    Mr. Hattersley: At their meeting in December 1974 the EEC Heads of Government noted that the objective laid down in the Treaty of Rome of election by universal suffrage should be achieved as soon as possible. We shall now undertake a thorough study of this matter.
    Mr. Grylls: Does the right hon. Gentleman accept that now that the referendum is over, the time for prevarication over direct elections to the European Parliament is also over? Does he agree that to have direct elections to the European Parliament in 1978 would be the best way to strengthen the democratic control of the institution? Will the Government hasten to make a decision on the matter, in agreement with what the rest of the Community did in 1974?
    Mr. Hattersley: I disagree with each of the three points of the hon. Gentleman's supplementary question. There has
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    certainly been no prevarication. If we had not taken time over the matter during the renegotiation, it would have been that we had prevaricated but that we had moved with an urgency and speed which were altogether intolerable while the British people were making up their minds as to where our future lay. The hon. Gentleman must understand that a high level of democracy is preserved within the Community by the existence of a Council of Ministers, each democratically elected and each able to prevent proposals going ahead which, in their view, are not in the national interest. There must now be a careful examination of the desirability and propriety of direct elections. I have no doubt that when that careful examination has been completed, my right hon. Friend will report it to the House.
    Mr. Heffer: As the question of direct elections was not one of the items in the renegotiated terms, will my right hon. Friend give an assurance that not only shall we examine the matter in depth but that the views of the Labour Party will be taken into consideration before there is any question of a commitment of any kind by the Government?
    Mr. Hattersley: That would be such a step forward—some hon. Members might describe it as a step in the other direction—such a step in our constitutional history that it would be essential that all the parties and many interests be consulted before the Government made up their mind.
    Mr. Eldon Griffiths: In the process of whatever consultation the Government feel to be right in the matter, will the right hon. Gentleman ensure that there is the fullest debate in the House?
    Mr. Hattersley: Yes, Sir. I give that assurance at once. Before any system of direct elections was implemented, legislation would need to be passed in this House. But the hon. Gentleman is right in implying that at the earliest stage the House should be notified of the Government's intentions and given any opportunity to express its views. I promise the hon. Gentleman that that will happen.

    Foreign Ministers
    Mr. Blakerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about

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    his latest meeting with other EEC Foreign Ministers.
    Mr. James Callaghan: At the meeting of the Council of Ministers yesterday I took the opportunity to assure them that following the referendum the United Kingdom would play a full and constructive part in Community policies and activities. In the course of a long agenda we discussed the Community's relations with Canada, Egypt and Portugal; we held an Association Council with Cyprus; we took note of Greece's application to join the Community; we considered the next steps on raw materials and commodities; and among various trade items, I am glad to say, we reached a satisfactory settlement on the question of beef exports to the Community from Botswana.
    Mr. Blaker: If the country continues on its present mad economic course, shall we not find it increasingly difficult to exert in the Community the influence we should be capable of exerting? If we can bring inflation under control, however—as other member countries of the Community appear to be doing—does the right hon. Gentleman agree that we shall be able to play a major rôle in influencing the policies of the Community, both internal and external?
    Mr. Callaghan: I do not necessarily accept the hypothesis with which the hon. Gentleman began his supplementary question, but every one of us on the Government side of the House remembers that on a very early page in the Labour Party manifesto we said that our first and most important task was to overcome inflation, and I believe that the steps now being taken will achieve that end. [HON. MEMBERS: "What are they?"] Those are questions that should be addressed to other Ministers. I have little doubt, having been at least an observer of some of the discussions, that there is more prospect of our overcoming inflation with—[An HON. MEMBER: "Careful."] I shall be very careful—the consent and assent of the trade unions and the people of this country than by any kind of statutory policies or political coalitions.
    Mr. Hooson: Is it correct that the right hon. Gentleman finds himself greatly inhibited in initiating any foreign policy moves because of the present rate of inflation? Does he find that rate an in-
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    tolerable hindrance to taking major steps in foreign policy?
    Mr. Callaghan: I am being tempted on to Tom Tiddler's ground. The answer is a mixed one. Britain's view is taken very seriously by our colleagues in the Community and other nations in the world. At the same time, I cannot depart from what I said on the 8 o'clock news—I do not know whether anybody listened to it—[Interruption.] I am glad that I had an audience. I said that of course the impact of inflation weakened our ability to take initiatives in foreign affairs. It weakens it in many ways. It weakens the respect with which we are listened to if our affairs do not seem to be under proper management, and it limits the assistance we can give when there are a number of desirable ends at stake.
    For example, we must now consider the question of aid to succour democracy in Portugal. I should like Britain to be in a position in which we could ensure that Portugal followed a democratic path by assistance from outside, if such a thing is possible. But how can I look my right hon. Friend the Chancellor of the Exchequer in the eye and ask him for large sums at present? I give that as an example. There are many other illustrations of that kind.
    Mr. Jay: Can my right hon. Friend say what was the settlement on beef exports from Botswana that he mentioned?
    Mr. Callaghan: Yes, Sir. I am grateful to my right hon. Friend for giving me the opportunity of boasting. The Batswana, who are so heavily dependent on cattle, instead of being required to pay a levy of 100 per cent. on their imports into the Community, as under the Community rules, will now pay a levy of 10 per cent. That is the minimum that anybody could be expected to pay. I am glad to say that that levy will make very little difference. They will also charge an export tax which they will be able to use in any way they like, in their own country, to reimburse their people. The Botswana delegation met me at 1 a.m. today in Luxembourg, and thanked me profusely. That only goes to show how much the fears that some people expressed before the referendum have proved to be incorrect.

    Energy Policy
    Mr. Rostasked the Secretary of State for Foreign and Commonwealth Affairs if EEC energy policy will be discussed at the next Heads of State meeting.
    Mr. Hattersley: The agenda for the meeting has not been settled, but I expect that energy matters will be discussed.
    Mr. Rost: Have the Government satisfied our European partners that the British National Oil Corporation, as it is proposed to be established under the Petroleum and Submarine Pipe-Lines Bill, will in no way contravene the rules on fair trading and unsubsidised competition? If so, how?
    Mr. Hattersley: Certainly we have satisfied our partners. I assume that we have done so by the force and logic of our argument.
    Mr. Watt: At the meeting will the right hon. Gentleman confirm this country's determination that the oil to be taken from the Scottish sector of the North Sea will be refined in the United Kingdom, and will not be shipped or piped straight to our EEC partners?
    Mr. Hattersley: Such questions are more appropriate for my right hon. Friend the Secretary of State for Energy, but I must remind the hon. Gentleman that our policy on the national control of oil—a policy which was shared by the previous Government—has been accepted—[Interruption.] The British national policy on British oil was accepted by our predecessors when they were in Government, and it is in all ways consistent with our membership of the Community.

    Mineral Resources
    Mr. Tim Rentonasked the Secretary of State for Foreign and Commonwealth Affairs if he will take an initiative towards the development of an EEC policy for the development of mineral resources among the Group of 77.
    Mr. Hattersley: The Prime Minister's initiative on commodities at the Heads of Commonwealth Government meeting at Kingston sought to create a broad frame-
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    work within which policies for individual raw materials, including the development of mineral resources, could be worked out. We are now pursuing these ideas with our partners in the EEC, where careful and urgent study is at present being given to these problems.
    Mr. Renton: Has the right hon. Gentleman taken note of the much more aggressive attitude towards commodity stabilisation schemes shown by the Group of 77 than the attitude advanced by the Prime Minister at the Jamaica conference? Is this not a very good area for the EEC to examine, both for financing overseas sources of minerals and for using its collective consumer power in the event of expropriation by the overseas host country?
    Mr. Hattersley: No, Sir. I think that the remedy the hon. Gentleman suggests is wrong. We have all noticed the aggressive attitude adopted by some developing countries. The object of the Kingston initiative of my right hon. Friend the Prime Minister was to convince them that in these matters co-operation is better than confrontation. If the hon. Gentleman wants to advance that thesis, he must advance it in a way which does not run side by side with the suggestion that the developed countries—the raw material consumers—should act in an aggressive fashion. That would be altogether inappropriate.
    Mr. Tugendhat: Can the Minister say anything further about the attitude of the Government to the most interesting document produced by the Commission on the supply of raw materials to the Community, and especially to its imaginative ideas for a combination of private and State enterprise in the exploration and development of new mineral resources in the less developed countries?
    Mr. Hattersley: That document was examined at the political co-operation meeting of the EEC Council of Ministers in Dublin some weeks ago. That was a preliminary examination. The details are now being considered by individual member countries and experts. I welcomed parts of that document when I attended that meeting, not least because they confirmed the suggestions put forward by the Prime Minister in Kingston some days before.

NORTH SEA OIL
The following Questions stood upon the Order Paper:
Mr. Cryer: To ask the Chancellor of the Duchy of Lancaster if he will make a statement on progress in the discharge of his responsibilities with regard to oil and energy matters.
Mr. Rost: To ask the Chancellor of the Duchy of Lancaster whether he will report progress on his negotiations with the oil industry on State participation.
The Chancellor of the Duchy of Lancaster (Mr. Harold Lever): I should like, Mr. Speaker, the leave of the House to answer Questions Nos. 41 and 42.
We are having constructive discussions with a substantial number of companies which now, on any reckoning, represent over half the interests in the North Sea. Of these companies, Burmah, Deminex, Tricentrol and Blackfriars Oil have agreed in principle to 51 per cent. Government participation in their commercial oil fields. In our discussions detailed proposals for giving effect to participation are being considered.
Mr. Cryer: Is my right hon. Friend satisfied that he has obtained the best possible deal for the British people? Is he satisfied that the matters concerning the exploitation of North Sea oil have now been agreed in principle? That having been done, is he now considering transferring his outstanding responsibilities to the Secretary of State for Energy?
Mr. Lever: I am satisfied that the Government are in the process of securing—and have already to a large extent secured—an excellent deal for the British people. That deal, not unnaturally, is not incompatible with the success of those who are developing the North Sea. Secondly, I am not able to say at this stage how all the deals will conclude. Therefore, I cannot raise my hon. Friend's anticipation about my future removal to areas which will cause him less anxiety than my present responsibilities.
Mr. Rost: How does the Chancellor reconcile his efforts to nationalise 51 per cent. of the North Sea oil, at an estimated cost of approximately £1 billion of tax-
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payers' money, with the advice he gave to the Prime Minister on the need to curtail inflation and the public borrowing requirement?
Mr. Lever: I do not accept the hon. Gentleman's description of my efforts—and even less the broad estimate of the cost which he attributes as likely to result from them. I therefore have no difficulty in reconciling the efforts to secure for the British people a fair share of the control of this vital national resource with our great determination—which was commented on in appropriate parts of Question Time—to deal with the problem of inflation.
Mrs. Winifred Ewing: Can we have a word from the Minister on the question of the conservation aspects of the development of the oil fields? Is the Minister aware that the EEC thinks that 180 million tons a year are appropriate, that the British Government are on record as saying that the figure of 110 million tons is the maximum, and that the Scottish National Party's view, in the best interests of Scotland's preservation, is 50 million tons a year? Does he understand that the question of preservation is not a joke to those people who live in the communities affected by the extraction of oil? Will the Minister say a word on this important question?
Mr. Lever: Happily, it is not for me to decide between the EEC Commission's view of the wise rate of exploitation of North Sea oil and the view of the Scottish National Party on the conservation of oil, and the wisdom of the respective positions of the Scottish National Party and the EEC.
Mr. Fernyhough: My right hon. Friend read out a list of the companies which he said had agreed to the State taking 51 per cent. of their shares. Does that list represent all the companies, or are there still companies with which he has to negotiate, or with which he is still negotiating but which are proving somewhat difficult?
Mr. Lever: The companies the names of which I read out are those which have so far firmly accepted in principle 51 per cent. State participation. I do not regard those which have not yet seen fit to reach such an agreement as being difficult. But it is a matter of choice.

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They are considering the Government's proposals and are discussing the various problems, as they see them, which arise. I hope to make substantial further progress steadily in this way.
Mr. Patrick Jenkin: Will the right hon. Gentleman answer the question put to him by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost)? If the Government are going to come forward in a few weeks with a harsh and unpalatable programme of public expenditure cuts, how can it conceivably make sense for them to lay out hundreds of millions, possibly thousands of millions, of pounds in buying out the North Sea oil companies?
Mr. Lever: The right hon. Gentleman appears not to have followed the clear explanation given by myself and other members of the Government about our purposes. We are not laying out these sums, which are torturing the fantasies of the Conservative Party and the Opposition. We are negotiating on the basis of making a contribution to the future cost of the development of the North Sea as appropriate. We would advance money promptly only where the alternative to doing so would be to hold up the further exploration and exploitation of this vital asset.
Mr. Skinner: Does my right hon. Friend agree that a number of the companies on the list which he read out have had to negotiate from a position of relative weakness rather than strength? Does he expect some of the larger, more efficient and better backed companies to agree as readily as those which he has mentioned? Will he take on board the proposition that if he is successful he might have to live by the present Cabinet maxim, which is that if any Cabinet Minister tends to carry out Labour Party policy too well he is shifted sideways or downwards?
Mr. Lever: The occupational risk of Labour and Conservative Cabinet Ministers being successful can be regarded as one of the lesser risks in both cases. However, I do not believe that sideways, upwards or downwards movements of Cabinet Ministers are directly relevant to my negotiations about the North Sea.
To answer the more serious part of my hon. Friend's question, naturally there is
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an unevenness in the response to the proposals which I made, which some companies accepted fairly readily, while some were more cautious about the problems which might be involved for them and which needed further examination.
The Government formed the view that this was not a nationalisation operation but was a participation operation to give us control of an adequate percentage of North Sea oil and to allow us to develop expertise and to put the further development of the North Sea more readily within the reach of the Government through the BNOC. That being the Government position, we did not feel the need for any compulsory powers. We believed that we could reach a fair basis with those reasonable companies which were willing to deal with us sufficiently to fulfil the Government's purpose of achieving 51 per cent. Government participation in the commercial oil fields of the North Sea. I have no reason to feel pessimistic in any way about accomplishing that purpose in due time.
Mr. Aitken: As the Chancellor of the Duchy indicated in his answer the nature of his wide-ranging powers over North Sea oil, and as we are also aware of the Paymaster-General's extensive responsibilities in the financial and taxation aspects of North Sea oil, will the right hon. Gentleman clarify for us exactly what the Secretary of State for Energy is allowed to do all day long in the matter of North Sea oil?
Mr. Lever: It is absolutely impossible to create that disunity between members of the Government Front Bench which exists between members of the Opposition Front Bench. I assure the hon. Gentleman that my duties in regard to North Sea oil are limited to being chief negotiator with the oil companies for the Government's purpose of achieving a 51 per cent. participation. My right hon. Friend the Paymaster-General has charge of the fiscal aspects of the North Sea—the petroleum revenue tax and similar fiscal aspects. If the hon. Gentleman will ponder the resulting equation, he will see that the Secretary of State for Energy has a considerable remit.
Mr. Sillars: Is my right hon. Friend aware that Scottish trade unionists will applaud his rejection of the idea put forward by the hon. Member for Moray

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and Nairn (Mrs. Ewing) on behalf of the Scottish National Party? Will he confirm that if we reduce the rate of exploration and output to 50 million tons a year we shall need fewer rigs, fewer platforms, fewer supply ships, and less engineering activity—which will mean fewer jobs for Scottish workers?
Mr. Lever: I am grateful to my hon. Friend for pointing out in so forthright a way the consequences that would follow any effort to hamstring the reasonable development and the reasonably speedy exploitation of the North Sea. Every reduction required by the SNP or anyone else would be accompanied by a loss of indirect and direct revenue for the Scottish people and would thereby affect the considerable achievement of improving the standard of life in Scotland which has already taken place and which will continue.
Mr. Biggs-Davison: Are the Government fully satisfied that, disregarding all these ideological considerations, they have obtained as good a deal for Britain as the Norwegian Government obtained for Norway?
Mr. Lever: It is difficult to compare precisely the relevant deals achieved. The Norwegian Government have perhaps exacted greater control and a greater share of the profits in their area than is the position in our area. But there are differences in the exploration position, in the licensing terms and in many other aspects. We are negotiating as firmly and toughly as is compatible with a scrupulous respect for our obligations and the fair reward offered to the companies which matches the needs of the British people—and Scots people are included in that entity—to get their fair share of the proceeds of the North Sea oil.
Mr. Rost: In view of the totally unsatisfactory nature of that reply I beg to seek leave to raise the matter on the Adjournment at the earliest opportunity.

QUESTIONS TO MINISTERS
Mr. Dalyell: On a point of order, Mr. Speaker. If you could, rightly, find 13 minutes for the Chancellor of the Duchy of Lancaster, how about two minutes for the Church Estate Commission?
Mr. Speaker: I would willingly find two minutes, or even more, but I had no request to do so.

EUROPEAN COMMUNITY (BUSINESS)
The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): With your permission, Mr. Speaker, I will make a statement about business to be taken in the Council of Ministers of the European Community during July. The monthly forecast for July was deposited yesterday.
The Heads of Government of the member States will meet in Brussels on 16th and 17th July. The agenda for this meeting has not been confirmed, but it is likely that there will be discussion on commodity matters in the context of relations with developing countries, and on the prospects for dialogue between oil producers and consumers. We expect the Heads of Government to discuss stage III of the Conference on Security and Co-operation in Europe and to exchange views on the general economic situation.
At present three meetings of the Council of Ministers are proposed for July. Finance Ministers will meet on 10th, Foreign Ministers on 15th and 16th, and Agriculture Ministers on 21st and 22nd July.
Finance Ministers are expected to carry out the second formal examination of the economic situation in the Community provided for in the convergence decision of 18th February 1974. They will also consider the Community exchange régime and work in preparation for the IMF meetings.
At the Foreign Affairs Council Ministers will make final preparations for the European Council in Brussels on 16th and 17th July. They are also expected to continue their discussion of raw materials problems in the light of preparations for the seventh special session of the United Nations General Assembly. Ministers will have before them a report on relations with Portugal and possibly the final text for formal approval of the agreement with Mexico.
Agriculture Ministers are expected to consider proposals amending the basic wine regulations and the part of the basic sugar regulations dealing with imports from ACP countries, and for the

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rationalisation of horticultural production under glass.
Mr. Eldon Griffiths: I am sure that the House is grateful for that full statement. At the meeting of the Heads of Government on 16th and 17th July, is the agenda not to contain a debate on the future evolution of the Community and its institutions? That seems to be a remarkable omission.
Secondly, I note that the Finance Ministers are to meet on 10th July. Bearing in mind the debate that took place in the House two weeks ago on the Community's proposals for dealing with economic problems of the member countries, will the British representatives at that meeting have available to them the details of the package which the Prime Minister has promised? If they do not, they will be at a disadvantage.
Thirdly, there is to be discussion on relations with Portugal at the Foreign Affairs Council. Can the House be told in advance of the Government's policies towards Portugal in respect of the EEC? Do we favour Portugal's eventual admission to the Community?
Mr. Hattersley: The Heads of Government at their meeting may well receive from Mr. Tindemans an interim account of the discussions he has had on European unity and the definition of union. That is very much a matter for him, and if that discussion takes place it will be in a rather informal atmosphere.
Even were it not put on the agenda, I do not believe that the Heads of Government could be accused of dereliction by omitting another examination of EEC institutions. The Government's view is that the EEC is much better served if it gets on with the work of the EEC rather than constantly examining its institutions and mechanisms.
On the Finance Ministers' meeting, the hon. Gentleman must not tempt me to answer questions which are well outside my province. The Secretary of State refused to do something similar earlier today and I intend to follow the path he set.
The Foreign Affairs Ministers' meeting will examine relations between the Community and Portugal. Our attitude to Portugal from within the EEC is clear and has been described many times. We
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hope that the Community can offer assistance to Portugal, especially assistance that is likely to encourage the development of democracy within Portugal. It is inherent in the Treaty of Rome that Portugal can apply for membership of the Community when the Government of Portugal and the organisation of Portuguese politics are genuinely democratic. When that happens we shall, of course, welcome an application.
Mr. David Steel: Will the Finance Ministers be doing anything to speed up the negotiations which are going on within the Community on the question of the restraint of cheap imports from the Far East?
Secondly, does his reply to the hon. Member for Bury St. Edmunds (Mr. Griffiths) mean that the whole question of direct elections to the European Parliament will not be considered by the Council of Ministers except in the context of Mr. Tindemans's report in the autumn?
Mr. Hattersley: I said in my initial statement and again to the hon. Member for Bury St. Edmunds (Mr. Griffiths) that the agenda for the Prime Minister's meeting is not yet fixed. If there is a predisposition to discuss direct elections I am sure that none of the Ministers present will be reluctant to do so. I cannot assure the hon. Gentleman at this moment that the subject will firmly appear on the agenda.
Discussions on textile imports from the Far East are going on within the Commission. I cannot give the hon. Gentleman an assurance that the subject will appear on any ministerial agenda next month.
Mr. Fernyhough: When the question of glasshouses is discussed, will my right hon. Friend make clear to the EEC that there is enough vandalism in this country without the Government being prepared to pay for vandalism to knock down that which they paid to put up?
Mr. Hattersley: It is not my duty to deal with the substance of this matter. As I understand it, the discussions on the rationalisation of horticulture are intended to give an opportunity to those horticultural producers who find the increase in horticultural costs so severe that they doubt their ability to continue as viable

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units, to go out of business in a way which causes them the minimum amount of hardship. I regard that as a desirable objective, as I am sure does my hon. Friend.
Mr. Scott-Hopkins: Will the right hon. Gentleman tell the Minister of Agriculture, Fisheries and Food to re-examine his policy towards horticulturists in refusing to give them the subsidy allowed by the EEC? Will the right hon. Gentleman also confirm that at the Agricultural Ministers' meeting in July, Ministers will deal with the questions of milk and olive oil swindles that have been taking place in the past? Will he also confirm that the Ministers will be looking at the stock taking report of Commissioner Lardinois, and, taking decisions on that very important document concerning the forward development of the agricultural policy of the EEC? Will he also confirm that it is no good the institutions standing still? Although one does not want to take decisions in a hurry, one must move forward in the development of the institutions over the coming months. Can the right hon. Gentleman also tell us which right hon. and hon. Gentlemen opposite will be joining us in the European Parliament?
Mr. Hattersley: The stock taking report, which I agree is central to the future of agriculture within the Community, is now being discussed in the capitals. I doubt whether the discussions that are going on in the capitals of the Nine will have moved so quickly and made such progress for the report to be discussed fruitfully at the August Ministers' meeting. Questions of the alleged swindles and subsidies withheld are for the Minister for Agriculture, Fisheries and Food.
Mr. Donald Stewart: Is the Minister aware that due notice will be taken in Scotland that fishing again is not deemed of sufficient importance to appear on the agenda? Is he also aware that since the destruction of food was one of the most repugnant aspects of EEC policy, the idea of rationalisation of horticultural production under glass is lunatic in a world in which food prices are high and many are starving?
Mr. Hattersley: I can only assume—I make this interpretation as much as anything out of charity—that the hon. Gentleman does not know what is the
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intention of the raionalisation of horticultural production under glass, otherwise I do not think he would describe it in such intemperate language.
Turning to the need to discuss fishing problems, I do not deny that there are problems involved in both the Law of the Sea Conference and the EEC fisheries policy. It is important not to confuse talk with action. Our duty is to make sure that a satisfactory fisheries policy emerges from the EEC and from the Law of the Sea Conference. That may be obtained best by bilateral diplomacy rather than by my appearing in the House every month and announcing that we shall soon do something about it.
Mr. Cryer: Will my right hon. Friend assure the House that full consultation will be undertaken with the horticultural industry before any decisions are reached which apply to this country under the rationalisation of horticulture under glass scheme? What representations will be made to extend the arrangements for the ACP countries to non-associate countries? What representations are likely to be made to reduce the skimmed milk mountain?
Mr. Hattersley: Neither of the last two subjects that my hon. Friend raised will be discussed next month. On the rationalisation of horticulture, my hon. Friend the Minister of State for Agriculture will discuss any prospects as well as any decisions with the industry. Although the last two subjects are not on the agenda, my hon. Friend knows that a good deal of progress is being made, not least in the provision of assistance to Asian developing countries. Inside or outside the Council of Ministers, we shall pursue that as vigorously as we can.
Mr. Nicholas Winterton: The Minister of State has informed the House that a meeting of Agricultural Ministers will take place in the latter part of July. Will he give an assurance to the House that the growing crisis in the dairy industry in this country, which could result in rationing this winter, will be on the agenda?
Mr. Hattersley: No, I cannot give an assurance of that sort, nor would it be appropriate for me to comment on a question in no way related to the business of the EEC next month.
Mr. William Hamilton: Can the Minister be more specific about what is to happen to regional policy in the EEC? I am sure he understands that this is very critical to areas such as Scotland and that that is one of the reasons why Scotland voted to stay in the EEC? Will he reassure us that what Mr. George Thomson said in the course of the Referendum campaign was that we had a lot to teach the EEC about regional policy and that that will be translated into facts when we get around the table in Europe?
Mr. Hattersley: I certainly share Mr. Thomson's judgment that we have a regional policy in this country which should commend itself to our partners within the Community. Two important things have to be said about the Community and British regional policy. First, during the renegotiations we obtained, without doubt and without any sort of controversy, the certainty that British regional policy could be applied in the way in which the British Government determine and that it would in no way be inhibited by decisions taken outside this country.
Secondly, it is now our duty to press as hard as we can and as best we can for an extension of Community-wide regional policies, many of which already benefit Great Britain and all of which, if we can extend them appropriately, will bring increased benefit to the hard-hit areas of this country.
Mr. Blaker: Can the right hon. Gentleman tell us what has happened to the Council of Development Ministers? Is it not a fact that they have not met for three or four months? Are they not faced with an important document proposing large increases in aid to the countries of South-East Asia? Should they not be considering that document?
Mr. Hattersley: There are a number of matters which the Development Ministers need to consider, but these raise difficult issues for individual member Governments. Not least is the question of the financing of any project which Development Ministers might rightly want to pursue. Therefore, it was generally agreed two or three months ago that the time was not right for such a meeting.
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I hope that such a meeting will take place quite soon, but it will not be in July.
Mr. Spearing: Will my right hon Friend be more specific about the subject of sugar in the ACP countries, due to be discussed on 21st July by the Agriculture Ministers? Secondly, does he recall that the debate which we had on the economic guidelines, since the Referendum, was on a motion to take note but that the Minister did not allow the Question to be put? Does he believe that that is a satisfactory state of affairs?
Mr. Hattersley: Questions about procedure in this House should be directed not to me but to my right hon. Friend the Leader of the House. By and large the House has been given the opportunity to debate all issues of substance before they go in front of the Council of Ministers. Indeed, the very issue to which my hon. Friend has referred was one on which we placed a reserve in order to give the House the opportunity to discuss that subject. Because of the tone of the debate and the contributions that were made, the Government felt able to release that reserve after the debate had taken place. Certainly we postponed our agreement until that had happened.
Mr. Peyton: As we are discussing Community business, I should like to take advantage of the right hon. Gentleman's presence—because he is always very helpful—to ask him when it is likely that an announcement will be made about which Members of the Labour Party will be attending the European Parliament?
Mr. Hattersley: An announcement will be made very shortly. However, the right hon. Gentleman knows—the decision has already been taken—that they will attend that Parliament. I have no doubt that whichever of my right hon. and hon. Friends are chosen, they will add to the galaxy of talent already there.
Mr. Peyton: Will the right hon. Gentleman translate "very shortly"?
Mr. Peter Mills: Is the Minister of State saying that there will be no chance of discussing in Brussels the very important problem of the milk industry, bearing in mind that there is a surplus in the

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Community and a shortage here and that unless something is done there will be very serious problems for the British consumer? Will he think again on that, please?
Mr. Hattersley: I take the hon. Gentleman's point. I think that there may well be opportunity to discuss that matter. I merely described what was on the form of the agenda as it stands at present. It is always the situation, on days such as these, that I must anounce the agenda as we understand it. I know that there is some discussion at present about limitations of supplies in the Community and the need to increase supplies in Great Britain. That may be the issue to which the hon. Gentleman is drawing attention. If that is an issue that my right. hon. Friend believes should be discussed, I reply that it may well be discussed. My duty, and my only ability concerning matters such as this, is to tell the hon. Gentleman of the form of items on the agenda.

MEMBERS (ACCESS BY CONSTITUENTS)
Mr. Stanley: On a point of order, Mr. Speaker. I should like to raise the circumstances in which a constituent of mine was yesterday unable to obtain entry at the St. Stephen's entrance to see me. The constituent concerned came up specially from my constituency by appointment. She had with her a letter of appointment signed by myself. Despite that, she was refused entry at the St. Stephen's entrance by the police officer at the head of the queue. She was asked to queue, and subsequently got entry to the Central Lobby one and a quarter hours later.
I fully appreciate the difficulties facing the police when a mass lobby is going on, but I hope that this matter will be investigated further by the Serjeant at Arms and his staff and clearer guidelines produced so that any constituent who has an appointment with a Member of this House and has written evidence of that appointment is at all times able to get access to the Central Lobby.
Mrs. Chalker: Further to that point of order, Mr. Speaker. I should like to
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support my hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley), because I have encountered this matter in previous mass lobbies. I took the precaution of making appointments for a number of constituents, but restricted the number so that as many constituencies as possible could be represented in the Central Lobby yesterday. Constituents of mine were also halted for between one and one and a half hours when coming for appointments with letters in their hands. I hope that something can be done about this matter for the future.
Mr. Speaker: I am very sorry indeed if hon. Members or, indeed, their constituents have been caused inconvenience. I think that it is very occasionally that a mistake is made. This is one of the consequences of mass lobbies. Certainly we will do our best to see that constituents have access to their Members.
On the whole, I think that the authorities of the House do an extremely good job in controlling these lobbies.

CARAVAN SITES ACT 1968 (AMENDMENT)
4.2 p.m.
Mr. John Loveridge: I beg to move,
That leave be given to bring in a Bill to amend the Caravan Sites Act 1968.
Part I of the Caravan Sites Act gave greater security to tenants on fixed sites and Part II dealt with the problems of travelling of gipsy families. My Bill deals only with Part II.
Perhaps I may explain my intentions to the House under three heads: first, what the Bill sets out to do; secondly, the reasons why it is needed to protect residents living near illegal camps; and, thirdly, how it protects the campers themselves.
First, the Bill aims to remove an anomaly. This arises because Section 10 of the Act makes certain encampments illegal in local authority areas where adequate sites have been provided for families on the move.
Section 11 was intended to ensure enforcement. It does not work. The Bill is to enable it to work as intended. It applies only in local authority areas which have been designated by the Secretary of

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State as providing adeqeuate facilities for travelling families. In these areas only it enables local authorities to obtain summonses to attend court against the owners of caravans alleged to be breaking the law so that they may answer the complaint. If the owner cannot be traced, the court may order that a notice be affixed to the caravan concerned inviting the owner to court. If he then fails to come to offer a defence, and only then, the court may try the alleged offence and, if it is found proved, order that the offending caravan be moved.
Secondly, the reason why this amendment is necessary can be demonstrated from a case in my own borough, but it affects many other areas. Indeed, my hon. Friend the Member for Orpington (Mr. Stanbrook) in November last year asked:
"Is the Minister aware that the Caravan Sites Act has completely failed to solve the problem of unlawful gipsy camping".—[official Report, 13th November 1974; Vol. 881. c. 398.]
These encampments may be filthy, even insanitary, and often give rise to bitter complaints and even actual fear for the health and safety of the children of many residents living nearby.
The hon. Member for Bootle (Mr. Mahon) had to call in the fire brigade to help clear up the debris from such a camp. In my constituency, an encampment in Moor Lane, Cranham, which moved away in 1973, was back again for months in 1974, breaking the law with impunity because the enforcement section could not be applied.
That section was said by the Government in June last year to provide an expeditious means by which a magistrates' court could grant an order of eviction on the offenders and their caravans. It did not and could not do so. Nor could it do so in the neighbouring constituency of the hon. Member for Hornchurch (Mr. Williams) into whose area they moved via Romford. The same problems in 1968 caused the hon. Member for Hornchurch to support the then Bill, on which he served as a member of the Committee, and he supports this amending Bill today.
There are two main reasons why the Act does not function as intended. The first is that local council officers often
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cannot find the names of the owners on whom to serve summonses.
The London borough of Havering was among the first to provide sites to be designated and has experience of how the Act does not work. The chief executive of that borough wrote to me saying:
"Our experience is that an illegal gipsy encampment is not a fixed body of persons. Numbers of people and caravans vary from day to day."
To overcome the difficulty of finding the owners the council tried to bring a case in their absence. This was opposed and went to the High Court. On 18th July 1974 the court determined that a caravanner could not be proceeded against unless he had an opportunity to be heard. At the same time the court recognised the council's difficulty in saying that there were
"great practical difficulties for local authorities seeking to operate these provisions",
and went on,
"even if the difficulties render the machinery of this legislation ineffective"
the court must still ensure that the defendant had the opportunity to dispute the facts.
The machinery is, in fact, useless. The Bill seeks to remove some of the difficulties of enforcement for local authorities whilst at the same time preserving the right of the citizen to be heard in his own defence. It would not only protect residents from illegal camps but be helpful to travelling families themselves.
Thirdly, until the end of 1974 only 110 sites, providing for 1,635 caravans, had been provided in the kingdom even though the Government estimated that there may be 5,000 such travelling families. That is 1,500 more families than Lord Avebury estimated when he so effectively introduced his Bill as the then Member for Orpington in 1968. I am glad that my hon. Friend the present Member for Orpington supports this measure today.
If Section 11 is amended to work, councils will see the benefit that comes from providing proper sites, more sites will become available, and the need for illegal camping will grow less. More facilities and stable conditions should enable gipsy children to have a better education. This problem was raised by the hon. Members for Nottingham, West

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(Mr. English) and Hornchurch in 1968. The latter reminded the House of the Plowden Report's statement that gipsy children
"are probably the most seriously severely deprived children in this country. Most of them do not even go to school."
I know that the Government are considering the working of the Act. If they mean to amend it, I hope that they will favourably consider the proposals now put forward in the Bill.
I am grateful to hon. Members on both sides of the House who support the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. John Loveridge, Mr. Alan Lee Williams, Mr. Michael Neubert, Mr. Michael English, Mr. Simon Mahon, Mr. David Mitchell, Mr. Michael Shersby, Mr. Roger Sims and Mr. Ivor Stanbrook.

CARAVAN SITES ACT 1968 (AMENDMENT)
  CARAVAN SITES ACT 1968 (AMENDMENT)
  Mr. John Loveridge accordingly presented a Bill to amend the Caravan Sites Act 1968: and the same was read the First time; and ordered to be read a Second time upon 11th July and to be printed [Bill 184].

SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [Lords]
Order for Second Reading read.
4.10 p.m.
The Secretary of State for Scotland (Mr. William Ross): I beg to move, That the Bill be now read a Second time.
Mr. Alick Buchanan-Smith: On a point of order, Mr. Speaker. Because of the Government's handling of business such as this, the Bill raises a particular problem in that it completed its stages in another place only yesterday and the Bill, as amended by another place, and certainly with the amendments that were made in the course of yesterday afternoon, coming from another place, was available in the Vote Office only after 12 o'clock today. Hon. Members are put under some difficulty when a Bill as important as this one is to be debated in the House but is made available only some four hours in advance of the debate actually starting. I would be grateful, Mr. Speaker, if you would consider that point and give your opinion on it.
Mr. Douglas Crawford: Further to that point of order, Mr. Speaker. While I am not supporting the Government, I would point out that it was the Conservatives who held up the Bill in the first place.
Mr. Ross: I believe an explanation is due. The Bill was printed ten and a half weeks ago and the main amendments were made not yesterday but very much earlier. I am very surprised if the hon. Gentleman was not aware of the few amendments that were made.
Mr. John Peyton: Further to that point of order, Mr. Speaker. A certain natural curiosity leads me to wonder what on earth the right hon. Gentleman the Secretary of State would have said had the positions been reversed and a substantially amended Bill come from another place at midday with no opportunity for detailed study, and apart from the substance of the matter there is just the question of courtesy. What I am now complaining about—and I hope the right hon. Gentleman will pass it on to his colleague—is that the House of Commons is constantly treated to a process of discourtesy and disregard which would

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never have been accepted by the Labour Party had they been in Opposition.
Mr. Ross: I do not know whether the shadow Leader of the House is aware that the Bill could have been considered in relation to its principle a long time ago and further considered in relation to Second Reading by the Scottish Grand Committee——
Mr. T. G. D. Galbraith: Why the Scottish Grand Committee?
Mr. Ross: It could have been considered there but was blocked by hon. Gentlemen opposite, and the hon. Gentleman who shouts is an expert at blocking.
Mr. Peyton: Further to that point, Mr. Speaker. The Opposition are under no obligation whatever to dance to the Government's tune, and the fact that the Opposition find it objectionable that the matter should go to the Scottish Grand Committee is simply no excuse for the Government's disgraceful conduct.
Mr. Speaker: I have listened to these exchanges with great interest but they are nothing to do with the Chair.
Mr. Ross: The Bill seeks to bring to the whole of Scotland the benefits of a new executive body—the Scottish Development Agency—charged with furthering the development of Scotland's economy and improving its environment. The Bill gives the agency substantial financial resources and wide powers for carrying out these tasks. It is surprising, therefore, that there should be a history of blocking and destruction in respect of this important Bill.
It is not in the form in which we intended it to be discussed in this House. I regret any inconvenience due to hon. Members not being up to date on the latest points in relation to some amendments made in another place. Certain vital powers which are fundamental to the entire concept of the agency have been removed as a result of the misguided action of the noble Friends of hon. Members opposite in another place. I would never have thought that the other place was the best example of democracy but the House may be assured that we shall restore these powers in full so that the
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agency can play the rôle which we designed for it.
The Bill is one of historic significance to Scotland. It is the first to confer on a Secretary of State for Scotland substantial powers in relation to Scottish industry. Together with the executive responsibility for selective industrial assistance, which I assume next Tuesday, taking over from the Department of Industry, this means a major direct responsibility for jobs in Scotland, the first time a Secretary of State for Scotland has had this power.
There is no doubt that the current economic scene in Scotland is sombre but it is not one of unrelieved gloom. Unemployment has been rising progressively over the years and now 4·7 per cent. of our workers are unemployed, and the figures of short-time working, redundancies and job vacancies are causing concern. Continuing inflation, by eroding the export competitiveness of Scottish industry, could jeopardise future employment. Of course, these difficulties are not peculiar to Scotland. They reflect the difficulties which all Western industrialised nations have faced over the past two years, and especially the problems of the British economy, with which Scotland's prosperity is intimately bound up.
The reassuring aspect of the current Scottish situation is that Scotland is proving more resilient to today's economic difficulties than the rest of Britain or countries like France or West Germany. In the past we used to be hit first and hardest in any recession. Today unemployment has risen here more slowly than elsewhere. In the early 1960s Scotland had an unemployment rate which was more than double that of the British average. If that situation still prevailed today we should now be experiencing unemployment figures of over 8 per cent. That is why I am so angry that the Bill has been held up.
In the mid-1960s we were losing as many as 45,000 people each year by net emigration. The most recent figures show a net gain of population. That is something to be noted and gives an indication that the people of Scotland have more confidence in Scotland now than they had in the past. The activity associated with North Sea oil development has been a major force underlying the improving

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trend. It has created directly or indirectly some 40,000 jobs in Scotland. These jobs have all come about in advance of our receiving any oil and result from the massive public and private investment which has been injected into Scotland to get the oil ashore. But much of the credit also lies with the vigorous regional policies which have been pursued by successive United Kingdom Governments over a longer period, extending generous investment inducements to industry throughout Scotland and creating a modern infrastructure.
We still have a long way to go, however, before Scotland is able to offer the range and quality of jobs and the living environment needed for all who want to make their homes in Scotland. We need to grasp all the opportunities available to us and to spread their benefits more widely throughout Scotland. There are more opportunities today because of the oil development. There are continuing problems in the rural areas, but, above all, our older towns and cities, especially of Clydeside, lack the jobs and quality of life which nowadays people are entitled to expect. This is why we need the agency with adequate powers and resources to bring to the development of Scotland.
The Scottish Development Agency marks the creation of a uniquely Scottish approach to industrial development in Scotland. Policies to create jobs must continue to be based on a strong national policy, because only this can ensure that jobs are diverted from the more prosperous regions to Scotland and other areas in need of employment. Scotland has gained considerable benefits from traditional regional policies. Anyone who knows of the changes that have taken place in Fife and Lanarkshire, with the disappearance from some areas of entire coalmines and the bringing in of modern industries, must give credit to these past traditional policies. We do not intend to dismantle them. We strengthened them last year by doubling the regional employment premium and making the whole of Scotland a development area.
Many people in Scotland, however, have felt over the years that we could benefit more from the existing system if we had decision-making machinery which would enable us to identify and seek out the types of industrial development most
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likely to prosper in Scotland. Also, a more direct approach is needed if we are to transform and modernise the structure of Scotland's older industries and help home-based Scottish industry to develop. After all, only one job in five in Scotland's manufacturing sector is provided by firms which have come into Scotland since the war. The other four-fifths come from Scotland's indigenous industries, many of them small and badly structured.
Attention to this sector is just as vital. Transforming an old industrial structure such as that of West Central Scotland is a monumentally difficult task. We must not underestimate it. The owners of Scottish industry—past or present—must bear their share of the responsibility for the weakened state of many of our older industries today. Too often they failed to plough back profits into new plant and machinery at the right time and were unwilling to take the risk of expansion.
As a result, Scottish industry has not been in a strong position to resist the pressures of wider market forces. Too frequently individual industrial concerns—British or international—have rationalised out of existence what they call marginal Scottish plants to promote the greater profitability of their organisation as a whole. The overall result has been a substantial loss of jobs and industrial capacity in Scotland.
Obviously, the world does not owe Scotland a living. Completely uncompetitive industries cannot be supported indefinitely. But there have certainly been too many missed opportunities.
This is where the SDA can come in. What we feel is needed is a body whose main concern is to keep and create as many jobs in Scotland as possible—not just to make the fastest and biggest profits. It will have to take risks.
The SDA will have this motivation and the powers needed to step in and attempt to establish a viable and free-standing Scottish concern where jobs might otherwise be lost altogether. This power to involve itself directly in industry is perhaps the most fundamental new element in the entire concept of the SDA, and one which has the enthusiastic support of Scotland's workers—and we believe many people in management.
Through the misguided action of the Opposition in another place, the Bill

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as it stands denies to the agency the full powers needed to perform this rôle. That action shows the extent to which the Opposition are out of touch with the feelings and aspirations of the people of Scotland. I repeat the undertakings I gave earlier that we shall restore to the full the powers which have been removed in another place.
The SDA will not have an exclusively industrial remit. It is charged not simply with building factories and creating jobs but also with removing past dereliction and undertaking imaginative schemes to reshape and improve the environment of whole areas, making them attractive and pleasant places in which to live and work.
The combination of these two tasks in the remit of a single agency is a novel one. It is also what Scotland needs. We have to tackle quickly and in a coordinated fashion the economic and environmental decay which spoils the whole way of life of too many of Scotland's workers and stands in the way of attracting new work and new life to our older towns and cities. The resources which the agency will spend on improving the environment will pay dividends.
It will be able to undertake the whole process of redevelopment from clearing dereliction to providing factories and attracting the jobs to fill them. We have seen from past experience how building new roads, new houses and new towns has done much to attract industry and workpeople to Scotland. The agency will be applying these lessons to our older industrial communities. It will work particularly closely with local authorities to ensure that its projects are fully in accord with the needs of the community. We have already discussed this rôle with the local authorities and they have assured us of their full co-operation in these tasks. The discussions will continue.
I turn to the main provisions in the Bill. Clause 1 empowers me to appoint a chairman and between six and 12 other members to the agency from backgrounds which I consider relevant to its functions, and in particular, industry, banking, accounting and finance, trade unions, local government and environmental matters. I am also empowered to appoint the first chief executive of the agency in consultation with the chairman. This will
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enable this vital appointment to be filled without necessarily waiting for the agency to be fully established. But the chief executive will always be the employee of the agency and all subsequent appointments to this post will be filled by the agency with my approval.
When I have appointed the chairman designate of the agency—and I would like to be able to do so within the next few weeks—I shall invite to serve with him a number of members designate to form an organising committee to plan in advance for the establishment of the agency. I do not want to waste any time. The remaining members of the agency I shall appoint at a later date. The formation of an organising committee will ensure the least possible delay in getting the agency into action. It will be the organising committee's task to decide on the structure for the agency. The agency will be absorbing the work of two existing organisations—the Scottish Industrial Estates Corporation and the Small Industries Council for Rural Areas of Scotland.
I shall charge the organising committee to pay most particular attention to the interests of all the people at present employed in them. All our consultations so far indicate that the staff of the Estates Corporation and the Small Industries Council take great heart from the fact that they will be joining a new and expanding organisation with a remit—and the resources—to do a bigger and better job than they have been able to do in the past. This is certainly the right approach and I think the staff of the two organisations need have no fear about the change. I shall also ensure that the organising committee fully consults them on the shape of the agency's staff structure.
Clause 2, which caused some trouble in another place, specifies the objects, functions and general powers of the agency. The chief functions are providing finance for industrial undertakings, providing and managing industrial estates, developing and improving the environment and bringing derelict land into use. The clause as emasculated by the Opposition in another place now lacks the agency's vital function of establishing and carrying on undertakings by itself and in conjunction with private industry, and the corresponding power to form companies. We shall put that right.

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Clause 4 enables me to give the agency both general and specific directions as to the discharge of its functions. We have no intention of tying up the agency with unnecessary controls. No doubt we shall get complaints both ways, as we have had in the past. Some will say that we are not giving the agency enough freedom while others will say that we are not controlling it sufficiently. I have been through it all with respect to another Bill dealing with the northern parts of Scotland. I can give all the facts and figures about those who have criticisms to make. One lot balanced out the other.
We shall allow it the maximum degree of initiative and independence that is consistent with the nature of its functions. But it is proper that in the last resort I should be able to ensure that its priorities are the right ones and in keeping with the Government's general strategy towards development.
Clause 5 enables me to direct the agency to exercise in particular cases the functions of regional selective assistance under Section 7 of the Industry Act. These are the functions for which I become responsible next Tuesday. The agency will not be given the burdensome task of handling applications for selective assistance but I shall be able to use it, with the applicant company's consent, where I think its expertise will be of value in monitoring the Government's stake in a company which has received special help.
I attach the greatest importance to developing a close working relationship between SDA and the staff of what will now be my Glasgow office. It will be open to the agency to propose schemes of combined assistance where an element of subsidised help as well as agency finance appears justified.
Clause 6 enables the agency to perform the functions of providing and managing industrial sites and premises which it will inherit from the Scottish Industrial Estates Corporation. Here it will be taking over a going concern with a proud record. As a nationalised industry it has a profitable background in financing and building up the stock of modern factories. Its staff and resources will form part of the executive effort of the agency from the outset and will enable a quick start of its work.
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Clauses 7 and 8 deal with the agency's environmental functions.
Dr. M. S. Miller: Before my right hon. Friend deletes Clause 6, will he deal with the possibility of transferring agency property if a new town has been wound up? Will there be consultations with the local authorities?
Mr. Ross: I cannot see a new town being wound up by exercise of this Bill, but I look forward to reading any discussion that takes place in Committee on that point.
I was dealing with the agency environmental functions. These will be of immense potential benefit both to the economy of Scotland and to a large proportion of our population who currently have to live and work in drab and depressing surroundings. The agency's overall responsibility for the derelict land programme, which it will exercise in the closest consultation with local authorities and in arrangement with me, will enable a single-minded effort to he made in clearing the scars of the last industrial revolution. We intend to have discussions with the regional and district authorities to ensure that we progress speedily to an expanded rate of clearance with no loss of momentum in existing programmes.
One of the great advantages of the agency is that it will be able to couple its derelict land clearance responsibilities with the powers under Clause 7 and to devise and implement schemes which go beyond the simple clearance of land, involving the creation of a completely new environment which can transform the appearance of an area while making a positive contribution to the needs of the community for jobs, commercial, recreational and cultural facilities. It will create something which will positively attract people to an area in place of conditions which are too often an eyesore and an obstacle to redevelopment.
Mr. Galbraith: Will the right hon. Gentleman explain how that will fit in with the powers of the local authorities in those areas?
Mr. Ross: If the hon. Gentleman had been listening, he would know that we have already discussed that issue. There must be co-operation and agreement with

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a local authority. There may be occasions when a local authority that is doing a good job will be able to continue as an agent for the SDA. Indeed, the agency and the authorities must work together if we are to achieve the right kind of momentum.
Clauses 9, 10 and 11 give the agency the powers in relation to land which it needs to exercise its industrial estates and environmental functions.
Clauses 12, 13 and 14, together with Schedule 2, provide for the agency's financial arrangements. It will be given an initial financial allocation of £200 million for the exercise of its functions. The Bill provides for that allocation to be raised to £300 million subject to parliamentary approval. This will save the business of introducing completely new legislation. The matter can be effected by placing the appropriate form of words on the Order Paper and having a debate in the House lasting about an hour and a half.
The sums I have mentioned are additional to the existing spending in Scotland on selective assistance, regional development grants and the regional employment premium. It is worth noting that all these matters add up to £150 million per annum. Those who seem to think that Scotland is getting a raw deal should consider what is being provided in this measure and the continuation——
Mr. Gordon Wilson Mr. Gordon Wilson (Dundee, East) rose——
Mr. Ross: Not in the middle of a sentence. I ask them to consider that the items I have mentioned add up to £150 million a year. I bear in mind the letter that was kindly sent to me by the hon. Member for Perth and East Perthshire (Mr. Crawford) which described the SDA as a pigmy.
Mr. David Lambie: That hon. Gentleman is a Tory.
Mr. Ross: I can assure the hon. Member for Perth and East Perthshire that the SDA more than matches that which he wrote to me in a letter dated 30th January. That letter was written before he knew what the Bill would contain.
Mr. Gordon Wilson: I am grateful to the right hon. Gentleman for giving way at the end of the paragraph if not in the middle of the sentence. The right hon. Gentleman has said that additional finance might be available to the extent of £200 million, and that it might be increased to £300 million. Will the right hon. Gentleman tell us what period that additional sum will cover? Is the period intended to be three years, five years, 10 years or 15 years, or will matter be left in a vague fashion with no additional information being provided?
Secondly, bearing in mind the massive oil revenue which will start flowing in now that the oil has appeared, does the right hon. Gentleman agree that the amount of additional assistance given by means of the Bill will be quite insufficient to match Scotland's serious problem of growing unemployment?
Mr. Ross: Perhaps the hon. Gentleman has finished his speech. The matters that he has raised will be fully covered. If the hon. Gentleman can read, he will see that there is no time stated. If he is aware of what usually happens in relation to Bills of this nature, he will realise that when the money runs out, or looks like running out, we return to the House for more. If the hon. Gentleman has any knowledge of how moneys are provided for the SSHA and other organisations, he will appreciate the way in which provision is made. The hon. Gentleman cannot make any great point about the money having to last for ever and ever. Those who are interested in the development of Scotland will be glad to see the money used purposefully and profitably and as quickly as possible. The House will be ready to supply further moneys.
The hon. Gentleman mentioned oil revenue. We are introducing the Bill before we get a single penny from oil revenues. The hon. Gentleman should appreciate what has been done by British Governments by means of the traditional incentives of the past, amounting to over £150 million in a single year. That is only in relation to the finance that stems from the Industry Act and from REP. If the hon. Gentleman would consider those matters and then tell the people of Scotland what has been done by a British Government, I think he would be a little

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less mealy-mouthed in his nationalist propaganda.
Mr. Teddy Taylor: The Secretary of State has spelt out that £150 million is being provided by way of various forms of assistance because of action that has been taken by previous Governments and by the present Government. Will the right hon. Gentleman give us an estimate of the additional burden of taxation placed on industry by his Government?
Mr. Ross: Not in this Bill and not in this part of my speech. The moneys are additional to existing spending. As I have said, that spending goes to the industries that need it. This is a commitment to the development of Scotland's economy on a scale which is quite unprecedented.
Clause 15 provides for the transfer to the agency of the Scottish Industrial Estates Corporation and the Small Industries Council for the Rural Areas of Scotland.
Schedule 3 provides important safeguards for the staff. The transfer of the activities of the Small Industries Council will give an important rural dimension to the agency's work. It will bring the benefits of a broadly-powered development agency to those rural regions of Scotland outside the Highlands and Islands which have long advocated the resources of a body of this kind.
The valuable work which SICRAS has done in the rural areas will be combined with a rural factory building programme which the SDA will in due course inherit from the Development Commission. I am glad to say that I have had a discussion with the chairman of the Commission, Mr. Donald Chapman, a former Member of this House. Mr. Chapman wholeheartedly supports our proposals and has agreed to make himself and the services of the commission available to the agency until 1st January 1977 to ensure an orderly hand-over of duties.
There is one aspect of the agency to which the Bill does not refer. There is not one mention of it in the Bill, although one would have thought from the debates in another place that it was the Bill's core and centre. I refer to the agency's relationship with the National Enterprise Board. This is naturally a matter of great
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interest and one on which some odd notions have been flying around. The agency will in no sense be a creature of the NEB. It will be responsible to me as Secretary of State.
I am surprised that a body as august as the CBI did not realise that we never mention specifically the Secretary of State for Industry, the Secretary of State for the Home Department, the Secretary of State for Scotland or the Secretary of State for Northern Ireland. The "Secretary of State" is a hydra-headed individual. [An HON. MEMBER: "A hydra-headed monster?"] I do not know whether that is a reference to the present Secretary of State for Scotland. This body will be responsible to me. It will have its own funds and take its own decisions. These will be decisions about Scotland taken in Scotland. We envisage a close and complementary relationship between the SDA and the National Enterprise Board in Scotland.
My right hon. Friend the Secretary of State for Industry and I will be working out the details of that relationship and in due course we shall be issuing guidance to both sides. This will be done once the two bodies are established and are able to make their own suggestions about what the relationship should be. But the guidance will deal, among other things, with arrangements for the NEB's own functions in Scotland. This guidance will make clear that the SDA will normally be responsible for schemes concerning companies wholly or predominantly based in Scotland. Where its actions or the actions of the NEB could have an effect on employment in Scotland, the NEB would be expected to exercise its powers in full consultation with the SDA.
One point worth stressing is that there will be no rigid demarcation between a class of companies or undertakings in Scotland which are the concern of the agency and others which are to be reserved to the actions of the NEB. There is no question of the agency's activities being limited to small locally-owned companies, as some misguided comment has suggested. On the contrary, the agency will develop contacts with the whole of Scottish industry. It will be able to enter into discussion with any Scottish-based company or the management of any Scottish undertaking to see how that company or undertaking can best contribute

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to the general good of the Scottish economy. If proposals emerge from such discussions which point to action by the NEB as well as by the SDA—for example, assistance to or acquisition of an interest in holdings in England—the agency may make proposals to the NEB to that effect.
The idea of a Scottish Development Agency is not new. The Labour Party in Scotland and the Scottish Trades Union Congress have long argued the case for a Scottish-based body with direct powers to develop industry in Scotland. They have not been alone in this view. A wide range of bodies and organisations—for example, the Scottish Council (Development and Industry), the West Central Scotland Planning Team, and even some of our political parties—have all argued the case for a body with executive responsibilities. The Government have acted to make a reality of this widely shared aspiration of people in Scotland in bringing forward the proposals for the SDA. The response to our proposals, when we published them early this year in our consultation document, confirmed that. Responsible opinion from all quarters in Scotland is virtually unanimous in acknowledging the need for such a body. It ill becomes anybody who professes to have Scotland's interests at heart to seek to stultify these provisions or to delay still further the introduction of the agency.
It is just over 10 years ago since I, as Secretary of State for Scotland, introduced the Highlands and Islands Development (Scotland) Bill. I well remember the speeches made at that time. One ex-Secretary of State for Scotland said that the measure came straight from Karl Marx. I remember saying that that right hon. Gentleman's criticisms came straight from Groucho Marx. Suspicions were aroused and there was talk of nationalisation by the back door. Really! I wonder whether those people looking back on those speeches today are very proud of what they said. I am certainly proud of the Highlands and Islands Development Board and its achievement of the Scottish Development Agency. I commend the Bill to the House.
4.45 p.m.
Mr. Alick Buchanan-Smith: If the right hon.
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Gentleman the Secretary of State for Scotland is so proud of the Highlands and Islands Development Board and the Bill on that topic which he introduced into the House, he might reflect on the procedures used on that Bill. The procedure then employed meant that the Second Reading was taken on the Floor of the House, which is the proper place for such legislation to be dealt with.
The right hon. Gentleman knows that all major items of legislation, whether the Opposition vote against them or not, are normally taken on the Floor. That is the proper place for them to be dealt with. Furthermore, the Local Government (Scotland) Bill 1973 introduced by a Conservative Government—again, not voted against by the Labour Opposition—was taken on the Floor.
Mr. Douglas Henderson Mr. Douglas Henderson (Aberdeenshire, East) rose——
Mr. Buchanan-Smith: I cannot give way. I have only just begun.
The right hon. Gentleman in his remarks on the procedures to be adopted on the progress of the Bill is seeking to cover the Government's failure to manage their business timetable. He has suggested that the Bill could have been sent to the Scottish Grand Committee, where there is no possibility of its being voted down.
Mr. Ross Mr. Ross rose——
Mr. Henderson: Wait until the end of the sentence‡
Mr. Buchanan-Smith: I shall give way to the right hon. Gentleman in a moment. I was saying that this was a measure of the Government's failure to manage its business timetable, and that is why the Secretary of State sought to make his accusations.
Mr. Ross: The hon. Gentleman should know that the procedures of the House allow the Opposition to vote against a Bill even after it has been discussed in the Scottish Grand Committee. If a motion is tabled and signed by six hon. Members, the House must debate the legislation concerned and it can be voted upon in the House. Therefore, there could be two debates on such a matter.
Mr. Buchanan-Smith: Will the right hon. Gentleman say how many times he used that procedure when in Opposition? He cannot do so. The Labour Opposition never used that procedure because they faced a Government which had the courtesy to provide time for these matters to be properly debated on the Floor of the House.
Mr. Henderson: Could the hon. Gentleman explain the advantage of debating this measure on the Floor of the House when there is not one English or Welsh Member present in the Chamber?
Mr. Buchanan-Smith: The hon. Gentleman is being unfair to the right hon. Member for Cardiff, West (Mr. Thomas), who is now in the Chair, and also he has failed to observe that at the end of his bench there is another Welsh Member, the hon. Member for Carmarthen (Mr. Evans). There are also present numerous Members from other parts of the United Kingdom. On important matters such as are covered by the Bill it is surely important that they should be properly debated on the Floor of the House.
It is worth pointing out that a certain amount of delay in parliamentary proceedings is justifiable if it serves the cause of democracy. The right hon. Gentleman spoke of the urgency in getting the Bill enacted so that the powers in the Bill may be exercised at the earliest opportunity. I ask him to remember two things. Of course we want to see measures that will improve the Scottish economy. It is interesting to appreciate that unemployment was already falling in Scotland and was falling under a Conservative Government.
Mr. Lambie: Nonsense.
Mr. Buchanan-Smith: The hon. Gentleman should contain himself. Although unemployment under a Labour Government is at an unprecedented high level—over 100,000—the Secretary of State sought to take credit for the fact that the general level of employment in Scotland and the job prospects in our economy were better than a number of years ago.
The right hon. Gentleman also mentioned the improvement in the figure of
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migration from Scotland. I welcome this and also the news that there is now a net gain to population in Scotland, which is a great change. The right hon. Gentleman should also reflect that this great improvement in migration took place during a period of Conservative Government. Although many basic problems still need to be tackled in Scotland, the right hon. Gentleman should not ignore the many methods available to tackle those problems if the will exists.
I remind the right hon. Gentleman that under Section 7 of the Industry Act 1972 there is power for the Government to help industry in Scotland and elsewhere. It is available to the Government at the present time if they choose to use it. Therefore one must ask whether the Secretary of State's concern to get this Bill quickly and urgently into action stems from a general desire to help industry—because general powers ale already available—or from the fact that these are powers, additional to those under Section 7 of the Industry Act 1972, enabling him to extend the degree of Government intervention into profitable industry as well as into industry which genuinely needs help.
This is the only conclusion I can reach from his statement this afternoon, when he repeated the assurance of the Minister in another place that he would restore those powers which were deleted in another place. It appears that he is simply not willing to use the powers available to him because he wants these additional and much wider powers of State intervention which are not available to him at the present time.
I am surprised at the right hon. Gentleman's confidence in thinking that he can so easily achieve these powers, after what happened this morning in Committee, when the Minister of State, Scottish Office, was left in a minority of one and defeated by the rest of the Committee. Perhaps his right hon. Friend was frightened to tell him what had happened. He may not have known. But he shows a very naïve confidence this afternoon if he thinks that he can get these powers easily. The House and everyone outside it must know that the Secretary of State simply wants this Bill in order to acquire very much wider powers of intervention than he has now.

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With regard to improvement of the environment, if the will of Government is there, and the Government are prepared to provide the money, they do not necessarily need the powers sought in the Bill. One has only to look at the Local Employment Act 1972, or to go back to the Local Government (Scotland) Act 1966, or the Countryside (Scotland) Act 1967, to see all the powers already available to the Government to help improve the environment, to do away with dereliction, and so on, in Scotland—all of these being purposes that the Opposition support. Legislation has been enacted by successive Governments under different political parties.
The truth is that if the Secretary of State wanted to do this he could; and the urgency of the introduction of this Bill is a judgment upon him, simply demonstrating that he is not prepared at the moment to give the money to local authorities to enable them to carry on with the work themselves. It makes me wonder how genuine are his protestations that after this Bill is passed the money will necessarily be available later.
I believe that the right hon. Gentleman's sense of urgency about the Bill, and his concern to get the agency into action quickly, are simply a smokescreen for his current unwillingness to provide the necessary resources, either under the Industry Act or through the various local government Acts, to enable others to do the job of improving the environment that they are able to do at the present time.
I will not let the Secretary of State get away with the belief that delaying this Bill for proper consideration is in any way denying help to industry or to local authorities in Scotland in improving the environment in which they are operating.
The Minister of State, Scottish Office (Mr. Bruce Millan): Is the right hon. Gentleman saying that it is the view of the Conservative Opposition that we do not need a Scottish Development Agency at all, or is he saying that it is an agency with rather different powers? He seems to be arguing the former.
Mr. Buchanan-Smith: Not in the least, but I wish the right hon. Gentleman would listen to what I am saying. I was
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dealing perfectly specifically at the beginning with the accusations of the Secretary of State concerning the Opposition's seeking proper debate of this very important measure, and that by its being properly debated, and proper time given to it, certain benefits were being denied to people in Scotland. My point is that, because of what is happening in this House, benefits are not being denied to the Scottish people. I want to put that on record firmly and clearly this afternoon.
Coming to the more specific provisions of the Bill, I support many of the intentions and proposals in it, either to help industry or to improve the environment in Scotland, though I question the extent of and the need for some of the powers it is sought to take. Equally, while believing that the development agency can have a useful function—I hope that if it comes into being it will perform a useful function—one is bound to reflect, at the same time, upon the establishment of another new agency to carry out many of the powers already available to central and local government.
We are kidding ourselves if we think that by the establishment of an agency we shall necessarily solve some of the problems that we are facing in Scotland at the present time. What is needed is, first, the will to solve them, and, secondly, the resources to solve them. No matter how many agencies or boards may be set up, these problems will not be solved unless the Government are prepared to have the will and to make available the resources to do so. The important point is that the powers are there at the moment, but the will and the resources have been lacking.
Dr. M. S. Miller: Would not the hon. Member agree that it is very much better and easier, and facilitates the situation no end, if potential developers can go to a central agency instead of to 10, 12 or 15 different agencies to get these things done?
Mr. Buchanan-Smith: I do not think that the hon. Gentleman understands the situation fully. If there were only one agency it might be easier, and there is some argument for many of these powers being exercised by the Scottish Office itself, because people then know to whom

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they can go in order to get things done. But there is a multiplication of agencies, and this affects the conclusion of any issue more than anything else.
I have no doctrinaire opposition to the establishment of an agency in order to carry out these tasks, if it is proved to be the best way to do it and will not conflict with what has been done by other agencies and bodies of Government in other directions. There are certain circumstances in which an agency can be a good thing. I assure the right hon. Gentleman that in the course of the Committee stage we shall do all we can to improve the agency, and to make sure that it is a fit body in relation to all the other bodies with which it has to operate in carrying out its job. But unless the Government are prepared to back up this agency in many other ways, particularly with resources, I suggest that it will achieve no more than the Government have already been able to achieve or other Governments before them.
Turning to the powers of the agency, I suggest that the Secretary of State in his speech glossed over the attitude of various bodies in Scotland. He said that it has the support, for example, of the Scottish TUC, but he is absolutely wrong if he thinks that it has widespread support throughout industry.
I was surprised that the Minister in another place took particular exception to criticisms made of this agency by, for example, the Secretary of the Scottish Branch of the CBI. He interpreted what he said as part of a personal vendetta by the secretary of the CBI in Scotland against what the Government were seeking to do. The Secretary of State repeated something of that cavalier attitude towards the CBI when he said that many sections of industry gave their wholehearted support to the Government's proposals. I question that, and to support what I say I refer only to the letter which the Scottish division of the CBI circulated to all hon. Members on 15th May in the course of which it said:
"These powers are wide-ranging, ill-defined and require clarification…The safeguards on the powers of the SDA would appear to be inadequate."
Clearly the CBI has considerable doubts about its operation, and these are brought out in a letter sent by the CBI to the Minister of State, a copy of which I
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received, in which it makes clear its opposition to many parts of the Bill. Incidentally, the CBI wrote on 10th February and 14th April but received no reply. It had to write again on 2nd May summarising its points of opposition to the Bill.
That letter regrets the lack of consultation—the inadequate consultation which the Government were prepared to carry out with bodies such as the CBI, and having summarised its opposition to certain parts of the SDA, the concluding paragraph says:
"In all the circumstances we feel impelled to advocate parliamentary opposition to the Bill in principle."
The Secretary of State is wrong if be believes that the Bill has wide support in Scotland beyond his own supporters and members of the STUC. Many people in Scotland have misgivings about it. Certain purposes of the SDA are worthy of support, but some of its proposed powers give cause for concern and give rise to the opposition which I put forward to the Bill.
As originally drafted when it went to the House of Lords and as the Secretary of State proposes to alter it in its passage through this House, the Bill gives to the Government powers which are far beyond anything that any Government have had in any past industry Bill. It is here that the Scottish National Party especially shows tremendous naïvety in its approach. The Bill is simply a vehicle for greater State intervention and an extension of nationalisation. It is interesting that the SNP supports the Government, though no one should be surprised about it since it supports the Government on many matters, from Clydebank councillors to defence and other Left-wing policies. In this Bill, again we have the SNP supporting measures which are completely Socialist in their nature.
Mr. Norman Buchan: The hon. Gentleman can take this as a formal declaration that the discussions have broken down.
Mr. Buchanan-Smith: I should be interested to know what these discussions are. That intervention shows the extent of the credibility which the Press puts upon leaks from the SNP when its Members try to put round stories like that. I

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should be interested to hear what justification the SNP has for such announcements. It would be completely out of character for the Conservative Party to have talks with the second Socialist Party of Scotland, and certainly I would not be a party to any such talks.
I was about to deal with the powers which the House of Lords deleted and which the Secretary of State intends to put back into the Bill in the course of its passage through this House. Here I come to the fundamental difference between the two sides of the House—the Labour Government and the SNP on the one hand, and the Conservative Party on the other—in their attitudes towards and policies for industry.
I can show the contrast best by comparing the proposals in this Bill with the 1972 Industry Act, which my party introduced when in Government, and indeed also in the creature of the previous Labour Government, the Industrial Reorganisation Corporation. In both we find a fundamentally different attitude towards industry from that in this Bill.
In both the IRC and in the kind of intervention which takes places under the 1972 Act, compared with the kind of intervention envisaged in this Bill, we see a totally different approach to the problems of industry and a different attitude towards industry.
Under the 1972 Act, intervention is seen basically in two forms. It is seen first as a rescue operation for a firm which has got itself into trouble, especially if it is important to the national economy and if State intervention is necessary for the security of jobs. The other way in which intervention may properly take place, as laid down in the 1972 Act, is where a pump-priming operation is necessary to help an industry in difficulty get back again on to the road of profitability. Basically, therefore, it is seen as a short-term rescue operation or as a pump-priming operation to help an industry to be profitable once again. All this is written carefully into the 1972 Industry Act. What is more, those powers are to be used only in the last resort. When all other methods have failed to help an industry, State intervention may take place.
Once an industry is back on its feet, there is an obligation on the Government
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to dispose of their interest in it, as was the case with the Labour Government's Industrial Reorganisation Corporation. The function of the IRC was to invest in a firm in order to help it and then to sell off its investment and turn round its resources so that it was then able to go on to help another industry or firm if required.
This concept of a rescue or pump-priming operation is in complete contrast to what the Government propose in this Bill, which is simply a licence for indiscriminate Government intervention without limit of time for the furtherance of political ends. It is simply to extend the power of the State and of the Government. It is required for that alone.
Intervention proposals of this kind embodied in a Bill without any limit of time, give rise to a great deal of worry in industry and in the CBI. We have the predicament into which other firms are placed because of the subsequent unfair competition which can result from this form of intervention. This is an important matter. The Secretary of State was critical of Scottish industry and said that the record of certain private industries was not good in terms of investment and so on. That may be so. But I ask the right hon. Gentleman to reflect on some of the reasons for that bad performance. The fault may lie with the Government, who have been creating conditions in which industry is unable to prosper.
The Government wrap up their policies towards industry in a package which looks attractive. They say, "We will help you if you are in difficulty, and we will help you to expand." But, by means of other policies, they create the difficulties which cause firms to go to them seeking help in the first place. Then the Government turn round and say, "We told you so. Private industry has failed."
I ask the Secretary of State to realise—he should also reflect that the cause of that failure may be within the Government's control—that the way to deal with it is to get to the root cause and to deal with the Government's economic policies rather than the cosmetics of rescue operations and State intervention.
It is in that respect that I see the biggest difference between the approach of the Conservative Party and the approach of

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the Government and the Scottish Nationalist Party, because they are seeking to intervene in industry simply for the sake of intervening and of extending the power of the State. That is my main criticism of the Government and it is for that reason that the powers that they are giving to the SDA are wrong and should be opposed.
Mr. Buchan: If the hon. Gentleman is sustaining the line of argument that the purpose and aim of such a development is in order to increase the power of Government, would he not consider tabling an amendment to ensure that workers in any establishment have full control over any moneys given? This would remove governmental control and give it back to the people.
Mr. Buchanan-Smith: We all know of the hon. Gentleman's idiosyncratic views on intervention in industry. When we deal with the industrial democracy sections of the Bill, we shall look forward to hearing what he has to say.
I should like to turn to two other aspects whch give me and people in Scotland cause for concern. The first is the relationship of the Scottish Development Agency with the National Enterprise Board. The Secretary of State was, to some extent, sensitive to this because he remarked upon it and tried to reassure the House that there would be no problems of demarcation between these two bodies. However, these bodies give me cause for a certain amount of worry because there has been some mixed and double thinking by the Government.
In paragraph 6 of the consultative document which the Secretary of State produced in January this year he states quite categorically that
"The SDA will in no sense be simply a Scottish 'arm' of the National Enterprise Board. As an independent body, responsible to the Secretary of State for Scotland, it will operate its industrial powers in a distinctive fashion best designed to meet Scottish needs."
The Secretary of State repeated that statement this afternoon.
Paragraph 5 of that document states categorically that
"the Scottish Development Agency would carry out in Scotland appropriate functions of the National Enterprise Board."
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No wonder there is confusion when statements of that nature are to be found in neighbouring paragraphs of the consultative document. They create an element of confusion in people's minds.
I should like to refer to the speech of the hon. Member for Liverpool, Walton (Mr. Heffer) when the Industry Bill was debated in Committee on 4th March. As reported at column 18 he made it absolutely clear that the writ of the NEB does run to Scotland—and throughout the whole of the United Kingdom.
Throughout the debates in the House of Lords the Minister of State went to considerable lengths to try to distinguish the different functions of the National Enterprise Board and the Scottish Development Agency. In the Second Reading debate on 15th March and on Report on 24th May he tried to spell out the differences between the functions of the two bodies in Scotland. In another place on 24th June the Minister of State said:
"The point is that there will be no rigid demarcation between some companies or undertakings in Scotland which are the concern of the Agency and others which are reserved to the NEB."
That is simply confusing.
The Minister of State then referred to the guidelines, to which the Secretary of State has referred. He said:
"On the subject of the guidelines, my statement is fairly lengthy, perhaps not necessarily easy to take in completely"—[Official Report, House of Lords; 24th June 1975 Vol. 361, c. 1298–99.]
It is not easy to take in completely. I only hope that too many people are not too easily taken in by it.
In the House of Lords the Minister of State merely compounded the confusion that existed between these two bodies about the powers they are to exercise. In some respects the SDA is to have the power, and in other respects the NEB is to have the power. This simply adds to the confusion of industry in Scotland about how these powers are to work in the end. In Committee we shall require more specific guidelines from the Secretary of State about where the NEB finishes and the SDA starts, otherwise industry in Scotland will not know to whom it should go if it needs help.
I turn to the subject of finance. The Secretary of State was less than fair to the House when he gave an indication of

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the amount of money that should be spent. I sympathise with the point put to him by the hon. Member for Dundee, East (Mr. Wilson) about precisely what expenditure this body should have. The limit is £200 million. I am surprised that the Secretary of State was not prepared to give a better indication of the period of time over which this amount of money will be available.
In a Press statement issued by the Scottish Office on 31st January he indicated that the time scale would be five years—in other words, of the order of £40 million a year for five years. I see that the right hon. Gentleman is shaking his head. If he has changed his mind since then, perhaps he would give the House the benefit of his change of mind. He stated these figures quite clearly in the Press notice.
Mr. Crawford: Will the hon. Gentleman tell the House how much money his party would like the SDA to be given?
Mr. Buchanan-Smith: It is the Government who are in power and the Government who have to answer these points. The hon. Gentleman should know that. I am waiting to hear what the Government have to say on this.
I have taken these figures from the right hon. Gentleman's Press statement and he is talking about £40 million a year, from which running expenses of about £3½ million have to be deducted. Against this has to be set the sum of £15 million to £16 million which is already being spent by agencies which the SDA will take over. This leaves a net sum of about £20 million a year which is additional money for Scottish industry. I have done my arithmetic on the best information that is available. Perhaps when the right hon. Gentleman the Minister of State replies he will deal with this matter.
Welcome as the figure of £20 million a year is—and I am glad to see money being spent in Scotland on regenerating industry and helping the environment—I caution the House that this is a much smaller sum than the Government would like people in Scotland to think they are spending. The saving of £15 million to £16 million a year—the sum of money that is being subsumed by the Scottish Development Agency—is being spent on existing pro-
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grammes, and it would be subject to increases, because these agencies are committed to programmes at present, and to increases in money terms as a result of inflation. Therefore, with inflation running as it is at present, at about 25 per cent., the money being spent, although it is £15 million currently, would rise over the next year to about £20 million.
Yet what is absolutely clear from the Explanatory and Financial Memorandum to the Bill is that the limit set to expenditure under this Bill is in financial terms and not real terms. The money that would be spent were this body not to come into being would be increasing in money terms, whereas the actual money that the Secretary of State will be spending is absolutely fixed in money terms. Therefore, the net amount of money in real terms which will be available is likely to be very much less than the Secretary of State has sought to make out either in this debate or in speeches he has made outside the House.
There are many other points in the Bill to which I should like to refer, but I am sure that many of my hon. Friends will raise them during the debate. We shall certainly return to them in Committee.
In conclusion, while additional money and additional resources to help industry and the environment in Scotland are things that we welcome, and things that will be welcomed generally in Scotland, it is only right to question the actual working and the powers of the SDA itself. If, on the one hand—and here I answer specifically the point put to me by the Minister of State—it is needed to provide a new drive for industrial development and an improvement in the environment, the concept of an agency may well be justified. But, on the other hand, we are bound to question the powers given to the agency.
It is not a matter of simply letting oneself be taken in by the honeyed words of the Secretary of State. The powers of this agency are the powers of the NEB extended to Scotland. What we are seeing is the extension of Socialism in Scotland for Socialism's sake. I ask people in Scotland not to be kidded by what the Government are doing.
Secondly, with the multiplicity of agencies—we shall have the SDA, the BNOC, the NEB and, in the Highland

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area, the HIDB—we are running into the danger of getting into a massive bureaucratic muddle which is the creation of the present Government.
That is why I recommend my right hon. and hon. Friends to vote against the Bill tonight.
5.23 p.m.
Mr. Peter Doig: I welcome the Bill because I believe that it will go a long way towards helping to solve what is and has been the main problem in Scotland for many years—unemployment. In Dundee at present we are facing a difficult period. It is a difficult period when compared with other Labour-controlled periods. If one compares it with the Tory-controlled periods, one can appreciate that it is quite a prosperous period. It depends on what it is compared with.
I also welcome the Bill because, as has been said repeatedly, when Britain's regulations are applied to Scotland they do not always work out as well as would special regulations for Scotland. Therefore, I welcome the Bill as giving special regulations for Scotland and the power to deal with Scotland as a separate community, in the sense of dealing with the problem in the way that has been advocated by hon. Members of the Scottish National Party in the past, who have said—it was a well-known phrase even before most of them came to the House—that if England catches a chill, Scotland gets pneumonia. That is the sort of situation we want to be able to prevent. The Bill will enable the Secretary of State for Scotland to do just that. I therefore welcome it for that reason.
I come now to one of the problems that has bothered my area for a very long time. There have been periods when we have had possibly record high unemployment—almost 30 per cent. of the working population unemployed in the 1920s and about 45 per cent. unemployed in the 1930s. We in our area know what high unemployment means. Fortunately, we have not had anything like that for a long time. However, we have had it in the past, and it his always been a bogy to people in the Dundee area.
We succeeded in solving this problem when the first post-war Labour Government passed the Distribution of Industries
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Act, which allowed financial inducements to be given to areas of very high unemployment in order to solve their problems. Dundee was one of the first areas to benefit from this policy. We reduced unemployment of between 30,000 and 40,000 to virtually full employment when we had under 2,000 unemployed in the City of Dundee. That is how successful that policy was. We have never gone back to such high levels of unemployment, although under the Tories we have gone as high as 24,000 fairly recently, in 1972. That was for a short period, but it just shows that the latent danger is still there, not far under the surface. We want to be able to deal with it.
The reason why we solved the problem in the first place was that we in the Dundee area were allowed to give the highest financial inducements that it was possible to give in Britain. On that basis of fair competition we were able to attract industry to our area on a scale that was almost unbelievable at that time. But what has happened since then? We have had very high unemployment in certain other parts of Britain, notably around the Glasgow area. Special development areas were introduced, and they received a higher priority and higher financial inducements than those which we could give in Dundee to attract new industry.
The problem started with the closure of mines. Special development area status was given to fairly small pockets but then it was spread to the entire Glasgow area, and that was a very different matter. The result was that we found for the first time that we were starting to lose out again. We were losing our because we could not give the top financial inducements that could be given by other areas which were serious competitors. Unemployment again became a problem.
From that time onwards, under successive Governments, we have repeatedly petitioned various Ministers in order to get Dundee back on to the top grade for financial inducements. We have tried to get special development area status. We have been told by Ministers under successive Tory Governments that in fact it made very little difference. It is interesting to note that we had a meeting this week with our Minister of State, who told us almost the same thing—that it makes very little difference.

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That is what Ministers say at meetings, but let us see what they say when talking dispassionately from a distance and in letters. One of the Ministers who has said this is the right hon. Member for Knutsford (Mr. Davies) when he was in charge of the Department responsible for these grants. He refused to allow us special development area status and stressed that it was a very minimal advantage, being a grant of 22 per cent. as against 20 per cent. In a letter to the clerk to the Tayside Development Authority the right hon. Gentleman said:
"Among other considerations I have to take into account the fact that extending the Special Development Areas is likely to deprive the existing Areas of some of the mobile jobs available."
The right hon. Gentleman considered that this status was effective, even if it was a marginal difference. He went on to say:
"If SDA incentives are a crucial factor I should have thought it made sense for those concerned to look at the extensive areas of Scotland where jobs are also urgently needed and such incentives are given."
What this meant was that when we were complaining about unemployment in Dundee and saying that this marginal difference made the difference between our getting jobs and not getting them, the right hon. Gentleman told us—in a letter; not at a meeting—that we should say "We do not need these jobs, and you should redirect them to Glasgow because they have the top priority through their special development area status". That is what in effect he was saying. One can imagine the difficulties of me going back to Dundee and telling that to the unemployed. That is what he wanted.
We heard the same story this week from the Minister of State—that it makes very little difference. But this marginal difference is very important, as the previous Minister spelled out in his reply to me and the Dundee corporation. It makes a difference and if we were granted that status we would be very happy.
This fund is to be administered in Scotland on a Scottish basis. Now the whole of Scotland is either a development or a special development area. No longer do we have grey areas or other types of area. I am asking that, now that the Government have this glorious
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opportunity, they should change the situation and give the same incentives to every part of Scotland. They consider that this enhanced status makes it only a marginal difference anyway. I do not think it will cause hardship to allow all areas to compete on a fair and equal basis and that is all that we in the Dundee area are asking. If we can have that, we are quite confident that the natural attractions of our area—good trade union relations and labour relations, a good climate, a large number of golf courses, and so on—will bring industry to our area.
Mr. Donald Stewart: I am grateful to the hon. Member for giving way. I am following with interest his excellent "commercial" for the Dundee area. On the face of it, it would seem fair to extend the system over the whole of Scotland, but what does he think of the effect on an area such as mine where there is an unemployment rate of 16 per cent. and high freight rates? What would happen to us or even to the West of Scotland.
Mr. Doig: Is the hon. Member's area a special development area?
Mr. Stewart Mr. Stewart indicated assent.
Mr. Doig: It is and it has this marginal difference, but even with it, because of the natural disadvantages, the area cannot attract industry. I am not particularly concerned about the hon. Member's area or the ex-mining areas which will take only a very small number of jobs. I am concerned about competition from other industrial areas in Scotland and elsewhere. That is a different proposition and that is what I am complaining about.
If the Government want to readjust the system to help isolated pockets, which would have no overall effect on Scotland, I would not object. I object to a highly industrialised area having an advantage over another such area which, over a period of years, has had consistently high unemployment. There have been one or two occasions in history when unemployment in the Glasgow area has been higher than that in Dundee, but there have been many occasions when the opposite has been the case.

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It has been said many times that Glasgow is the No. 1 industrial area in Scotland, and Dundee has always claimed to come second. I am not sure that that is strictly true. There is probably more industry around Edinburgh than Dundee. We are not worried about competition from the Orkneys and Shetlands or any of the other small parts. We are concerned about our main competitor—Glasgow.
The Labour Government set up a study of the Tayside area and decided that it was one of three in Britain and the only one in Scotland that was ripe for rapid industrial expansion. We have the offices, the ground, the sites, the labour force and everything required for this rapid expansion. We are asking the Government to implement what they foresaw for Tayside and to allow us to compete on equal terms with other large industrial areas in the country. If we can compete on equal terms I am certain that we can hold our own and expand considerably to the benefit of the whole of Scotland.
It is bad for Scotland that all our industry should be centred in one area. It is argued that industry and offices should be moved away from London, which is the most overcrowded part of Britain, but what is the point of sending it to Glasgow which is the most overcrowded part of Scotland?
We must not set up one industrial area of colossal size. Instead we must develop the existing industrial areas which can easily be expanded, and the classic case at the moment is Tayside. I urge the Government fully to consider this matter when they start to use the Bill.
5.37 p.m.
Mr. Donald Stewart: I hope that the hon. Member for Dundee, West (Mr. Doig) will excuse me if I do not continue his very eloquent plea on behalf of his area. No doubt the Government will take his comments into account in due course. My party welcomes the principle behind the Bill. We shall seek to amend certain provisions during the Bill's progress and on other matters we shall at least require clarification.
We agree that the Bill is an effort to do something to repair the decades, if not generations, of neglect of Scotland by successive Governments at Westminster.
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It hardly calls for the fanfare which the Secretary of State gave it today, but it is entitled to perhaps a tune on the pipes, and we welcome it as far as it goes. Scotland knows that a Bill of this kind is essential, and that makes the dragging of their feet by the Tories all the more reprehensible. The implications of the Bill for jobs in Scotland are far too serious for the kind of party politics in which the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) indulged.
One suspects that the discovery and exploitation of Scottish oil had a good deal to do with concentrating the mind of the Government in the direction of the Bill. No country capable of commanding the resources that Scotland now has could accept any delay in the provision of substantial benefits.
I will not deal with the nuts and bolts of the Bill, as I hope that one of my hon. Friends will be able to speak later in the debate, but I should like to make some observations and to ask questions which I hope will be answered in the winding-up speech.
We welcome the remit of the agency to further economic developments. It must also be a source of great satisfaction that one of its functions will be to remove the blight of the first industrial revolution on Scotland, a great deal of which still remains around the countryside. One hopes that the powers in the Bill—and we are not afraid of them in the least—will be used, together with other remedies in the hands of the Government, to see that no further blight comes along with the extraction of oil.
First, is the control of the agency to be vested in the Scottish Assembly when that body is set up? I assume that several of the functions of the Secretary of State will eventually be transferred to the Assembly. The Assembly must be given the right to decide and control the part to be played by the agency in the Scottish economy.
Secondly, is the agency to be responsible to the National Enterprise Board? We must have this matter cleared up. It would seem that the functions of the board are to be retained and administered on a wholly United Kingdom basis. We should like an assurance that the development agency will be completely autonomous on a Scottish basis.

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Thirdly, how is the Highlands and Island Development Board affected by the setting up of the development agency? The board covers a wide and underdeveloped area of Scotland, and although Highlanders and Islanders have reservations about its policies and functions, about what it has done and failed to do, there is no doubt that it has been of tremendous aid to the area of its operations. Nevertheless, those in the Highland area have some disquiet about the situation which will follow the setting up of the agency. Compared with the agency, the board's finances are miniscule. Can we be assured that the interests and operations of the agency will cover the whole of Scotland?
Mr. J. Grimond: I am much interested in this point and I wholly agree with the hon. Gentleman. May we also be assured that this will not simply lead to another layer of bureaucrats? The board is already too centralised in Inverness and is too bureaucratic.
Mr. Stewart: I fully agree with the right hon. Gentleman. The hon. Member for North Angus and Mearns referred to a multiplicity of agencies. The short cut to getting rid of that multiplicity is a Scottish Government to do the complete job.
I welcome the provisions in the Bill which will allow the agency to assist in maintaining and improving the air services in the Highland and Islands. This will not be regarded as a generous donation by the Government. In the Highlands and Islands we are entitled to reasonable public transport in frequency and costs. We pay our share in income tax to cut the deficit of British Rail. It is correct that where railways are required they should be provided, even at a loss. We think that the same principle should apply to the airways in the Highlands and Islands.
We shall support the Government to secure the setting up of the agency. The Bill is a bit of a rough diamond, but we hope to polish its corners and to send it forth as something that will be of great assistance to the people of Scotland.
5.43 p.m.
Mr. Russell Fairgrieve: It would not be proper for me to follow the hon. Member for Western Isles (Mr. Stewart) without making some comments on one or two of his remarks. We hear the continual parrot cry of neglect of Scotland by successive British Governments. That idea should be nailed once and for all. I ask the House to consider the roads, the schools, the grants to industry that have come from the British taxpayer and British industry over the past 25 years to help the people of the United Kingdom, including Scotland.
Mr. Gordon Wilson: Will the hon. Gentleman give way?
Mr. Fairgrieve: Yes, provided that my speech is not delayed.
Mr. Wilson: Despite that advantage to the House, may I ask whether the hon. Gentleman is aware that during that period Scottish unemployment has been significantly higher than unemployment in other parts of the United Kingdom? Is he also aware that during that period there have been considerable poverty and deprivation in Scotland?
Mr. Fairgrieve: I am not aware of that.
I go on to the second point made by the hon. Member for Western Isles, the exploitation of Scottish resources, particularly oil. I remind him that we in Scotland are net importers of gas and coal. I find the whole attitude of the Scottish National Party on these matters parochial, selfish, small-minded and petty.
Now I return to the speech that I had intended to make, which will be short. I wonder why we are having this Bill at this time. The country has a £9 billion borrowing requirement. We have inflation running at a rate two to three times that of our competitors in Western Europe. What is the contribution of this Government to dealing with the serious position affecting everyone in the country? It is the Community Land Bill, the Employment Protection Bill, the Petroleum and Submarine Pipe-Lines Bill and the Industry Bill—in other words, nationalisation of land, the employer-bashing bill, and the setting up of a stupid and useless oil company and the National Enterprise Board. As a result, the House is today

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bunged up with legislation. There are too many Committees sitting, doing too much useless work, and all that we are getting as a contribution to the serious state of the country and its people is more nationalisation.
I regret that in all these measures the Labour Party has the support of the SNP for more nationalisation. In the unlikely event of the SNP's getting an independent Scotland, it will inherit Socialist legislation, but to me Scottish nationalisation is no less abhorent than British nationalisation.
What gripes me is the arrogance of politicians and the civil servants they employ, their belief that they can run industry properly. What is one of the things they are to do in this wretched Bill? It is to promote industrial democracy in undertakings under the agency's control.
In the 25 years since the war we have learnt nothing about how to run our nationalised industries. Is there any industrial democracy in the coal industry, the railway industry or the gas industry? [HON. MEMBERS: "Yes."] Rubbish. There is far more industrial democracy in the private sector than in the nationalised industries. If we are a responsible House of Commons we should be trying to learn how to run our present nationalised industries properly instead of propagating another set, as we are in the Bill.
The whole Bill goes on like Alice in Wonderland, through a glass darkly. Apparently we are to reclaim land from the sea. Why not reclaim sea from the land? It is about as sensible for a development agency.
This is a bad Bill, because we already have too much legislation, too much interference. The job of Government is not one of arrogance. It is of creating the conditions in which people and industry can prosper. We do not want Government going into industry. We want Government out of industry.
5.49 p.m.
Mr. Frank McElhone: I shall not try to follow the example of the hon. Member for Aberdeenshire, West (Mr. Fairgrieve), certainly not in bringing the water into the land. I feel some concern about the
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comments of my hon. Friend the Member for Dundee, West (Mr. Doig), but as he is not present I shall reserve my comments until he returns, if I happen still to be speaking at the time.
The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), speaking from the Opposition Front Bench, said that the Bill had the support of the Labour Party and some of its friends on the STUC. He cannot have read the newspapers which I have seen. He cannot have listened to people in industry and on the shop floor. This Bill will provide a greater stimulus to the Scottish economy than any Government have ever provided before.
The Bill will accomplish two powerful purposes. It will give a tremendous incentive to industry. It also looks seriously at the problem of urban dereliction, an issue which I hope to raise in the Adjournment debate next Monday evening.
In the nine months in which the Government have been in office the people living in the west of Scotland, and especially those in Glasgow, have received the promise of 6,000 defence jobs, the setting up of the BNOC, the development of offshore oil supplies administration, and the Scottish Development Agency office. Those organisations will provide a tremendous boost in job opportunities. I pay tribute to the efforts made by the Government to assist industry.
I should like to concentrate on the other aspects of the Bill which deal with the running of the city of Glasgow.
Mr. Teddy Taylor: The hon. Gentleman referred to the boost to Scottish industry of £25 million a year. Will he say from where he thinks that sum will come?
Mr. McElhone: I did not mention £25 million a year. The hon. Member for Glasgow, Cathcart (Mr. Taylor) will have to do better than that. I shall give him another chance, but not just now. Anyone who has followed the progress of the planning team, the study which went into that report, and the work of the officers of the Scottish Development Department who were members of that team will understand the embryo stage of the Bill.

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We welcome the Bill because for too long the economy of Scotland, and especially in the west of that country, has been badly mixed. Too often many of out brightest and youngest people have had to travel south to obtain jobs suitable for their skills, taking their families with them. That represents a tremendous loss to Scotland over generations. However, I was delighted to hear my right hon. Friend say that there had been a net inflow of 7,000 people over the past year. That is a tremendous boost to the people of Scotland, where there is always a genuine fear that the brightest and youngest people take their skills abroad. With the establishment of the departments in Scotland and with oil coming on stream, a new, prosperous era is starting in Scotland. We are seeing the opening of a new chapter of economic history in Scotland.
I shall confine my remarks to Clause 8 of the Bill, which deals with derelict land. A tremendous boost will be provided by the moving of 6,000 defence jobs to Glasgow. Paragraph 14 of the consultative document says that the aim, as with the derelict land programme, is to recognise the special and massive task which needs to be undertaken, especially in Glasgow. The consultative document also indicates the special needs of Glasgow.
According to The Sunday Times of 8th June 1975, Baillie Dick Dynes, the leader of the Glasgow District Council Labour Group, said:
"We do have this very severe problem of multiple deprivation."
I think that is a sad fact which is well recognised.
I was disturbed to read in the Scotsman today that
"Civil Servants fear move to Glasgow."
The article says that Mr. Duncan Makie, who represents the Society of Civil Servants, said that he
"did not disguise the fact that many civil servants did not want to go to Glasgow."
He went on to express reservations about housing and many other aspects of life in the city.
Speaking with a degree of bias, I must say that anyone who lives and works in Glasgow does not want to move. It is a warm-hearted city. It compares favourably with other parts of the United
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Kingdom. However, the most difficult job is to attract people in the first instance. In the past there was an example of this in the case of the Post Office Savings Bank. We tempted people from London. When those people saw what Glasgow had to offer, they did not want to return to London.
We must recognise that the housing and other urban problems with which we are confronted today cannot be tackled overnight. I pleaded in my statements in the Press and on television for £50 million a year over 10 years. That figure is negotiable. I do not expect to see that sum being provided by the Treasury tomorrow morning. However, we are ready to put the case to the Treasury. The will exists in the city of Glasgow, but the resources with which the local authority can tackle the problem are not there.
Why do I emphasise that? Let us be honest. Civil servants in the Ministry of Defence are fighting a rearguard action not to come to Glasgow. They have threatened industrial action. They are not due to come to Glasgow until at least 1978–79. Therefore I welcome Clause 8, which will allow money to be made available to cure the urban dereliction which is prevalent in Glasgow.
Clause 8(3) states:
"the agency may dispose of the land free of charge to a local authority."
That is welcome. That provision can be used under the New Towns (Scotland) Act 1968 for open spaces as well as for industrial and housing development. I hope that Clause 8 will remain unscathed in Committee. Glasgow and Clydeside suffer from urban deprivation and slums. Such conditions have prevailed in the west of Scotland for far too long as a result of economic factors.
We realise that the solution to our problems will not be found in the and nationalism which is purveyed by members of the Scottish National Party. The solution will be found with increasing investment in the economy of Scotland and high productivity. With high investment and high productivity are to be found the high wages which are necessary to increase and sustain the standard of living which the people of Scotland should enjoy in the 1970s.
I am depressed with the report of the Department of the Environment which

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says that 115 of the 121 worst areas of Britain are to be found in Scotland, especially on Clydeside. We are not proud of that. Much of the blame for that lies with those who supported the Conservative Opposition decade after decade.
Let us be practical. I have no wish to go into Scottish economic and industrial history in detail. We must accept that homes with outside toilets were slums from the moment they were built. We have a long history of bad health, deprivation, bad housing and lack of educational facilities, which were tied up with the bad economic factors and high unemployment which prevailed in the west of Scotland.
I take issue with my hon. Friend the Member for Dundee, West on his comparison of the unemployment figures for Glasgow and Dundee. I think that he misunderstands the position. Glasgow has had a population of 1 million people but the population figure has fallen to 750,000. It is not overcrowded. Many people have been decanted to new towns. People come into Glasgow to work from Lanarkshire, Renfrewshire and Ayrshire. Glasgow has to be considered in a different context from Dundee. I am concerned about the unemployment in Dundee just as much as I am concerned about unemployment in Glasgow or anywhere else in the United Kingdom.
Hon. Members who represent the Scottish National Party do not solve Scotland's economic problems by making speeches and waving flags at Bannockburn. If Robert the Bruce could hear the "tartan Tory" speeches made by members of the SNP he would say, as many electors will say in the next General Election, that if we are to have Tories in power we may as well have the real ones.
It is true that many of the most able people leave the shores of Scotland to find employment. I do not wish my son, or anyone else's son, to be the next president of the Caledonian Society in Ottawa, Melbourne or anywhere else. The hon. Member for the Western Isles (Mr. Stewart) can testify that that has been the fate of many of our young people.
The Labour Government in nine months have done more to provide job opportunities than have any Government in our history. I admit that many of the job opportunities are coming to Glasgow
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because Glasgow is the fulcrum of the industrial West. We have to accept that we must attract civil servants to Glasgow, but we cannot direct labour and I hope that we shall never do that. We have to induce people to come. The knocking campaign against Glasgow which has been pursued through the media, especially in television programmes in recent years, has made people reluctant to come to Glasgow.
Glasgow has the Scottish Opera, the Scottish National Orchestra and the best art collection outside London. It has some of the best schools and good housing. We have much to offer. The image of a certain part of Glasgow that exists in some people's minds is applied to the whole of Glasgow.
I welcome the substantial investment in Scottish industry which is made available by the Bill and I also welcome the provisions which enable derelict land to be cleared for new industry. What worries me and many of my hon. Friends is the proliferation of industrial promotional agencies. They have all done a good job in the past, although they have limitations, but the fragmentation of promotional agencies does not help. If an industrialist, because of competing pressures, cannot make up his mind which part of Scotland to come to, he will go elsewhere. I am glad that the Scottish Development Agency, although it does not replace the promotional agencies, will at least draw them together and make them more effective in bringing jobs and job opportunities to Scotland.
We must accept that cross-border companies and multinational companies must in time have separate Scottish company registration. Such a provision would have made the Bill more efficient. Comments have been made about the inefficiency of nationalised industries. I am prepared to say that they have not been as accountable as they should have been, but we hope to correct that by the Industrial Democracy Bill.
I ask the Minister to ensure that there is adequate monitoring of aid to companies. There have been one or two examples of monitoring not being adequate. Plessey in the Vale of Leven obtained machinery at a low price and attempted to take it south. Only the vigilance of the work force prevented that scandal. It has been reported to me

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by a prominent trade union that Chrysler has shifted machine tools to Spain and South America and caused the production of new models to be jeopardised, especially at Linwood.
Miss Harvie Anderson: Will the hon. Gentleman tell me exactly which machine tool has been moved anywhere from my constituency?
Mr. McElhone: The trade union provided me with this information. I have to qualify that remark and say that I cannot substantiate that the removal was precisely from Linwood, although it was from Chrysler. The union has done some research and in the past its word has been sound. Such practices are nevertheless a cause for concern. We must monitor the money that goes to companies over the years to ensure that it is used in Scotland for the Scottish worker and to promote the Scottish economy.
We must also ensure that there is more research and development to enable us to take advantage of new technologies which will provide new jobs. It is not a question of labour-intensive industry against capital-intensive industry. We must have both. Concentration on capital-intensive industry leads to a low wage economy, and we must have a mixture of both.
I hope the Government realise that the primary source of new jobs is still indigenous industry. We must preserve the indigenous, entrepreneurial spirit in Scotland. If there is anything wrong in Scotland, it is that Scots have not been prepared to put their faith in Scotland. Many people involved in management and in business invest in Hong Kong and other parts of Asia and Europe.
Mr. Hamish Watt: Does not the hon. Gentleman agree that what has been wrong with Scotland is not and nationalism but and centralism?
Mr. McElhone: No. The accusation of and nationalism which I make refers to the Scottish National Party. I am now referring to the disgraceful record of Scottish industrialists and investors who invest in Europe and other parts of the world. Although that investment may have made a substantial contribu-
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tion in invisible earnings to our balance of payments position, it did nothing to help the Scottish unemployment figures.
Those people are praying for an economic miracle. They must get off their knees. They must come away from the international telephones and put their hearts, their minds and their faith in Scotland. We have the will and the skill within the work force. The need is all too evident. The Government have provided the opportunity and created the catalyst with the finance and the agency. I hope that the industrialists will take advantage of it, because it will be only then that we shall see the standard of living that is long overdue come into being in Scotland in the 1970s.
6.10 p.m.
Mr. David Steel: I find myself in rather the same position as the Leader of the Scottish National Party was a few minutes ago, because I give a cautious and possibly a temporary welcome to the Bill at this stage.
The Committee that will be considering the Bill will have the important task of trying to drag out of the Government some clarification about the precise rôle of the agency in relation to other bodies that exist at present. I believe that many improvements can be made to the Bill, but I certainly see no case for refusing the Bill a Second Reading in principle.
Some of the speeches that we have heard so far and that we shall no doubt hear later remind me—I thought that the Secretary of State made a fair point—of the speeches made during the passage of the Highlands and Islands Development (Scotland) Bill. A Conservative Member said that he had not seen such powers since those of Hitler. We can all make criticisms of the Highlands and Islands Development Board now, but there are few hon. Members who would advocate that the whole thing should be scrapped and that it was a mistake.
We should take with a pinch of salt some of the more extreme utterances about the Scottish Development Agency. If one is to criticise the Bill fundamentally, it should be on the ground that the powers of the agency are not large enough and that the rôle of the agency should be strengthened rather than weakened.

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Let us deal first with finance. The sum involved is £200 million for an unspecified period of time. I was rather entertained when the Secretary of State said that we could add another £100 million in an hour and a half. With the present rate of inflation, that may prove necessary. However, the serious point has to be made that, with the present rate of inflation, within two years one would need to raise the level to £300 million merely to keep pace with the inflation, without making any additional real resources available to the agency. One has to take into account that the financing of the agency is not over generous.
Moreover, perhaps one can criticise more the methods that are used. I have always strongly disagreed with the Scottish National Party's approach to and propaganda on "Scotland's oil" and all the rest which gives an appalling impression of Scotland to people elsewhere. However, I believe that there is a justified grievance because nowhere are the revenues from oil directly related to benefits for Scotland. I do not see why we should not have had a development corporation or agency—whatever it might be called—part of whose finance derived from a fixed percentage of revenues from the oil resources that have been discovered off Scotland. I believe that the proposal would command majority opinion in Scotland and would free the agency, when it is set up, from the direct control which, of course, it will have from the Treasury in Whitehall. That is one of the strongest criticisms that can be made of the relative weakness inherent in the Bill.
During the Committee stage it will be necessary to put back something into Clause 2 of the Bill to replace the section which was removed in the other place. I do not say that I necessarily agreed with the wording as it then stood, but unless we allow the agency to indulge in activities with others in setting up enterprises we really are saying that its power is limited to what might be termed a "glorified clean-up operation" in Scotland. That cannot make sense.
My noble friend Lord Mackie of Benshie moved in the other place at a rather late stage on Report that there should be inserted into Clause 2 the words
"establishing and carrying on jointly with experienced persons or companies industrial undertakings".—[Official Report, House of Lords, 19th June, 1975; Vol. 361, c. 1004]
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In my view that was an improvement on the Government's original wording. Lord Mackie did not press his amendment at that stage, but in support of it he said that one of the things that was wrong with Scotland was that far too many of our new industries were branches of other industries, multinational companies and so on. The result is that when there is any cutting back the first thing that goes is the branch. Therefore, there is a clear possible rôle for the agency to involve itself, particularly with younger people of real enterprise but who perhaps lack capital, in setting up new and Scottish-based industries with headquarters within Scotland.
Dr. M. S. Miller: I have been following what the hon. Gentleman has said with a great deal of interest. Does he agree, however, that one of the ways he could achieve his aim of making the development agency an effective agency is to ensure in the first instance that the chairman and the members of the agency are people who believe in what the agency sets out to do and that my right hon. Friend must be extremely careful in choosing the right people to pursue the policies which will lead to this end?
Mr. Steel: I agree with the hon. Gentleman. That is an important point. To put it bluntly, I hope that this will not be yet another body that will be used for "jobs for the boys" by which ever Secretary of State happens to be in office. Far too many public bodies in Scotland, and indeed in Great Britain as a whole, are subject to this practice. I agree that it is important that the qualifications and the enthusiasm of the people appointed must be obvious.
Secondly, I should like to see inserted in the powers of the agency, as set out in Clause 2, some reference to the rôleof the agency in rural areas as was set out in the consultative document. This is so important that it should be written into the Bill. I should like to quote from the consultative document, which says:
"Although the major rôle of the Agency will lie in the promotion of industry and in environmental regeneration in urban or semi-urban areas, the Government intend that it should also be given a clear policy remit to encourage and assist rural development where this falls within the general economic and industrial growth objectives of the Agency."
I agree with that paragraph. I believe that it should be inserted in the Bill

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because, as the Secretary of State said, the agency will have a monumental task in simply dealing with industrial dereliction of West Central Scotland. Unless the powers are specifically inserted in the legislation, I fear that the honeyed words of the consultative document will simply be forgotten and the resources diverted.
I bear in mind that the Small Industries Council is to be merged with the new organisation. One should pay tribute to the work that it has done in the past in the smaller communities in Scotland. Therefore, it is important that the agency should have a specific separate unit within it to deal with this particular problem. Otherwise I fear that the very good intentions of the consultative document will simply be smothered by the more expensive and greater work of the agency as a whole.
I hope that if we proceed with this legislation, get the agency set up and have the advisory board under the direction of the Secretary of State rather than the Secretary of State for Industry dealing with financial incentives to industry, we shall have some stability and continuity about industrial incentives for industry in development areas.
Looking back over the past 10 years—and Lord Tanlaw listed them in his speech in the other place——
Mr. William Small: On a point of order, Mr. Deputy Speaker. They may have intellectual chaperones in the other place, but I believe that under our rules of order an hon. Member can quote only Government Ministers in another place.
Mr. Deputy Speaker (Mr. George Thomas): The hon. Gentleman is quite right. An hon. Member is allowed to paraphrase but not to quote exactly.
Mr. Steel: Mr. Deputy Speaker, you will be relieved to hear that I have no intention of quoting in detail the list that my noble Friend Lord Tanlaw gave. I merely draw attention to his excellent speech. He mentioned in detail what I intend to make a passing reference to, namely, that over the past 10 years there have been six or seven major legislative changes in the scale and type of invest-
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ment incentives to industry. The rapidity of change within such a short period of time is unsettling to industry. It makes it quite impossible to plan ahead with any confidence.
The point I am trying to make is that if the Bill becomes law and the agency is set up we must have some degree of continuity and stability in whatever investment incentive plans are produced so that the industrialists can make plans. That has not been done over the past 10 years.
The hon. Member for the Western Isles (Mr. Stewart) made a valid point about the potential duplication of bureaucracy between the Highlands and Islands Development Board and various other organisations, including the National Enterprise Board when it is set up, and the agency. The Government have been far from clear as to where the demarcation lines will be. It is important not to increase the total amount of bureaucracy more than necessary.
For example, the Development Commission set up by the Liberal Government in 1911 is happily going on and doing a good job in certain areas of the United Kingdom which have suffered from depopulation. It has done an extremely good job in the Borders. Is that body to continue unaffected by the creation of the Scottish Development Agency and the National Enterprise Board? I should hate to see it buried, because of the good work that it has done. There is no point in bringing in agency after agency designed to assist industry in different parts of the country without some rationalisation and streamlining.
Mr. William Ross: I mentioned that point specifically in my speech. I said that an arrangement had been made with the chairman, Donald Chapman. The Development Commission is continuing in co-operation with us and will give us its help until 1st January 1977 in relation to the transition.
Mr. Steel: I followed that point but perhaps not as closely as I might have done. Do I understand that the commission will cease to exist after 1977?
Mr. Ross: The hon. Gentleman knows that the commission has a United Kingdom remit. I am talking about its work

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in Scotland. There is no reason why it should not carry on elsewhere because of what we are doing in Scotland.
Mr. Steel: If that is the case, that is one element which will disappear. If similar powers are to be included in the Industry Bill, logically the commission's United Kingdom rôlewill disappear. Therefore, as I said earlier, within the Scottish Development Agency there must be a specific unit to carry on the work which the Development Commission has been doing in smaller communities.
The part of the Bill on industrial relation is important. I do not take the gloomy view taken by one or two speakers in the debate. Public industry—this is one of the failings of nationalisation as a doctrine—has been no better than private industry in terms of employee participation and industrial democracy. If there is a new determination that in future enterprises there should be a pattern of industrial partnership, my right hon. and hon. Friends and I are all for it. That will be an important provision.
I should like to know how the aid which the agency will give will be tied in with the aid which is available from the regional and social funds of the European Community. I have argued before—I am sorry that the Secretary of State has so far set his mind against this proposition—that there is a good case, particularly as the right hon. Gentleman has new powers under the Industry Bill, for the Scottish Office having a liaison office in Brussels to take direct benefit from these grants. I see no case for having to accept the facilities available from the European Commission at second hand through the post from the Department of Industry. When I was in Brussels before the referendum took place, I understood that the Commission would be agreeable to such an arrangement. I think that the Scottish Office should think again on that question.
Lastly, I come to one question touched on by the hon. Member for the Western Isles about the future political control of the agency. We are about to start a process of legislation for substantial devolution to Scotland. That devolution will make no sense unless the future control of the agency is in the hands of the elected
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body in Edinburgh, otherwise the devolution will be mere paper window dressing. There should be some indication during the passage of the Bill about the future political control of this welcome agency.
6.24 p.m.
Mr. Dennis Canavan: I think that right hon. and hon. Members on both sides of the House will agree that some regeneration of the Scottish economy and industry is absolutely vital in the best interests of the Scottish people. The Bill is intended to be an instrument for that type of regeneration. I should like to think that it will be judged not on any narrow doctrinaire, political ground but on the litmus test of whether in the long term it will provide better employment opportunities for Scottish working people and their families. The Scottish Development Agency will be seen as a success or a failure on that test.
We have seen the effects of unemployment in Scotland for too long. A decade ago Scotland's unemployment figure was two and a quarter times the United Kingdom average. Although that figure has now fallen, it is still 1·3 times the United Kingdom average. There is no room for complacency when we realise that there are today over 100,000 people in Scotland without jobs. I have seen the effect of unemployment recently in my constituency with factories and mills closing down or people being put on short time.
We have seen the effect of unemployment in the past with the extent of emigration which has taken place out of Scotland. Recently the population figures have been stabilised or even increased. However, we certainly do not want a situation where working people have to pack their bags and go trekking all over the place looking for jobs. That is not my concept of a fair Socialist society. It is the job of the Government, particularly a Socialist Government, to get to grips with the economy and to bring jobs to the people instead of having the people trekking off all over the place like nomads looking for jobs.
Before putting forward any ideas for a successful regeneration of the Scottish economy, it is important to diagnose what is wrong with it and why there is a lack of industrial development in Scotland. I should like to propose two major factors. The first is the lack of Government power

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to disperse industry. There is a maldistribution of industrial development, not only in Scotland but throughout the whole of the United Kingdom. One reason is that when the private industrialist is taking a decision on where to locate industry, his main criterion is to maximise his profits. He does not think of areas of high unemployment or of social deprivation. His decision is based on maximising his profits.
Successive Governments have made attempts to try to intervene in this kind of natural laissez-faire growth process. For example, we have had development areas, special development areas, development certificates, development grants, regional employment premium, advance factories and so on. We have seen some benefits from such State intervention. For example, many people in my constituency would be out of work now had not the Labour Government brought in advance factories.
Although such measures are not perfect, we should be grateful that successive Governments have taken steps to try to locate industry in deprived areas. My constituency would have had at least one more advance factory but for another broken promise by the previous Tory Government. A few years ago the hon. Member for Ayr (Mr. Younger), who was then in charge of industry at the Scottish Office, came to interview some local government representatives in Kilsyth. The hon. Gentleman promised that, as soon as a tenant had been found for the advance factory which was near completion at that time, steps would be taken to build another advance factory. We are still waiting for it. I hope my right hon. Friend will see that that promise which was broken by the previous Tory regime is fulfilled as soon as possible after he takes over his new industrial powers on 1st July.
Mr. Hector Monro: I hope that the hon. Gentleman informed my hon. Friend the Member for Ayr (Mr. Younger) that he intended to attack his integrity in the House. If not, he is showing great disrespect for an hon. Member.
Mr. Canavan: That may be one of the rules of conduct in debating societies, but I am trying to get jobs for my con-
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stituents. The hon. Member for Ayr should be here, because this matter is as vital to his constituency as to mine.
Miss Harvie Anderson: Will the hon. Gentleman give way?
Mr. Canavan: I do not wish to give way too often, because I have been accused of speaking too long on previous occasions.
In my opinion, such governmental intervention has been inadequate and there is only one way of effectively dispersing industry. That is by being involved in the actual decision-making on the dispersal of industry, which is normally done by the owners of industry. That is why I see an extension of public enterprise, whereby the Government are involved in the ownership, in whole or in part, of industry, as absolutely vital if the Government are to have adequate powers to disperse industry.
It is significant that some of the most successful ventures in bringing jobs to Scotland have been in the public sector. One thinks, for example, of the thousands of jobs in the Civil Service and why it is that we are able to have those jobs in Scotland. It is simply because they are in the public sector. It is a great pity that the House of Lords took away that function from the Scottish Development Agency, and it will be our job to restore it in this House. [Interruption.]
Mr. Galbraith: In fairness, will not the hon. Gentleman also mention Bathgate and Linwood?
Mr. Deputy Speaker: Order. We can only have one hon. Gentleman on his feet at any one time.
Mr. Canavan: I do not need any lessons in manners, Mr. Deputy Speaker, from hon. Members opposite, and especially the hon. Member for Dumfries (Mr. Monro), who intervened from a sitting position.
The second weakness in Scottish industry, in my opinion, is lack of investment. That again is not a problem that is peculiar to Scotland. Figures were given in answer to a Question put to the Secretary of State for Industry on 9th June when the Under-Secretary of State for Industry replied:
"Investment by manufacturing industry, measured at 1970 prices, amounted to £1,975 million in 1973–74 and £2,110 million in

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1974–75. The results of the latest survey by my Department of manufacturers' investment intentions, covering calendar years, are published today and suggest that the volume of investment by manufacturing industry in 1975 could he of the order of 15 per cent. lower than in 1974."—[Official Report, 9th June, 1975, Vol. 893, c. 18–19.]
Here again we see the effect of the inadequacy of private investment.
Far too often industry is dependent on the whim of private investors, many of whom are quite capable of taking money out of industry and investing it elsewhere if they do not happen to like the particular tone of the Government in power at a particular time. Even Conservatives would admit that there is a lack of investment in industry and even some of them would be in favour of some kind of investment bank to prop up industry, which was essentially what the 1972 Act provided for. To my mind, however, it is not sufficient simply to take public money to prop up a private concern and bolster it up without some reciprocal public control. That is absolutely essential if the taxpayers' money is to be put into industry. There must be at least some element of public ownership and public control.
Instead of the Scottish Development Agency simply being some kind of free gifts scheme, it must be seen to be a means of extending public enterprise so that the Government have more influence on the location and dispersal of industry. It is a great pity to see Conservative Members repeating some of the clichés they uttered 10 years ago when the Highlands and Islands Development Bill was being debated in this House, when they tried to smear it with taunts of Marxism, and 10 years later they are coming forward with similar quotations.
The hon. Member for Aberdeenshire, West (Mr. Fairgrieve) made a very short contribution earlier when he claimed that the Government were not being very helpful on the question of industrial development. I wonder whether he thinks that his comment in the Scotsman of 26th April was very constructive when he warned Scottish business men to be careful of the implications of the proposed Scottish Development Agency Bill, the "little cousin" of the Industry Bill, and he said:
"MacBenn is not a nice little chap but a mischievous and dangerous wee rat."
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If that is the kind of verminous language used by hon. Gentlemen on the Opposition benches, it is certainly not a very constructive contribution to curing the ills of Scottish industry, British industry or any other industry.
I hope that the hon. Member might offer an apology to my right hon. Friend the Secretary of State for Energy, who was at that time Secretary of State for Industry, for that terrible language. I notice that the hon. Member is demoting himself back to the back benches. Perhaps he would like to intervene.
Mr. Fairgrieve: The hon. Gentleman has quoted me absolutely correctly, except that the word I used was "brat" not "rat". It was a misprint.
Mr. Canavan: I am not sure whether that intervention excuses the hon. Gentleman's language. I still feel that it was very unconstructive, a very destructive and disgusting remark to make and most unhelpful. We also have coming into this debate on the Scottish Development Agency the SNP the neo-Tories of Scotland, like the hon. Member for Perth and East Perthshire (Mr. Crawford), who last month was quoted in the Press as saying that Tories should have agreed to the Scottish Development Agency Bill going to the Scottish Grand Committee because the Scottish National Party would have helped to extract the Socialist part from it. This would effectively have emasculated the development agency and made it less effective in solving Scotland's problems.
The SNP also seems to have an alliance with the Scottish Confederation of British Industry in claiming that the Secretary of State for Scotland is not to be responsible for the Bill. The Secretary of the Scottish CBI claimed in the Glasgow Herald on 15th May that there was something sinister about there being no specific reference to the Secretary of State for Scotland, the reference being simply to "the Secretary of State". There is nothing sinister about it at all. That is normal practice in Scottish Bills.
It is interesting to note that the Scottish National Party Members made the same mistake when debating the Community Land Bill, when they thought that as far as Scottish land was concerned the words "Secretary of State" referred to the Secretary of State for the Environment. It did nothing of the kind. It referred to the

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Secretary of State for Scotland. The SNP has done a great disservice in trying to reduce the debate on this very important development agency to a kind of Scotland versus England battle without having any constructive alternatives of its own to offer.
I notice that the SNP's sole representative in the Lords, Lord Belhaven, did not even vote on the amendment which took out the Socialist part of the Bill. I wonder whether this silence was significant or whether he did not realise that a debate on Scottish industry was going on at that time. He and his Tory colleagues in another place may consider themselves self-styled experts on industry but their only qualification to speak for Scottish industry or the Scottish people is the fact that they happen to have been born in a noble bed. They have seen fit to try to butcher this Bill, but I hope that we in this House will see that it is restored to its former glory and that that is done by putting into it the public enterprise function and the part about industrial democracy, so that it will lead to a new era in the history of Scotland where we will have jobs and better prospects leading to better living standards for the working people and their families, a new era where, instead of man being the slave of industry, industry will be made the servant of man.
6.40 p.m.
Miss Harvie Anderson: I would like to apologise to you, Mr. Deputy Speaker, and to the Secretary of State for my absence earlier. If hon. Members look at the Order Paper today, pages 9323–24, they will see an extraordinary list of Committees which makes it no easier for any of us to be in two places at once.
I do not wish to refer to the speech of the hon. Member for West Stirling-shire (Mr. Canavan) except to say that, apart from his discourtesy to my hon. Friend the Member for Ayr (Mr. Younger), it would have been for the benefit of the House, had he wished to raise the subject at all, to have included in his speech the date of the then Minister's visit, the date of occupancy of the factory concerned and the date of the General Election. We would then have been presented with a much more realistic picture of what happened.
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I support what has been said by the hon. Member for Glasgow, Queen's Park (Mr. McElhone) about the proposed move to Glasgow of the Ministry of Defence. If I thought that the Bill would do anything to help this I would be an enthusiastic supporter. For reasons I will explain, I do not feel that way. It should be widely publicised that the move of the Savings Bank to the City of Glasgow has been wholly successful. Those executives who were moved, many of whom now live in my constituency, would not now exchange their lot for any alternative.
I oppose this Bill with considerable regret. If its simple aim was to make secure the employment prospects for the Scottish people, it would have the support of myself and my hon. Friends. I do not believe that it has the simple aim that I have described. I consider the Government's intentions, as expressed in the Bill to be entirely doubtful. This is a power monster and we must look at it in that way. I see the Secretary of State smiling. Maybe he does not think that it is a power monster. What we are looking at today is not the Bill as it will be used by him when enacted but what will be in the hands of any Secretary of State—the possibilities which lie within its clauses. It is to this that I take exception.
The size and scope of the Bill is something which we have to consider, together with the background against which it is set. The Bill aims to spend £300 million of public money. That is a large amount. We must first ask where that money is to come from. It is small wonder that earlier speakers have doubted whether the amount which is actually likely to be forthcoming will produce the impact which the total amount suggested might be expected to make.
We all know of the financial plight of this country. We all know that the money must come either through taxation or from borrowing. These days "borrowing" means borrowing from abroad. The Government, having no other source of income, are obliged to get the money from one or other of these sources. If the money comes from taxation, it comes from those people who are unable to invest that money at present in those very industries which it is proposed should have investment because the money is being taken away from them in taxation before they can do

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anything with it. If we do not believe that profitable industry should be allowed to make its own investment, it seems strange to imagine that this new bureaucracy, which I will describe later, will know where to place that money better than those who are running the industry.
If there were to be a good return on this money and if it meant that jobs would be maintained profitably, I would take a different view of this Bill. If, on the other hand, the money has to be borrowed, it simply adds to the inflation which is raging, out of control, and increases our £9 billion-worth of borrowing. People do not seem to realise today, least of all the Government, that borrowing of whatever kind has to be repaid sooner or later. The Government still pay lip service to a mixed economy, to the free enterprise element which contributes so much and which could contribute a great deal more than it is allowed to do at present. Yet the Government put forward measure after measure designed to ensure that free enterprise cannot work at any level.
I suggest that this Bill, being another example of the Government's approach to free enterprise, gives powers that have not yet been described in detail. I have said that it is a monster Bill because I believe that these powers are exceedingly wide. They seem to be limitless. The powers in Clause 2, for example, never stop.
I turn now to the extent of the bureaucracy which will be required to exercise and control this agency. We have recently had an extension of bureaucracy which is deplored by virtually every man and woman in the country. We are now multiplying fearfully the degree of bureaucracy under which we all live. It is more important in Scotland than in any other part of the United Kingdom. We are frightened of yet another layer of Government control. There are many people who will pay through rates or taxes or both for six separate layers of bureaucracy. The burden is something that has not been appreciated. All of this has to be paid for by the unfortunate taxpayer and ratepayer. Many people in Scotland are beginning to take a new interest in what is going on in the bureaucratic process. They will view this Bill with considerable alarm.
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In addition to these six layers of bureaucracy which will have to be paid for, there are other impositions which have already been mentioned. There is, for example, the National Enterprise Board, and the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) made a good point in connection with the EEC. Scotland has already benefited from its social fund. All of these powers, with the bureaucracy which supports them, are placed on the shoulders of the people. They will in no way be welcome. We are witnessing a continuing attack on the independence of people, personal or business. The attack is costly. If this is not a direct nationalisation measure it is certainly a hybrid. It is creeping nationalisation.
Despite the proven failure of nationalisation it still seems to hold a charm for the Government. It holds this charm—and I do not include the Secretary of State in what I am about to say—because it is attractive to many in the Labour Party since it is moving us steadily as a nation towards a totalitarian State. That may not be to the right hon. Gentleman's liking or to the liking of many Labour Members. It is, however, certainly acceptable to that powerful minority in the Labour Party which is already running the Government.
The Bill proposes additional funds for Scotland, despite the fact that there are already powers provided to do almost everything that has been openly described as becoming likely under the Bill. If the effect were likely to be for the good of Scotland and if this measure were likely to achieve profitability, our debate today would be taking a different shape. This is not so. No one looking squarely into the future could possibly support such a measure.
6.48 p.m.
Mr. Douglas Crawford: I feel a little like Pavlov's dog, having been told by Labour Members that I am a Conservative and by the Conservative Members that I am a Socialist. Lord Hughes said in another place during the debate on this Bill that Scotland's economic problems could not be solved by reliance on traditional United Kingdom methods of applying inducements and instruments of persuasion or, as Lord Polwarth put it when he was Chairman of

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the Scottish Council, the carrot and the stick.
Lord Hughes went on to say that there were too many examples of Scottish establishments and the jobs they provided having been rationalised out of existence, being merely Scottish branches of what are now British companies while what were proud and thriving independent Scottish companies have been closed down and their operations transferred south of the border. To all of this my hon. Friends would give a most fervent "Hear, hear". But the news is news that we have heard before. We would, equally fervently, ask the noble Lord where he and his party have been for the last 60 years or so, because this process of centralisation is nothing new and can be traced at least as far back as 1914, if not before.
I will bore right hon. and hon. Gentlemen by reading out some of the companies which have been taken over and which are now in difficulties—Glenfield and Kennedy, Lyle Carpets, Robertsons Jams, Marine Oil Industry Repair, Honeywell, Hoover, Caledonian Repro-graphic, Beaverbrook, Brown and Poulson, Scottish Aviation, William London and BSR. All of these companies, with the obvious exception of Hoover, which has not actually been taken over, have cut back their operations in Scotland within the last year.
For the noble Lord to say that we are suffering from companies closing down in Scotland and moving their operations to England is old hat. It is one thing for the noble Lord to diagnose an illness, it is another thing to cure it. The nature of the illness has been crying out for all of us to hear yet nothing has been done. It galls me and it grieves me to hear month after month, when Scottish unemployment remains at an unacceptably high level, representatives of the Scottish Labour Party and the General Secretary of the STUC saying that something must be done. We are sick, tired and fed up of hearing the STUC representatives saying that something must be done. Are they unable to see that the solution is staring them in the face—namely, self-government?
The Government tell us that certain things have been done. In a way I suppose that is true, but, to quote the Latin tag,
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parturient monies nascetur exiguus mus—namely, the mountains have laboured and brought forth a mouse. The fact is that the Scottish Development Agency will have to rely on the Westminster Treasury for whatever money it receives. Is this not using a nutcracker to crack a sledge, a feather duster to attack Edinburgh Castle or an aspirin to cure the industrial and social cancer? Let it be put firmly on the record that no Scottish Government would produce such a puny Bill.
The Secretary of State has said that I have called him a pygmy. If I did, I apologise, but I do not think I did. I think that my reference to "pygmy" was in my description of the Bill.
Mr. William Ross: I would not accuse the hon. Gentleman of using that kind of language when addressing me. The hon. Gentleman described the SDA as a pygmy of an organisation.
Mr. Crawford: I accept that. I have far too much respect and affection for the Secretary of State to describe him as a pygmy.
Once again, Scotland is being made subservient to the political will of Westminster. It is being made a poor second. The Secretary of State referred to the relationship between the SDA and the National Enterprise Board. The NEB legislation was drafted before this Bill, published before it and debated before it. Clearly the SDA is being made to play second fiddle to the NEB not only operationally but politically. Scotland, with industrial problems that are the largest in Western Europe, is being made the cat's-paw of the NEB and the Department of Industry.
The SNP does not want the NEB to run in Scotland for operational and political reasons. We shall table amendments in Committee to ensure that it shall exercise no power, jurisdiction or control over companies, institutions, partnerships, nationalised industries or any other industrial and commercial bodies operating in Scotland irrespective of the geographical location of the head offices or registered offices.
Mr. McElhone: Does the hon. Gentleman not realise that if we take British Leyland as an example, and the Bathgate factory in particular—I do not intend to go into the merits or demerits of that case as there are numerous other examples

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such as Chrysler—it is clear that it may well be necessary for the National Enterprise Board to give financial assistance of an overall nature? Does the hon. Gentleman not realise that that would be done after consultation with the Secretary of State for Scotland?
Mr. Crawford: I take the hon. Gentleman's point, but it was he who mentioned that it would be good to have Scottish-registered companies for certain reasons. If an organisation were established called British Leyland (Scotland) as a corporate entity, the SDA would be able to look after it without any NEB interference.
Mr. Buchan: I completely understand the hon. Gentleman's problem. He says that Scotland wants to be independent and that as an independent State it would not want to have anything south of the border affecting it. However, I cannot understand why he should reject Scottish influence and control over cross-border aspects when he is so concerned about the interests of the Scottish people. We shall not solve the problem of British Leyland by registering the company in Scotland. The Chrysler problem will not be solved by registering a certain section in Scotland. We are dealing with a unitary problem. The hon. Gentleman seems willing to let the whole of Scottish industry go to the wall before Scotland has independence rather than taking part in joint consultation south of the border.
Mr. Crawford: The hon. Gentleman knows that it is not true. It is up to the SDA to look after British Leyland and Bathgate. We do not want London to have any control over companies in Scotland, irrespective of the location of their head offices and registered offices.
In the context of the NEB, an indication of the cavalier treatment meted out to Scotland in all things was given by Lord Hughes in the debate in another place. The noble Lord said that the Industry Bill provides the NEB with corresponding powers to establish and engage in industrial undertakings throughout the United Kingdom and that no attempts had been made to remove those powers. Let me remind the noble Lord that the hon. Member for Caernarvon (Mr. Wigley) and myself attempted to ensure that the NEB would have no powers in Scotland or Wales and that Scotland
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should have a differently oriented agency. However, the noble Lord said that he is not aware of any move to ensure that the NEB does not operate in Scotland.
Mr. Tam Dalyell: As one who has week-by-week if not day-by-day relations with British Leyland and Bathgate, I am fully aware that we are faced with a complex situation. However, like it or not, the company is tied up with its United Kingdom bases.
Mr. Crawford: I think that I have passed on from that. What is important is the psychological effect on the people of Scotland, given that the SDA is to be made subservient to the NEB. Even the Edinburgh Chamber of Commerce is falling into bad psychology. It referred to the NEB in a recent memorandum on the SDA as the "premier board". The SDA is not even primus inter pares.
No one has spelt out the relationship between the NEB and SDA. I ask the Government to clarify the position, and especially in the context of companies such as British Leyland, Ferranti, Scott Lithgow, Rolls-Royce, Honeywell, NCR, IBM, BNOC and BAA.
What the SNP wants is an agency with teeth and money. The teeth of the agency should operate the entire system of financial evaluation and assistance. The agency should be given responsibility for the stimulation of investment in new competitive projects, for the support of relevant research and development and for the attraction of suitable funds for investment in Scotland.
We do not necessarily see the agency as any kind of instrument for take-overs by the Government. We are concerned with development rather than ownership. We believe that it is of the utmost importance that the agency should be a single-purpose dynamic outfit unburdened by heterogeneous responsibility. I take the point of the hon. Member for Glasgow, Queen's Park that there is a real need for proper control and monitoring. I go along with him on that.
We believe that there should be less political content in the Bill and more practicality. There is a body in the Republic of Ireland—and there are similar bodies elsewhere—called the Industrial Development Authority of Ireland. It has been very successful. Of course,

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Ireland is a republic and enjoys self-government. The authority has been outstandingly successful and is of interest to Scotland.
The authority has internal offices in Donegal, Sligo, Monaghan, Galway, Athlone, Waterford, Cork and Shannon. Perhaps more importantly it has international offices in London, Paris, Cologne, New York, Chicago, San Francisco and Tokyo.
That is the sort of set-up that we should have in Scotland. The SDA head office should be decentralised to Edinburgh, Glasgow, Aberdeen, Dumfries, Perth, Inverness, Hawick, Stornaway, Kirkwall, Lerwick and, of course, Kilmarnock. On an international level, it should have offices in London, Brussels, Tokyo, San Francisco, Chicago, Toronto, New York, Melbourne, Lagos, Moscow, Peking and elsewhere. I note that Labour Members are laughing, but that is the kind of SDA structure that we want to see. However, we have Lord Hughes saying that the agency might find it necessary to set up an office in some other part of the United Kingdom or overseas. It must be made clear that overseas offices are a "must" and not a "might".
In this context I draw the attention of the House to Clause 2, which describes the general purposes and functions of the agency. Some are excellent in the same way as are admonitions and exhortations that we should all get up earlier in the morning and work harder. But some are much vaguer, and we shall seek to clarify them in Committee.
Specifically the SDA should have an additional statutory duty to assist exports and to be the basis of a mixed venture capital company. Hon. Members have talked about stimulating indigenous industry but have offered no solution to that problem. In addition to the need to attract industry to Scotland from abroad, there is a need to stimulate the growth of companies in Central Scotland. Success on this score is Central Scotland's twentieth-century nine of diamonds. The only way in which the present process can be halted is by the establishment of a mixed base venture capital company.
The chairman of one of the most successful European Companies, European Enterprise Development, said recently:
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"Creation of processes and production of ideas and industries depends on men more than money, on imagination as well as on initiative. Seek out creative men with the vision of things to be done. Help breathe life into new ideas and processes and have a sensitive appreciation for creative drive."
There is a great need in Scotland for venture capital for industry. We believe that the SDA should have an arm of its organisation to deal specifically with venture capital. It could invest with pride in the entrepreneurs who, it is hoped, will make profits, and then the Government can sell their equity share to a merchant banker and those companies can grow in Scotland and provide long-lasting jobs.
All this activity needs money. We are told that the United Kingdom economy is in dire straits. But the Scottish economy is not in dire straits. We are not suffering from the English disease. If the hon. Member for Renfrewshire, West (Mr. Buchan) wants to quote export figures, I have the latest Scottish Council figures with me.
At present the Bill has a vague commitment to £200 million, raisable to £300 million. But there is no single mention of what happens when that money runs out, although the Secretary of State went some way in this regard when he said that he would still have to come back to the House for more money. That means coming back to the Treasury.
We in the SNP want a firm annual commitment to the SDA—starting, say, with £100 million in its first year of operation, rising to £300 million in the fifth year, with a review of future annual budgets beginning no later than the SDA's fourth year of operation. Furthermore, we want a separate amount of money to be allocable by the SDA to the shipbuilding industry in Scotland. We do not want that money to be administered, as at present proposed for the NEB, on a United Kingdom-wide basis.
This is the kind of SDA that any self-respecting, self-governing country should have—not the thing we now have in front of us. But I must make the point that any SDA is better than no SDA. All that the Scottish Conservatives have done by blocking the Bill—in addition to giving Labour an excuse, however lame, for holding up the creation of a devolved agency—is to block the etablishment of new jobs and new investment. I hope

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that the Scottish electorate will take that fact to heart.
There seems to have been a remarkable change of heart. On 11th December the hon. Member for Aberdeen, South (Mr. Sproat) asked the Secretary of State to ensure that the SDA would have as one of its main functions
"the direction of finance to north-east of Scotland to get the infrastructure under way".
Furthermore, the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) asked the Secretary of State to recognise that what was needed in Scotland was
"cash to modernise old industry and create new jobs".—[Official Report, 11th December 1974; Vol. 883, c. 501–2.]
It would appear that the Scottish Tories are now dancing to another tune especially when the hon. Member for North Augus and Mearns said today that the Conservative Party would vote against the Bill.
Let me reiterate the position of the SNP. We shall support anything that will help Scotland, in however small a way. We shall support any devolutionary measure, however small, festooned with however much public relations. We shall give our support to this Bill on its Second Reading. But in supporting the measure we give notice that in Committee we shall seek more money for the agency, more practical power and more expertise. In this context and in others we shall not take "No" for an answer.
In the same week as Scottish oil was landed at the Isle of Grain and the right hon. Member for Worcester (Mr. Walker) was saying that a third of Scottish oil should be sold, the Scottish Office was telling local authorities in Scotland to cut back on their expenditure. The right hon. Member for Worcester said that Scottish oil—he called it "North Sea oil"—would be worth between £150,000 million and £350,000 million. That amount of money could keep the SDA going for a very long time indeed.
7.7 p.m.
Dr. Jeremy Bray: The hon. Member for Perth and East Perthshire (Mr. Crawford) made one sensible suggestion—namely, that the SDA should have powers to invest venture capital in enterprises. I was interested in the example he gave of the European Enterprise Development, but his proposals
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for the SDA were absurd. The idea of having world-wide offices scattered in towns where major European countries do not even have consulates would justify the rebuke which the right hon. Member for Renfrewshire, East (Miss Harvie Anderson) gave to the Bill—namely, that it would create an impossibly inflated bureaucracy. Perhaps the right hon. Lady has not read the memorandum to the Bill. It points out that an additional 250 to 300 staff would be required. That seems to me to be a modest number of people to carry out the duties in the Bill in view of the benefits it will bring to the Scottish economy.
The right hon. Lady also seemed to be mistaken in her view that the Bill would place a burden on the Scottish or British economy in terms of the resources that it would use. Everybody is anxious to see investment increased. Undoubtedly the bulk of funds distributed through the SDA will go into investment. There is no lack of investment funds available to firms now. It is simply that they do not, as they see it, have the opportunity to invest profitably.
The right hon. Lady also raised a question which I should like to consider relating to the ways in which the SDA can enlarge investment opportunities in Scotland. The West Central Scotland Plan has identified fairly the problems of the Scottish economy generally, but more particularly in West-Central Scotland that the problem does not so much relate to incoming or outgoing firms as to the fact that the firms there are not expanding as fast as comparable firms in other parts of Britain and Europe.
Let us take the characteristics of a typical engineering firm in which we want to see growth. Just because it has survived, it has a sound market. I am speaking of firms which may have been Queen's Award winners for exports and which serve a world-wide market. Such a firm's profitability has varied, although generally it is not high enough. It has at present limited investment plans, and it has plans for no more than maintaining its present level of employment. It is ready to expand its industrial training if somebody else will pay for it. It is ready to take Government orders. It is prepared to move cautiously into new business, but at no more than the rate of investment afforded by maintaining the present financial

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control of the company. In effect, its behaviour pattern such as to leave a stagnant and declining engineering industry. That is a pattern which the agency will seek to change.
Miss Harvie Anderson: I am interested in the hon. Gentleman's argument, but I can think of one substantial engineering firm in my constituency where there has been investment of £1½ million in an important sector. All that the firm now requires is an order. Why cannot that firm obtain an order? That is all that is needed. It has to be a large order authorised by the Government. But the Government have no money. However, if £10 million of the £300 million mentioned in the Bill were available to the firm I have in mind, it would ensure jobs for thousands of workers for many years to come.
Dr. Bray: The right hon. Lady must have in mind the firm of Babcock and Wilcox. The contribution that the SDA can make is to create opportunities for interconnected developments—developments which Babcock and Wilcox and other similar firms could undertake not on their own but only by joining with others.
John Brown Engineering has gone into a new line of business in turbo-generators, which are useful for pumping stations for big pipelines, such as the enormous one going to Russia. It cannot find a partner within the United Kingdom, let alone in Scotland, to make the pipes or to supply the steel to make the pipes. Here is an industry with long-term potential that is not being developed.
Or again, together with some of my hon. Friends, I visited ICI Grangemouth last Friday to see some very interesting work related to solvent extraction of metals. One hopes that this will lead to further chemical industry investment in Scotland, but why only the chemical industry? The metal extraction will require a great deal of engineering, consulting and contracting work, and can bring a great deal of wealth to Scotland. How can this be organised beyond the chemical industry to reach a wider sphere?
Another example is offshore engineering, which is now moving into deeper
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water, requiring new systems which are being developed. A number of Scottish firms are active in these new systems, including Yarrow and others. One hopes that it will lead to considerable expansion, but there is no indication of the scale of effort required that can build up to a powerful enough group to tackle world markets and compete with firms like Brown and Root.
How, against that background, can the SDA act? First, it must try to work with existing enterprises, leaving control in the hands of existing management if it can. I am sure that it will do this and get interesting proposals from existing enterprises, but I very much doubt, if it limits itself to that kind of operation, that it will get very far. It can also establish new enterprises. Here the process of starting up, acquiring a licence, making marketing agreements and so on is perfectly familiar.
I do not see why the SDA cannot adopt the same mode of company promotion as established company groups use, and I hope to see it starting with a number of completely new enterprises on a substantial scale. It may finally find that it needs to go into an area of activity where, frankly, the existing firms are not exploiting the opportunities that are open to them and where it has to move in with a scale of operation which eventually will not make sense to the enterprises that remain, so that eventually, in one way or another, there will be a takeover. It must be able to operate in a way which will change the management of existing enterprises which are not able to take the opportunities they have had. I know that my right hon. Friend the Minister of State——
Miss Harvie Anderson: I am sorry to interrupt again, but the conclusion that the hon. Member has just reached illustrates my point. The firm I mentioned in my constituency is not able to get an order from SSEB. It is Babcock and Wilcox. It is Government authority that is needed. If the Government spend in another way, money is not available in such cases. I accept what the hon. Member says. My point is that the priorities are wrong.
Dr. BrayThere is no point in building power stations if no one wants to use their electricity. The rates of growth of

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electricity demand have been very much lower than were anticipated. If the right hon. Lady wishes to explore this possibility, the obvious direction in which to look is the major electricity-consuming industries in which Scotland could invest. There are some, and I hope that the right hon. Lady will pursue this point, but not just the isolated piece of industrial development in a single power sttaion.
I very much hope that the SDA will not be left to operate without a plan. I know that my right hon. Friend the Minister of State, who is replying to the debate, is sceptical whether a plan should be provided for the SDA. I was encouraged to hear my right hon. Friend the Secretary of State, in opening the debate, say that it was necessary for the SDA to be deliberately selective. It must have a clear conception of the pattern of industrial development that it is seeking.
The plan can be provided by the SDA itself. I have no preconceptions that this must necessarily be produced in the Scottish Office. It is difficult, with a department which has not previously had industrial responsibilities, to move at once into the industrial planning field. On the other hand, there are advantages in having fresh minds and a fresh organisation. It is an open question whether the plan should come from the Scottish Office or from the SDA itself.
It will need criteria, by which I do not mean simply in terms of return on capital investment and pricing policies—the traditional nationalised industries' criteria. I mean the decision whether the money is best spent on capital- or labour-intensive projects, a subject to which my hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) referred. I ask my right hon. Friend to consider, for example, whether, with the money produced for the Invergordon project, it would not have been possible to produce a great many more jobs in other industries.
We need to look very carefully at the structure of the capital subsidies as well as labour subsidies, to make sure that the balance produces the highest value added, the highest income per head, within Scotland.
There was one amendment made in the House of Lords, which I hope my
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right hon. Friend will consider very carefully, pointing to a need for the SDA to consider industrial relations. There is no doubt at all that industrial relations in the United Kingdom, and in Scotland in particular, are a factor affecting the readiness of anyone, foreign or United Kingdom business men or Government, to invest. This is a view given, in my experience, not simply by German tycoons. It is a view that I hear expressed by trade union officials in my own constituency, by Labour councillors and by my own constituency party officers.
We need to be realistic about this. I very much hope that the SDA will appoint a full-time senior official to be concerned with industrial relations policy. I shall give an example of the sort of question with which he should be dealing. He should produce a standard procedure agreement and a standard wage structure which the unions have agreed to operate in enterprises coming into Scotland. It is possible—I have done it myself—to come to a procedure agreement with trade unions in advance of an enterprise being set up. It is possible to agree the principles of a wage structure. There is ample ability, within the Scottish trade union leadership, to produce such standard agreements which could be part of the package sold to encourage investment in Scotland.
I would go very much further than this myself—though I doubt whether I shall be able to persuade the Government—and say that the SDA ought to be prepared to experiment with totally different forms of industrial management. I put down an amendment to the Industry Bill in Committee which would have authorised the employees in an enterprise to opt to turn that enterprise into a workers' co-operative. I hope that the Scottish Development Agency will have the imagination to set up enterprises deliberately to operate as workers' co-operatives, if that is the wish of the employees in the enterprise. I hope that no management structure will be accepted by the SDA, for any enterprise it sets up, which has not first been fully discussed with the employees who are a part of that enterprise. These developments in industrial democracy, and this serious attack on the problems of industrial relations, are an essential part of development of industry

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in Scotland. They would, in any view, strengthen rather than weaken the Bill.
The respect in which I find the Bill limited is not the financial totals that have been prescribed. There is a Bill at present before the House, the Statutory Corporations (Financial Provisions) Bill, which, more or less at the nod of a head, is adding some £3,000 million to the funds available for public enterprises in the United Kingdom. The funds available to the SDA can readily be increased. My right hon. Friend has made this point over and over again.
I would have liked to see, not in the Bill perhaps but in a statement, a target of job creation, because it is this that will set the scale and the pace of the initial activity of the SDA. If it is setting a target such as "We think that we shall do well if we get three or four enterprises off the ground in the first year with a job creation of 1,000 in the first year and 3,000 in the second", it could be a commercial success, but it will not have very much impact on the Scottish economy. The number of jobs needed in West-Central Scotland in the next five to 10 years is 70,000 or 80,000. A substantial proportion of that must be created either directly by or under the influence of the SDA. It is that scale of activity which I have not yet heard by my right hon. Friend or the Government in general talking about in relation to this Bill.
We shall have an opportunity to pursue this further in Committee. If I may, I should like to give notice of my intention, if I am fortunate enough to serve on the Standing Commitee, to seek to write into the Bill some form of target for job creation in order to put a real spine into the implementation of the Bill.
7.21 p.m.
Mr. Hamish Gray: We have just listened to a very interesting and constructive speech by the hon. Member for Motherwell and Wishaw (Dr. Bray). But, before dealing with one or two of the matters which he raised, I want to make a brief reference to the remarks to the hon. Member for Perth and East Perthshire (Mr. Crawford). I do not take up any of the points that he made, but I wish to comment on his closing remarks in which he accused my right hon. and hon. Friends of trying to
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delay this Bill. It is already on the record and should be put on the record again, that my right hon. and hon. Friends used a perfectly reasonable parliamentary procedure in order to have this Bill debated on the Floor of the House.
The hon. Member for Perth and East Perthshire went on to say that the people of Scotland would take note of these matters. Let me remind him that at this very time the people of Scotland are taking note of a great many matters. They are taking special note of the many irresponsibilities being perpetrated at different times, sometimes by members of his party.
I refer to a statement which I understand to have been made by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), who described the landing of oil from the North Sea at an English port as "an act of aggression". That is precisely the emotional appeal that members of the Scottish National Party have been trying to stir up throughout Scotland for a very long time, and, the sooner that it is nailed on this, the better. If the statement is not correct, I hope that the hon. Member for Perth and East Perthshire will say so.
Mr. Crawford: I cannot say whether it is correct. But the hon. Gentleman accused members of my party of stirring up emotions. We are very angry about urban deprivation in the west of Scotland and about the fact that decades of Conservative and Labour rule have left us with the highest unemployment figures in Western Europe.
Mr. Gray: I should not have given way to the hon. Gentleman. It is obvious that he is embarrassed by what I said. The people of Scotland will take note of all these matters.
Perhaps, on reflection, I might take up one point to which the hon. Member for Perth and East Perthshire referred. He spoke about a company in my constituency, known locally as MOIRA, which had fallen on evil days. The company has had a considerable amount of Government support. I am taking up the matter with the Department of Energy to see what can be done about it.
In terms of this Bill, it is perhaps of interest to point out—and I hope that the Secretary of State will consider carefully—that where considerable aid is given,

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there is great anxiety about forward planning in companies which are to be so assisted.
If the Secretary of State had announced that he intended to accept the Bill as it came back from the Lords, I should have looked upon the matter with an open mind because, unlike some of my hon. Friends, I do not see the dangers in the Bill that some of them see. I believe that there is much good in the Bill. But the matter to which I take the greatest exception and the reason why I cannot possibly support the Bill on Second Reading is the very fact that the Secretary of State has announced that he will put back into the Bill that part which I consider to be most obnoxious. In other words, the Secretary of State intends to reintroduce the power given to the agency to establish undertakings by itself. I do not see why it is necessary. It is not in the best interests of Scotland. I do not see how the setting up of companies or projects to be run entirely by the agency will benefit the people of Scotland.
To digress for a moment, last Saturday in my constituency I attended the naming of a very large platform for the Ninian field. The platform was built by Highland Fabricators (Brown & Root) Ltd., which is a free enterprise company. Such is the standard of labour relations that the men working for the company were able to negotiate terms which enabled them to complete the contract six weeks ahead of schedule and to gain bonuses accordingly.
The jobs which have been provided in my part of the country have been provided by private industry. They have not been provided by any nationalised undertaking or by any concern in which there is State participation. Certainly grants have been made available for the purpose, such as those which the Seccretary of State described earlier, following the policy adopted by successive Governments for the benefit of Scotland. But the companies themselves have no connection with the State, and their achievement is most commendable.
At the moment, I am serving on the Standing Committee which is considering the Petroleum and Submarine Pipe-lines Bill. We have been debating for some time the setting up of the British
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National Oil Corporation. This, again, is a proposal which the official Opposition deplore. We do not consider that it is necessary for taxpayers' money to be tied up in this way. The Government have adequate measures to get their revenue from the oil industry, as they have from any other industry, through normal taxation legislation. We do not see the need to set up such an organisation. There is no doubt that it is a form of nationalisation. The National Enterprise Board has many vast powers, but probably the powers which the Secretary of State proposes to take in this Bill relatively are as great.
There is also the problem of costs. I am a little worried by all the promises that the Government are making about sums in the region of £200 million or £300 million, not to mention the extortionate promises made by the Scottish National Party which are all made on the basis of oil and on the basis of its price either staying up or rising. I cannot imagine what the outcome will be if the price goes the other way.
Instead of the Bill which we are now considering, we could have achieved the same objects with a Scottish development fund. This, tied to oil revenues, could have directed the money in the same way to areas where it was required most.
The powers of the Secretary of State worry me a little. Certain of them are outlined in Clause 4. Among other things that says:
"After consulting with the Agency, the Secretary of State may give the Agency directions of a general or specific character as to the exercise of their functions…"
May we be given some indication of the difference between "general" and "specific" instructions? This is a matter which we have come across in our deliberations on the Petroleum and Submarine Pipe-Lines Bill, and the Secretary of State on one occasion gave us an example of a direction, but, unless he had told us, we should not have known whether it was general or specific. Is it necessary in this instance to have both types of instruction?
The Title of the Bill and the Explanatory and Financial Memorandum are very important. I do not think any hon.

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Member will disagree with that memorandum. It states:
The purpose of the Bill is to provide for the further economic development of Scotland with a special emphasis on providing, main taming and safeguarding employment and on improving the environment.
We should all heartily endorse this. We disagree on how this can best be achieved.
I welcome in particular Clause 19 which refers to air services in the Highlands and Islands. In Schedule 5 certain former Acts are repealed. Three different sections of the Highlands and Islands Development (Scotland) Act 1965 are repealed. I presume that this is because there will be no conflict of interest there. I believe that the Highlands and Islands Development Board has the power to assist air services in the Islands. Perhaps the Minister would deal with this matter when he replies.
We have the National Enterprise Board, the BNOC and now the SDA. Of the three, the SDA is certainly the lesser evil. There is certainly much good in it, but I do not know why the Secretary of State must spoil many good ideas and thoughts which appear in the Bill be re-introducing the totally obnoxious clause which was removed in another place.
I know that many of my right hon. and hon. Friends wish to take part in this debate so I shall not take up any more of the House's time. In many ways it is with regret that I cannot support the Bill on Second Reading.
7.32 p.m.
Mr. Richard Buchanan: I welcome the Bill with some enthusiasm, in contrast to its reception by the hon. Member for Ross and Cromarty (Mr. Gray), who wishes to set up a Scottish development fund. Is not such a fund just what his hon. Friends were complaining about when they said that a development fund would simply issue doles, that there would be no monitoring and that firms which were receiving assistance would not be required to have an efficient test.
It would seem from the remarks of some Conservative Members that Scotland was booming because private enterprise was taking all the initiatives. In fact, the Secretary of State is still doling out millions of pounds under various
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Acts to help private enterprise along the road.
The right hon. Member for Renfrew-shire, East (Miss Harvie Anderson) mentioned taxation. I appreciate that taxation locally and nationally is probably getting near to saturation point. However, one of the greatest leaks as regards taxation is paying people unemployment benefit. The Bill is surely about the creation of employment and the stimulation of industry to enable the Chancellor of the Exchequer to have the money to pursue the many things that we desire in a social environment.
I am glad that my right hon. Friend the Secretary of State is determined to restore the provision, which was deleted from the Bill in another place, because the teeth have been drawn from the Bill. I am glad that he is seeking to reintroduce that clause.
The Bill is a means for furthering the economy of Scotland and for improving its environment. A great deal has been said about economic aspects and, therefore, I wish to direct my remarks to the environment. The environment has become a major political issue and is taking its place in the mainstream of political argument—a subject as vast as the universe itself.
Many hon. Members have experienced the kind of environment which the Bill seeks to eradicate. I welcome the multiplicity of rôles of the Bill, including the promotion of industry and industrial democracy, and the management of estates. However, the most important of these rôles is the improvement of the environment. It is a recognition of this rôle that it has been included in the statute. It has been recognised that decay on the economic front is rapidly followed by decay and dereliction in the surrounding area. One of the best features of the Bill is that something will be done to improve the environment.
In 1964 I was elected as Member of Parliament for an industrial constituency which is typical of such constituencies throughout Scotland. It is certainly typical of industrial constituencies to the north and east of Glasgow. There is not a single major industry in the whole of the East End of Glasgow. This area used to be the power-house of the West of Scotland. There is no point in Scottish National Members blaming this on the

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United Kingdom Government. It was Scotsmen and Scotswomen who did not believe in Scotland. This is why Scotland fell into decay. If we have a Scottish Government it will have t3 be different in context and personnel from the men and women who almost led Scotland to ruination in the past.
Mr. Crawford: We are blaming the situation on the fact that Scotland does not have a Government of its own.
Mr. Buchanan: Scotland had its own railways, its own steel industry and its own indigenous industries. Scotsmen let Scotland down. They did not believe in Scotland.
The consequent follow on to industrial decay in my constituency is typical. The age of the steam locomotive is past and all the supporting industries to that industry died with it. As a consequence, buildings around the factories are decaying, derelict and being pulled down. Industrialists have visited my constituency to see the finest sites in the West of Scotland. I am not raising this as a matter of propaganda. The railways were given the best sites so that transportation of people and goods would be faster. Until the steam engine was invented, the fastest speed that man could travel was what it was in the days of Julius Caesar—the speed of a galloping horse. The railways were given all the sites they wanted. These sites are now lying vacant in Springburn and in East End. An industrialist can see the decay and dereliction that exists in the old environment, and are being discouraged from investing.
Glasgow Corporation is doing a first-class job clearing these derelict sites. However, the whole scheme is spoilt by one tenement block sticking up in the midst of, perhaps, 20 or 30 acres. Something must be done about that. I hope that the Minister will take power in the Bill to ensure that sterilised sites are made available to industrialists. It is no encouragement to the industrialists if the environment surrounding the area where they want to build their factories is as bad as it is in some parts of Glasgow.
If we are to create a progressive, industrial base in Scotland it is necessary to have the right environment. This involves co-operation with the local authorities. The regional councils have a considerable
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amount of economic power invested in them. Will they still have that power or will the SDA be taking control?
My hon. Friend the Member for West Stirlingshire (Mr. Canavan) referred to people who travel all over Scotland—the industrial nomads who travel long distances to their places of work. He made the important point that housing is just as important as jobs. Houses must be built close to places of work. The local authorities could do a tremendous job on this if they got the money. Glasgow corporation has published plans today for environmental improvement amounting to £8 million. It could do a magnificent job on the environment if the money were forthcoming. So much more could be done in relation to housing management. I hope that my right hon. Friend will have some influence about asking local authorities, particularly in Glasgow, to tidy up post-war housing schemes.
Another matter which worries me is the delay in processing planning applications. It seems to take a terribly long time to say "No", which seems rather ridiculous.
The situation in which I was involved in Ardersier, in the North of Scotland, gives cause for concern. Inverness has a harbour authority and Cromarty has a harbour authority. But the men who were launching the rig from Ardersier had no control over the seaway between Cromarty and Inverness. They have to go through all the paraphernalia of a public inquiry before they can get permission to clear the seaway to launch these rigs. That is ridiculous and the process should be streamlined or eliminated.
If the environment is important to the creation of a sound industrial base, so is industrial relations. I shall not try to give the trade unionists any advice. I simply mention the matter. From listening to the media and reading the newspapers, one would think that very few people do any work in West-Central Scotland. But industrial relations in Scotland generally are better than they are almost anywhere else, certainly in Europe. The prestige of the TUC and the STUC is such that, by and large, the unofficial strike, the cause of most of the dissension, usually stimulated by a small

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group of so-called International Socialists, could be contained. The STUC and the TUC will have to use their not inconsiderable power and prestige to see that the influence of these sinister wreckers is not developed in such a way as to place any of the industrial development about which we are talking in jeopardy.
My hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) spoke in terms of workers' control. I was recently in Yugoslavia. We must really look at the question of self-management. It is working very efficiently there. They have something to show us. I hope that we shall pursue the extension of industrial democracy here with just a little more vigour.
With a little reservation, I welcome the Bill. The little reservation is that I would like to see a little more money involved. But the fact that the Bill is necessary at all is a trenchant condemnation of private enterprise, and particularly of the Scots in industry and commerce. A herculean task confronts the new SDA—progressing areas of potential growth, supplementing private enterprise, indulging in joint ventures with private enterprise and seeing that it has the proper plans and sets itself the proper targets, and monitoring its efficiency.
It would be tragic, however, if the SDA became a convalescent home for failures. My hon. Friend the Member for Motherwell and Wishaw mentioned indigenous industries. I hope that the Bill will occasionally nurse back to viability many of our indigenous industries. But where the SDA will be at its best, I hope, is in the creation of new jobs. I do not agree with my hon. Friend about targets, because if we set a target for creating so many thousand jobs and fail by 500, everyone will say that we failed to reach our target.
About 40,000 jobs have been created in the oil industry. However, for the Scots, what a catalogue of lost opportunities there is in the matter of offshore engineering. We see on television programmes about the platforms being constructed in Norway, rigs being towed across the sea and supply ships being ordered from overseas. Even the tanker that took the oil from the Argyll field down to London flew the flag of Liberia. On the subject of Scottish oil, my limited
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knowledge of geography indicates that the median line for the Argyll field is as close to England as it is to Scotland, and it is British oil. But even the undersea pipes which will pump most of the oil into Scotland came from Italy.
In short, our share of the market in offshore engineering has reached only 40 per cent. of the total and the performance of British and Scottish industry falls far short of what we are entitled to expect.
The agency is to have a chairman and not fewer than six and not more than 12 other members. I hope that the Minister will take the advice that has been offered to him today and see that the appointments to the agency are not retired civil servants or worthy trade union officials. We are looking for people with initiative and enterprise, successful people with entrepreneurial minds. Let us give them the power to do the job and let them get on with it. If they are no good, let us get rid of them. If the SDA is to succeed, it is essential that we give it the maximum degree of independence. I wish it well.
7.46 p.m.
Mr. Hector Monro: It is always a privilege to speak after the hon. Member for Glasgow, Springburn (Mr. Buchanan). He always speaks with such sincerity about Glasgow. I was particularly interested in his views on the environment, on which I shall comment later. We may have crossed swords about social democracy, but that has not been because I do not think he knows what it means, and I certainly do not do so in relation to what was removed from the Bill in another place.
I want to speak about the practicalities of the Bill in relation to industrialists who may want to come to Scotland to set up business there. Over many years I have been involved in efforts to attract industries to Dumfriesshire and I have learned a good deal during this period. I willingly pay tribute to those who have worked hard in the same area, such as the county council, the town councils and the development authority, always working under both Governments. I accept that there has been help from the present Government as there has from previous Conservative Governments.
I pay a very short but sincere tribute to the Department of Trade and Industry in Glasgow. It has played a very great

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part in the industrial development of our country over recent years—and no one more than the late chief executive there, Mr. John Warne. He should certainly go on record as one who has done a great service for Scotland.
During the period about which I am talking we were working under the Local Employment Act 1963, which initiated the advance factories, the development districts and, later, special development areas. If the hon. Member for Dumfries, West (Mr. Doig) had been present I should have discussed his views about the whole of Scotland being one special development area. On this topic I believe that there is still a very important place for incentives for those areas which really need industry, in which we have unemployment of 6 per cent., 10 per cent. or even 15 per cent., as some areas of Scotland have. They deserve an extra incentive to attract industry, over and above what is going to areas perhaps more favourable in terms of unemployment percentages. However, that is something that should be discussed in Committee, and not now.
The present system, complicated as it may seem at first sight to an industrialist, has worked well. I know that people are sometimes frustrated about the time it takes. However, they have got there in the end. Today the Secretary of State has introduced an additional system, on top of the present system. This is something on which the Minister of State should comment in winding up the debate. My original impression was that we would have the SDA and that surely the SIDO would disappear and we would not have the two systems. I still think that it is up to the right hon. Gentleman to prove more effectively than has been done so far that the suggested system will work better than what we have at present. I feel that this addition will cause confusion, certainly in the early stages.
SIDO plus the 1972 Industry Act gave emphatic control of industrial development in Scotland to the Department of Industry in Glasgow and there was close co-ordination with the development of new industry in England and Wales. This was a major step forward and I feel that this co-ordination will be lost in the splitting up of future industrial development. I have always believed that the Secretary of State should have the maxi-
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mum authority over development in Scotland, provided that the United Kingdom advantages were not lost. I have some doubts in this matter now. Most new industry coming direct to Scotland comes from England and has its first contact with the Department of Industry in London. From there is is channelled to the most appropriate location, whether in Scotland, the North-East of England or Wales.
If the NEB is the front runner in England, it will tend, if possible, to retain industry in England and not, as I should like, push industry to the North and into Scotland where it is most needed.
Mrs. Winifred Ewing: Is there not a hint of denigration in the hon. Member's remarks of the excellent work done by the Scottish Council (Development and Industry)? I speak as an elected executive member of that body. It has directed a great deal of industry to Scotland. If enterprises like that were encouraged we would not have to fear what the hon. Gentleman fears.
Mr. Monro: I am not sure whether the hon. Lady was here when I started speaking—[HON. MEMBERS: "She has only just come in."]
Mrs. Ewing: I have been here quite a long time.
Mr. Monro: I have paid compliments to many people who have played a part in bringing industry to Scotland. [HON. MEMBERS: "The hon. Lady should be here."]
Mrs. Ewing: Hon. Members should not make cheap remarks.
Mr. Monro: If the hon. Lady does not quieten down, I shall be unable to finish my speech. Of course, the Scottish Council has played a very important part in these activities, but the majority of industrial development in Scotland started following contact with the Department of Industry in London.
Are the SDA and the NEB both to set up offices in America and Europe, fighting for industry separately, or will there be a United Kingdom approach, as I should like, to channel industry to where it is mostly likely to be successful? In view of this additional complication, what is the standing of the advisory committee

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which is such an important cog in the wheel, providing loans and grants to industry under the 1972 Act? Will it be kept under SIDO and the Industry Act, or will it be taken over by the SDA?
I come now to the question of SICRAS, which has an important part to play in the rural economy of Scotland. It could have done more than it has done. Whatever the Bill says about the staff, I hope that they are quite happy to change their responsibilities to the SDA.
The SIE has been an excellent organisation and it is a pity to shut it down, even if it is being put under the wing of the SDA. It has been doing such an important and efficient job that I would have left it alone. Will the SDA set up offices in the regions of Scotland? There must be the closest contact between regional authorities and the SDA if it is to work as we hope it will.
I am not happy about the Secretary of State's remarks concerning the Development Commission. I appreciate that Mr. Donald Chapman, for whom I have the highest regard, has accepted that his responsibilities in Scotland should be taken over by the SDA. The commission has had a chequered career since 1911. It has been more active in some periods than in others and it is currently particularly active. It has been stimulated by the Scottish Office and I give it credit for that.
I was impressed by Mr. Chapman and his colleagues when they came to Dumfries and Galloway last winter and studied the plan prepared by the authority. They recently accepted that plan and proposed to build factories at Gretna and Kirk-connel. Because we are a region and I want to see harmony, I thank the commission for the factories it is to build at Galloway as well.
Under the last 12 months of Socialism, unemployment in my constituency has increased by 33 per cent. and the number is now 342 higher than a year ago. Some industries are on short time and others, such as the textile industry, are deeply concerned at the situation. We have to view the matter in the context of the 100,000 unemployed in Scotland.
The Government cannot be proud of their industrial or economic policies. I
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noted that the Secretary of State in his speech accepted responsibility for jobs in Scotland. Did he appreciate what he was saying? Did he mean that he is prepared to answer Questions in the House on unemployment?
While the Government's intentions for the SDA may be good, they have complicated a situation that industrialists coming to Scotland never find it easy to understand.
The Secretary of State has also shown that substantial resources will be required if the Bill is to be of the value that he expects. The sum of £200 million is mentioned in the Bill. It appears from the mathematics of my hon. Friends and others to mean about £20 million to £30 million a year over and above the money now coming into Scotland under the Industry Act 1972. Therefore, it is not quite the bonanza that the Secretary of State heralded when he announced the Bill some time ago.
Will the £200 million, or whatever it is be sacrosanct when the Prime Minister announces his economic package next month? Shall we learn of a cutback in the £200 million or the annual amount when the statement is made before the House rises?
If the Government have their way, the legislation will include a number of points with which we cannot agree. Another place made substantial improvements to the Bill. If the Government were prepared to leave it at that, there would be fewer objections to it.
I conclude on the matter about which the hon. Member for Springburn spoke—the environment. It is most important that we raise the standard of the environment, particularly in West-Central Scotland. We must make the area a much happier place to live in from the point of view of recreation and standard of life. But there seems to be a paradox in that, whereas the Bill encourages expenditure to that end, local authorities are having to cut back on almost anything that would come under that heading. Perhaps the Minister of State will explain just what money the local authorities can begin planning to spend in the present financial year, or even the next financial year, under this heading.
I welcome projects such as the Strathclyde Park, a major development in an

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area that was not attractive before the engineering works began about two years ago. It is well on its way to fruition. The Government might also put some resources towards the future of Hampden Park.
If the money is not available for the environmental improvements about which the Secretary of State talked, he is building castles in the air and holding out prospects of things that will not happen in Scotland in the foreseeable future. We want to see an end to slagheaps, derelict houses and areas of deprivation, but many such matters could be dealt with now without the passage of the Bill, if the money were available to local authorities, under a whole host of local government Acts and the Industry Act.
To the extent that this is an unnecessary Bill, because the powers already exist and have been working well, the Secretary of State should let well alone and restrain himself from breaking up a system that was worth improving but certainly was not ripe for abolition.
8.4 p.m.
Mr. William Hamilton: I want to say something about one or two of the speeches we have just heard, not least the last one. We gather that the Conservative Opposition will vote against the Bill not too enthusiastically, mainly because they think that the House of Lords has improved it. That was the gist of the speech of the hon. Member for Ross and Cromarty (Mr. Gray), and the hon. Member for Dumfries (Mr. Monro) also commented to that effect. In our view, however, the House of Lords emasculated the Bill. I was glad to learn that my right hon. Friend the Secretary of State intends to put it right.
If it has any justification for existing—and I doubt that—the House of Lords exists to tidy up legislation from this House, not to emasculate it. Therefore, it is right and proper for this House to tell the other place just where to go. We intend to produce the law which the electorate gave us a mandate to put on the statute book. The hon. Member for Ross and Cromarty and the right hon. Member for Renfrewshire, East (Miss Harvie Anderson) said that they were against public enterprise in principle. That is a point of view that can be understood, but it is one which we do not support and
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which cannot be sustained. The Scottish economy is weak enough, but if it were not for public enterprise it would be virtually a desert.
I give one example. The new towns are the most imaginative social experiment of public enterprise that we have seen in the post-war world. People come to this country from all over the world to see our new towns, which are an example of co-operation. After the pouring in of public money and after public planning, industry is encouraged—bribed, if one wishes so to describe it—and given incentives to develop in the new towns. They constitute one of the best examples of a second industrial revolution, combined with probably the best environmental conditions anywhere in Scotland.
My right hon. Friend the Minister of State, in an unfortunate experience this morning in the debate on the Glenrothes Statutory Instrument, had reason to comment on this aspect of the new towns. The public enterprise sectors in Scotland are the very basis of our success. My right hon. Friend the Secretary of State will go down in history as a revolutionary in that he will have been responsible for the introduction of both the Highlands and Islands Development Board and now this measure. I recall that when he introduced the legislation setting up the board the then Shadow Secretary of State, Michael Noble as he then was, described it as a Marxist measure. But when he saw that his constituency was omitted from the original project he sought amendments to bring it within the Marxism that was being introduced by my right hon. Friend. No doubt Tory Members will describe the Bill as a further extension of Marxism. If so I am a damned good Marxist, because I very much welcome the Bill.
I have never heard such a farrago of parochial nonsense in all my life as I heard tonight from the hon. Member for Perth and East Perthshire (Mr. Crawford). It was the most nauseating mixture of insularity and ignorance that I have ever heard in the House. When the Scottish National Party seeks to disclaim responsibility for the activities of the Tartan Army, I accept that, but the emotive arguments used by the hon. Gentleman today were designed to whip up the kind

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of feeling that expresses itself in violence. The hon. Gentleman ended his speech in the same emotive tone, talking of Scottish oil being delivered to an English port. If that is not emotional nonsense deliberately designed to whip up hatred between people who happen to belong to one part of the United Kingdom and others who happen to be born and bred in another part, I do not know what is.
Mr. Henderson: In his remarks the hon. Gentleman is giving us a lesson in whipping up hatred and discord. It is clear that he does not understand that the Scottish National Party has always taken a constitutional view of the objectives which we wish to attain. We stand up for the rights of the Scottish people and for the right of the working people in Scotland to jobs. If the hon. Gentleman regards that as whipping up hatred, he has a distorted sense of values.
Mr. Hamilton: The hon. Gentleman said that anybody who did not have a Scottish birth certificate would have to leave Scotland if there were an independent, separate State.
Mrs. Winifred Ewing: On a point of order, Mr. Deputy Speaker. It may be considered that the hon. Gentleman's language was unparliamentary as he accused by hon. Friend of being a racist. If the hon. Gentleman had the chance, I wonder whether he would say that outside the Chamber. He knows that he can say that here with impunity.
Mr. Deputy Speaker (Sir Myer Galpern): The point of order was addressed to the Chair. I do not consider the contribution of the hon. Member for Fife, Central (Mr. Hamilton) as in any way unparliamentary. I hope that the exchanges will not reach the stage where there is some kind of warfare between the two sides of the House.
Mr. Hamilton: I am expressing what was said outside the House.
Mrs. Ewing: Withdraw it.
Mr. Hamilton: I referred to what was said outside the Chamber by the hon. Gentleman. He is on record as having said it.
Mrs. Ewing: Where?
Mr. Hamilton: I shall provide the hon. Lady with the quotation.
I turn from that subject and refer briefly to another—
Mrs. Ewing: No wonder.
Mr. Hamilton: The hon. Lady enters and leaves the Chamber within a few moments.
Mrs. Ewing: On a point of order, Mr. Deputy Speaker. The chairman of the battered wives committee knows why I was in and out of this Chamber. It is unworthy of the hon. Gentleman to make that remark.
Mr. Hamilton: I was chairman of that committee, which ended its proceedings shortly after 6 p.m. I have been in the Chamber since then. The hon. Lady has been here for about 10 minutes since that time. It is now 8.10 p.m.
Mrs. Ewing: On a point of order, Mr. Deputy Speaker——
Mr. Deputy Speaker: Let us have exemplary behaviour in the House. I think that hon. Members on both sides are getting a little out of hand. The comments were fair debating points. If we continue with points of order, we shall be unable to proceed with the debate.
Mr. Hamilton: I shall now refer to the Bill.
My right hon. Friend seeks to extend public ownership. He intends to take comprehensive powers not only to extend existing public ownership but to initiate new public enterprises and public participation in existing private enterprises. I am glad of that. My right hon. Friend will have enormous powers. Those powers will be more comprehensive than have been assumed by any previous Government. The Secretary of State will be in charge of economic planning and industry in Scotland.
I should like to ask a question concerning the relationship between the Scottish Development Agency and the NED. This matter was referred to by Lord Hughes, who spoke of the drawing up of administrative rules to define the relationship between the NED and the SDA. Those rules will be adjusted from time to time in the light of experience according to circumstances. He said that

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the rules would be published in due course. It is important that the rules should be drawn up as quickly as possible. I hope that my right hon. Friend will give us some indication of the schedule he has in mind for that purpose.
My hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) spoke about the quality of life. I am glad that that is not an insignificant part of the provisions of the Bill and that the Bill is not exclusively an exercise to promote economic and industrial growth.
I am one of an increasing number of people who believe that growth is not necessarily good in itself. We must pay much more attention to the improvement of the quality of life rather than the quantity of goods and services which we produce. We see far too many communities in the United Kingdom enduring the scars and the sores of the rapacious first Industrial Revolution—the slum houses, the slum schools and the slum hospitals. Progress is being made to remove the worst of those evils. It has been done at public expense. We are obliged to use public money with which to remove the scars created by private enterprise. Public resources have been used to cure this privately-created evil.
I ask one question of my right hon. Friend, although he may not be able to answer it immediately. Continued reference has been made to the fact that the great bulk of the money to be made available under the Bill will be spent in the west-central area of Scotland. I understand that decision, which has been made on the basis of population and social and economic deprivation. There are good grounds for asserting that repeatedly. I hope that my right hon. Friend will give an indication of how he envisages the machinery by which the resources will be divided between the regions.
Although the Fife region has a good record in clearing dereliction, an unacceptable amount still remains to be dealt with. The National Coal Board seeks to extend its opencast operations in the Cardenden Bowhill area, which has been an eyesore for far too long. It gives the impression of arrogantly overriding the wishes and the desires of local councils and people. I do not know how that fits in with the terms of the Bill. How-
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ever, I should like my right hon. Friend to clear up that matter.
There will be an interesting debate on the Bill in Committee. Despite the absurdities of one of the Scottish National Party spokesmen, that party will evidently not oppose the principle of the Bill. We shall be interested to see what amendments are proposed by the Scottish National Party.
The Tory Opposition are opposed to the principles of the Bill, presumably because it extends public enterprise. The people of Scotland see their salvation in the extension of public enterprise because private enterprise has manifestly failed in the past 300 or 400 years.
8.20 p.m.
Lord James Douglas-Hamilton: The hon. Member for Fife, Central (Mr. Hamilton) referred to the relationship between the National Enterprise Board and the Scottish Development Agency, and I too wish to touch on that subject. Some clauses of the Bill raise issues which are not clear, and I wish to mention several matters which cause concern to the Law Society of Scotland and company lawyers.
Clause 14(1)(a) provides that the SDA shall have power to acquire just under 30 per cent. of the share capital in a company at a cost of up to £2 million without the formal consent of the Secretary of State for Scotland, subject to the total limit of certain expenditure laid down in Clause 13(3). The Welsh Development Agency Bill and the Industry Bill contain similar provisions, and it would appear that these powers are cumulative and not mutually exclusive. Those powers should not be cumulative.
Will the Minister make clear, if necessary by an amendment at a later stage, that the maximum cumulative shareholding in a company by the Scottish Development Agency, the Welsh Development Agency and the National Enterprise Board will be only 30 per cent.? To put the question differently, will he ensure, again by amendment if necessary, that acquisition of share capital in a company by one of the bodies I have mentioned is mutually exclusive of the other two bodies acquiring any share capital in that company?

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There is a City code—I understand that it is a Stock Exchange booklet—which states that a shareholding of 30 per cent in a public company is equivalent to effective control of that company. Is the Minister satisfied that the clause is not in conflict with Article 7 of the EEC draft directive on general bids in relation to the acquisition of a controlling interest in a company? At an early stage the hon. Member for Fife, Central raised this topic very generally with the Government. If the Minister would give a clear indication of where the Government stand on this issue, it would be of considerable assistance.
Of perhaps greater importance is the matter of principle which arises on paragraph 19 of Schedule 1. According to that paragraph the agency is exempt from the provisions of Section 14(1) of the Prevention of Fraud (Investments) Act 1958. That Act prohibits the distribution of circulars in relation to investments subject to various exceptions, and provides that permission must be given by the Department of Trade. The provision in the Scottish Development Agency (No. 2) Bill to which I have referred would surely put the agency outwith the scope of the law. Why should the agency be exempt from the terms of the Prevention of Fraud (Investments) Act when every other firm, company and body in the country is subject to them? In short, why should the agency be given superior powers to everyone else? Does not that provision give the agency an immunity which it should not have? I shall be grateful to the Minister if he will answer these questions.
We are committed to the establishment of a Scottish Development Fund which will, obviously, have to be administered by a body or agency. The debate today concerns not whether there should be an agency but what the powers of that agency should be.
8.24 p.m.
Dr. M. S. Miller: I give an unequivocal welcome to the Bill and I am not put off by the criticism that the Bill contains another series of plans for action which will lead to alleged bureaucratic control. Whenever a civilised community wishes to take action, it is advisable to begin by planning that action in some detail, and I warmly welcome the
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opportunity to say a few words in support of this set of proposals.
I listened with a great deal of interest to the speech made by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), but he was at least 75 years out of date in his avowed, open espousal of the laissez faire system. I have news for him. We are in a different ball game now. We are not today living in the world he was talking about.
The agency has a huge task ahead of it. I hope that what we shall hear from the Prime Minister in the next few weeks will make no difference to the Government's intentions in respect of this measure. There are enormous problems to be overcome and I cannot help but be impressed by the scope of the Bill. But in addition to a long-term solution to some of our problems, we are looking for one or two quicker results. For example, I should like the agency quickly to do something about the steel industry in Scotland and to deal with some of the problems of the multinational companies. I should like it also to monitor the money that comes to industry, sometimes to firms which very soon thereafter close down and transfer their assets to other parts of the country. The agency should have power to monitor that money.
I am happy that the relationship of the Scottish Development Agency to the National Enterprise Board will not be one of subservience and that the SDA will not be a creature of the NEB. It is to be responsible to the Secretary of State for Scotland for its funds and decisions and, in the words of the Secretary of State, decisions about Scotland will be taken in Scotland.
I should like to ask my right hon. Friend two questions about Clause 6, under which the Secretary of State is enabled to transfer to the agency the property of a new town which has been wound up under Section 36 of the New Towns (Scotland) Act 1968. My hon. Friend the Member for Fife Central (Mr. Hamilton) and other hon. Members who represent new towns may be interested in this. My first question is, when does my right hon. Friend propose to start winding up any new town in Scotland?
Secondly, when this is done, and property is transferred from the new town

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to the Scottish Development Agency, how much say will the local authority have in the transfer of the property and what will the scope of the transfer be?
I should like for a moment to refer to our friends the Scottish National Party. It is very easy to make cheap propaganda points about Scotland and its deprivation areas. I am astonished at the little boy and little girl attitudes adopted by the Scottish National Party. They pop up every now and again to make points similar to those they learned at school where the teacher gave them a list and told them that when they answered questions in examinations they must quote from the list. They raise what they believe are nice little telling points which are really tedious nonsense.
When one examines the difficulties in Scotland it must be remembered that Scotland and England did not start at the same base line, certainly not in terms of what has happened since the Industrial Revolution. One Scottish Nationalist hon. Member complains that it was because Scotland did not have its own government that Scottish industrialists let their country down. However, as my hon. Friend the Member for Fife, Central indicated, the fact is that the Scottish industrialists themselves let down and had no confidence in Scotland.
It is no use saying that Scotland is in its present position because it did not have its own government. Southern England did not have its own government but its industrialists did not let it down. The jibes, jeers and sneers from the Scottish National Party indicate to me as a medical man that they have a very sad inferiority complex. My advice to them is to get out of it because it will do them no good and it would do the Scottish people no good.
The hon. Member for Aberdeenshire, East (Mr. Henderson) made a very robust speech, similar to the speeches of the hon. Member for Glasgow, Hillhead (Mr. Galbraith). However, with the arguments that he put forward it is no wonder that we have a Scottish National Party. If Members of the Scottish National Party had the interests of Scotland at heart I would advise them to forget their inferiority complex to stand up in the world and be counted as men and women and not as little children.
Mrs. Winifred Ewing: That is just what we are going to do.
Dr. Miller: They are plagued by this inferiority complex.
Mrs. Winifred Ewing: Rubbish.
Dr. Miller: I intervened in an hon. Member's speech to ask about the way in which the Scottish Development Agency will be controlled. This is the heart of the matter, certainly as regards its operation. As I have indicated, the Bill is good, comprehensive and contains everything that is needed. We can argue in Committee about certain niceties that have to be added about more money and so on. However, the most important aspect is how the agency will operate and be controlled and who the chairman and members of the agency will be. The chairman must not be a stooge either of this or of any other Government. As the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) indicated, it must not be a question of "jobs for the boys".
The establishment of this agency is probably the most important step that has been taken in Scotland for a long time from the industrial point of view. We have the pulling together of most of the agencies that will be used for the industrial, economic and environmental development of Scotland in the near and indeed the more distant future.
The nationalised industries are being criticised. Many Opposition Members have evinced doubts about the Bill because they do not like nationalisation. They can also point—and I do not take exception to this—to the undoubted fact that there is an element in our nationalisation so far which does not generate a feeling of great success. I would not argue about that. However, nationalisation is only the first step towards public ownership. It is not the end result. It is unfortunate that no Government since nationalisation was first implemented in respect of some industries not so long ago, has yet gone beyond the first step. One can argue about what that means. Indeed, there are many subleties and intricacies about what is meant by "public ownership"—but I repeat, nationalisation is only the first step.

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I must confess openly and unashamedly that I am not afraid of public ownership, because, in the same way as I indicated at the beginning that I thought that the hon. Member for North Angus and Mearns was 75 or 100 years out of date, I still feel that a full-bodied policy of nationalisation with a view to public ownership is the best hope for the future prosperity of Scotland.
I look forward to seeing this Bill on the statute book. I look forward to seeking some of its provisions being brought to bear on the Scottish economy as quickly as possible and to other provisions being implemented in order that the people of Scotland should live full lives unhampered and untrammelled by the stupidities which unfortunately happen to have been thrown up by some people, so that the prosperity of Scotland can be assured for a long time to come.
8.36 p.m.
Mr. Hamish Watt: In giving a warm welcome to the Bill, I am saddened by hon. Members on both sides of the House who have seen fit to use this opportunity to try to score cheap party points.
The hon. Member for East Kilbride (Dr. Miller) claimed that the Scottish National Party spoke from an inferiority complex. If being in second place in 42 seats in Scotland is an inferior position, we are delighted to be in such a situation. The fact is that the Scottish National Party is breathing down the necks of many right hon. and hon. Members and they are frightened.
I should particularly like to draw attention to Clause 2 of the Bill and the hope for Scotland that it contains. Clause 2 sees the agency providing, maintaining and safeguarding employment. That is a very laudable aim. It foresees the agency undertaking the redevelopment and improvement of the environment. It promises to bring derelict land into use and to improve its appearance. Further, the agency may do anything that is ncessary for performing its functions. That gives the agency limitless powers which can be used for the good or ill of Scotland.
No one will deny that much needs to be done to rehabilitate the derelict areas of Scotland. The unsightly coal bings
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which have for so long been an eyesore ought to be got rid of, and only a determined effort over many years to come will get rid of them.
If one takes a train journey through any region of Scotland, one soon realises how much dereliction exists and how much requires to be done. One also realises just how much land is in the hands of bodies like the National Coal Board and British Rail. If the Scottish Development Agency is to have the power to acquire and to rehabilitate that land, I trust that the House will vote it all the powers that it needs to get the job done. The landscape of Central Scotland is certainly nothing to be proud about, and any steps taken to improve it will be welcome.
The potential of much of the land about which I am talking is not high. It is perhaps suitable only for the growing of trees. For a bankrupt nation like Britain, however, every tree planted will play a small part in helping to cut down the ridiculously high bill for the import of timber, a bill which amounted to over £2,000 million last year. Provided that care is taken to have a proper blend of hard and soft woods, the appearance of the whole countryside can be greatly enhanced by forestry expansion.
Recently I had the opportunity of flying over Germany from south to north and of seeing something of the vast forest areas of that country. There in the forests below lay the real wealth of Germany. It does not have to import as much raw material as we do. Every weekend I fly from south to north of the British Isles, and I am ashamed—yes, ashamed—to see just how much land lies derelict.
The greatest single indictment of the capitalist system in this country has been the way in which capital has been used, or misused, to keep so many acres out of production. It matters not whether land is being reserved for deer shooting, grouse moor or walking. What matters is that land has been kept derelict and unproductive. I hope that the Scottish Development Agency will classify much of these deer forests and grouse moors as derelict land, will take it in hand and do something about it.
I appeal, therefore, to members of the agency, whoever they may be, to go easy on certain sections of the Act and

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go heavily on others. The Scottish Development Agency sets out to provide jobs and create wealth in Scotland, and I commend to the agency and its members the opportunity that lies in forestry for this purpose. If we can cut down that tremendous timber bill, I am quite sure that it will be commendable to do so. To save the pound we must save imports, and one of the best ways of doing that is by utilising our derelict acres to grow trees.
We are told that under the Scottish Development Agency we are to have some £2,200 million available in the next few years. I can give the House an example of one young man in the north-east of Scotland who can himself use £50 million of that money to set up a pulp mill that would do a great deal to bring jobs to Scotland and it is, after all, jobs that the Scottish Development Agency is speaking about. I particularly welcome the provision in the Bill for establishing industries to provide employment. I hope that the Scottish Development Agency will see this as its major rôle. I for one have never been able to appreciate the logic of deliberately keeping people out of work, and if the Bill has the effect of providing jobs where none exist at present it is greatly to be welcomed.
The hoary old theory that a high level of unemployment helps to prevent wage rises and encourages other workers to keep their jobs simply is not relevant in modern society and, therefore, the system must be changed. If a person cannot contribute to the current account of the nation, he should be expected to contribute to the capital account of the nation. It is to be hoped that the Scottish Development Agency, while creating employment opportunities in the accepted sense, will concentrate on improving the infrastructure of Scotland in such a way that it will provide jobs and will not seek to compete unduly with private enterprise right across the board.
I was particularly pleased to hear the Secretary of State for Scotland say that any continuation of unprofitable industry unduly prolonged was not in the country's best interest. I hope that that will be taken to heart. Going round the country as I do, one finds people asking "What the dickens are the Government going to do about unemployment?" Nobody hates an unemployed man more than his neigh-
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bour who has to leave his home early in the morning to go to work to pay taxes to keep his neighbour lying in bed. I wish that the Government would recognise this. Nobody hates the scrounger more than the man who has to pay taxes to keep somebody else who is failing to pull his weight in the community.
I welcome particularly Clause 2(2)(e) which promotes industrial democracy in the undertakings which the agency controls. As a member of a Committee of this House which has been investigating the motor vehicle industry, I cannot but be impressed by the great concern that so many workers have for the future of their jobs in that industry.
Equally, I am impressed by the sincerity and the degree of effort expended on behalf of these workers by the unions, who believe that the time has come when the worker must have a greater degree of participation in the management, not only of the industry, but of individual factories. I welcome the clause.
The hon. Member for Motherwell and Wishaw (Dr. Bray) suggested that it would be wrong for the agency to establish offices overseas. I could not disagree more. So long as Scottish business is filtered through London offices and London-based agencies, Scottish business will be strangled. I look forward to the day when Scotsmen will go all over the world, backed by a Scottish Government, seeking orders for Scottish firms and work for Scottish workers.
Mr. Michael Clark Hutchison: Does the hon. Gentleman seek representation through Brussels or elsewhere?
Mr. Watt: I want the representation to be straight from the Scottish factories to wherever the customer is. This Bill contains powers which, if wrongly used, could be horrifying and stultifying for Scotland. If used properly they will be a tool that can transform and revitalise Scottish industry for generations to come.
8.47 p.m.
Mr. Norman Buchan: The hon. Member for Banff (Mr. Watt) is my favourite Scottish Nationalist Member. I was particularly pleased to hear, in his opening remarks, of his enthusiasm for his party because we all remember how, quite recently, he was a

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Conservative Party candidate. The other curious thing is that, having been a Conservative Party candidate and therefore, one would have thought, temporised the worst excesses of the SNP, he went on to say that there was nothing worse with which the Bill had to deal than the misuse of land through capital. I thought that his conversion was a double conversion. Then he said that there was nothing he hated more than unemployment—indeed, there was nothing that the man next door hated more than unemployment because he hated paying money to scroungers. He reverted to his old Conservatism.
In a short and tragic speech the hon. Member went full circle. We shall save the pound by planting trees, he said. The pound is in difficulties now. I do not know how long the hon. Member thinks it takes to grow a tree. I can tell him. It takes 40 years. Can we wait 40 years before dealing with this problem?
In another debate I said that the trouble with the Scottish Nationalist Party was not only that diagnosed by my hon. and medical Friend the Member for East Kilbride (Dr. Miller)——
Mrs. Winifred Ewing: Scottish National Party.
Mr. Buchan: I prefer to call it the Scottish Nationalist Party because having heard some of the rubbish emanating from those benches—[Interruption.]—not just from the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), who is my second favourite SNP Member—I feel it is not right for it to describe itself as "National". There are many people who care for Scotland and the Scottish people a great deal more.
My hon. and medical Friend the Member for East Kilbride diagnosed an inferiority complex in the SNP. A medical colleague of his, Dr. David Stephenson, also of the SNP, has analysed a health report which was published at the weekend dealing with Scotland and particularly with the incidence of smoking, drinking and the over-consumption of sugar leading to bad dental health. Dr. Stephenson blames it all on the lack of self-government. He suggests that that leads to frustration and that frustration leads to the taking of sugar. It seems
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that we do not require a political diagnosis when we have a medical diagnosis of that sort. In fact, it is a lot of rubbish.
Perhaps the more important speech was made by the hon. Member for Perth and East Perthshire (Mr. Crawford). The hon. Gentleman went wrong on a much more important matter. We had a lot of fun with the hon. Gentleman but he was making a serious and dangerous point. He was suggesting that it is sufficient if administration is carried out in Scotland, that it is fine if the SDA handles things but wrong if an Englishman dares to do so. That is seriously and dangerously wrong in that many of our troubles do not stop at the border. In my constituency I face the Chrysler problems. My hon. Friend the Member for West Lothian (Mr. Dalyell) faces the cross-border problem of Bathgate. That is partly a macro-economic situation but it is a cross-border situation. Often the problem that faces a firm is in toto of a cross-border nature. It may very well be faced with a problem in Scotland that applies to other sectors in England. The solution might be found in England or it might be found in Scotland. If it is an integrated firm, a cross-border solution might be required.
I understand the hon. Member for Perth and East Perthshire when he is honestly saying "I wish to see an independent Scotland." That I understand, but like his hon. Friend the Member for Banff, who wants to wait 40 years before he saves the pound with the trees——
Mr. Watt Mr. Watt rose——
Mr. Buchan: I shall be with the hon. Gentleman in a moment. Just as the hon. Member for Banff is willing to wait 40 years for his trees to grow, so his hon. Friend is willing to see Scottish industry collapse rather than have the involvement of the NEB merely because it is a cross-border agency. That seems to be the height of irresponsibility. That is why I say that the hon. Gentleman's party does not deserve the title "national". It seems that it is willing to throw the well-being of the Scottish people to the dogs for the crudest of dogmas. I am interested in caring for the Scottish people. That is what I put first, not the abstraction of a thing called Scotland.
Mr. Crawford: Let us take for an example a Scottish firm which has large operations in England. Would the hon. Gentleman say that the SDA should be allowed to look after that company's operations in England as it is a cross-border company?
Mr. Watt Mr. Watt rose——
Mr. Buchan: Order.
Mr. Deputy Speaker: Order. The hon. Member for Renfrewshire, West (Mr. Buchan) is not conducting the business of the House.
I make an appeal to hon. Members as I know that there are three hon. Members who are still anxious to take part in the debate. I think it is unfair to those Members, who are patiently waiting to be called, for their colleagues to encourage interventions.
Mr. Buchan: Mr. Deputy Speaker, I had refused several interventions but I thought it would save the time of the House if I gave way to the hon. Member for Banff. I had promised to do so. Would it now be in order for me to give way to the hon. Gentleman?
Mr. Deputy Speaker: Very well.
Mr. Watt: If the hon. Gentleman cares so much for Scotland, why did he not ensure that more trees were planted when he was a Minister? If he had adopted that approach there would now be many more healthy growing trees.
Mr. Buchan: I considerably increased tree-planting in Scotland but perhaps I did not do nearly enough.
I maintain that there must be involvement between the SDA and the NEB. If the diagnosis is that the solution should be found through the NEB, it seems only right that we should do it in that way. If the SDA has a problem in Scotland which is of a cross-border nature, England should be involved. After all, we retain our say, influence and control as regards NEB policy.
The Bill seeks to deal with the same problem as that with which we tried to deal in the Highlands and Islands Development (Scotland) Bill. We required that legislation because of the failure of landlordism in the Highlands, and we require this Bill because of the failure of capitalism in Scotland and Britain. The
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legislation which we enacted was an indictment of the history of capitalism in Scotland and of every coal owner who had mines in Scotland. The fact that those coal owners were Scottish did not stop Scottish miners being exploited or the land of Scotland being desecrated. Therefore, to be "Scottish" is not enough.
I am surprised when I hear Opposition Members say that we must not allow the SDA to compete with private enterprise. In the name of heaven, why not? Private enterprise has been consistently wrong in terms of economic change ever since 1945. We have only to look at the tools and equipment which we give to our factory workers. The amount of such investment per worker in British industry is only half the figure allocated to workers in Germany, France, Belgium or Japan. That is why we cannot compete. That is also true of Scotland. Our investment per worker amounts to only a third of the sum invested per worker in the United States. This is the problem we must solve. Private industry has been unable to cope with this kind of investment both in Scotland and in England. That is why we require this Bill.
The Tories have attempted to emasculate the Bill. There are aspects of industrial democracy which we must seek to get back into its provisions, and we must also try to give greater powers to the SDA than exist at present. If we made one mistake over the Highlands and Islands Board, it was that we were too timid over the powers which we gave to that body. However, the board has done extremely well, but it has not done well enough. I hope that we shall learn from that experience and take courage—for the more courageous we are, the more response we shall get.
I am not worried about public ownership. I welcome it. I believe that too much power resides in companies. That power should be deceased—and the way to do it is to involve the community, and that will be to the community's good.
8.58 p.m.
Mr. Iain Sproat: I was interested in the dialogue which the hon. Member for Renfrewshire. West (Mr. Buchan) conducted with SNP Members. I thought he administered a fine rebuke to their absurd case.

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I am sorry that the hon. Member for Fife, Central (Mr. Hamilton) has left the Chamber. [Interruption.] At least he was present for most of the afternoon, as I can testify because I waited for him to speak, which is more than can be said of the hon. Member for Moray and Nairn (Mrs. Ewing).
Mrs. Winifred Ewing: On a point of order, Mr. Deputy Speaker. Is there no protection for hon. Members against such attacks? I have been in the Chamber longer than the hon. Member for Fife, Central (Mr. Hamilton). Furthermore, we both served on an important Committee of the House whose proceedings went on until 6.30 this evening. This is lowering the tone of the House.
Mr. Deputy Speaker: The number of points of order raised by the hon. Member for Moray and Nairn (Mrs. Ewing) amount almost to a 10-minute speech.
Mr. Sproat: I apologise to you, Mr. Deputy Speaker, for mentioning the hon. Lady. I agree with the hon. Member for Fife, Central that the SNP cannot say that it believes in a straightforward, constitutional means of action and yet use language which excites non-constitutional emotions. That is what SNP members have done. They say that the landing of British oil in England is an act of aggression, that it was an act of thievery. It is that kind of emotional language which stirs the worst sort of emotions of the kind that found expression in the recent trial in Glasgow.
I wish that we had more time to pin down mis-statements. We heard from one SNP Member that Scotland has the highest unemployment rate in Western Europe. Let me tell SNP Members that the rate is not even higher than in the rest of the United Kingdom. The rate of unemployment is higher in Wales, Northern Ireland and the North of England.
We also hear statements from the SNP that oil from the Argyll field is Scottish oil, but there is no way internationally to draw boundary lines in that way. That also applies to the Josephine field. It is a farrago of hysteria and emotionalism which highlights differences, but that is the kind of emotional argument to which we are treated by the SNP. I hope
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that the people of Scotland will begin to realise it.
I support the idea of a Scottish Development Fund. I shall vote against the Bill tonight, however, not because I do not think there are many excellent parts in it but because in particular the funds that the Bill proposes to disburse could very easily be disbursed, without the extra bureaucracy, under the Industry Act 1972 among other measures. Above all, I object to the former part of Clause 2 which it is the stated intention of the Secretary of State to restore, which basically means that the Scottish Development Agency would be capable by itself of carrying on industrial undertakings. I oppose this as a totally unnecessary and damaging extension of State control. It is a damaging extension of State interference—capricious interference, in the language used by an hon. Member on the other side of the House in Committee last week. The Secretary of State said that he would himself ultimately have control of the SDA. This is precisely what we fear.
The hon. Member for Glasgow, Springburn (Mr. Buchanan), said he hoped the SDA would have the maximum independence. If it were to have it, we might find ourselves supporting it more readily. It is precisely because it will be half a commercial creature and half a political creature that we find ourselves quite unable to support it. We have had far too much experience in this country in recent years of State bodies which cannot make up their minds what is their prime aim, whether it is the return to the taxpayer on a commercial basis or the provision of jobs for the maximum number of people. The recent row between Sir Monty Finniston and the Secretary of State for Energy is a very good example of that division and conflict which we believe will hamstring the SDA in carrying out aims with which we would in certain cases agree.
We would view with very considerable concern that part of Clause 6 which allows the SDA to give rent-free accommodation in certain circumstances—the length of time being at the disposal of the Secretary of State—to the bodies or companies to which it wishes to give it. My understanding is that in certain circumstances this is possible, and in my opinion it would lead to unfair competition between

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straightforward commercial companies and those backed by the SDA. There are also a number of other matters for concern which I shall not go into in great detail now.
Industrial democracy is ill defined in the Bill as it stands. There are a number of ways in which we might support the promotion of industrial democracy. What I fear, however, in the light of the Employment Protection Bill, is that the promotion of industrial democracy simply means giving more power to the trade unions within companies. I think that the trade unions have too much power already and that the abuse of power by the trade unions is perhaps the biggest single obstacle that the country faces today. Therefore, for that reason, but primarily because I object to the extension of State control unnecessarily, I shall vote against the Bill tonight.
9.3 p.m.
Mr. Alexander Fletcher: I shall try to be brief and also not to cover the ground that has been ably covered by my hon. Friend the Member for Aberdeen, South (Mr. Sproat) and other hon. Friends during the debate.
The Bill as presented to the House has two main functions, an industrial function and an environmental function, and it is about the latter that I should like to speak briefly. Just before doing that I point out to the Secretary of State that the main problem facing Scottish industry today is the problem facing industry throughout the United Kingdom—inflation. Soaring costs and falling orders are the problems and the nightmares facing management throughout industry in Scotland and throughout the United Kingdom.
The test of this Bill in the present serious economic climate must be whether it helps in this inflationary situation—and of course it does not. As presented to us, the Bill feeds inflation, whatever else it does. It is being introduced at rather a strange time, because it appears from all reports that the Government are becoming aware of the dangers of inflation and the havoc that it may create on the British economy. If the Prime Minister's words mean anything, apparently strong action is about to be taken on public expenditure, and that may kill the Bill before it sees the light of day.
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It is fair to say that, from the jobs and investment point of view, the Bill contains more theory than business or financial acumen, and I am afraid that it contains more political propaganda than good sense.
As I said at the beginning of my remarks, however, it is the environmental aspects of the Bill that I find more interesting, because here is what is alleged to be an attack on urban deprivation coming within weeks of the reform of local government in Scotland. It was my understanding that the reform of local government was to be the vehicle for a physical as well as an administrative improvement in local communities. I always thought that there was a hope that something would be done to ease urban deprivation. I remember hearing recently the argument that the reform of local government would be the main instrument for this. I think that a few months at least might have elapsed, before introducing the SDA to take on this job, to see whether local government was capable of doing it.
About the first letter that the right hon Gentleman received on becoming Secretary of State last year was from me begging him to postpone the reorganisation of local government and instead to look at its structure. However, it is clear that he has no faith in the ability of the new structure of local government to settle the problems of urban deprivation in Scotland and that he is looking to the SDA to tackle these environmental difficulties.
I suggest that if the Bill is intended to tackle urban deprivation in Glasgow, for example—a city where labour councils have wasted more public money than would have been necessary to regenerate all the industry in Scotland and all the deprived areas many times over—the Government should set out to do the job properly. I suggest that the way to do the job is the way that I have argued for many years, which is not by setting up the SDA as such but by putting into the district of Glasgow a development corporation to manage its financial affairs and its planning in a way aimed at giving the taxpayers and residents in Glasgow value for money for the first time ever.
But I suppose that that would be too realistic an approach for Government

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supporters. It seems that in some strange way the majorities in elections of Government supporters thrive in proportion to the amount of deprivation in their constituencies. That is one of the ironies of the Scottish political scene.
We are discussing a problem which requires much more than money for its solution. First and foremost, it requires good political management and good administrative action. It is a problem which should not be seen politically as some kind of cash option, as the Scottish National Party would try to make it by outbidding everyone else in the total to be spent of British taxpayers' money.
This Bill attempts to gloss over the real problems of Scotland and the real solutions to them. That is why I shall oppose it.
9.10 p.m.
Mr. Nicholas Fairbairn: I am sure that no hon. Member would quarrel with the two concepts behind the Bill—that we should have more money to spend on all the things we like in Scotland and that we should get everything right, improve the environment and live happily ever after. The quarrel is with the way in which this can be achieved. I am sure that all hon. Members want to achieve the same objective, and no one more than I, certainly on the Conservative benches, is more anxious to improve the environment and employment prospects in Scotland.
The question is whether the setting up of another agency which has a small amount of money is the way to do it. Hon. Members talk as if money is something that we have to squeeze out of our very rich grandmother who has plenty if only we can persuade her to give it to us. However, that is not the situation. To offer money and to set up a new bureaucracy to spend it is a sort of parliamentary fantasy.
The Bill demonstrates the twin fantasies that all we have to do is to suggest money and someone to spend it, and then we shall all live happily ever after. This time it will be this organisation—as it was the last one, the one before that and the one before that—that will cure the irremediable and resistant difficulties of Scottish industrial development.
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There is a falsehood in both those arguments. The amount of money that is forthcoming is very little. The argument that that money will be taken out of profitable industry, which then becomes less profitable and will require money to prop it up, is not a sensible one in the long run. This money will not simply be taken out of the locker of the Treasury. It will have to be provided by industry which must be sustained and kept efficient.
Maintaining employment has nothing whatever to do merely with providing immediate jobs. We must provide jobs and industries which are viable. Only in that way shall we ensure that there will be proper investment in Scottish industry. Those whose rates are increasing by 75 per cent., whose taxes are increasing and whose incomes are being destroyed by inflation will not look happily at the prospect of yet another agency being set up with more money and with its "Jack-and-the-Beanstalk" cure for all ills.
We hear a lot about democracy from Labour Members, and it is for this reason that I am against the Scottish Development Agency. A less democratic concept we cannot have. Recently we have heard a great deal about sovereignty. This House consistently passes the power, the blame and the opportunity to the executive. What will happen in this case? Although it is the Secretary of State—and I have the greatest regard for the right hon. Member for Kilmarnock (Mr. Ross)—[Interruption]—as a man, not as a Secretary of State. I am sorry that the SNP made me reduce the compliment.
Mr. William Ross: There is only one chairman of this board.
Mr. Fairbairn: There is one chairman who is chosen by the Secretary of State. The members are chosen by the Secretary of State, and the Secretary of State sets down their powers and orders, specific and otherwise. However, in fact, it is not the Secretary of State who does this; it is the extension of the bureaucracy which does it. We are handing the bureaucracy power and imagining that the bureaucracy will be able to run Scottish industry and increase Scottish employment in a manner that industry cannot and no one else can. That is

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why the agency is a particularly unwelcome concept.
Labour Members always imagine that the bureaucracy and the executive will solve everything. We have the National Enterprise Board which they believe will work wonders and fiddle about with industry in Scotland on a massive scale. We have the Scottish Development Agency which apparently will do the same. They believe that if we can only create enough bureaucrats with enough income and money, all will live happily ever after. That is the reverse of the experience of the Scottish people. The more that that has been Government practice, the less has been the success of Scottish industry. Give us the money. Give the money to the agencies which already exist. Let industries profitably go on without punishing them by setting up new agencies.
I believe that we are on a false trail, setting up more and more confusing agencies in Scotland. We shall be fettered by bureaucracy and by this great promise called the Scottish Development Agency, as if it will cure our ills. I do not believe that it will cure our ills. This is not public ownership, public participation or public anything. It excludes the public. From what is the public more excluded than a nationalised industry?
Mr. Buchan: A private industry.
Mr. Fairbairn: The hon. Gentleman may think so, but that is not so.
I believe that we are on the wrong trail. We believe in these precepts, but this method of achieving them we believe to be utterly wrong and false. It has been tried before and has failed.
9.16 p.m.
Mr. Teddy Taylor: I am sure that the whole House would wish to congratulate the right hon. Member for Glasgow, Craigton (Mr. Millan) and myself on reducing our windup speeches by a quarter of an hour to enable my hon. Friends to make such excellent speeches. However, I am sure that the right hon. Gentleman will agree that we shall repeat this experiment only if we have more constructive speeches from Labour Members and Members of the other minority parties in the House. Undoubtedly the whole weight of opinion
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in the debate has come from Conservative Members.
There have been two great mistakes in the debate which have worried me. The first of them is the acceptance or almost the advocacy by Members of some parties that the Scottish Development Agency will somehow be a miracle cure for the problems of Scotland. The hon. Member for Glasgow, Queen's Park (Mr. McElhone), in his amusing speech, said that somehow it would help solve urban deprivation. The hon. Member for East Kilbride (Dr. Miller) said that it would somehow perhaps help to give freedom for new towns. The hon. Member for Banff (Mr. Watt), in his remarkable speech, said that it would somehow bring an end to grouse moors and would get layabouts out of bed.
There is a danger that we are seeking in this agency a cure for all the ills of Scotland. I do not believe that, and that is why we shall be voting against the Bill.
A second dangerous argument was put forward by the hon. Member for Fife, Central (Mr. Hamilton) in a typically nasty speech. He is always criticising people for not being here, but unfortunately whenever I want to attack him he is not present and I cannot do so. The hon. Member for Fife, Central and the hon. Members for Glasgow, Spring-burn (Mr. Buchanan), West Stirlingshire (Mr. Canavan) and Renfrewshire, West (Mr. Buchan) all said once again that we had to do something because capitalism had failed to provide jobs and industry, that everything was going wrong and that Socialism had to step in because capitalism had failed. I would agree with the hon. Member for Renfrewshire. West that industry is not investing. Investment is well down, and the outlook for jobs is pretty miserable and bad. But the hon. Gentleman should ask why that is so. Industry was investing when times were better and sensible Conservative policies were being pursued. Why is it not investing now? Why are jobs being lost and firms moving away?
The essential difference, which the hon. Gentleman and his colleagues should face, is that there is in industry now a total lack of confidence and a feeling that things are going entirely wrong. The main

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reason for that is the imposition of Socialist policies, hampering firms by taxation and restrictions, and the threat of nationalisation and all the things that go with Socialist policies. If we find something going wrong with investment, decision-making and jobs, that cannot be blamed on capitalism, which has provided so much of the wealth that profligate Socialist Governments have spent.
Mr. Buchan: I do not know whether the hon. Gentleman was asking me to ask myself or to answer him. The basic reasons for this is that British capitalism has invested its money almost everywhere else except in its own industry. For example, it has pursued the rapid buck by going into speculative overseas investing, and into property development, to which Centre Point is a great monument. There have been two decades of investing anywhere except in British industry, and that is the problem we have inherited.
Mr. Taylor: If the hon. Gentleman looks at those industries in which we have tried nationalisation or State intervention, he will see that that has not brought expansion of great job opportunities or added to the national wealth. It has created enormous problems.
Socialist policies, allied to international problems, have brought this country to a state in which the pound is falling daily and there is a great emergency which will call for savage measures. But some hon. Gentlemen still think that if we extend nationalisation we shall somehow make things better and better.
The Secretary of State's speech, which was a rather shaky advocacy of the Bill, contained one point that I would accept. He said that the nation was facing serious problems, and I accept that there is more uncertainty and less confidence in Scotland than ever before.
It was interesting that the one thing he did not mention, as Ministers usually do, was his inheritance. When he took over as Secretary of State he did so after three Conservative years. Unemployment was falling sharply in Scotland, the differential between the Scottish level of unemployment and that of the rest of the country had almost vanished, emigration, which had stood at 50,000 a year under
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some Labour Governments, had crumbled to just about nothing, and the wage differentials between manufacturing industry in Scotland and the rest of the United Kingdom had almost disappeared.
Now unemployment is high and rising, yet we never hear demands from Labour Members that the Secretary of State should resign if unemployment exceeds 100,000. We are in a situation where the number of vacancies is falling and investment is down. It was astonishing to read in the Daily Record, from which most Labour Members seem to get most of their economic facts, that there have been 800 lay-offs in the Cromarty area in the last two weeks in the crucial oil exploration industry. Only a Socialist Government could create gloom, misery and redundancy in the oil industry in Scotland.
Mr. Harry Gourlay: If the Conservative Government did as well as the hon. Member is suggesting why do they have fewer Members in the House now than they had before the last General Election?
Mr. Taylor: One of the reasons for that is that at elections the Labour Party candidates disseminate the most scandalous and misleading facts, there is astonishing escapism from the SNP, and the Liberals say that they agree with everyone about everything.
Things are now in such a serious state that the people of Scotland are waking up to that fact——
Mr. Deputy Speaker: Order. I have admired the cut of the back of the hon. Member's coat and I have admired his haircut. I should like him now to face me and to address the Chair.
Mr. Taylor: I apologise, Mr. Deputy Speaker. I was moving round gradually. I wish the Government would do the same and move round to common sense.
Everyone accepts that we face a serious problem, but what is the answer? In this case the Government are providing £200 million. They are supported by the hon. Member for Glasgow, Queen's Park and by the hon. Member for West Stirlingshire, and when I see the latter hon. Member looking happy my fears grow that there is something dangerous about a Bill. In this case the Bill provides Scotland with

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£200 million. If the Government were merely saying that Scotland has its problems and that they are to distribute £200 million in a fair and sensible way, they would not run into objections from the Scottish Conservatives, Scottish industry or the Scottish people. But that is not the proposition before us now. If the Government want to spend that money quickly for the benefit of Scotland there are plenty of ways in which they could do it.
The Secretary of State said that we needed more infrastructure. Yet we have just been told in Written Answers that the Government are cutting local government spending in 1976–77 by £45 million. Much of that was to have been spent on infrastructure. More capital spending cuts are to come. The right hon. Gentleman said that we needed to spend more on helping industry, but the 1972 Act already permits him to do that. He said that more should be spent on derelict land, but the Local Employment Acts already enable him to do that.
The only thing for which he has no powers under existing legislation is a major expansion of the public sector. That is at the root of our objections. The Secretary of State and a noble Lord in the other place have said that the Government will restore to this Bill the provisions which allow them to make a major expansion of the public sector. We believe that this is an important point of principle. We oppose it rigidly.
Other matters in connection with the money have been raised. The Secretary of State spoke about £200 million. He said that the agency can spend it when it likes, with no restrictions. Yet the Scottish Office Press Department issued a statement on behalf of the Scottish Economic Planning Department saying that the agency would spend over five years an expected £200 million, which would work out at about £40 million a year—not the gigantic £200 million of which we have heard. In the Explanatory and Financial Memorandum there is a statement that £15 million of the annual expenditure will be for work already being done by other agencies. Taking off £15 million, we are left with £25 million a year—not on my figures but on official information put out by the Scottish Office.
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In the present industrial situation, the people of Scotland are entitled to ask what amount of cash we are talking about. I am sure that the matter will have been discussed with the Treasury.
Mr. Crawford: How much would the hon. Gentleman's party give to the Scottish Development Agency?
Mr. Taylor: I will engage with no one, not even the Scottish National Party, in an auction for votes when the country faces serious problems. Unlike the Scottish Nationals, I do not believe that the best way of spending money for Scotland is extending State enterprise and nationalisation.
In an excellent speech, my right hon. Friend the Member for Renfrewshire, East (Miss Harvie Anderson) asked where the money was coming from. I asked the hon. Member for Glasgow, Queen's Park this question twice and did not receive a clear answer. The Government have no money of their own. They have no great piggy bank. In fact, their piggy bank was bust a long time ago. The only ways to get the money are by cutting spending in Scotland in other directions, by printing the money—which the Government have been doing very successfully—or by taxing private industry, taking money from successful, profitable industry and putting it directly into firms which the Government or bureaucrats choose. It is a transfer transaction.
The hon. Member for Fife, Central and others said that the Bill was right, because if State money were pouring into industry they should have control. Have they looked at the amount of taxation that industry in Britain is paying? It is paying £8 million a day into the Treasury. Only recently I saw an estimate by Professor Lawson of Manchester University that about 63 per cent. of corporate profits were being taken in taxation.
When the country faces such acute financal problems, we do not believe that it is helpful to suggest that the answer is to extend State control of industry. In this, unfortunately, we appear to be alone. For the Liberals, the hon. Member for Roxburgh, Selkirk and Peebles said that he did not like the wording of Clause 2. He agrees with the general sentiment, but would like to express it differently.

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This shows the normal delightful confusion and inconsistency of the Liberal Party, which was also shown in the other place when the Liberal Peers surprisingly supported the removal of industrial democracy from this Bill but opposed it in the Welsh Bill. That is the appropriate Liberal way of supporting both sides and getting credit for it.
The Scottish Nationals are in a different situation. It is unfortunate for them, because often minority parties find people wooing them and seeking their support. Today, despite their efforts, they have both major parties seeking their enmity instead of friendship. We on the Conservative Benches do not just hurl abuse at the Scottish Nationals but point out to the people of Scotland that on all the crunch Socialist issues we have discussed in this Parliament their votes have been with the Labour Party.
Here is a clear and specific issue of the power to spend. The only new power in the Bill which is not included in existing legislation is that of spending public money on State intervention in industry. We oppose that. The Scottish National Party side with the Labour Party on this issue, as it does on other State control measures.
We have many objections to the Bill. The powers contained in it should not go unchallenged. The Minister of State will cite a host of precedents. The Bill is unique. It brings together all the most objectionable parts of other Bills affecting the freedom of the individual.
Clause 9 gives the new agency the power to acquire land compulsorily. Clause 10 gives it the right of access if it is considering the purchase of land. It has the right to walk into land in Banffshire, Ross and Cromarty or West Renfrewshire, to bore holes and to search. That applies to all land except that owned by the nationalised industries, where the approval of the Secretary of State is required.
I am worried about the Bill because it promotes a major extension of bureaucracy. Our people are not aware of the dangers to our economy from the enormous growth of bureaucracy. My right hon. Friend the Member for Renfrew-shire, East was right. I looked up some recent Answers to Questions about the growth of bureaucracy. The figures are
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frightening. On 6th May we were told that the number of workers in Britain employed in the public service was 6,500,000, which is over 26 per cent. of the working population.
The rate of increase is even more alarming. The latest indication of the rate of increase in the numbers of people employed in the public service—which includes Government, local government and the nationalised industries—shows a rate of 60,000 per year. That means about 1,000 every week. When a nation such as ours faces acute financial problems, it is appalling that the Government should seek to solve their problems by adding to the numbers employed by the State, which must be carried by the other sections of the community. The Bill will set up an agency which I believe to be unnecessary, bearing in mind the other powers available to the Secretary of State. It will create a further 253,000 jobs. That is an estimate, and I am sure that the final figure will be higher.
Our third objection to the Bill is that there is a danger of confusion arising between the job-seeking and the job-providing agencies. There will be many agencies to which people in Scottish industry can look for help. The National Enterprise Board will operate in Scotland, as will the Scottish Development Agency. The Scottish Office will exercise, in co-operation with the new body, powers under Section 7 of the Industry Act. There is also the Highlands and Islands Development Board. In view of the number of agencies already existing to give help to industry, there is a danger of people standing on each other's toes and of the agencies not enjoying that degree of co-operation for which we might hope. If we continue with this we must set up a co-ordinating agency, with a chairman, staff, a computer and a large number of public employees.
Our other major worry is that there is increasing State intervention in Scotland. It will be almost impossible for there to be fair competition with Government-supported industry. It is impossible for there to be proper and fair competition with a State-owned firm, as it will not follow the normal financial disciplines. There is nothing in the Bill which gives adequate safeguards to private industry.

577
My fear is that by attempting to save jobs and putting State money into industry we shall destroy jobs because of the unfair competition thereby created. We shall once again give more power to a non-elected body.
I hope that the hon. Member for Kirkcaldy (Mr. Gourlay), who joined me this morning in defeat577ing the Government on the matter of giving more powers to a non-elected body, will bear in mind that this Bill will give immense powers to a non-elected body.
The House should remember that there is an urgent problem in Scotland. If the Secretary of State has £25 million to spare there are plenty of ways it can be spent to the advantage of Scotland and its people. One way in which that could be done would be by relieving the tax burden on industry and allowing private industry to have more to spend on investment.
I will summarise our case against the Bill. First, the Bill is not needed. If cash is there to spare, it can be spent now. As the Secretary of State said, the amount of money available this year will be relatively small and larger amounts will not be available for some time. Secondly, the Bill is inevitably bureaucratic, when we should be concerned about the number of people employed in the public service. Thirdly, it will create confusion because of the multiplicity of agencies. Fourthly, we have to bear in mind the Government's pledge to restore interventionist powers in the Bill which, at a time of financial crisis, is crazy.
We do not argue that the Bill in itself will create a Marxist nightmare, but it is a further small step along the road to State Socialism. It is being brought forward at a time when the Government are contemplating—unless they are stopped by the more sensible people in their ranks—the nationalisation of shipbuilding, aircraft, oil, ports and development land. It is folly for the Government, in the light of our financial nightmare, to combat which measures will be introduced which will harm the livelihood and security of every working person in the land, to go forward in this mad way splashing money around and imposing interventionist policies. Although I believe that the Labour Party will receive
578
the nation's answer when next it faces the electors, in the meantime it is damaging the nation and the people.
Mr. Alexander Wilson: If the hon. Gentleman is so much against State intervention, why did he campaign to use public money for the private enterprise Queen's Park Football Club?
Mr. Taylor: If the hon. Gentleman has heard my recent comments on the Queen's Park Football Club, he will know that I am concerned to protect the interests of local residents.
The Government are going along the wrong road. Our only hope of making a recovery lies in the encouragement of free enterprise, the removal of unnecessary burdens and the creation of incentives to work, to save and to invest.
The final reason why we shall vote against the Bill is that we believe that the Secretary of State has failed Scotland. He has participated, however reluctantly, in imposing irresponsible Socialist policies, which are destroying the vitality and enterprise of the British nation—a plight from which before long a Conservative Government will be called upon by the people to rescue them with policies which are more realistic, more rational and more sensible than are those contained in the Bill.
9.28 p.m.
The Minister of State, Scottish Office (Mr. Bruce Millan): I shall take up a little later several matters raised by the hon. Member for Glasgow, Cathcart (Mr. Taylor). I should like first to say a little about some of the general comments with which he began his speech.
I do not deny for one moment—my right hon. Friend the Secretary of State explicitly said so this afternoon—that Britain and Scotland face a difficult economic situation. But we do not intend to listen to lectures from Conservative Members when the inheritance they left us in February 1974 was a three-day working week, a disastrous decline in the Scottish housing programme, an investment situation which had declined during the whole period of Conservative Government, an unemployment situation in which for 29 consecutive months unemployment in Scotland was more than 100,000 and a North Sea Oil industry

579
which was completely out of Government control. For part of that time the hon. Member for Cathcart was a member of the Conservative Government. I do not recollect very well what the hon. Gentleman did in the Government except to keep a good deal quieter than he does at present—which was a blessing in itself.
There is fairly wide recognition in Scotland that there is a firm place for regional policy and that there are achievements to the credit of regional policy. Of course, we shall consider some of the points that were made about that aspect. For example, my hon. Friend the Member for Dundee, West (Mr. Doig) referred to special development area status for Dundee.
Although the Government have made very considerable improvements in regional policy by doubling the regional employment premium and extending development area status to the whole of Scotland, nevertheless the traditional regional policy is not sufficient to deal with the economic problems of Scotland and there is a wide recognition that new initiatives are needed. That is why there has been a general welcome for the Bill, not only by the STUC but by the Scottish Council (Development and Industry).
I should like to say a word about the CBI in Scotland because I have been accused of being discourteous to it. The first body that I met to discuss the consultative document was the CBI in Scotland. I offered it a second meeting, which it turned down because the date was not suitable. However, the delayed meeting will take place on 30th June, next Monday. I do not accept in any way that I have not consulted the CBI and other people in Scotland. At the first meeting we had a constructive discussion, and I have no doubt that we shall have a similarly constructive meeting when we meet on Monday next.
There has been a general welcome for the Bill in Scotland and also by Members of the various parties in the House. My hon. Friends have welcomed it without any qualification. They believe, as I believe, that it is a very important step forward in the industrial regeneration of Scotland. I am glad that the Scottish National Party and the Liberal Party are also to vote for the Second Reading of the Bill.
580
I thought that the performance of the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) did not clarify the attitude of the Conservative Party to the agency. I am not sure that the hon. Member for Cathcart, who speaks extremely rapidly and with great ability to confuse the issue, clarified the matter for us either, because I am still not clear whether the Conservative Party is saying that we do not need an agency at all or that we do need an agency but a rather different one from the agency that is provided for in the Bill. I do not care very much what the Conservative view is because it is a politically discredited party in Scotland. It is a rump party that represents no coherent body of opinion or view in Scotland. I do not believe that it has a single sensible thing to say about Scotland's economy. That is evident by the way it has put forward the hon. Member for Cathcart to close the debate.
Mr. Teddy Taylor: Will the Minister give way?
Mr. Millan: No, because the hon. Gentleman took some extra time.
I believe that there is a very strong case for new initiatives to be taken and for an agency of this sort.
The next point to consider is whether the right function has been given to the agency. I believe it is absolutely essential, if this agency is to be successful, that it should operate with a co-ordinated approach. We have suffered from a lack of co-ordination and a lack of coherence in dealing with many of Scotland's economic planning problems. That is why in the Bill we have given a wide range of responsibilities to the agency. That is why the agency has industrial and factory building functions. It has functions to clear up derelict areas that are unattractive to incoming industry and, for that matter, to the existing population. That is why it has the function of environmental improvement and industrial promotion. All these factors hang together and are directed towards the aim of industrial regeneration and making Scotland a more attractive place for existing and incoming industry.
I should like to mention some of those functions in turn. The industrial function is the most important because it contains the maximum amount of innovation—the new things that we are to

581
do for Scotland. We have no intention of accepting the House of Lords amendments. We shall restore to the Bill the full powers that it had when it was originally published.
On the industrial function, the distinction between what the SDA will do and what can be done under Section 7 of the Industry Act is not sufficiently well appreciated, as was clear from a number of contributions made by Opposition Members. Section 7 powers are important and will continue. From 1st July they will be the responsibility of my right hon. Friend rather than the Department of Industry.
We foresee a much more active rôle for the SDA than is possible under Section 7 powers. In a sense, Section 7 powers are passive. A problem arises, an application is made to the Government for assistance—often far too late for the Government to intervene effectively—and we find ourselves spending large sums of public money in a fairly ineffective way because there is not the right opportunity properly to assess the situation in the time available. But the SDA will have an active rôle. It will not be waiting for people to come to it for help. It will actively seek out new industrial opportunities for Scotland and put them in hand with co-operation from private industry or by itself exclusively if it believes that that is the best way to push industrial developments forward. Therefore, it will have an entrepreneurial rôle which is not possible under Section 7 of the Industry Act.
We must appreciate that this is the basic function of the SDA. Inevitably it will get involved at some time or other with "lame ducks", because we have a particular lame duck situation at present. The SDA is not primarily meant to deal with lame ducks but to look for new opportunities for the expansion of industry in Scotland. Therefore, if it is to work effectively it will have to undertake that rôle with considerable vigour.
The agency will also be involved with Section 7 assistance if directed by my right hon. Friend. Many cases will require both a Section 7 and an SDA job to be done, because they are on the borderline between one form of assistance and another.
582
We must remember that the SDA will have an active rôle in looking for new opportunities. It will be concerned with our older industries, but it will also be looking for new and expanding industry in Scotland and ensuring that it produces the maximum opportunity for the people of Scotland.
The agency will not be concerned only with attracting industry from outside. In the past we have perhaps been too concerned to bring industry into Scotland, but the real regeneration of Scottish industry will have to come from our indigenous industries which still occupy the bulk of our industrial population. Nor will the agency be concerned only with large firms. We see a special rôle for it in helping small firms.
Industrial priorities will be matters for the agency, but many opportunities in North Sea oil, engineering and so on are bound to be among the first priorities when the agency is established.
Geographically, as I have made clear on other occasions, West-Central Scotland must be the priority area for industrial development at this time. However, I fully appreciate that many other parts of Scotland—Dundee has been brought to attention dramatically in the last week or two—require a good deal of help. There is no question of the SDA being excluded from particular areas. It will help wherever help is needed, but with a bias in its initial stages—I must be frank—towards West-Central Scotland, which is our main industrial problem area at present.
Of course the other functions are clear enough, but it is not simply a take-over from the SIEC, admirable though that body has been, because we see a new impetus being given to the work of factory building and we see it again as part of the more major co-ordinating rôle for the agency. We hope, for example, that on factory building we can achieve something like a doubling of the factory building in progress at the present time. Derelict areas are very important for clearance to provide a welcoming industrial environment and also to provide better living conditions for many of our people who are at present living in a quite intolerable environment, much of it a heritage from the Industrial Revolution.

583
On questions concerning derelict areas, I have not found that local authorities resent these powers being given to the agency. They see the rôle of the agency as not supplanting their powers but providing a complement to the powers they have been given under the new local government reorganisation, and the discussions that I have had with local authorities have been absolutely amicable about this. In the first instance in any case, the agency will use many local authorities as its agents, but again there is a very strong case for an independent agency being involved in a large-scale clearance of industrial dereliction. The agency will be successful only if it manages to clear industrial dereliction faster than it has been cleared so far.
Mr. Teddy Taylor: Does the Minister stand by the statement, which appears in the Press release, that the land clearance programme will be doubled?
Mr. Millan: Yes, of course I do, and I hope that the hon. Gentleman will welcome that. He does not look too happy but he appears to indicate that he will. We are grateful for small mercies.
So far as environmental improvement is concerned, may I again make clear that this is the clearance of derelict land and we have in mind a number of potential major schemes specifically related to industrial development. It is not environmental improvement for housing, for example, for which we already have powers and opportunities. It is not rural improvement, though that is very important to the Countryside Commission. It is environmental improvement related to improving the industrial environment of Scotland.
I was questioned about how the Scottish Development Agency would be organised. Most of these matters are really for the agency itself but it will not be able to operate effectively—to pick up one particular point—without offices in more than one part of Scotland. That is not a matter for me or the Government to lay down. It is something that will come naturally through the development of the agency's work. The agency will be subject to the guidance and direction of the Secretary of State for Scotland. Taken with the Section 7 powers, it will
584
place unprecedented industrial powers in the hands of my right hon. Friend so that decision-making about industry in Scotland will be seen to be, and will be, quite squarely in the hands of my right hon. Friend the Secretary of State for Scotland. I am not going to say what the position will be under the Assembly. That is a matter to be considered in the context of devolution. The whole question of trade and industry powers is being looked at in the context of devolution and we shall be making proposals in due course, but I have nothing to say on that at the moment.
I was asked about the Highlands and Islands Development Board. I met the board and it was perfectly happy with the Scottish Development Agency and saw no difficulty in making arrangements for the division of responsibility between the board and the agency. In the vast majority of cases the agency will not interfere in matters strictly within the present competence of the board, and the board and I saw no difficulty in that or in the arrangements we are making with the Development Commission or the Small Industries Council for Rural Areas of Scotland. I consider that on all these matters we have had a great welcome from the bodies concerned.
Mr. David Steel: The hon. Gentleman passed over the question of devolution with such speed that it must have taken his breath away. Surely the Government have a view on what will be the future rôle of the agency in the context of devolution.
Mr. Millan: Of course I have a view. It will all be disclosed in good time.
Mr. Donald Stewart Mr. Donald Stewart rose—
Mr. Millan: I cannot, with respect, give way now. The views of the Government on this subject will not be disclosed at five minutes to 10 o'clock this evening.
The financial powers in the Bill provide for £200 million rising to £300 million. The hon. Member for Glasgow, Cathcart (Mr. Taylor) kept reading a Press release of January which dealt with the consultative document. He has not noticed that between the time when the consultative document was published and the appearance of the Bill we increased

585
the overall finance of the agency from £200 million to £300 million. That explains his puzzlement about the figures.
There is no time limit in the Bill. There is no question of saying that it will have to last for five, four or three years. It will last for as long as the agency has an effective job to do, and in my view there will be no difficulty in persuading the House when the time comes, if the agency does an effective job, as I believe it will, to vote it additional powers. The important thing is that we have enough money in the Bill at the moment to give the agency an excellent start and to enable it to make a major impact on the various functions to be given to it.
I was asked about the relationship between the National Enterprise Board and the agency. Those who have read the Bill and compared it with the Industry Bill in terms of the small print will see that although there are differences in wording the powers in this Bill are almost exactly the same on the industrial side as the powers in the Industry Bill for the NEB. There is no question of the agency being in any way subsidiary or subservient to the NEB. A number of hon. Members, particularly members of the Scottish National Party, were rather disappointed that there was no mention of the NEB in the Bill. They had hoped that there would be such a mention which could be interpreted as giving the board authority over the agency.
That is not the situation. When we are dealing with predominantly as well as exclusively Scottish problems the proper body will be the agency, with consultation where necessary with the NEB, in exactly the same way as, when the NEB is dealing with a predominantly English situation but one which has implications for
Scotland, it will consult the SDA. Those who worry about the NEB having power to come into Scotland might look at Clause 2(3), which will give the agency equal power to go into England whenever that is necessary for the proper functioning of the agency.
The rules which will determine the relationship between the NEB and the SDA will be published, as will the rules about financial guidelines and the rest. We do not intend to do things in secret. We want to make clear the basis on which the industry will operate.
This is a major Bill of great importance for the industrial development of Scotland, which is why I am genuinely disappointed that the Conservative Party has opposed it. We are establishing here a powerful body which has a great potential for the industrial good of Scotland. It will not perform miracles. It will not solve Scotland's industrial problems overnight. No one has ever claimed that. But it will make a major impact on those problems.
I want to launch it with the maximum co-operation from all sides of Scottish industry. I believe we can do that. I believe that we can get the agency working quickly, in the autumn of this year. We in Scotland have suffered too much in recent years from a lack of self-confidence in our industrial will and our industrial ability. We see the agency as one of the means of re-establishing that self-confidence and setting Scotland right in the industrial field. I commend the Bill to the House.
Question put, That the Bill be read a Second time:—
The House divided: Ayes 295, Noes 224.

Division No. 246.]

AYES

[10.0 p.m.

Abse, Leo

Booth, Albert

Castle, Rt Hon Barbara

Allaun, Frank

Boothroyd, Miss Betty

Clemitson, Ivor

Anderson, Donald

Bottomley, Rt Hon Arthur

Cocks, Michael (Bristol S)

Archer, Peter

Boyden, James (Bish Auck)

Cohen, Stanley

Armstrong, Ernest

Bradley, Tom

Coleman, Donald

Ashley, Jack

Bray, Dr Jeremy

Concannon, J. D.

Ashton, Joe

Brown, Hugh D. (Provan)

Conlan, Bernard

Atkins, Ronald (Preston N)

Brown, Ronald (Hackney S)

Cook, Robin F. (Edin C)

Atkinson, Norman

Buchan, Norman

Corbett, Robin

Bagier, Gordon A. T.

Buchanan, Richard

Craigen, J. M. (Maryhill)

Bain, Mrs Margaret

Butler, Mrs Joyce (Wood Green)

Crawford, Douglas

Barnett, Guy (Greenwich)

Callaghan, Jim (Middleton & P)

Crawshaw, Richard

Barnett, Rt Hon Joel (Heywood)

Campbell, Ian

Cronin, John

Bean, R. E.

Canavan, Dennis

Crosland, Rt Hon Anthony

Beith, A. J.

Cant, R. B.

Cryer, Bob

Bennett, Andrew (Stockport N)

Carmichael, Neil

Cunningham, Dr J. (Whiteh)

Bidwell, Sydney

Carter, Ray

Dalyell, Tam

Blenkinsop, Arthur

Carter-Jones, Lewis

Davidson, Arthur

Davies, Bryan (Enfield N)

Kaufman, Gerald

Roper, John

Davies, Denzil (Llanelli)

Kelley, Richard

Rose, Paul B.

Davies, Ifor (Gower)

Kerr, Russell

Ross, Stephen (Isle of Wight)

Davis, Clinton (Hackney C)

Kilroy-Silk, Robert

Ross, Rt Hon W. (Kilmarnock)

Deakins, Eric

Kinnock, Neil

Rowlands, Ted

Dean, Joseph (Leeds W)

Lambie, David

Ryman, John

de Freitas, Rt Hon Sir Geoffrey

Lamborn, Harry

Sandelson, Neville

Delargy, Hugh

Lamond James

Sedgemore, Brian

Dell, Rt Hon Edmund

Leadbitter, Ted

Selby, Harry

Dempsey, James

Lestor, Miss Joan (Eton & Slough)

Shaw, Arnold (Ilford South)

Doig, Peter

Lever, Rt Hon Harold

Sheldon, Robert (Ashton-u-Lyne)

Dormand, J. D.

Lewis, Arthur (Newham N)

Shore, Rt Hon Peter

Douglas-Mann, Bruce

Lewis, Ron (Carlisle)

Short, Rt Hon E. (Newcastle C)

Duffy, A. E. P.

Lipton, Marcus

Short, Mrs Renée (Wolv NE)

Dunn, James A.

Litterick, Tom

Silkin, Rt Hon John (Deptford)

Dunnett, Jack

Lomas, Kenneth

Silkin, Rt Hon S. C. (Dulwich)

Dunwoody, Mrs Gwyneth

Loyden, Eddie

Sillars, James

Edelman, Maurice

Luard, Evan

Silverman, Julius

Edwards, Robert (Wolv SE)

Lyon, Alexander (York)

Skinner, Dennis

Ellis, Tom (Wrexham)

Lyons, Edward (Bradford W)

Small, William

English, Michael

Mabon, Dr J. Dickson

Smith, Cyril (Rochdale)

Evans, Gwynfor (Carmarthen)

McCartney, Hugh

Smith, John (N Lanarkshire)

Evans, Ioan (Aberdare)

MacCormick, Iain

Snape, Peter

Evans, John (Newton)

McElhone, Frank

Spearing, Nigel

Ewing, Harry (Stirling)

MacFarquhar, Roderick

Spriggs, Leslie

Ewing, Mrs Winifred (Moray)

McGuire, Michael (Ince)

Stallard, A. W.

Faulds, Andrew

Mackenzie, Gregor

Steel, David (Roxburgh)

Fernyhough, Rt Hon E.

Mackintosh, John P.

Stewart, Donald (Western Isles)

Flannery, Martin

McMillan, Tom (Glasgow C)

Stewart, Rt Hon M. (Fulham)

Fletcher, Raymond (Ilkeston)

McNamara, Kevin

Stott, Roger

Fletcher, Ted (Darlington)

Madden, Max

Strang, Gavin

Ford, Ben

Magee, Bryan

Strauss, Rt Hon G. R.

Forrester, John

Mahon, Simon

Summerskill, Hon Dr Shirley

Fowler, Gerald (The Wrekin)

Marks, Kenneth

Swain, Thomas

Freeson, Reginald

Marquand, David

Taylor, Mrs Ann (Bolton W)

Freud, Clement

Marshall, Jim (Leicester S)

Thomas, Jeffrey (Abertillery)

Garrett, John (Norwich S)

Mason, Rt Hon Roy

Thomas, Mike (Newcastle E)

Garrett, W. E. (Wallsend)

Maynard, Miss Joan

Thomas, Ron (Bristol NW)

Gilbert, Dr John

Meacher, Michael

Thompson, George

Golding, John

Mellish, Rt Hon Robert

Tierney, Sydney

Gould, Bryan

Mendelson, John

Tinn, James

Gourlay, Harry

Mikardo, Ian

Tomlinson, John

Graham, Ted

Millan, Bruce

Tomney, Frank

Grant, George (Morpeth)

Miller, Dr M. S. (E Kilbride)

Torney, Tom

Grimond, Rt Hon J.

Mitchell, R. C. (Soton, Itchen)

Tuck, Raphael

Grocott, Bruce

Molloy, William

Urwin, T. W.

Hamilton, W. W. (Central Fife)

Morris, Alfred (Wythenshawe)

Varley, Rt Hon Eric G.

Hardy, Peter

Morris, Charles R. (Openshaw)

Wainwright, Edwin (Dearne V)

Harper, Joseph

Morris, Rt Hon J. (Aberavon)

Wainwright, Richard (Colne V)

Harrison, Walter (Wakefield)

Moyle, Roland

Walden, Brian (B'ham, L'dyw'd)

Hart, Rt Hon Judith

Mulley, Rt Hon Frederick

Walker, Harold (Doncaster)

Hatton, Frank

Murray, Rt Hon Ronald King

Walker, Terry (Kingswood)

Hayman, Mrs Helene

Newens, Stanley

Ward, Michael

Healey, Rt Hon Denis

Noble, Mike

Watkins, David

Heffer, Eric S.

Oakes, Gordon

Watkinson, John

Henderson, Douglas

O'Malley, Rt Hon Brian

Watt, Hamish

Hooley, Frank

Orbach, Maurice

Weetch, Ken

Hooson, Emlyn

Orme, Rt Hon Stanley

Weitzman, David

Horam, John

Ovenden, John

Wellbeloved, James

Howells, Geraint (Cardigan)

Owen, Dr David

Welsh, Andrew

Hoyle, Doug (Nelson)

Padley, Walter

White, Frank R. (Bury)

Huckfield, Les

Palmer, Arthur

White, James (Pollok)

Hughes, Rt Hon C. (Anglesey)

Park, George

Whitehead, Phillip

Hughes, Mark (Durham)

Parker, John

Whitlock, William

Hughes, Robert (Aberdeen N)

Parry, Robert

Wigley, Dafydd

Hughes, Roy (Newport)

Pavitt, Laurie

Willey, Rt Hon Frederick

Hunter, Adam

Peart, Rt Hon Fred

Irvine, Rt Hon Sir A. (Edge Hill)

Pendry, Tom

Williams, Alan (Swansea W)

Irving, Rt Hon S. (Dartford)

Penhaligon, David

Williams, Alan Lee (Hornch'ch)

Jackson, Colin (Brighouse)

Phipps, Dr Colin

Williams, W. T. (Warrington)

Janner, Greville

Prescott, John

Wilson, Alexander (Hamilton)

Jay, Rt Hon Douglas

Price, William (Rugby)

Wilson, Gordon (Dundee E)

Jeger, Mrs Lena

Radice, Giles

Wilson, William (Coventry SE)

Jenkins, Hugh (Putney)

Rees, Rt Hon Merlyn (Leeds S)

Wise, Mrs Audrey

Jenkins, Rt Hon Roy (Stechford)

Reid, George

Woodall, Alec

John, Brynmor

Richardson, Miss Jo

Woof, Robert

Johnson, James (Hull West)

Richardson, Miss Jo

Wrigglesworth, Ian

Johnson, Walter (Derby S)

Roberts, Albert (Normanton)

Young, David (Bolton E)

Jones, Alec (Rhondda)

Roberts, Gwilym (Cannock)

Jones, Barry (East Flint)

Robertson, John (Paisley)

TELLERS FOR THE AYES:

Jones, Dan (Burnley)

Roderick, Caerwyn

Mr. John Ellis and

Judd, Frank

Rodgers, George (Chorley)

Mr. James Hamilton

588

589

NOES

Adley, Robert

Hall-Davis, A. G. F.

Morrison, Hon Peter (Chester)

Aitken, Jonathan

Hamilton, Michael (Salisbury)

Mudd, David

Alison, Michael

Hampson, Dr Keith

Neave, Airey

Amery, Rt Hon Julian

Hannam, John

Nelson, Anthony

Arnold, Tom

Harrison, Col Sir Harwood (Eye)

Neubert, Michael

Atkins, Rt Hon H. (Spelthorne)

Harvie Anderson, Rt Hon Miss

Newton, Tony

Awdry, Daniel

Hastings, Stephen

Onslow, Cranley

Baker Kenneth

Havers, Sir Michael

Oppenheim, Mrs Sally

Bell, Ronald

Hawkins, Paul

Osborn, John

Bennett, Sir Frederic (Torbay)

Hayhoe, Barney

Page, Rt Hon R. Graham (Crosby)

Bennett, Dr Reginald (Fareham)

Heseltine, Michael

Pattie, Geoffrey

Benyon, W.

Higgins Terence L.

Percival, Ian

Berry, Hon Anthony

Holland, Philip

Prior, Rt Hon James

Biffen, John

Hordern, Peter

Raison, Timothy

Biggs-Davison, John

Howe, Rt Hon Sir Geoffrey

Rathbone, Tim

Boscawen, Hon Robert

Howell, David (Guildford)

Rawlinson, Rt Hon Sir Peter

Bowden, A. (Brighton, Kemptown)

Howell, Ralph (North Norfolk)

Rees, Peter (Dover & Deal)

Boyson, Dr Rhodes (Brent)

Hunt, John

Rees-Davies, W. R.

Brittan, Leon

Hurd, Douglas

Renton, Rt Hon Sir D. (Hunts)

Brotherton, Michael

Hutchison, Michael Clark

Renton, Tim (Mid-Sussex)

Brown, Sir Edward (Bath)

Irvine, Bryant Godman (Rye)

Ridsdale, Julian

Bryan, Sir Paul

Irving, Charles (Cheltenham)

Rippon, Rt Hon Geoffrey

Buchanan-Smith, Alick

James, David

Roberts, Michael (Cardiff NW)

Bulmer, Esmond

Jenkin, Rt Hon P. (Wanst'd & W'df'd)

Roberts, Wyn (Conway)

Burden, F. A.

Jessel, Toby

Rodgers, Sir John (Sevenoaks)

Carlisle, Mark

Johnson Smith, G. (E Grinstead)

Rossi, Hugh (Hornsey)

Carr, Rt Hon Robert

Jones, Arthur (Daventry)

Rost, Peter (SE Derbyshire)

Chalker, Mrs Lynda

Jopling, Michael

Royle, Sir Anthony

Clark, Alan (Plymouth, Sutton)

Joseph, Rt Hon Sir Keith

Sainsbury, Tim

Clark, William (Croydon S)

Kaberry, Sir Donald

St. John-Stevas, Norman

Clarke, Kenneth (Rushcliffe)

Kellett-Bowman, Mrs Elaine

Scott, Nicholas

Clegg, Walter

Kershaw, Anthony

Scott-Hopkins, James

Cockcroft, John

Kimball, Marcus

Shaw, Giles (Pudsey)

Cooke, Robert (Bristol W)

King, Evelyn (South Dorset)

Shelton, William (Streatham)

Cope, John

King, Tom (Bridgwater)

Shersby, Michael

Cordis, John H.

Kitson, Sir Timothy

Silvester, Fred

Cormack, Patrick

Knight, Mrs Jill

Sims, Roger

Corrie, John

Knox, David

Sinclair, Sir George

Costain, A. P.

Lamont, Norman

Skeet, T. H. H.

Crouch, David

Lane, David

Smith, Dudley (Warwick)

Crowder, F. P.

Langford-Holt, Sir John

Speed, Keith

Dean, Paul (N Somerset)

Latham, Michael (Melton)

Spence, John

Dodsworth, Geoffrey

Lawrence, Ivan

Spicer, Michael (S Worcester)

Douglas-Hamilton, Lord James

Lawson, Nigel

Sproat, Iain

Drayson, Burnaby

Le Marchant, Spencer

Stainton, Keith

Durant, Tony

Lester, Jim (Beeston)

Stanbrook, Ivor

Eden, Rt Hon Sir John

Lewis, Kenneth (Rutland)

Stanley, John

Edwards, Nicholas (Pembroke)

Lloyd, Ian

Steen, Anthony (Wavertree)

Elliott, Sir William

McAdden, Sir Stephen

Stewart, Ian (Hitchin)

Emery, Peter

McCrindle, Robert

Stokes, John

Fairbairn, Nicholas

Macfarlane, Neil

Stradling Thomas, J.

Farr, John

MacGregor, John

Tapsell, Peter

Fell, Anthony

McNair-Wilson, M. (Newbury)

Taylor, R. (Croydon NW)

Finsberg, Geoffrey

McNair-Wllson, P. (New Forest)

Taylor, Teddy (Cathcart)

Fisher, Sir Nigel

Madel, David

Tebbit, Norman

Fletcher, Alex (Edinburgh N)

Marshall, Michael (Arundel)

Temple-Morris, Peter

Fookes, Miss Janet

Marten, Neil

Thomas, Rt Hon P. (Hendon S)

Fowler, Norman (Sutton C'f'd)

Mates, Michael

Townsend, Cyril D.

Fry, Peter

Mather, Carol

Trotter, Neville

Galbraith, Hon. T. G. D.

Maude, Angus

Tugendhat, Christopher

Gardiner, George (Reigate)

Mawby, Ray

van Straubenzee, W. R.

Gardner, Edward (S Fylde)

Mayhew, Patrick

Vaughan, Dr Gerard

Gilmour, Rt Hon Ian (Chesham)

Meyer, Sir Anthony

Viggers, Peter

Gilmour, Sir John (East Fife)

Miller, Hal (Bromsgrove)

Walker-Smith, Rt Hon Sir Derek

Glyn, Dr Alan

Mills, Peter

Wall, Patrick

Godber, Rt Hon Joseph

Miscampbell, Norman

Walters, Dennis

Goodlad, Alastair

Mitchell, David (Basingstoke)

Warren, Kenneth

Gorst, John

Moate, Roger

Weatherill, Bernard

Gow, Ian (Eastbourne)

Monro, Hector

Wells, John

Gower, Sir Raymond (Barry)

Montgomery, Fergus

Winterton, Nicholas

Grant, Anthony (Harrow C)

Moore, John (Croydon C)

Young, Sir G. (Ealing, Acton)

Gray, Hamish

More, Jasper (Ludlow)

Younger, Hon George

Grieve, Percy

Morgan, Geraint

Grist, Ian

Morgan-Giles, Rear-Admiral

TELLERS FOR THE NOES

Grylls, Michael

Morris, Michael (Northampton S)

Mr. Adam Butler and

Hall, Sir John

Morrison, Charles (Devizes)

Mr. Russell Fairgrieve.

Question accordingly agreed to.
Bill read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [Lords]

  BUSINESS OF THE HOUSE
  Ordered.
  That, at this day's Sitting, the Diseases of Animals Bill [Lords], the Industrial and Pro-
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  vident Societies Bill [Lords], the Motion relating to Ways and Means (Disallowance of losses (capital gains tax and corporation tax)) and the Motion relating to Procedure (Use of Trustee Savings Banks by Solicitors) may be proceeded with, though opposed, until any hour.—[Mr. Coleman.]

SCOTTISH DEVELOPMENT AGENCY (No. 2) [MONEY]
Queen's Recommendation having been signified—
Motion made and Question proposed:
That, for the purposes of any Act of the present Session to establish a Scottish Development Agency; to provide for the appointment by the Secretary of State of a Scottish Industrial Development Advisory Board; to make provision for assistance in connection with air services serving the Highlands and Islands; and for connected purposes, it is expedient to authorise—
(1) subject to the prescribed limit—

(a) the payment out of money provided by Parliament of the expenses of the Secretary of State in making payments to the Scottish Development Agency;

(b) the payment out of the National Loans Fund of sums required for making loans to the Scottish Development Agency;

(c) the payment out of the Consolidated Fund of sums required for fulfilling any guarantee given by the Treasury in respect of sums borrowed by that Agency;

and in this paragraph of this Resolution "the prescribed limit" means the limit of £300 million imposed by the said Act of the present Session on the aggregate amount outstanding, otherwise than by way of interest, in respect of—

(i) the general external borrowing (as defined in the Act) of the Scottish Development Agency and their wholly owned subsidiaries;

(ii) sums issued by the Treasury in fulfilment of guarantees in respect of sums borrowed by the Agency from a person other than the Secretary of State;

(iii) sums paid to the Agency by the Secretary of State less repayments to the Secretary of State by the Agency (other than payments made by the Agency in consideration of receiving public dividend capital) and less sums paid in respect of the administrative expenses of the Agency; and

(iv) loans guaranteed by the Agency otherwise than in the exercise of powers conferred on the Secretary of State by section 7 of the Industry Act 1972 and exercisable by the Agency by virtue of the said Act of the present Session and loans guaranteed by a wholly owned subsidiary of the Agency;

(2) the payment out of money provided by Parliament of any expenses of the Secretary of State incurred by him in consequence of any provision of the said Act of the present Sessioc—

(a) enabling him to assist persons providing or proposing to provide air services serving the Highlands and Islands; and

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(b) enabling him to pay compensation in respect of the loss of office of any person who suffers such loss in consequence of the said Act;

(3) the payment out of money provided by Parliament of any administrative expenses of the Secretary of State incurred by him in consequence of any provision of the said Act.
And that it is expedient to authorise any payment into the Consolidated Fund or the National Loans Fund under the said Act of the present Session.—[Mr. Coleman.]
10.14 p.m.
Mr. Hector Monro: We have listened to the Minister of State, Scottish Office, indicating that money is no object at all, but we are in the midst of a major financial crisis and it is up to the Government to tell us a little more about where the finance is coming from and about how it is to be spent.
I am very keen indeed that money should be spent wisely in the creation of jobs and the promotion of industry in Scotland, but we are talking in terms of £300 million, and the Minister of State, in winding up, disowned, perhaps, his Press hand out of January that the money would be spent over five years.
It is only right that the Treasury Minister who will reply to this debate should give some indication of how much per year is likely to be spent, certainly in the initial two years. I agree that it is impossible to say what will happen in the future, but the Government must have some idea of the amount of money that will be spent in the coming year and the year after.
Also in terms of the Money Resolution I think that it would be beneficial to the House to know some of the breakdown of the money which is to be provided to air services in Scotland. How much is to go to Logan Air and how much to British Airways? I wish both services well, but in my view the House is entitled to know how the money is to be spent and where it is going in relation to the air services mentioned in the Money Resolution.
Finally, from my point of view, the House would like to know a little more about the cross-entry arrangement between Section 7 of the Industry Act 1972 and the powers of the SDA. How much

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money do the Government expect will be transferred in the first year from work which might be done under Section 7 of the Industry Act to the SDA? This will give the Committee some help in knowing the apportionment of the money under the 1972 Act.
Overall, we have had extraordinarily little information from the Government in relation to the Money Resolution, especially about where the money is to come from and how it is to be spent. Earlier, I asked whether the money was sacrosanct in relation to the package deal which the Prime Minister has promised next month. If we pass this Money Resolution of £300 million, are we likely to find it cut to £200 million or £100 million next month under the economic crisis proposals?
I believe that we are entitled to more information, and that is what I seek.
10.17 p.m.
Mr. Nicholas Fairbairn: We are discussing a Money Resolution which is an endless commitment. We start with £300 million, and the Minister of State announced proudly that he had increased it from £200 million to £300 million as if it were coming out of his own pocket.
Secondly, we are asked to authorise the payment of money provided under any provision of this legislation. Under Clause 5, the commitment is bottomless. The agency may borrow, lend, hire, sell and do anything else that it wishes, and the Secretary of State must repay it. That is outside the £300 million of the first requirement.
The third matter is that of expenditure. A number of questions seem to arise from the absurd explanatory notes in the Bill. We are to have an additional 250 to 300 persons. It is said that the administrative expenses of the agency are difficult to estimate with precision—I am sure that they are—but that they may build up to a level of about £3·5 million per annum. Will that be the expense of employing 205 to 300 people? What is more, does the figure take any account of inflation? If so, what is the estimate for the year with which we are dealing, and what is the estimate five years hence? It is misleading the House to ask it to approve an annual sum of £3·5 million,
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with inflation as it is, as if that will be the figure for five or eight years to come.
The Minister of State would like to give the impression that all the money will be spent immediately. He said that there was enough money to give the agency a good start, as if it were a present being given to a child going to school. We are entitled to know from where the money is to come. Will it be raised from taxes? Will it be raised from rates? Will it be printed? Will it be raised in Scotland, in England or even in Northern Ireland? How is it to be raised?
Mr. James Hamilton (Vice-Chamberlain of the Household): From rich people like the hon. and learned Gentleman.
Mr. Fairbairn: I am infinitely richer than the hon. Gentleman in all qualities except money.
Every day the Chancellor of the Exchequer and the Prime Minister tell us that we must cut the commitment which this House makes to expenditure, especially undescribed expenditure. It is all very well to talk in terms of £300 million. We have the expenses, and we have the commitment under Clause 5, which is bottomless.
Every night this House is asked to approve further expenditure. That is national deception and national schizophrenia. I should like the Treasury to answer these questions. What will be the estimated extra borrowing requirement of Parliament, how far has inflation been taken into account in expenditure and commitments, and what proposals are there for raising this sum of money? If the Treasury does not answer these questions, it is pretending that it gives by night and threatens to take away by day.
10.21 p.m.
Mr. Gordon Wilson: I should like to follow up comments made during the preceding debate on whether this sum is adequate in view of the grievous needs of Scotland at present.
The hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) asked where this money would come from. The intention is, as can be seen from the Money Resolution, to take

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it from the Consolidated Fund or the National Loans Fund. However, it is equally clear to those of us who have read the Petroleum and Submarine Pipe-Lines Bill that excesses on the oil account will be paid into the Consolidated Fund.
Therefore, we may well find—and this is accepted by all hon. Members—that even if there is no nexus, a large percentage of these funds will come from the revenues that will accrue from the development of oil in the North Sea. If this is so, we should examine the allowance for the agency in a more generous fashion than has been suggested so far. For example, I shall take a period of 10 years and assume that the agency started from its full commitment. We could find in the region of about £400 million or £500 million during that 10-year period, provided that the Secretary of State came back to Parliament for more funds.
To put the situation into perspective, by the early 1980's the Government's estimates of revenues from the Scottish sector of the North Sea will be in the region of £3,000 million. Therefore, the Government could be more generous.
I ask for an assurance from the Government that there is no intention of using other cut-backs, which may be announced during the budgetry statement which has been promised by the Prime Minister in two or three weeks' time, because already there are rumours that Govan shipbuilders are being put under pressure not to spend on modernisation and re-equipment the £20 million that had been promised to them over that period.
Therefore, if it is the Government's intention, on the one hand, to subtract from existing assistance to industry in Scotland and, on the other hand, to give assistance in the form of this Money Resolution, we may be dealing with a net situation where savings are being made on other essential and necessary forms of investment in Scotland in order to give an appearance of being generous.
The overall situation indicates that, far from Scotland being generously treated by the Government, we shall get back only a small sum of what is really and truly ours. I, therefore, ask the Government to reconsider the terms of the Money Resolution and to consider allowing an
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amendment to be tabled in Committee to increase the sum.
10.23 p.m.
Mr. Nigel Lawson: My hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) and my hon. Friend the Member for Dumfries (Mr. Monro)—who initiated this debate on the Money Resolution—have clone the House a service in the best tradition of Scottish good housekeeping.
It is intolerable that the Government should expect that a Money Resolution involving considerably more than £300 million should go through on the nod. This is intolerable at any time, but, above all, at a time when we are, as everyone knows, in the gravest economic crisis and when the amount of the Government's official borrowing requirement of £9,000 million—and the public sector borrowing requirement is likely to be considerably more than that—is, in the Chancellor's own admission, one of the major elements in our crisis, with which he knows he has to deal. Yet here we have a further £300 million plus, which the Government expected to go through on the nod.
I am glad that the Secretary of State for Scotland is present, not merely because this is obviously an important measure affecting Scotland but also because he, in his time, has questioned Money Resolutions and I am sure that he would agree that that is a proper thing for the House of Commons to do. Incidentally, I am also glad to see the newly-appointed Minister of State at the Treasury, the hon. Member for Llanelli (Mr. Davies). I hope that he will be replying to the debate on behalf of the Treasury. If not, I certainly hope that we shall have a Treasury Minister replying. It would be an intolerable affront to the House if no Treasury Minister replied to the debate, especially with the vast sums of money involved.
I should like to raise one or two matters and ask some questions. First, as has been pointed out, there is nothing that says how much is to be spent in providing the air services serving the Highlands and Islands. Indeed, there is just the bland statement in the Explanatory and Financial Memorandum to the Bill that
"It is not possible to provide an estimate of expenditure to be incurred under Clause 19"—

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which is the Clause at issue—
"since this will be a matter for negotiation."
That is not good enough. We must be given some idea of the limit and of how much will be involved. I cannot for a moment believe that the Treasury has given a blank cheque for this measure. Therefore the House should be told what is involved.
Secondly, we must know how much of the £300 million will fall in the current financial year, 1975–76. This will have an effect on the public sector borrowing requirements in this year of crisis. We must have this information.
We should also like an estimate for the following financial year, the year in which the Chancellor of the Exchequer has said that public expenditure cuts are to be introduced, 1976–77. If the Chancellor can look ahead for cuts in that year, we can also be told what the expenditure is expected to be in that year on the SDA. But certainly we must know what expenditure on the agency will be in the current financial year.
Again, the £300 million does not include any interest payments. Interest payments, at this time of inflation and with interest rates at an almost usurious level, are a very substantial sum. The Government should say how much they expect to fall due in interest payments and, indeed, to whom these payments are to be made. Schedule 2 of the Bill, which is the main part relating to the Money Resolution, states:
"For the purposes of the exercise of any of their functions, the Agency may borrow money from the Secretary of State and may, with the consent of the Secretary of State given with the approval of the Treasury, borrow money, whether in sterling or otherwise, from any other person or body, whether in the United Kingdom or elsewhere."
How much of the money is to be borrowed within the United Kingdom on the gilt-edged market, and how much is to be borrowed from overseas? Our overseas indebtedness is already another major factor in our crisis. Confidence in sterling is low. That must be accepted on all sides of the House. Confidence in the pound is reducing. How much of this money will be borrowed from the Arabs or whoever else it is overseas who is lending us money at present, and lending
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it to sustain Socialist follies of one kind or another?
How much is the interest charge? Interest at 15 per cent. on £300 million is about £45 million a year. A great deal of money is involved. Interest payments are qiute over and above the £300 million which is the prescribed limit in the Money Resolution.
We need to be told a great deal more about the administrative costs. What are they and how are they to be divided between wages and salaries and other expenses, such as rents for office buildings, and so on? This may be a small amount compared with the £300 million we have been talking about, but we all know that there is an enormous amount of waste in the public sector, and one of the main ways in which we shall deal with this economic crisis is by cutting out that waste in a range of small ways. Control of the proliferation of administration is one. When control of this sort of expenditure is totally lost, the cost escalates and the problem of inflation grows. I hope that we shall have the benefit of a Treasury Minister to answer these important questions.
10.32 p.m.
Mr. David Howell: It was a good idea to have this short debate on the cost of this proposal and I am sure that Ministers will be the first to agree that it is important in these critical times to cast an eye over the finances and the cash and resource costs of major new projects. Whether we agree with them or not we all have a responsibility in these critical times to study carefully the spending of sums of this kind.
We are dealing here with £300 million which is a substantial sum. It must be found from somewhere—from the taxpayer, from the saver, or, and I hope that this will not be the case, from the printing presses. I hope that a Treasury Minister will explain that this last course will not be adopted.
My hon. Friends have raised important points and I am only sorry that Labour back benchers have not entered into the debate because the money will have to come from somewhere. It will have to come from cutting other programmes. It is a part of the Parliamentary process that we need to strengthen to hear the views of hon. Members about their priorities. If

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they want money spent on the SDA which schemes do they want the Government to cut to provide the cash? We have not heard from Labour Members on that point. They have had a busy day debating the Bill, of course. Perhaps they think that £300 million is not important.
Mr. Frank Hooley: The highest priority for this country is the encouragement of industrial investment, and that is precisely what the Bill seeks to do.
Mr. Howell: Some would say that the bar to industrial investment is the high rate of inflation. That comes from excessive Government spending and high pay, and that could prove to be a circular argument.
It is important to follow up one or two of the questions which have been posed about finances. The Bill proposes a figure of £200 million to start with. That sum would have been approved on the nod but for our desire to debate it. A further £100 million is to be approved by the affirmative resolution procedure. The Secretary of State confirmed, I think with some pride, that this was a 1½hours procedure, and that timescale works out at £66 million an hour, or a little over £1 million a minute as the rate at which the Government hope the House will approve the expenditure.
There must be some clarity, too, on the pace at which it is planned that this expenditure should be "unfolded". This is serious because it is critical for the public sector deficit and the public sector borrowing requirement that we should know just how much of that expenditure will be incurred in year one. The Press release, which the Minister of State said was no longer relevant to the situation that the Government now foresaw, mentioned a period of 5 years which means £40 million a year for the £200 million. The Secretary of State, in brisk form, said that he wanted the money used up as quickly as possible. Presumably that means that if he could find the outlets for it he would like the whole £300 million to be pushed through in the current financial year. If that is so it makes a considerable difference to the Government's finances and to the very fine balance which the Chancellor is trying to strike on the public sector deficit.
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We are so near the precipice that the tolerances are very fine. If we are suddenly to have an additional £300 million. or £260 million on top of the £40 million originally envisaged—if that is what was envisaged—pushed up into this year, it is an important consideration. We want to know exactly what the spread will be.
The Minister of State said that he wanted the money to last as long as the agency had an effective job to do, which sounds more like the even-spread approach. If the Secretary of State's view prevails, and the cry will be "Spend the money as quickly as possible", that is a serious matter from the point of view of public finances.
We need to know the strategy—if such precision is possible—because it has important implications for the overall borrowing requirement at a critical time, when inflation is through the roof and our finances are in a sadly deteriorated condition.
My hon. Friend asked how much would be borrowed from abroad. The agency has powers under the appropriate schedule to borrow from abroad. We shall be grateful if the Minister will tell us how the borrowing will be organised, and whether it will be carried out under the procedures authorised in the previous Finance Act, which included a new section governing statutory corporations' overseas borrowings. Are the procedures to be those governed by that section, or will there be different procedures?
Descending from those vast figures, which are very important, to the small ones, I agree with my hon. Friends that the House should do more than just to glance at the considerable figure of £3½ million a year for running the agency's office or offices. That figure is presumably in today's pounds and will be much more when they come into existence. The sum of £3½ million is a great deal for running an office or offices. It is a great deal if there are 750 persons involved. Even if every man, woman and boy in the office were paid £60 a week, that would not come to anywhere near £3½ million. It is nearer £2¼ million, leaving £1¼ million for the rental and other expenses.
If the money covers 250–300 people, we are dealing with substantial sums. At £60 a week, 300 would cost £900,000.

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If they were paid the same as we are paid—£90 a week—the total would be £1,350,000, leaving over £2 million for the rental and other matters. This seems to be office planning on a very generous scale. It may be peanuts compared with the £200 million, but if we multiply this approach to office expenses by the whole bureaucracy of Government we have our problem on the plate before us. If the Chancellor of the Exchequer could get a grip of excess administrative costs of the kind we are talking about here, many of his difficulties would be removed, together with some of the furrows on his brow.
We must know where that odd £1 million or £2 million is going in this office operation, how many extra people will be in the office, what that figure of £3,500,000 represents, and whether it is in some future projection of money terms or in 1974 survey prices. These are important matters. They are not just candle ends. If we can get these issues right we shall yet save our public finances and enable the economy to proceed without making all the drastic expenditure cuts—though we are bound to have some—which Labour Members fear very much.
If we cannot get these things right, if we let this sort of money through on the nod without serious analysis, if we let this sort of administrative expense through without careful examination, we shall be winking the green light for a further slide in the whole of our public finances, and for further increases in the astronomical borrowing requirement. It is now officially running at £9 billion, in 1975 pounds, but is probably much higher. Many people think that it will be £12 billion or £13 billion before we are through. We are winking the green light for a further agonising round of increased inflation, lower investment, lower profits and fewer jobs for the people of Scotland. It is important that the facts should be correctly put. May we have some answers?
10.40 p.m.
Mr. James Sillars: The carping reluctance of the approach of the Conservative Party to the Bill and the money to be provided with which to back the Scottish Development Agency will not go unnoticed in Scotland.
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It is remarkable that three technical monetary questions should have been asked by a member of the Conservative Party. When we asked questions about the amount of money to be committed by the Conservative Government under the Industry Act 1972 we were told that that amount depended on how successful we were in attracting investment. We were told that the more investment there was the more grants and expenditure there would be. There was an open cheque attitude to investment under the Industry Act 1972.
Tht £300 million allocated to the Scottish Development Agency is not enough. If the Scottish Development Agency spends up to the limt of £300 million in the first two years of its life it will be a highly successful operation. The Government will be able to claim an enormous investment success in the rehabilitation of land north of the border. We shall have proved our case for further Government assistance. I am happy to agree with the prescribed limit of £300 million.
There has been no mention by the Opposition of the fact that this is a year of crisis for the working people of Scotland. A financial crisis faces the country. The unemployed, their families and the young people pouring out of schools on to a labour market which is already severely depressed face a time of crisis. They look to the Government for action. The Money Resolution will enable the Government to take adequately backed action in the next two years.
The Opposition complained that no Government supporters seemed to be concerned about the amounts to be spent. That is why I speak. When the Minister makes a decision on the voluntary timetable I hope that he will bear in mind that the Tory Party has had a fair crack of the whip. In the other place, for which there are no elections, the Scottish Tories are better represented than in any other part of the Palace of Westminster. Those Tories have knocked our Bill about a considerable amount. Will the Minister discuss with the Leader of the House, the Chief Whip, and through the usual channels, the possibility of a generous, timetable motion being introduced so that the Bill becomes law and the £300 million is spent on employment in Scotland?
10.43 p.m.
The Minister of State, Scottish Office (Mr. Bruce Millan): I should first like to answer the point made by my hon. Friend the Member for South Ayrshire (Mr. Sillars) as it is relevant to the amount of money which we shall be able to spend this year. We are anxious to put this Bill on to the statute book at the earliest possible date. We shall be taking steps to achieve that end. I know that we will have the support not only of my hon. Friends but also of the people of Scotland. However, there may be a few dissenters here and there. We can deal with them when we come to them. We shall put this Bill on to the statute book as soon as possible. However, until we do so it is impossible for me to give figures for one year.
The Bill was drafted on the basis that we would provide an amount—not an annual amount. The amount has no time limit attached to it. The amount which may be spent in the current year will depend on when we can establish the agency and how successful it is in its early stages in identifying useful ways of spending the money which is available to it. As we proceed along that road we shall give the information to the House in the usual way. I cannot now say how much is likely to be spent in the current year. It is provided for in the Government's public expenditure calculations.
Mr. Lawson: I am glad that the right hon. Gentleman said that. As a sum has been provided for in the Government's calculations for this year, why will he not reveal to the House what that sum is?
Mr. Millan: For the simple reason that it is impossible to make the calculation at present. If the hon. Gentleman—who I know follows these matters with great care—will look at the public expenditure White Papers, he will see that there is always a fairly generous amount allowed for developments that may take place during the year, contingencies and so on. We are not entering into this undertaking lightly, with no idea of the financial consequences and with no regard for the difficult public expenditure considerations we face in the current year. This is public expenditure which is specifically directed towards maintaining and expanding, and therefore improving, the productive capacity of
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Scotland. It is not, as the hon. Gentleman seems to suggest, public money which will be wasted. To suggest that is to misread what we are trying to do.
Similarly, I am unable to provide a breakdown between the various functions of the agency and say that so much of the £300 million will be spent on one and so much on another function. Again, we have specifically and deliberately drawn the expenditure limits in a way which does not provide for a division of the expenditure. We want to allow the agency the maximum flexibility in determining its priorities and the emphasis it puts at any time on one or other of its functions. It follows from what I said in winding up the Second Reading debate that it is a primary purpose of the Government to provide maximum flexibility, so that a co-ordinated approach to Scotland's industrial problems can be made by the agency.
As to where the money will come from, it is never the practice of a Money Resolution to hypothecate particular revenues to particular expenditure. There is nothing peculiar about this Money Resolution, which is in the standard form. In paragraph 1(a) we use the standard formula of authorising—
"the payment out of money provided by Parliament"
Hon. Gentlemen will have the opportunity to cast an eagle eye over the Estimates when they come along and we look forward, when we debate them, to hearing other illuminating remarks, for example from the hon. Member for Blaby (Mr. Lawson), about the Scottish Development Agency.
Similarly, paragraph 1(b) refers to:
"the payment out of the National Loans Fund",
and paragraph 1(c) to:
"the payment out of the Consolidated Fund".
Those are the sources which are always described in Money Resolutions, and in that respect this Money Resolution is no different from any other.
Mr. Lawson: I give the right hon. Gentleman credit for reading well. The Money Resolution is cast in the conventional form but the purpose of the debate is for the House to be given a little more information than is contained in the Money Resolution.
Mr. Millan: I might just be able to do that if the hon. Gentleman will allow me to develop my speech.
The hon. Member for Dumfries (Mr. Monro) mentioned air services. There is a special reason why I do not want to put a figure on that sum of money in the current year. We are dealing with one company—Loganair—and not with British Airways. We have decided that no subsidies will be paid to British Airways. A proposal is under discussion at the moment and there is a figure in mind, but it is considered inappropriate and lacking in proper regard for the need to preserve the public purse to put a figure in the Explanatory Memorandum. If these negotiations are completed—as I hope they will be—within a week or two, I shall be happy to give the figure. The hon. Gentleman will realise that in the middle of the negotiations it would have been inappropriate for us to include in the Money Resolution a figure which Loganair would have been able to identify immediately as the figure we had in mind. That would have been prejudicial to the negotiations.
I am sorry that I am unable to give that figure, but I hope to be able to give it soon with other details of the services that we intend to subsidise. The House will know that last week I gave certain information about Shetland internal services in answer to the right hon. Member for Orkney and Shetland (Mr. Grimond).
I was asked about inflation and whether the figures were at current rates. They are. The Explanatory and Financial Memorandum follows the normal pattern. It is never the practice under any Government in any legislation to allow for future inflation. The figures in the Explanatory and Financial Memorandum are expressed at rates which pertain at the time that the Bill is published. It is obvious that if there is a continuation of a high rate of inflation the money under this or any other Bill will run out sooner than expected. I should not hide that fact. It is an ineluctable consequence.
I was asked about the staff. The figures are given on page v of the Explanatory and Financial Memorandum. The total is expected to reach 750. However, we must remember that a fair number of
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staff, about 470, are already employed by the Scottish Industrial Estates Corporation and by the Small Industries Council for the Rural Areas of Scotland. Therefore, the additional numbers will be quite limited.
I confirm that the figure of £3½ million is not just for the additional persons. It takes account of the present expenditure for the SIEC and the SICRAS. If we take account of the SIEC and SICRAS current administrative expenditure and of the administrative expenditure for the extra 250 to 300 people, it will be seen that £3½ million is a fair estimate of what the administrative expenses are likely to be.
I confirm that the £300 million does not include interest payments. Those are specifically excluded in Clause 13 where the £300 million is mentioned. The agency is rather different from the NEB in this regard, because, whilst having an industrial rôle which is analogous to the rôle of the NEB, it will have an environmental and factory-building rôle, and so on, which will not be subject to the same financial targets guidelines as the specifically industrial rôle, which is not meant to be run at pub-lice expense, but to pay its way. We are dealing not with assistance to industry so much as an entrepreneurial function which is meant to pay its way. That makes it difficult to define the financial guidlines on which the agency will work. When we publish these guidlines, as we will, it will be seen that we shall fix additional targets for the different functions of the SDA as to whether they should be self-financing or money which cannot, in the short term at least, provide a normal financial return.
A decision will have to be taken at some time as to how much of the borrowing of the agency might be done by public dividend capital. That will make a difference to interest payments, and so on.
Mr. Lawson: These are important aspects of the situation which the Minister is considering and I hope he will give more information later. In the meantime, can he give some rough indication of how the £300 million is broken down between that which is expected to produce a commercial rate of return and that which is not, and what is the kind of commercial rate of return on the

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tranche which is expected to produce one?
Mr. Millan: We shall tell the House later, but it is too early to do that. The hon. Member for Blaby will appreciate that before introducing guidelines we have to discuss this with the agency. If his hon. Friends from Scottish constituencies would stop obstructing the Bill, we might get it through and could then give those answers, but we are at present prevented from doing so because of the obstructive tactics of his hon. Friends.
The other matter the hon. Gentleman raised was overseas borrowing, and this is provided for under Schedule 2 of the Bill. I can confirm that it will be done under the normal arrangements, because if the hon. Member looks at Schedule 2(3) he will find that borrowing powers are subject to the consent of the Secretary of State, given with the approval of the Treasury. Therefore I can say that, as with other public agencies, it will be subject to whatever guidance, guidelines, or constraints operate at the time.
There will be no special arrangement as I understand the position; but, if I am wrong, I will provide an alternative answer in due course. The borrowing will come under the normal provisions, as I understand it, for public agency borrowing and those are under the ultimate control of the Treasury, as we would all accept.
The question of North Sea oil which has been raised is not provided for in the Money Resolution. Perhaps I did not say so in my Second Reading speech, but I should have said that there will be no hypothecation of North Sea oil revenues to the development agency.
I have answered most of these points and I know that the House is anxious to approve this necessary money which will yield such a magnificent return for the people of Scotland through the agency.
Question put and agreed to.
Resolved,
That, for the purposes of any Act of the present Session to establish a Scottish Development Agency; to provide for the appointment by the Secretary of State of a Scottish Industrial Development Advisory Board; to make provision for assistance in connection
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with air services serving the Highlands and Islands; and for connected purposes, it is expedient to authorise—
(1) subject to the prescribed limit—

(a) the payment out of money provided by Parliament of the expenses of the Secretary of State in making payment., to the Scottish Development Agency;

(b) the payment out of the National Loans Fund of sums required for making loans to the Scottish Development Agency;

(c) the payment out of the Consolidated Fund of sums required for fulfilling any guarantee given by the Treasury in respect of sums borrowed by that Agency;

and in this paragraph of this Resolution "the prescribed limit" means the limit of £300 million imposed by the said Act of the present Session on the aggregate amount outstanding, otherwise than by way of interest, in respect of—

(i) the general external borrowing (as defined in the Act) of the Scottish Development Agency and their wholly owned subsidiaries;

(ii) sums issued by the Treasury in fulfilment of guarantees in respect of sums borrowed by the Agency from a person other than the Secretary of State;

(iii) sums paid to the Agency by the Secretary of State less repayments to the Secretary of State by the Agency (other than payments made by the Agency in consideration of receiving public dividend capital) and less sums paid in respect of the administrative expenses of the Agency; and

(iv) loans guaranteed by the Agency otherwise than in the exercise of powers conferred on the Secretary of State by section 7 of the Industry Act 1972 and exercisable by the Agency by virtue of the said Act of the present Session and loans guaranteed by a wholly owned subsidiary of the Agency;

(2) the payment out of money provided by Parliament of any expenses of the Secre tary of State incurred by him in consequence of any provision of the said Act of the present Session—

(a) enabling him to assist persons providing or proposing to provide air services serving the Highlands and Islands; and

(b) enabling him to pay compensation in respect of the loss of office of any person who suffers such loss in consequence of the said Act;

(3) the payment out of money provided by Parliament of any administrative expenses of the Secretary of State incurred by him in consequence of any provision pit the said Act.
And that it is expedient to authorise any payment into the Consolidated Fund or the National Loans Fund under the said Act of the present Session

DISEASES OF ANIMALS BILL
[Lords]
Not amended (in the Standing Committee), considered.
10.59 p.m.
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang)I beg to move, That the Bill be now read the Third time.
It has been gratifying to see the favourable response to this measure here and in the other place. I believe that that is confirmation that the Bill speaks for itself and I do not propose to take up the time of the House on this occasion.
The length of a Bill is no guide to its importance. In this case the House has recognised that the Bill meets a vital need—that of maintaining up-to-date defences against the scourge of animal diseases from abroad. I understand that hon. Members wish to raise a number of points, and with your permission, Mr. Deputy Speaker, I shall be happy to answer them at the end of the debate.
11.0 p.m.
Mr. Robert Hicks: As the Minister has implied, the Opposition welcome this Bill. That has been evident during its passage, because we have not sought in any way to obstruct its progress. We recognise the need to support the Government on animal health matters of this kind. Animal health is probably one of the most non-political subjects that this House considers. It is also one of the most technical.
There are two aspects I want to raise tonight which have been raised at earlier stages. I make no apology for bringing them up once more. The first concerns psittacosis. Considerable discussion has already taken place about whether this disease is endemic. If it is, clearly it represents an increased threat to our poultry industry. I am aware that this Bill is aimed at updating the provisions of the Diseases of Animals Act 1950, which relates to the import of animals, birds and "other things".
The Minister will be aware that the importation of parrots has caused considerable concern to poultry farmers since the import ban was removed by order in 1967. It is only right that we
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should again ask the Minister what the current stance is on this. We are anxious that the Minister should give priority to detecting and dealing with such diseases.
In addition there is the other aspect of psittacosis which manifests itself in the potential risk to human beings. The figures show that in each of the past five years on average two persons per year have died from this disease. In Committee we rather let the Minister off the hook, as he will recognise, because later that day he was to answer a Written Question tabled by my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) on this subject. In that answer the Minister said that he had reviewed the matter and had also taken the views of his right hon. Friend the Secretary of State for Social Services. He went on:
"While controls are not considered justified on human health grounds alone, a review of the disease risks to poultry posed by unrestricted imports of psittacines and other captive birds gives cause for concern. I am therefore considering the form and timing of appropriate import controls and I shall be consulting the trade and other interests."—[Official Report, 11th June 1975; Vol. 893, c. 190.]
Clearly in the light of this answer we will want to hear tonight whether we are likely to know the outcome of these inquiries and what form the appropriate import controls will take. Is the Minister thinking in terms of a ban? If there is not a total ban, what are the alternatives? I believe that we are justified in seeking clarification, because we interpret that not all is at one between the Departments that are involved. We should like clarification of the Minister's intentions.
Next, I turn to rabies. We accept that the Government have acted in respect of the Rabies Act 1974. That Act provides them with the various provisions which we hope will enable them to take the necessary measures should this disaster again come to these islands. However, we should like the Minister's assurance that he is satisfied that he has all the powers that the Government require. After all, we know that rabies is extending westwards across the continent of North-West Europe. That has given cause for considerable public concern. We would join with the Ministry in expressing the view that it is necessary to

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maintain the campaign to draw the attention of the public to the full implications if rabies were again to be found in the United Kingdom.
Will the Minister give an assurance that strict policing policies are taking place at airports and on ferries? If ever the statement that prevention is better than cure were relevant it is in this particular instance. That must be so given the potential threat and the implications that would be involved if rabies were again to break out in these islands. We seek further clarification, further explanation and the required assurance as regard psittacosis and rabies.
11.8 p.m.
Mr. Paul Hawkins: I welcome the Bill as has my hon. Friend the Member for Bodmin (Mr. Hicks). I do so particularly as we are told there will be no significant effect on public service manpower. But without extra manpower at the ports, how strict will be the controls that can be carried out over these dangerous diseases which can be imported? How much money will the work, as outlined, cost in a full year?
I now turn to the importation of psittacines. It was the death of a farm worker in my constituency that brought the matter to my notice. We must recognise the danger that they bring not only to human beings but to the whole of our poultry population. As the Minister has found, there is undoubtedly a tie-up with a virulent form of poultry fowl pest. The death of the farm worker's wife and the illness of many of his family worried both the NUAW organiser in my constituency, Mr. Jack Boddy, and the farmer, Mr. Ted Wootton. The Minister was kind enough to receive them with myself at a long and interesting discussion with his officials. We came away with a good impression of the way in which he understood the seriousness of the case.
It was a long time before the matter came to a head, but finally my Question on importation was answered. I have two supplementary questions to ask. First, why did the Secretary of State for Social Services not consider controls justified on human health grounds? If the right hon. Lady was serious about the matter and the Ministry of Agriculture considered that there was a reason for controls, the answer to my Question would have been
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worded differently. It would have combined the two matters and said that because of the joint effect it was agreed that action should be taken. I wish to know why the right hon. Lady took up the position she did.
Secondly, I should like to ask whether this means beyond a peradventure that at some time in the future there will be import controls on these birds? If so, how long does the Minister expect it will be before he is able to put these controls into effect? I am grateful to the Minister for having answer my Question, but I should like further clarification on those two points.
I wish to turn to the subject of rabies, which is undoubtedly a most horrifying disease which can affect animals and humans. I believe that there is no cure whatever for it and it seems that it has been spreading from the Polish corridor gradually across Europe as far as the French coastline opposite this country. How close to the coastline has it now reached? How much co-operation is there with the French authorities in finding out how they are endeavouring to control the situation? Is there constant co-operation and visits to the French veterinary headquarters to try to find out what can be done from our side to prevent the importation of any animal which might bring this disease into this country?
I wish to ask about extra precautions being taken at ports and airports. I should like to see a publicity film made on this topic screened as a warning to those who love to smuggle in pets. I believe that would be of immense benefit. People seem to be far more concerned about the welfare of animals in this country than about the welfare of human beings. There is no doubt that these matters hit the headlines and occasions on which Members of Parliament are lobbied are, nine times out of ten, connected with animals. I certainly consider that a film on the subject would bring the truth of the matter home to those who are likely to smuggle in a small dog and thereby risk the lives of thousands of pets throughout the country. If the message was rubbed home in that way, we might be able to avoid the importation of certain animals.
I congratulate the Minister on having brought forward this Bill and on the steps

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he is taking concerning the importation of psittacines. I hope that he will have every power behind his elbow to prevent this dread scourge of rabies invading the land.
11.16 p.m.
Mr. Mark Hughes: I apologise for not having been able to be present at the previous discussions on this Bill. Matters such as the Finance Bill happened to coincide.
I welcome the Bill wholeheartedly and wish only to ask the Minister a number of pertinent questions. He will recollect the time we spent on the Agriculture (Miscellaneous Provisions) Bill some years ago on the question of zöonosis, and what worries me first and foremost is how far, in legislating about the transmission of animal diseases, we are satisfactorily dealing with the problem of those diseases which are transmissible from animal to man.
In reading the Bill there appears to me to be a lacuna—I hope the Minister will be able to reassure me—between the rôle of his Department, with its highly-skilled veterinary staff, and the rôle of the Department of Health and Social Security and its highly-skilled staff. This gap between the rôles of two excellent Departments could give rise to risks to the population of this country, and I want to give a warning about them.
I have in mind not the highly specific psittacosis problem mentioned by the hon. Member for Norfolk, South-West (Mr. Hawkins) but the whole problem of ornithosis, with which the House is well acquainted. The Minister knows very well that there is some evidence—it may at the moment by ephemeral, it may not be proved beyond peradventure—that high concentrations of turkeys, hens, and so on, can lead to a risk to those involved in their maintenance and care. It crosses the line between a veterinary condition, which is the proper function of the Minister's Department, and a medical condition, which is the proper function of the Department of Health and Social Security.
I am not certain how the Bill affects the importation of poultry eggs or day-old chicks where there is no evidence that they are possessed of a disease which is damaging or disadvantageous to poultry. If it clearly damages poultry there are powers provided, but I am not certain
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that the Bill protects the poultry keeper or the poultry dresser in the factory. There is a gap, enabling the importation of day-old chicks which would totally satisfy the provisions of the Bill and which would not involve the disease of animals as defined by it yet such animals could carry a risk of disease to the human beings handling them, which I would find unacceptable. It seems that there is this gap.
Let me take this another stage and refer to what is probably the most prevalent cause of human discomfort that we have, which is salmonella. This Bill does not seem to cope with the problem of the transferance of salmonella from animals to humans. It is not classified as an animal disease. Yet the risk that the dairy man, shepherd, or whoever it may be who is dealing with these animals, could infect his family with salmonella is high. It may not be fatal, though unfortunately it can be on occasion. But it is a most unpleasant, nasty business, and it does not seem to be covered in the Bill because we are dealing too specifically with diseases of animals and assuming that man is not an animal. What worries me about the Bill is that, because of departmentalising in Whitehall, we classify animals as non-human and humans as non-animal. The two never get together, and the problems of these zoonotic conditions are not dealt with properly.
In general, I welcome the Bill. But, having read the discussion in another place and on Second Reading and in Committee in this House, I regret that this area was not aired more fully.
I turn to the problem of bees. I know that my hon. Friend has a keen interest in bee-keeping, and perhaps I should declare my own interest in that I am a very amateur bee-keeper.
A number of fertilised queen bees are imported. Those queen bees of themselves may be totally free from disease. It is only when they have been released into a colony that the presence of disease can be known. It is only when their eggs, their grubs and their progeny emerge that the presence of the disease can ever be discovered.
Even after a careful reading of
"other things, whether animate or inanimate",

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it does not appear that it covers the unborn progeny of the imported "thing". If we import fertilised queen bees from Israel, Italy or from wherever we are in the habit of importing them, they may bring into the country a disease which is both spreadable and vicious. I cannot see how the point can be covered by
"fish, reptiles, crustaceans and other cold-blooded creatures not falling within paragraph (a) or paragraph (b) above".
I cannot see how the unproduced eggs of a fertilised queen bee are covered by the provisions of the Bill.
Mr. Michael Ward: Is my hon. Friend suggesting that queen bees are imported solo, without attendant worker bees? The advice of the Ministry is that, when bees are imported, a worker bee sample should be sent away for examination to check whether there is any evidence of either American or European foul brood. I think that the American variety is the most common.
Mr. Hughes: I am more than happy to respond to my hon. Friend's intervention. I deal with the specific problem of foul brood. It is the practice to put any imported queen bee in a separate container, with a number of worker bees in a distinct container alongside so that the worker bees can be analysed to see whether they are afflicted with either American or European common foul brood. This is a relatively simple process, but there are a number of specifically commercial queen bees, particularly in Israel where there is a breed of queen bees that have an inherent characteristic of non-swarming. The practice is to import them without the worker bees.
It has not been realistic so far to test that group of queen bees because there are no worker bees. Bees of an imported sample are not the progeny of the queen, they are the progeny of the hive.
There seems to be a technical difficulty in the drafting of the Bill and it may extend to more than just bees. There may be fertilised females of a number of species who are disease-free themselves, but whose progeny may carry the risk of disease.
I welcome the Bill wholeheartedly, but there are two or three areas of difficulty.
11.27 p.m.
Mr. Geraint Howells: We have learned a great deal from the two hon. Members who spoke immediately preceding me. Both raised important issues and it has been an interesting debate so far.
I congratulate the Government on introducing the Bill as a matter of urgency. Much can be done to help the agriculture industry and its various sectors.
I am in favour of clauses 1 to 5. Their provisions are necessary if we are to safeguard our interests at home and abroad. I have had meetings with the chief executive officer of the National Farmers' Union at Aberystwyth, Mr. Evan Lewis, a number of branches of the union and farmers interested in animal diseases. All union leaders and the majority of farmers accept the Bill as a necessity if we are to improve our control of every type of disease.
There are one or two points on which I should like clarification. Now that we are full members of the EEC, have we a common policy to cover diseases of animals? In the late 1960s, we had a foot-and-mouth epidemic that cost us millions of pounds. Now we have a slaughtering policy, while the EEC has a vaccination policy. In future, will there be a slaughtering policy in the EEC or will we have to accept their vaccination policy? That is one matter which worries me.
Then there is another problem facing sheep farmers in Britain. Scab is on the increase once again, in many parts of the South of England and coming up to the Midlands. I wonder whether now is the opportune time to reintroduce compulsory dipping in Britain to safeguard the sheep industry.
I should also like to ask the Minister about the problem of thea nimal vis-à-vis the human being. Many people, particularly vets, have suffered from the disease brucellosis. In Britain we vaccinate our cattle with S19. I am wondering whether that is the policy within the rest of the EEC, and whether we can agree over a period upon a common policy of injecting all cattle with S19.
The Government's policy is to expand home food production. If we believe that we should try to conquer inflation,

619
it is our duty to take every precaution to safeguard our stock from any sort of disease entering Britain from any part of the world. It has been proved in the past that many millions of pounds have been lost to the agriculture industry because we did not have enough control over imports. We on the Liberal bench recognise the need to support the Government on animal health and welfare grounds and to make sure that the agriculture industry plays its part by accepting the revised provisions in relation to diseases of animals, which in the long run will be beneficial to all concerned.
11.32 p.m.
Mr. Nicholas Winterton: The hon. Member for Durham (Mr. Hughes) raised some fascinating matters. I hope that the Minister will deal with them adequately and fully. As the contribution of the hon. Member for Durham went on, I was reminded of the poem about the walrus and the carpenter, because the content of what he was saying became curiouser and curiouser.
I join my hon. Friend the Member for Bodmin (Mr. Hicks) and my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) in welcoming the Bill and hoping that it has a speedy passage on to the statute book.
I want to direct my remarks entirely to the disease of rabies. I did this in Committee and I wish to do so again tonight. Rabies is a horrific, terrible disease. Its effect upon man is quite unbelievable. I certainly go along with what was said by my hon. Friend the Member for Norfolk, South-West. Perhaps the Government could get a film made of the effects of this disease. I am sure that it would make anyone tempted to smuggle in an animal from the Continent think twice about what he was doing.
I direct my remarks to rabies because in recent weeks a number of people have drawn to my attention—perhaps even boasted of it—the fact that they have gone to the Continent and brought back an animal and got it into Britain terribly easily, the animal being concealed in a shopping bag, under a false seat in a car, in a false-bottomed car boot, or whatever. These animals could well have been in contact with animals infected by rabies,
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and they could bring that disease to Britain.
Will the Minister clearly indicate whether there will be sufficient officers to inspect all vehicles and all people that will be travelling to and from the continent of Europe? In recent years the number of movements to and from the Continent has increased dramatically, not only commercial movements but the movement of people going on holidays and visits. I hope that sufficient inspectors will be available to ensure that their presence is a deterrent to people who are tempted to bring animals into Britain without putting those animals through the necessary quarantine period.
This is a very serious matter. Rabies is sweeping across Western Europe. I believe that a number of cases have already been reported in the Pas de Calais and it is calculated that the disease will have reached the Channel ports before 1980. That obviously poses a serious threat to this country. I was to some extent reassured by the answer that the Minister gave in Committee, but I hope that he will be a little more forthcoming this evening and will indicate clearly that he is confident that there will be enough inspectors to deter people who might be tempted, perhaps for what they believe to be the best of reasons, to bring animals into the country without them going through the necessary quarantine period.
11.36 p.m.
Mr. John Farr: I welcome the Bill and congratulate the Government on proceeding with it. I should like to echo the queries of my hon. Friends on whether there will be enough vets to staff what would appear to be an increased number of duties. I am well aware that the Explanatory Memorandum of the Bill says
"The Bill will have no significant effect on public service manpower."
However, judging from the duties which will be promulgated, by order, under the 12 headings in Schedule 1, they will certainly not have fewer duties, and they might actually have more. That assessment is based on the assumption that there will be no outbreaks of particularly nasty animal diseases such as hit this country from time to time, and which put a considerable strain on the State

621
veterinary services which, to put it mildly, are not exactly overmanned anyway.
Have the vets been consulted on the Bill? I imagine that they have. If so we should welcome an indication from the Minister of the view the vets have put forward. Do they regard the Bill as workable with no addition to their existing manpower?
The Bill gives the vets enough to do without having to cope with an outbreak of some animal disease. Who are we to assume that there will not be one of the periodic outbreaks of foot-and-mouth disease or swine fever?
Hon. Members have referred to rabies. An outbreak of this disease began on the Franco-German border and is moving westwards or north-westwards at a rate of 20 or 30 miles per year. It is expected to be at the Channel coast before 1980. It can be carried by rats and bats and all sorts of other animals as well as by human beings. It is difficult to think of an animal which cannot carry it. If the disease continues to approach the Channel coast at its present rate it would seem that the State veterinary staff will have to be doubled or trebled by the deadline of 1980 or before in order to make even more rigorous and meticulous checks than operate today.
I would not query increased expenditure on that subject. I hope that the Minister will be able to confirm that the Bill is slightly misleading where it says that there will be no additional public expenditure in this respect. More public money should be spent in this direction and I hope that the Minister will say that not a penny will be spared in the fight against rabies.
The vets are busy in other ways. For example, in the West and South-West the Ministry vets are trying to control the spread of bovine tuberculosis. They have taken steps in certain parts to eliminate the badgers that normally live there. I have no doubt that the Minister will soon be reporting to the House on the success or failure of those experiments. If they fail, and if bovine tuberculosis becomes more prevalent in those areas, and perhaps spreads outwards, that may mean yet another demand on the State veterinary service.
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Clause 1(3) refers to an order dealing with animals which
"are brought into Great Britain in such circumstances that they are not imported, within the meaning of this Act".
I take it to refer to animals in transit. If so, what is the position of the many passengers who pass through London Airport every day, travelling between countries on the African continent and, for instance, the United States, and who spend up to 12 or 24 hours in transit? What is the position of an animal in transit with its owner, passing through Britain from a part of the world where rabies is indigenous? Does the Bill give the Government the necessary power to make sure that this traffic is banned?
We are placing too much at risk if we permit animals to come into London Airport, if only for a short stay of an hour or two in the in-transit lounge, if they come from an area where rabies is suspected. The very least that I hope the Bill will do is to ensure that such animals are subject to veterinary inspection on arrival, and are not allowed to proceed if they are found to have any contagious or unpleasant disease.
I welcome the Bill, and am glad that the Government have introduced it.
11.44 p.m.
Mr. Strang: I am glad that once again the Bill has been shown to have all-party support. It was welcomed from the Opposition Front Bench, and the hon. Member for Cardigan (Mr. Howells) welcomed it on behalf of the Liberals. I am particularly glad that my hon. Friend the Member for Durham (Mr. Hughes) was able to take part in our discussions and give the Bill his general blessing. I shall deal as expeditiously as possible, with the points raised.
The hon. Member for Bodmin (Mr. Hicks) and the hon. Member for Norfolk, South-West (Mr. Hawkins) raised the subject of psittacosis. I received a deputation consisting of the hon. Member for Norfolk, South-West and his constituents. I am grateful for the hon. Gentleman's kind words about our meeting. As a result of that meeting the Government set up a review. This is an important matter and a number of interests are involved. The culmination of that review was the Written Answer which I

623
gave shortly after we last discussed the matter.
The hon. Member for Bodmin mentioned the position of the Department of Health and Social Security. There is no division with the Department. There was no intention to indicate that in the reply. We explained that the Department took the view that controls could not be justified on health grounds. There would be other claims for bans and controls on other diseases if it was accepted by the Department that there was justification for controls on health grounds.
The decision was taken on the basis of the problems of human health and the health of agriculture and poultry. On the basis of those considerations the Government decided that it would be right to introduce import controls. That is an important step. Hon. Members will want us to carry out full discussions with the trade, the Royal Society for the Protection of Birds and other interested bodies. It is our intention to introduce these controls. The discussions now taking place will be completed by the summer. The order will be prepared by the late summer, and the intention is that it will come into force within a few months. There are a number of way of doing that. We are thinking in terms of issuing licences and of quarantine to be paid for by the importers of all birds brought into the country. That is important as that procedure was not followed previously. I expect hon. Members to be more than satisfied at the urgency with which we are tackling this important matter.
My hon. Friend the Member for Durham (Mr. Hughes) raised a number of points. I emphasise that there is no running conflict on these matters between the Ministry of Agriculture and the Department of Health and Social Security. The Ministry of Agriculture is responsible for animal and poultry health. The Department of Health and Social Security is responsible for human health. I appreciate that there are areas where the interests of both Departments are involved. However, there is close consultation and co-operation between us on matters of mutual concern. Speaking on behalf of the Ministry of Agriculture, I cannot accept responsibility for human health matters, which fall within the remit of the Department of Health and
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Social Security. My hon. Friend referred to the importation of live animals. I assure him that positively all imported live poultry is quarantined under the present legislation.
Mr. Mark Hughes: Will my hon. Friend confirm that that applies to day-old chicks and eggs?
Mr. Strang: I will write to my hon. Friend about eggs and the questions he raised about bees, and the wider point. My hon. Friend did less than justice to himself when he described himself as a rather amateur bee-keeper. It is apparent to all hon. Members present that he has immense expertise and knowledge of these matters. He asked several specialised questions, and the best way to do justice to those questions is for me to write to him.
The hon. Member for Cardigan referred to sheep scab. National dipping is not required at present, but a dipping area has been designated in the southwest.
The hon. Member for Macclesfield (Mr. Winterton) mentioned several matters, some of which he had raised previously. In answer to him and to the hon. Member for Harborough (Mr. Farr) on the question of manpower, may I say that our first defence is Customs, and our veterinary officers provide the backup here. They are available for consultation with Customs on any animals that are considered to have been illegally landed. Although there is no additional manpower requirement for the purpose of implementing the Bill, we attach the highest importance to increasing the number of State veterinary officers.
When the Labour Government took over, our saddest inheritance in the Ministry of Agriculture was the position of the State Veterinary Service. There was a deplorable gap between the establishment and the number of vets in service. We are doing everything possible to recruit vets to get the number up to establishment as soon as possible. The salary relationship between the State sector and the private sector of the veterinary profession has never been better as a result of recent awards. Furthermore, the vets appreciate that we are doing everything we can to improve the job specification and the career prospects within the State

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Veterinary Service. I attach the highest importance to this, and we are tackling the matter with vigour and urgency.
I should like to take up the points made by a number of hon. Members about the important matter of rabies. I share the concern which has been expressed about the dangers from rabies. It was because of the urgent need to bring our defences against rabies up to date that the Rabies Act was passed last year to implement the recommendations in the Waterhouse Committee's report. The enabling powers in the Rabies Act have been implemented in two orders which came into operation in February. One of those orders deals with improved import controls and the other provides for comprehensive control measures to deal with outbreaks should they occur in Great Britain. It is for this reason that the Bill does not deal specifically with rabies, but brings up to date the general provisions covering the importation of animals and poultry and all potential carriers of animal diseases.
The new powers relating to rabies have been the subject of sustained publicity through the Press, radio and television. It is worth congratulating those people who have been directly concerned with seeking to maximise the publicity in the media for the measures which we are taking to bring home to the general public the urgency and importance of this matter. Anyone who saw the piece in The Times in May, read the feature piece in the Reader's Digest and heard and saw interviews on radio and television about this matter in recent months will appreciate the results that we have secured from issuing Press releases and efforts to get what might be described as free publicity for this important matter.
In addition, we have produced posters and leaflets. Appropriate multi-langauge posters have been distributed to airports and ports. These give graphic warning of the embargo on importing rabies susceptible animals without prior issue of an import licence requiring quarantine, and they carry a message in 13 different languages advising travellers of the importation regulations and the very serious penalties for breaches of them. Such penalties include up to one year's imprisonment or an unlimited fine or both, together with the possible destruc-
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tion of the animal illegally landed if no safe provisions can be made for it.
In addition to these posters, which are on display at airports, ports, ferries and at appropriate foreign exit points, other posters are on display at Crown post offices, veterinary surgeries and similar places.
I assure hon. Members that we attach great importance to maximising our defences against this threat. We will continue to be vigilant, to do what we can to make the public more aware of the situation, and to tighten up our lines of defence.
We can all recall instances in the past when we suffered such a scourge of animal disease from abroad. They have not been many. But now, in addition to what might be called the conventional disease risks, we have the problems posed by rapid air transport. A disease in the Far East today can be on our doorstep tomorrow. We know, too, that it could be transmitted by any one of innumerable possible carriers, animate and inanimate. This is the remorseless, growing threat to our livestock industry. For a hundred years our animal health legislation has been developed with the rationale that prevention is better than cure. I commend the Bill to the House as a measure worthy of its predecessors.
Question put and agreed to.
Bill accordingly read the Third time and passed, without amendment.

INDUSTRIAL AND PROVIDENT SOCIETIES BILL [Lords]
Not amended (in the Standing Committee), considered.
INDUSTRIAL AND PROVIDENT SOCIETIES BILL [Lords]
  Clause 3

    CONSTRUCTION, CITATION, AMENDMENT, COMMENCEMENT AND EXTENT
    Mr. Deputy Speaker (Mr. George Thomas): Mr. Speaker has selected the amendment in the name of the right hon. and learned Member for Surrey, East (Sir G. Howe).
    12.1 a.m.
    Mr. Peter Hordem: I beg to move Amendment No. 1, in page 3, line 9, leave out
    'but does not extend to Northern Ireland'.

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    The Minister of State who will be answering this debate is aware that we had a passage at the end of Committee stage when we inquired about Northern Ireland anti why the provisions of the Bill, with which we are quite content, did not apply to Northern Ireland. In the passage to which I refer the then Financial Secretary, now Minister for Transport, said:
    "I am advised that the authorities in Northern Ireland are looking at this matter. It would be premature for me to say whether concrete proposals will be brought forward, and, if so, within what time span. I understand that the situation is being looked at. En the present—what we must hope to be—temporary state of affairs in Northern Ireland legislative functions are being exercised by the House. In the past, legislation of this kind was reseved to Stormont."—[Official Report, Standing Committee B, 10th June, 1975, c. 24.]
    It was our supposition, on reading the Bill, that the reason Northern Ireland had been left out of consideration was that the Northern Ireland authorities would be bringing forward their own proposals so that the agricultural cooperatives which this Bill particularly affects would have the same benefits as those agricultural and other co-operatives here. The purpose of the amendment is to find out from the Government when they propose to include the citizens of Northern Ireland within the ambit of the Bill.
    The Minister of State, Treasury (Mr. Denzil Davies): May I first congratulate the hon. Members for Horsham and Crawley (Mr. Hordern) and his hon. Friends on their ingenuity in getting an amendment on Report stage to a Bill not amended in Committee. This is not always normal procedure.
    The hon. Member has asked me to comment on why the Bill excludes Northern Ireland. There is no sinister reason. This Bill, as the hon. Member knows, seeks to amend the Industrial and Provident Societies Act, 1965 which is the parent Act. That Act does not refer to Northern Ireland and he would therefore agree, I think, that it would not be appropriate in this Bill, which seeks to to extend it to Northern Ireland when amend the Act which relates to Britain, the parent Act does not.
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    The position in Northern Ireland is dealt with by their legislation, the Industrial and Provident Societies Act (Northern Ireland) 1969. The proper procedure for amending that Act would be through the constitution and procedures relating to Northern Ireland. At present the way to amend that Act in relation to Northern Ireland would be by Order in Council laid in draft before both Houses.
    I can give an assurance that it is the intention of the Northern Ireland Department, in the near future, to place an order in draft before both Houses, and that order will be subject to Affirmative Resolution in both Houses, so that there will be an opportunity in both Houses to debate the order. It will deal, it is hoped, mainly with the same provisions as this Bill. In other words, it will increase the limits in respect of Northern Ireland, as they are increased by this Bill.
    It is hoped that the order regarding Northern Ireland—there may be some slight variation dealing with specific Northern Ireland matters—will be laid in the near future and will bring the position there into line with the provisions for Britain, if this Bill gets a Third Reading tonight.
    I hope that that satisfies the hon. Member and that he will appreciate that there is no reason other than the constitutional one why it would not be appropriate to deal with the position in this Bill.
    In view of that assurance, I hope that the hon. Gentleman will withdraw the amendment and that soon there will be an order dealing with Northern Ireland.
    Mr. Hordern: I believe that this is the Minister of State's maiden speech at the Dispatch Box and from the Conservative benches we offer him our warm congratulations. We hope that we shall see him on many occasions. We have no doubt that we shall. In view of his lucid explanation, which we are happy to accept, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Bill read the Third time and passed, without amendment.

    CONSTRUCTION, CITATION, AMENDMENT, COMMENCEMENT AND EXTENT

      DISALLOWANCE OF LOSSES (CAPITAL GAINS TAX AND CORPORATION TAX)
      Resolved,
      That provision may be made for disallowing losses attributable to transactions within paragraph 15(2) of Schedule 7 to the Finance Act 1965.—[Mr. Denzil Davies.]

      TRUSTEE SAVINGS BANKS
      Ordered,
      That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, any Finance Bill of the present Session may include provision for making 'bank' in the Solicitors Act 1974 include a trustee savings bank.—[Mr. Denzil Davies.]

      ADJOURNMENT
      Motion made and Question proposed, That this House do now adjourn.—[Miss Boothroyd.]

CHILDREN (STERILISATION)
12.6 a.m.
Mr. Frank Hooley: Problems concerning sexual relations bearing on children and family responsibilities are highly emotive and arouse a good deal of public concern, as witness the recent controversies on such subjects as rape and abortion. It is natural that this should be so, since reproduction is the basic biological phenomenon and affects the survival of the whole species, quite apart from the emotional and social overtones of sexual relations between men and women.
Sterilisation is as sensitive an issue in this area as any other since it arouses arguments about the individual's rights, doctors' rights, patients' rights, responsibilities of society at large and, of course, of this Legislature. The subject becomes peculiarly difficult and poignant when the sterilisation of a young child is under consideration.
So far the law has had nothing to say about sterilisation of children. For abortion, there are legal grounds laid down in the 1967 Act but there is no
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statute law governing sterilisation, although under the Family Law Reform Act 1969 a parent's consent is necessary before any operation of any kind can be carried out on a child under the age of 16. Under the same Act sexual maturity could in some contexts outweigh the need for a parent's consent.
But the law has an indirect effect. Any doctor carrying out a sterilisation operation on a child, even with the parent's consent, could lay himself or herself open to an action for damages if the girl as an adult were subsequently to sue for being deprived of the chance of bearing children. This in itself could not remedy her condition of sterility, which might have damaging emotional or psychological consequences for her personality and inhibit the prospect of a satisfying marriage. There is in a sense a legal remedy if at a subsequent stage she were able to satisfy the court that the original operation had been unjustified or unnecessary.
As the situation stands, the protection of a child held by doctors to be too young to take her own decision lies partly in the hands of the parents—and I will return to that—but more in the medical profession's code of conduct and the individual doctor's reluctance to perform an unnecessary operation. There is apparently no way in which lay professionals, even administrators in the Department of Health and Social Security, can challenge the absolute autonomy of a doctor's clinical decision if the doctor chooses to disregard their views.
As far as I know, the doctor is under no obligation to seek the views of professional workers in other spheres, such as psychologists, especially qualified teachers or other persons who may be concerned with the child's welfare or education. This situation can clearly raise serious moral and legal dilemmas for any doctor faced with the decision whether to operate on the reproductive organs of a child too young or mentally incompetent to decide for herself.
The matter can be even more complicated because in some cases—and I have in mind one which has recently aroused particular public concern—there may even be a serious clash of medical opinion about the need for or the desirability of an operation of this kind. One doctor may claim that there might be a high

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chance of the girl, if she ever became pregnant, producing an abnormal child. Another distinguished surgeon might equally claim that the chances of the girl producing a physically normal baby would be very good so far as it is possible to foresee.
Similarly there could be a clash of medical opinion whether the girl's condition was hereditary and whether sterilisation could be of any real value. In a recent case Professor Walter Bodmer, Professor of Genetics at Oxford University, was quoted as saying:
"Even if Sotos Syndrome were inherited—and that is a matter for doubt—it is a hopeless task to attempt to eliminate such conditions from the population by sterilisation of those who suffer from them. It would have virtually no effect in reducing the frequency of the condition in the population. This is because the number of people who manifest the condition is so small compared with the number of carriers who pass it on to their children but who are perfectly normal themselves."
There is the question whether there is any ethical justification for eugenic sterilisation—namely, what has sometimes been called genetic engineering. Dr. Cederic Carter, Director of the Genetics Unit of the Medical Research Council, is quoted as saying:
"I would say there is no genetic justification for sterilising a girl of this age."
That is the age of 11 years. He continues:
"I cannot think of a case where it would be justified. I would advise anyone to wait until the girl was old enough to give her own consent."
If doctors themselves disagree, what about the rights of parents? That is clearly a matter of the greatest importance. Just as clinical freedom is intended for the benefit of the patient and not the doctor, so parents' rights are unchallenged only up to a certain point. The parent obviously is not allowed to batter or ill-treat a child without exposing himself or herself to legal reprisals. It could be argued that to sterilise a young child, even with parental consent, is an infringement of the fundamental human rights of the child itself which society should not permit under any conditions. Emphatically in my view no child should be sterilised because her offspring might at some future date be an inconvenient burden to society. The criterion must be the well-being of the child.
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I believe that there is one point on which everyone—and I am sure this includes my hon. Friend the Minister of State, Department of Health and Social Security—will agree—namely, that a decision to carry out an operation of this nature on a child raises serious and fundamental questions of human rights and public policy and has fairly wide ramifications. For example, what attitude should we take in regard to a child who may be so mentally subnormal as never to be likely to be in a position to give or withhold consent on the basis of a clear understanding of what was proposed?
Secondly, there is the question of a child who may be in the care of a public authority because the child has lost its parents or because the authority has been given power to take the child from the normal parents by court order. In that case should the public authority have the right to pronounce on a question of sterilisation vis-à-vis the judgment of the doctor or doctors?
Thirdly, there is the jealously guarded principle of the clinical freedom of the individual doctor to decide what he judges to be the best interests of his patient.
Fourthly, if society permits or allows to go by default sterilisation in the case of one form of abnormality, what about other diseases or other forms of abnormality, such an spinabifida, mongolism and so on? Where is the boundary to be drawn and who should be permitted to draw it?
My own inclination—this is a personal opinion—is that the sterilisation of a child under age 16 should be prohibited by law and that it might be convenient that a provision to this effect should be incorporated in the Children Bill which is now before Parliament. That would be a possible way of accomplishing the legal prohibition if the House felt that this was necessary——
Mr. Deputy Speaker (Mr. George Thomas): Order. I would remind the hon. Gentleman that he is not permitted in an Adjournment debate to seek legislation.
Mr. Hooley: I am grateful to you, Mr. Deputy Speaker, for bringing that fact to my attention. In making my

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remarks I was in no way calling in question the good faith of doctors who in certain cases may believe that sterilisation is necessary, nor am I in any way questioning their professional integrity. But I base my proposition first on the basic human rights of the individual child and, secondly, on my faith in the advancement of medical and natural science to solve problems of this kind in a scientific way without exposing children to damage or danger which might inadvertently be caused if sterilisation were permitted without any adequate safeguard.
12.13 a.m.
The Minister of State, Department of Health and Social Security (Dr. David Owen): I am grateful to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) for raising the wider question of sterilisation of a child under 16. He is naturally concerned about the particular case of the girl of 11 in Sheffield about whom so much concern has been expressed. As he knows, an application has been made for her to become a ward of court and that matter will be considered on 8th July by Mrs. Justice Heilbron. It would not serve the interests of that hearing—although I am in no way trying to say that the matter is sub judice—if I were to go into that case in great detail at this moment. That may be a matter for another time.
It is interesting how the ward of court procedure has been used in this case. Any person, including a body corporate or public corporation, may make an application under the rules of court to make a minor a ward of court. The officers of the court will usually satisfy themselves that such a person has a proper duty to or interest in the minor as to warrant the making of such an application. That application has the effect that the minor becomes a ward of court immediately, but if no further steps are taken in the matter that application and that status of the minor lapse after 21 days. If, however, the appropriate further steps are taken within that period, the minor remains a ward of court until such time as a registrar or judge has had the opportunity to consider the matter in the light of all the available evidence and to make some permanent order in the matter.
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In certain circumstances the minor is the proper defendant to the application but, being a minor, cannot represent himself and, where there is a parental dispute or there may be no parents, is in any case unlikely to have the means to enable him to do so. In those circumstances the Official Solicitor is invited to act as guardian of the minor for the purposes of the application and the hearing, and if he accepts nobody in those circumstances would suggest that the interests of the minor would not be more than adequately looked after.
The procedure used in this case is a method of trying to ensure that some way can be found for the hearing of possibly an alternative case as representing the best interests of the minor.
I share the great anxiety expressed by my hon. Friend—an anxiety which has been widely expressed—about the sterilisation of children. It raises profound moral and ethical issues to which there are no easy answers.
My hon. Friend said he felt that such a thing should be prohibited by law. It would make it easier if I were able to tell him and the House that there were no grounds for carrying out the procedure on a young child of, say, 15 or younger. But I am advised that I cannot.
There are what I would call "no argument cases" where sterilisation would be necessary. The treatment for a cancerous growth of the pelvis requiring pelvic clearance will inevitably include the sterilisation of the girl. A cancerous growth of the genital organs of a boy will require equally drastic treatment. Though rare, it can affect youngsters of this age group.
There are more controversial situations, such as the pregnant child of normal intelligence. It is a sad reflection on our society that several thousand children under 16 become pregnant every year. There will very occasionally be among them a girl for whom the completion of a pregnancy at any stage of her life would carry grave risks for her health or even the risk of death. For such a girl, termination of pregnancy would be justified in law, and the girl might be advised to be sterilised at the same time.

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There will also be again very occasionally a girl whose family is subject to a severe genetic condition, and who might not wish to bear a child which could eventually suffer from that condition The arguments for sterilisation in such a case will have to be balanced, but they may be very strong. But it is not possible, I believe, to lay down hard and fast rules. Each case must be looked at on its own facts and the facts considered bearing in mind what is known about the illness at the present time and the state of genetics. What is thought today to be fatal or incurable may not always be so.
There is always the risk that a child who is sterilised when her pregnancy is terminated may come to regret her decision. I am assuming that, where the child is of normal intelligence, a decision of this importance would never be made without her consent after the position had been explained to her in detail. To act otherwise would be hard to defend if the child were 15 or 16, and we are increasingly coming to a situation where a child is often asked about these things and is consulted.
There is another category—the vulnerable girl who has reached puberty. There are also a number of girls who are mentally subnormal and sexually vulnerable. If there are indications of hereditary abnormalities in her family, and if she is unable or unwilling to use an IUD or oral contraceptive, in such a case, it is possible to consider whether sterilisation would be in her best interests because of the problem of obtaining her consent in the full sense of that term. The consideration can become urgent if the girl is already pregnant and termination is contemplated, but I readily accept that these cases are much more arguable.
We ought not to think of this problem wholly in terms of girls. I mentioned the possibility of cancer in boys. The statistical information seems to suggest that there have been some vasectomy operations on boys under 16.
What I think is necessary—and this case in my hon. Friend's constituency has raised it very considerably—is that we should know more facts. The statistics on sterilisation are not comprehensive, but what is available has been collected from
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regional health authorities. We have already been told that in one region the sterilisations carried out on children under 16 were, for 1973, one boy and no girls, and for 1974 three boys and no girls. Another region has reported none in either year of either sex. Figures from only two of the 14 regions cannot be given any statistical significance for the country as a whole, but I shall be looking into this.
We are also examining the Hospital Activity Analysis (In Patients). We are trying to break down from that which cases would come under the classification of sterilisation. However, these figures include those cases in which sterilisation resulted from the operation of hysterectomy which may have been performed at the time of the abortion as a life-saving procedure. It means that the statistical base from which to disseminate this information is not very full.
Having done this, we then have to question some of the issues which my hon. Friend raised. I shall not go into matters involving legislation. Indeed, I should be out of order if I were to do so. But there is a Select Committee of this House which at the moment is reviewing the medical termination of pregnancy. It may be more appropriate to consider this matter when that Committee makes its proposals.
This case has highlighted the fact that there is no obligation for more than one doctor to be involved in the decision, whereas we make it an obligation in a termination of pregnancy that two doctors are involved. In my judgment, it would be most unwise for one doctor to make such a decision.
My hon. Friend referred to the more difficult problem, especially when taking into account social grounds in making a decision, about the consultation of other professional bodies. We have to recognise that, in a much more interdependent decision making process which generally health care has become, there is a need to involve other professions. The final responsibility will always have to rest with the medical profession, but the medical profession is not alone in making that sort of judgment.
I have already indicated to my hon. Friend that there is a lot to be said for adopting the case conference approach in

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procedures of this kind, bringing in all the relevant professional opinions. At times, they would be educational, psychological and psychiatric specialities. At other times, it would be a geneticist or a specialist in cancer. I am sure that the House would feel that the decision to sterilise a child was of such moment that it should not be made without all the available information from as wide and from as specialised an information base as we could possibly establish.
Although these are rare cases, they raise such profound issues that we ought to ask ourselves whether we should consider a code of practice. It may be that the professions concerned would welcome such a code. It is not an easy situation for a doctor to find himself having to make such a decision, often in a blaze of publicity.
Then we have to ask ourselves whether a code of practice, if adopted, should be reinforced by law and whether there are legislative safeguards that we should invoke. In effect, we are seeing in this case the invocation of an existing legislative procedure. It is the ward of court procedure. But is there some ground for having further legal safeguards?
However, I must tell my hon. Friend that I think that it would be very difficult to lay down any strict criteria which would have a universal application. Each case will be different. Each case will involve different considerations. But what has come out of this one case has made me convinced that we should now look at this issue. I undertake to my hon. Friend to look at this, taking account of all the professional opinion available to me, and to inform him and the House of the conclusions that we reach. It may take a few months to do. We shall not have the statistical information for some time, and I should welcome the views of my hon. Friend and of the professional bodies on the subject.
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There is a need for further thought about this issue. As I say, the one thing that I cannot promise now—and I hope that I have convinced my hon. Friend that it would be wrong to do so—is to prohibit sterilisation by law. Regrettably, there will be circumstances when the sterilisation of a child under the age of 16 will be necessary. What we have a duty to do is to ensure that those decisions, when they are made, are made in a manner which will be acceptable to public opinion as a whole.
That is not to say we should challenge the right of doctors to make their own clinical judgment, but we should ask them to see that their clinical judgment is part of an overall professional judgment and to weigh the opinions of others when they form their view in many of these cases.
I have not mentioned the views of the parents. That is a sine qua non. It would be impossible to conduct such an operation without the agreement of the parents, other than in the most exceptional circumstances. In the whole question of legislation and attitudes towards children, we know that we cannot always assume that the views of the parents are necessarily in the best interests of the child. They are in the vast majority of cases, but there are times when the public duty and our social duty is to ensure that the interests of the child are given a fair hearing—and that may not always come only by listening to the views of the professions or the parents.
In that spirit, I should like to assure my hon. Friend that I am taking this issue very seriously and looking at it deeply. I hope to reach some conclusions in the next few months.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes to One o'clock.