HC Deb 23 October 1975 vol 898 cc823-31

Amendments made: No. 57, in page 25, line 16, leave out 'such sums to the Agency' and insert 'to the Agency such sums—

  1. (a) without prejudice to section 11(14) above, in respect of administrative expenses relating to any of their functions, and
  2. (b) such other sums'.

No. 58, in page 25, line 42, at end insert— '(4) References to borrowing in this paragraph do not include borrowing under section 11 above.'.

No. 59, in page 26, line 4, after 'borrow', insert 'from him under paragraph 3 above'.

No. 60, in page 27, line 24, leave out '10' and insert '11'.—[Mr. Alec Jones.]

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

8.42 p.m.

Mr. John Morris

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

The Bill, as I have said previously, is a historic one for Wales. It is the first wholly Welsh Bill dealing with major economic and environmental questions, and a wide spectrum of opinion in Wales looks to the powers it contains to make a real contribution to overcoming some of our most deep-rooted problems. The Welsh Development Agency will be the vehicle for tackling some of the obstacles which stand in the way of the growth of a vigorous and dynamic economy in Wales.

The Government's intention to introduce this measure was made clear in their manifesto. A year later finds us in the closing stages of the Bill, and the Agency will be in operation by the beginning of next year. I have been encouraged at the wide measure of support the Bill has received throughout the Principality, with some exceptions.

I was sad to read that in the Liverpool Daily Post on 4th March this year the hon. Member for Caernarvon (Mr. Wigley) said that it was little more than a glorified land clearance authority". He went on in his statement to say: It is quite clear that the Secretary of State for Wales has lost the battle to achieve a really powerful and useful weapon in the fight for economic development for Wales. He went on to say that the Agency is little more than window-dressing". That was a sad comment. I hope that he will not now do a political somersault and try to seek credit for it at the same time.

The Bill has been changed partly by amendments inserted by the Government and partly by amendments accepted by the Government. In the process we have had to restore certain important measures which were removed in another place. If they had not been restored, the ability of the Agency to help in the regeneration of Welsh industry would have been significantly reduced.

The attempt to delay and then to draw some of the teeth of this important Bill will not have gone unnoticed in the Principality. The Opposition Peers cut away at some of the crucial powers which the Agency needs to enable it to make a powerful contribution to improving the health of the Welsh economy. In the present serious economic situation, Wales will look to the Agency to use the whole armoury of its considerable powers to push forward the re-invigoration of the economy in Wales. I do not apologise for repeating what has been said by many other people on other occasions: private enterprise, notwithstanding the virtues which hon. Members opposite attribute to it, has not succeeded in meeting the total needs of the present-day economy, and the Agency will seek to remedy some of its deficiencies. The Agency will have a number of important functions to perform. It will continue to carry out the work previously done by the Welsh Industrial Estates Corporation.

The Agency will be responsible for the work of clearing derelict land and for improving the environment, establishing close relationships with the local authorities, which, together with the Derelict Land Unit, have done such good work, and enabling us to enjoy the improved appearance of the landscape and also providing us with sorely needed land on which to build our new factories.

A novel function will be the provision of finance for industry; the Agency will also be able to carry on industrial undertakings itself, a function which it will undertake through subsidiaries. It is in this field that we shall look to the Agency to show flair and imagination in deploying its resources so that it can help to maintain industrial activity in Wales at a high level. It is for this reason that I feel grieved that Opposition Peers chose to remove this important function from the Agency.

A deal of concern has been expressed about the unfair competition which some people think will face existing firms from undertakings which the Agency may set up or support. We have said it before—and I say it again—that it is not intended that the Agency's undertakings would be put in the privileged position of being able to compete on unfair terms. One of the purposes of the Agency is to safeguard employment, and it could hardly claim to be doing that if it exercised its industrial functions in such a way that the position and prospects of existing firms were damaged. The board of the Agency, some of whose members will have direct experience of the industrial and commercial world, will carry out its functions responsibly and sensibly.

There has been much debate over the rôles of the Agency and the NEB. Guidelines setting out the relationship between the two organisations will be drawn up in consultation with the Agency and NEB and following discussions with interested bodies such as the CBI and TUC.

Secondly, I envisage that the Agency and NEB will develop a close and harmonious working relationship both to ensure their own smooth functioning and to avoid any risk of overlap in their dealings with industries and firms. Let me make it quite clear that the Agency will in no way be an arm or an agent of the NEB. The Agency will be a major public body in its own right.

What is important now is that we should make rapid progress to bring the Agency into operation so that it can make an early start on the tasks which face it. I have already announced that the headquarters will be located at Treforest, some 10 miles north of Cardiff. I was strongly influenced in this decision by the fact that the headquarters of the Welsh Industrial Estates Corporation, whose functions the Agency will subsume, is already located there. The Agency may need to set up one or more sub-offices in the Principality, but this will be for it to decide.

From the administrative point of view, the next important step will be to form the Organising Committee, the advance guard as it were of the Agency, which will have the responsibility of getting the Agency operational as smoothly as possible. We are now in process of recruiting a chief executive, and I hope shortly to be able to announce the names of the chairman and other board members.

The Agency will be taking over the staff of the Welsh Industrial Estates Corporation, and I am anxious that their assimilation into the Agency should take place smoothly. Some preliminary meetings have already been held with the appropriate Whitley Council and with local staff representatives, but the consultative process will now become more purposeful as our intentions become clearer. I place considerable importance on the need to ensure that staff interests are taken fully into account so that any problems which arise can be resolved with understanding and in the full knowledge of all the circumstances.

The question of the accountability of the Agency has been raised more than once. I shall set out to establish a relationship with the Agency which will enable me to account to Parliament for its activities and at the same time ensure that initiative is not stifled because of over-detailed control. I shall, of course, be meeting the chairman regularly. He will, therefore, be aware of my thinking and my intentions, and I shall be able to keep myself informed of possible developments in the Agency's plans and policies at an early stage in their formulation.

The Government have demonstrated their faith in the Agency by allocating a budget of £100 million, which can be raised to £150 million by resolution of this House. At a time when there is severe pressure on finances, this illustrates the importance which the Government attach to the need to provide this spur to the economic development of Wales. I have no doubt that the Agency will become an important instrument in helping to tackle the very real problems which face us. That is why I commend this Welsh Development Agency Bill to the House.

8.52 p.m.

Mr. Grist

I wish to say a few words on Third Reading because the Secretary of State appears to have fallen into the trap into which we saw him falling from the outset. He has overlarded the hopes of the Welsh people by promising far too much. The eventual result will be disappointment and a certain amount of bitterness and disillusionment. Such an attitude is foolish when we know that the economy will get into deeper waters. The Government should wait until we pull out of our difficulties before they take any action.

Conservatives believe that private enterprise has not failed in the way that the right hon. and learned Gentleman suggests. I cannot understand the basis on which the Agency is to operate its competitive sectors. We have been told that it will be subject to the usual City code, but there is a big difference in that a State business cannot go bankrupt. If money is wasted or foolishly invested, the Agency can never go out of business. That is a very real difference, and it is foolish for Ministers to pretend that they do not understand the situation. I give them more credit than that.

The Secretary of State said that the Agency's undertakings would not be put in a privileged position; but it will find itself in that situation if it has a minority shareholding in a company, whether by agreement or otherwise or via a willing seller. Indeed, the fact that it may be a "willing seller" may not be known to the directors, as the Minister will know from correspondence which I have recently conducted with him. That Agency will have an undue influence out of all proportion to any other possible shareholding.

I must voice the fears of the Opposition because we do not welcome an extension into entrepreneurial business by the State machine—an extension which, on the Secretary of State's own terms, threatens to grow.

8.54 p.m.

Mr. Wigley

In the concluding stages of the Bill it would be remiss of me not to wish the Agency well in its work. Unfortunately, I missed the opening passages of the Secretary of State's speech, but I understand that he referred to some comments I made when the Agency was starting out upon its road. Some of the fears which we had about the Bill have proved to be groundless, and I hope that this will be found to be the case when the Agency is an entity.

We have some reservations about the Bill. We are concerned about the way in which the Agency will work in co-operation with the National Enterprise Board. We accept that these matters will develop as time goes by, and no doubt the two bodies will co-exist and co-operate. We shall discover whether this is the case only from experience. We shall see how the Agency works, and we hope that it will work successfully. We have reservations on the point about co-ordination, on which we forced a vote. Even though it is not in the Bill, I appeal for the element of co-ordination to be given consideration as the Agency goes about its work.

I noted what the Secretary of State said about the matter of financial resources. We accept that at present there is a limitation on the amount of finance available. We should have liked more finance to be made available to the Agency. We should have liked the figure to be nearer £500 million over a period. Therefore, the question is over what period will the £100 million or £150 million be drawn up and used? It is important to find work for the 70,000 unemployed people in Wales and for our school leavers.

We are glad that the Bill has been introduced. My colleagues and predecessors have called for the creation of such a body as the Agency for a number of years. This is the first step forward, and we hope that our faith in the Agency to help to solve the problems of Wales will not be misplaced. We wish the Agency the best fortune in its work, and we hope that it will bring the results which are so badly needed.

8.56 p.m.

Mr. Geraint Howells

On behalf of the Welsh Liberals, I congratulate the Secretary of State on making a move in the right direction. The need for some kind of development agency in Wales has been plain for some time, but I have reservations, and I believe that to achieve any sort of unified policy for Wales the Agency must come under the control of the Welsh Assembly. I consider it to be a defect in the Bill that the Assembly is not even mentioned.

On behalf of the people in my constituency and in other parts of Mid-Wales, I wish the Agency the best for the future. If we can retain the young people in Mid-Wales and in other parts of Wales for many years to come, it will be of benefit to all concerned.

8.57 p.m.

Mr. Nicholas Edwards

In the context of the present economic disaster, I do not regard the Bill as being particularly important. Though it contains desirable parts, particularly those dealing with the questions of co-ordination and development land, the Bill has had too much claimed for it, and those claims are no more than a delusion and pretence, like the advance factories which the Secretary of State always boasts about and which stand empty all over Wales but which give the impression that he is doing something when all the time his profligate policies are throwing men and women out of work.

We have elaborated our objections to the Bill at length in Committee, and I need not repeat the arguments. We believe that the Agency as constituted will encourage a misdirection of resources, both human and financial, in a series of dubious ventures, when, if such resources are to be made available, they should be concentrated on improving the industrial infrastructure and the conditions in which private industry can succeed. We fear that we shall see a gradual enlarge- ment of the public sector, the creation of an odd and disastrous conglomerate of industrial enterprises, producing the wrong goods in the wrong place at the wrong price.

We seek to create an economy based on variety and choice and upon a profitable, vigorous and alert private sector. We do not have much confidence in an alternative based upon bureaucratic direction. We object to the very wide powers of direction assumed by the Secretary of State. He said in an interview with the Liverpool Daily Post: It will not be a free-standing corporation. It will be an Agency of the Minister. We are critical of the lack of adequate financial disciplines, in terms both of the duties to be imposed on the Agency and of the supervision of another large tranche of Government expenditure. We do not have confidence in the Government's ability to control such expenditure or to get value for money, and it is their failure to do so which is largely responsible for the fact that 64,300 people are out of work in Wales today.

Finally, we deplore the fact that, having taken these immense powers on the basis that they will be subject to parliamentary scrutiny, however inadequate, the Government are unwilling to give the assurance to which we are entitled—that they will not now surrender those powers to another body, a national assembly. In my view the tragedy is that the Secretary of State could have set up an Agency that would have been able to do valuable work with the wholehearted support and good will of both sides of industry and all the political parties. There is a place for an Agency, and now that we have one, however great its imperfections may be, we must make it work and achieve at least some of the hopes which the Secretary of State held out for it.

Certainly for our part, now that the Agency is coming into existence, we shall do our best to make it a success. We do not want to delay these proceedings further. We want to use the rest of the evening to have a discussion on the real issues that now confront us in Wales. For that reason, we do not, at this stage, intend to divide the House.

Mr. Barry Jones

We have heard a Cassandra-like speech from the hon. Member for Pembroke (Mr. Edwards).

He is far too pessimistic. My right hon. and learned Friend's policies are the right ones for Wales.

In the Welsh Office, with a Labour Government in power, we have always said that the fundamental economic problems in Wales still have to be solved. I reject the contention of the hon. Member for Cardiff, North (Mr. Grist) that we have pitched this Bill and its aims too high.

It is sad but a reality of life that all parts of the Principality have their problems. In some cases the Agency will be helping to resolve the problems of the past in the valleys of South Wales and of de-population in Mid-Wales. It will also look to the future—for example, Celtic Sea oil development and all its implications for South-West Wales. Each part of Wales is important. The Agency will have a vital rôle to play in my own part of the Principality.

I am immensely optimistic about the contribution which the Agency can, and will, make to the economic development of North Wales as a whole—halting depopulation, instigating industry, moving the great slate and coal tips in the Wrexham area and regenerating and revitalising our industrial base. My optimism is shared by fellow countrymen throughout the length and breadth of the country. I am not saying that the Agency will be a panacea for all the problems which beset us, but it is undoubtedly a major step in the right direction.

I conclude by pointing out that the Agency is brought to fruition by this Government within a year of coming to office.

Question out and agreed to.

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

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