HC Deb 21 October 1975 vol 898 cc397-411
Mr. Millan

I beg to move Amendment No. 28, in page 31, line 15, leave out 'or compensation payable by virtue of Schedules 1 or 3' and insert payable by virtue of paragraph 10 of Schedule 1 or of regulations made under paragraph 3 of Schedule 3'. The amendment removes from the Agency the obligation to increase the pensions of members of the Agency and compensation payments which may be made to present members of the SIEA and SICRAS by reference to the Pensions Increase Act 1971. Those provisions for automatic increases under the terms of the Pensions Increase Act 1971 are perfectly relevant from the staff point of view and are so provided, but they may not in every case be relevant from the point of view of membership. It would be necessary to examine the member's individual circumstances, and in some cases it would not be appropriate to make these provisions apply automatically because the person concerned might otherwise be covered perfectly adequately.

It will be within the power of the Agency to apply similar provisions—that can be done administratively—but there will be no obligation to provide for a comparatively small number of people automatic pension increases which will not necessarily be appropriate in all cases. The amendment does not prejudice the interests of the staff. They are fully covered and will remain covered even with the amendment.

Amendment agreed to.

Order for Third Reading read.—[Queen's Consent on behalf of the Crown, signified.]

11.13 p.m.

Mr. William Ross

I beg to move, That the Bill be now read the Third time.

Since the Second Reading debate on 25th June, the Bill has been subjected to full consideration both in Committee and on Report, and it has emerged a better Bill. In particular, I am pleased that we have reinstated in Clause 2(2)(b) the function which had been deleted elsewhere whereby the Agency is enabled to carry on industrial undertakings.

Today, on Report, the House accepted an amendment which will require the Agency to exercise this function through companies within the meaning of the Companies Act or through a partnership firm. This is a valuable clarification of the Bill. It will, I am sure, commend itself particularly to the CBI in Scotland and pave the way for full and fruitful co-operation between the Agency and the private sector. That is important.

It is absolutely essential for Scotland's future prosperity that the public and private sectors should work closely together, neither suspicious of the other's motives, but both dedicated to the development of the economy and the strengthening and expansion of existing firms, the stimulation of new ideas and the creation of the new job opportunities which Scotland so badly needs. One of the prime purposes of the Agency will be the provision, maintenance or safeguarding of employment. This policy will commend itself to existing firms and the people of Scotland generally.

In preparing the Bill, we have consulted all sorts of interests and organisations whose work will be touched upon by the functions of the Agency. It is only fair to say that across the board there is a wide general welcome for the Agency and a recognition that a body with the remit and power we propose can play a crucial part in the revitalisation of the Scottish economy.

The time for talking is now nearly over. We are at another stage. The Chairman has been appointed. Sit William Gray is uniquely well fitted for this task, with his wide knowledge of local government, his valuable experience as Chairman of the Scottish Special Housing Association and of a new town, and he is conversant with the problems of industry.

The Secretary of the Organising Committee has been established. Premises have been acquired in Sauchiehall Street and, with admirable speed, have been adapted to house the nucleus of the Agency, with room for expansion. In other words, we are determined to press on as quickly and speedily as possible to get the Agency established.

I hope soon to announce the membership of the Organising Committee, but meantime advertisements have been published for the post of chief executive, which will be of vital importance. I understand that there has been a fairly good response, and I hope that we shall be in a position to consider a short list very soon. We are determined to get these things right. It is our intention to have the Agency operational as soon as possible after Royal Assent. I think I can say that it will be operational before Christmas.

One of the first tasks of the Organising Committee will be to meet staff representatives of the Scottish Industrial Estates Association and of the Small Industries Council for the Rural Areas of Scotland to go into detailed arrangements about their absorption within the Agency. This is clearly important, and I see no fundamental problem, if only because they will be part of an expanding organisation. But, naturally, the staff will want to be reassured that their interests will be safeguarded.

The Agency will begin its work in difficult times. Despite what may be said by anyone, Scotland cannot be insulated from the economic difficulties of the United Kingdom and the Western World. Although the oil developments have given the economy greater resilience, we face a serious problem of unemployment.

I think that in the Agency we have a means of finding a longer-term solution for a comprehensive and co-ordinated attack on the deep-seated structural problems of the economy. I have heard it said today by hon. Members opposite that we should not look for miracles. It is tempting to look for ready answers and speedy action when establishing a new agency. However, I am confident that the Agency will make an effective impact, but among its tasks will be the solution of some of the most intractable problems of the economy, and these will not be solved overnight. Equally, the Agency must not spend too much time on further studies. The Agency will be drawn widely from people with experience of the various sectors which it will cover. I am sure that the House will join me in wishing the Agency every success in its challenging task. I am happy to commend the Bill to the House.

11.20 p.m.

Mr. Buchanan-Smith

Having listened to the Secretary of State, I can understand the sense of relief with which he has reached Third Reading. If we had not passed the Bill into law the right hon. Gentleman might have been left wondering what to do with the premises in Sauchiehall Street. That is obviously behind his sense of relief at having reached this stage tonight.

The right hon. Gentleman said that we have had full consideration of the Bill. I would agree with that. However, this is an important Bill—I have never tried to deny that. For it to reach the House at such a time in the Session is not necessarily the best way of dealing with such legislation. This is a lesson that all of us should heed. Legislation of this sort should be introduced rather earlier in the Session. That is an aside rather than a main point.

I join the right hon. Gentleman in wishing well of Sir William Gray, the Chairman-designate of the Scottish Development Agency, in the task ahead of him. Sir William is a man of realism and of broad administrative experience. As my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) said earlier, he is coming to an area of industry that is, to some extent, new to him. It is important that he has the right calibre and quality of people around him. All of us recognise his abilities and achievements in Scotland, and my right hon. and hon. Friends and myself genuinely wish him well in the task that is before him.

I believe that there are two matters on which the Agency will be judged. They will show in time whether the Government were right or wrong in establishing this body to do the task that has been set for it in Scotland. One matter that the right hon. Gentleman mentioned which is the 64,000-dollar question regarding the work of the Agency is the finance available to it. The right hon. Gentleman has warned the House not to expect miracles. I think that he was right to warn the House that the Agency will be successful only to the extent of the financial resources that it has at its disposal.

As the right hon. Gentleman fairly and correctly indicated, we are not living at a time when the Government are flush with funds and when there will be a lot of money to spend on the purposes for which the Agency has been established. In global terms the figures look very good, but people will judge the Agency by the money that the Government will be able to spend. In turn, the money that the Government will be able to spend will depend upon the success or otherwise of their financial policy for the United Kingdom as a whole. That is the first matter by which we shall judge the success of the Agency—namely, the ability of the Government to give it the funds necessary to fulfil the tasks that the Government have set it.

The second matter by which we shall judge the Agency is the way in which it carries out its tasks, whether it is better or worse than the bodies now responsible. I refer specifically to the issues of derelict land and the improvement of the environment in Scotland, jobs that are now the charge of the local authorities in Scotland. If it can do its job no better than existing local authorities we shall be entitled to ask in future years whether the setting up of the Agency and the accompanying bureaucracy was justified. I hope that it will lead to an improvement and to quicker and more effective action. If it is merely set up as duplication to what is already being done by local authorities, the vision some people have of the work of the Agency will have been fulfilled. To justify its creation it must carry out its tasks more effectively than the local authorities.

I come to the basic qualification and reservation that I hold, which the right hon. Gentleman has mentioned namely Clause 2(2)(b). Here is the one thing which motivated Conservative Members in their original opposition to the Agency. It is sad that the Government have reinstated these powers, enabling the Agency to intervene in profitable concerns in Scotland and take them over. It is here that there is a basic philosophical divide between us and the Government. We believe that the function of the Government is to facilitate the operation of industry, whereas under Clause 2(2)(b) the Government take a different attitude, underlining the difference between us.

The Government do not want to facilitate the operation of industry—they want to see the operation of industry carried out by the State. Here we must differ. I hope that in operating its functions the Agency will concentrate on those tasks which we all support, such as facilitating the operation of industry in Scotland and improving the environment. I am sure that I express the feelings of my right hon. and hon. Friends when I say that I hope that the Agency does not get bogged down with its functions under Clause 2(2)(b) and lose sight of its other functions. I believe that Clause 2(2)(b) is inserted for purely doctrinaire reasons. If the Agency wishes to have the support, sympathy and understanding of the people of Scotland it will do well to steer clear of that clause. With that one major reservation I wish the Agency well in its other tasks.

11.27 p.m.

Mr. Robert Hughes

I am glad that even with that reservation, the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) has cast aside in the main his objections to the Bill as a whole. It seems as though all parts of the House now support the Bill. No one will be surprised to find that I wish the Bill and the Agency well. I hope that the Agency will help new industry, co-operatives of all kinds, and new enterprises. If the Agency is to succeed it will need vision, imagination and, above all, courage. It may need to take controversial decisions. If it does not, it may not be facing up to its task. I trust that the Agency will have the nerve to sustain its point of view when it is under attack, as no doubt it will be.

The terms of the Bill give the Agency a wide remit for the regeneration of the Scottish economy. No one who has looked at the Scottish economy recently, or at its history, can deny the need for such a wide remit. We have heard much of urban deprivation and derelict industry. Such things bear witness to the fact that the free enterprise system has failed the people of Scotland. If it had not, there would not be any necessity for the Agency.

Mr. Nicholas Fairbairn (Kinross and West Perthshire)

We are to invest £300 million in private enterprise under this Bill. Where is it coming from? From private enterprise, is it not?

Mr. Hughes

It will not come solely from private enterprise. It will come from taxpayers, whether companies or individuals. At least the hon. and learned Member recognises that there is a considerable amount of money involved which will be invested to provide funds, even for the private enterprise system.

Over the years we can see that the difficulty in Scotland, in common with the rest of the United Kingdom, has been that private enterprise companies have always put profits before people. That is why I welcome Clause 2(2)(b), which gives the Agency the opportunity not simply to rely on giving loans to companies to keep them going, but to taking part in new enterprises.

The day has long passed when we regarded the role of the State as being one of propping up companies until such time as they might become profitable and then letting them go back to private industry, or when the only role of the Government was simply to act as a source of funds, through whatever industry Act it might be, in order to keep companies going or to give them particular advantages.

I believe that the day is coming when the State must intervene even more in public enterprise. But I want to say one word of caution, because I believe that in some of the remarks made by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) there was over-simplification and seeking for an easy answer. No one can say that the problems of the Scottish economy can be solved in the context of Scotland alone, totally dicorced from the United Kingdom economy.

I believe that the Scottish Development Agency has a very important role to play and that it will succeed, given the backing of all quarters of this House. I wish it well, and I am sure that in all parts of Scotland the passing of this Bill tonight on its Third Reading will be widely welcomed. It will be seen as the fulfilling of an election pledge by the Labour Government, and I believe it is being done in the right spirit and with the right intention.

11.32 p.m.

Mr. Crawford

On the Second Reading there were three fairly clear positions. The first came from the party which wanted none of it, the Conservative Party. The second was from the Government, which sought to use the SDA as something of a public relations exercise, with a lot of froth and not much gravity. The third was from my own party, which wished to fashion it into something bigger, less dogmatic, more democratic and more accountable.

The Conservatives, I gather, have had a change of mind and are not going to oppose tonight, apparently. I am delighted to hear it. I am very glad of their change of heart. They seem to be changing their minds on several things these days.

The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) said that he opposed Clause 2(2)(b) on Second Reading—

Mr. Buchanan-Smith

Will the hon. Member do me the courtesy of reading my speech?

Mr. Crawford

I believe that the hon. Gentleman said that he voted against the Bill because of Clause 2(2)(b). I said to the Secretary of State at the time that the SDA Bill was a pygmy Bill, and I have not changed my mind about that. We have not had an answer to how long the £300 million will last or how much extra this is on top of the existing income, how we are to fashion procedures for getting more money, or what is the proper answer to the question whether or not the SDA is free from the National Enterprise Board.

I feel that the SDA, as it stands, is mutton dressed up as lamb, but some meat is better than none, and at least we have some morsels.

My party is disappointed that the Government have not seen fit to accept the need for a much higher rolling budget of £300 million a year. Let no one say that Scotland cannot afford it. At the end of the decade the oil revenue will be £3,000 million a year, and £300 million is only one-tenth of that.

Mr. Robert Hughes

I hope that the hon. Gentleman is not saying that, irrespective of the figures from North Sea oil, the government of the Scottish economy can be solely north of the border, with no regard whatsoever to United Kingdom economic policies.

Mr. Crawford

I say that our problems are greater, with our higher unemployment and our urban deprivation. The hon. Member for Aberdeenshire, West (Mr. Fairgrieve) says that Scotland does not have higher unemployment than the United Kingdom. What I say is that we in Scotland have higher unemployment than the rest of the United Kingdom. The statistics show this. The figure for the United Kingdom is 4 to 5 per cent. and for Scotland it is between 6 and 7 per cent.

The Scottish National Party is disappointed that the request for a higher budget has not been accepted by the Government. We are disappointed that the amendments seeking decentralisation and internationalisation of the activities of the Scottish Development Agency have not been accepted. Above all, we are disappointed by the wriggling of Labour and Conservative Members on the question of the answerability of the Scottish Development Agency to the Scottish Assembly. It is no use saying that the Assembly will have power over the economy and industry if the Scottish Development Agency is not directly answerable to it.

It is worth repeating the anxiety felt by the Scottish people about an alliance of the Conservative and Labour Parties in Committee. The Conservative and Labour alliance in Committee was a monstrous and shocking alliance against Scotland.

Mr. Fairgrieve

As a Conservative Whip on the Bill, I point out that on no occasion was there an alliance between the Conservative and Labour Parties. The hon. Gentleman knows that full well.

Mr. Crawford

The hon. Member for Aberdeenshire, West knows that on three occasions Conservative and Labour Members voted together against Scottish National Party amendments.

It is clear that the Scottish Development Agency, as it stands at present, will no more than begin to solve Scotland's problems. Certainly it will not begin to meet the exciting challenges which I believe face the Scottish economy. However, Scotland needs a Scottish Development Agency and it must have one. Although this Agency leaves much to be desired, it is at least a faltering step towards the right goal.

The Scottish National Party sees the Scottish Development Agency as a beginning and a new departure which, with self-government, can have some of the dogma written out and be fashioned more fully and nearly to the hearts, desires and economic needs of the Scottish people.

Mr. Dempsey

I shall make a brief intervention. I have been very tolerant. I have listened for a long time to all sorts of claptrap from the Opposition. I am delighted that the Bill has, at last, reached Third Reading, and I hope that it will be approved.

I am pleased that we are to concentrate on the principal purpose of the Bill; namely, the expansion of employment in Scotland. If we fragment our efforts in Bangladesh, Pakistan and other parts of the world, as we have been advised to do, it would be very foolish. We must not allow a domestic instrument of this nature to be abused in that way. Therefore, we should all welcome the Bill.

It must be borne in mind that there is grudging admiration by the Opposition. The Agency when it becomes operative will be of inestimable value to the people of Scotland.

I should like to direct the attention of the Agency to the approaches which I believe should be made towards ensuring the success of this proposed legislation. I believe that the Agency should approach the problem from the point of view of getting its priorities right. Its priorities should be in the areas where we have the highest unemployment. I happen to come from the constituency of Coatbridge and Airdrie, which is part of North Lanarkshire, which is at present among the top three of the unemployment league in Scotland. Indeed, in the last return we had nearly 500 boys and girls without jobs in that part of Lanarkshire, and that is only a corner of the new Strathclyde Region.

It is my belief that certainly Sir William Gray should approach the problem by applying the very desirable principles of this legislation to the areas needing it most.

I, too, heard the Front Bench speaker for the Conservative Party talk about need and the desirability of meeting needs where they are greatest. That is why my hon. Friend the Member for Paisley (Mr. Robertson) congratulated the Conservative Front Bench speaker on his conversion to Marxism, on adopting the principle— to each according to his needs". The most urgent need is in Coatbridge and Airdrie in North Lanarkshire as well as in two other areas on the mainland of Scotland. I should like the Agency to make a study of the steps it can take and the shots in the arm it can give to industrialists to expand their enterprises, to increase their manufacturing capacity, with a view not only to maintaining existing jobs but to providing additional jobs.

One of the difficulties we experience when it comes to promulgating legislation is that when it comes to the construction of small factories there is an attempt to pass the responsibility on to local authorities, which reply that, because of the difficulty about borrowing powers, they cannot proceed to erect small factories. In my part of the country more than 100 people have expressed interest in small factories to meet the needs of spin-off jobs from the oil development in the north. Not one small factory has been built. I should like to direct the Agency's attention to this problem, which would be within its remit and which would make a substantial contribution to the lowering of unemployment in my area of Scotland.

When we seek to attract industrial enterprises to come to my area the male employees will say "We would not mind coming to North Lanarkshire, but our wives and families will not come".

Mr. Canavan

It is not a salubrious area.

Mr. Dempsey

My hon. Friend knows: he comes from the area. We should like factories to be titivated, brought up to date, and re-modelled. Layouts should be improved. Attention should be paid to the provision of recreational and other amenities. This is one of the main inducements for industrialists to come to areas like North Lanarkshire and provide much needed jobs.

I wish the Agency well. I believe that it can not only meet the challenge but will have the personnel, the capacity and the experience to meet the challenge.

11.44 p.m.

Mr. Canavan

The declared aim of the Bill is, first, to regenerate Scottish industry and to provide more jobs for Scottish workers. I suppose that the four parties would agree on the legitimacy of the aims. It is a pity that the Liberals cannot be here tonight. They are obviously away home to their beds.

There appears to be a difference of opinion in the other parties. At every stage the Tories have, in accordance with their tradition, fought tooth and nail to preserve the rights of private enterprise. This is the private enterprise which has failed Scotland in the past. The Tories see this Bill as a threat to the rights of the private enterprise they are determined to protect. They made sure that the Bill would not go to the Scottish Grand Committee for a Second Reading and the Government had to re-introduce it in the Lords.

Mr. Fairgrieve

Has the hon. Member never heard of the Scottish whisky, textile, shipbuilding and agriculture industries? Those, I believe, are private enterprises.

Mr. Canavan

I have heard of those industries, and the Scottish shipbuilding industry, to take one of the hon. Gentleman's examples, has had gross inefficiency and mass unemployment under private enterprise. That is why the Government are determined to take it into public ownership.

The Scottish National Party at least believes in some kind of agency, though, if we are to believe its industry spokesman, it does not believe in a substantial public enterprise role for the Agency. Hon. Members from the SNP have tried to introduce red herrings into this debate with arguments about the initial allocation of funds to the Agency.

I admit that £200 million, rising to £300 million with the consent of the Treasury, is not enough to solve Scotland's industrial and employment problems, but it is only an initial allocation and there is no reason why this House or possibly even at some future date a Scottish Assembly should not allocate more. Of course, it would not matter if the Government were giving the Agency £2,000 million—the SNP would still conduct the argument like auctioneers by calling for £5,000 million or £10,000 million. The Government are right not to be distracted into this kind of debate.

The real argument is not about the initial allocation of funds or whether the Agency should have an office in Tobermory or Timbuctoo—we spent an hour earlier discussing the location of offices—but about the nature and powers of the Agency. Will it be just another agency to prop up the existing system or will it radically change the system? Will it be a Socialist Agency or a body which, to use the new word introduced tonight by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), facilitates industry rather than intervening? When public money is being spent, there must be public control, and this means a strong public enterprise rôle for the Agency.

The SNP has the naive concept that budding young Scottish businessmen, or even those from multinational companies, should be able to say to the Chairman, Sir William Gray, "Look at me, I am Douglas MacCrawford. I would like to start a haggis factory in Inverness. I have a degree from Cambridge University and am a very successful businessman".

Sir William, in his munificence, should be duty bound to give him £2 million or £3 million. If he makes a loss and the business collapses within a few months, that is just too bad; that is public money down the drain. If he makes a profit, the Agency will, in time, sell off its holding to some private profiteer. That appears to be the daft concept envisaged by the hon. Member for Perth and East Perthshire (Mr. Crawford).

Mr. Crawford

I should be delighted if the hon. Member for West Stirlingshire (Mr. Canavan) could join the haggis factory to beat the haggis out of the heather.

Mr. Canavan

The hon. Member's sense of humour is quite good. It is a pity his political and economic judgment do not measure up to the same standard.

The Agency must not be allowed to degenerate into just another bank for handing out public money to private enterprise. There must be some form of accountability, and the only way to get that is by extending public ownership.

My greatest regret is that new Clause 1 was accepted this afternoon. It will prohibit the Agency from entering into a real public enterprise role in the newspaper industry and other media in Scotland. With that reservation, I welcome the Bill and look forward to its helping to create a better society in Scotland, a better Scotland where the living standards and job security of Scottish workers can be vastly improved.

11.53 p.m.

Mr. Millan

I am glad that the Bill has had a general welcome. I would not have spoken now except that a number of points have been raised to which I think some hon. Members might want answers.

As my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) said, it will be necessary for the Agency to have priorities and to concentrate its attention in the early stages in particular in the areas of activity and in the geographic areas of Scotland where its efforts will do most good. I repeat that in terms of industrial dereliction and the need for industrial regeneration, the West of Scotland is obviously a priority area for the Agency.

I say that with no disrespect to other areas of Scotland and without in any way detracting from the point made earlier this evening that the Agency will have an all-Scottish rôle. It has a wide remit because it will need it if an attack is to be made on all fronts on Scotland's industrial and environmental problems.

If Clause 2(2)(b) has not been included the Agency would have been weakened and would have been in a sense simply picking up a number of disparate functions currently carried out by different agencies, collecting them together in a reasonably coherent form but lacking the element of enterprise and initiative of its own hand which provides an additional ingredient for tackling Scotland's problems.

It was always our main intention that the Agency should be able to act in this way, not simply handing out munificence to private enterprise or concerned only with factory building and so on. We wanted an agency which would do things and involve itself in industry directly, and that is what Clause 2(2)(b) does.

I believe we have provided the right range of functions for the Agency. The canards about the Agency being a subsidiary of the NEB have been dealt with most effectively during the passage of the Bill. It is tragic that the hon. Member for Perth and East Perthshire (Mr. Crawford) should even at this late stage be talking in slogans which have been dealt with in Committee and on other occasions. The poverty of ideas about the Agency on the hon. Gentleman's bench has been for me one of the most depressing features not only of today's proceedings but of the whole proceedings on the Bill.

The Conservative Party scores slightly higher marks, but I cannot say more than that, because at the end of the day the Opposition have been extremely reluctant converts to the idea of the Agency. I think that in their heart of hearts many Conservative Members would love to vote against the whole concept of the Agency, but they have not the political courage to do it, because they recognise that it has been widely welcomed by a range of Scottish opinion on both sides of industry.

The Agency starts its life with a tremendous amount of good will in Scotland. I believe that with that good will and co-operation, and with the wide range of functions that the Agency has under the Bill, it can make a major contribution to Scotland's industrial regeneration. That is what we intend. We wish the Agency well in the work that it will now take up.

Question put and agreed to.

Bill accordingly read the Third time and passed, with amendments.