Scottish Development Agency (Hansard, 15 March 1978)

§ 6. Mr. Teddy Taylor
asked the Secretary of State for Scotland if he will make a statement on the work of the Scottish Development Agency.

§ Mr. Gregor MacKenzie
For the activities of the Agency until 31st March 1977, I refer the hon. Member to its report for 1976–77, a copy of which is in the Library. Since that date, the Agency has continued its valuable work of furthering Scottish economic development.

§ Mr. Taylor
Does the Minister agree that it is quite wrong that an organisation that spends as much public money as the SDA does should be subject to virtually no scrutiny by Parliament? Will he agree, therefore, to reappoint, or to recommend the reappointment of, the Select Committee on Scottish Affairs, so that we may look at the affairs of the SDA and at how it spends its money, particularly as most of the money that it spends comes from taxes on profitable industry?

§ Mr. MacKenzie
It is not right to say, as the hon. Gentleman does, that the SDA is not accountable to the House of Commons. Indeed, the Chief Executive of the SDA is an officer who accounts to the Public Accounts Committee. In the House we have had many opportunities of questioning the work of the Agency. It will be within the hon. Member's recollection that we debated the SDA's work in the Scottish Grand Committee during an Estimates debate. I am bound to say that whilst this is a matter for my right hon. Friend the Lord President, when last we had a Select Committee on Scottish Affairs—which, incidentally, we started, in 1969—the hon. Member and his colleagues decided to scrap it, in 1972, for the very good and simple reason that they could not get their own Back Benchers to attend.

§ Mr. Crawford
Will the Minister remind the hon. Member for Glasgow, Cathcart (Mr. Taylor) that the Tories voted against the establishment of the SDA? The SNP does not oppose it. Will 419 the Minister also remind the hon. Member for Cathcart that by cavilling at the SDA he is saying that he is against the creation of jobs in Scotland? Will the Minister further remind the hon. Member of his monstrous, scandalous and disgraceful about-turn when in 1974 the hon. Member said that he was in favour of a Scottish Assembly with economic powers?

§ Mr. MacKenzie
I am sometimes not quite sure what the hon. Member for Glasgow, Cathcart (Mr. Taylor) is in favour of concerning the SDA. He comes here, he makes public comments in the Press in which he batters the living daylights out of the SDA, and the next minute he thinks that it is a good thing. I am not sure where the hon. Member for Perth and East Perthshire (Mr. Crawford) stands on the question of the SDA, either.

§ Mr. Alexander Wilson
Will my right hon. Friend accept that the effect of the SDA is non-existent in the Hamilton constituency? We have had two factories empty for the last seven years and still have not fulfilled the promise that we made following the cessation of the new town at Stonehouse for an industrial estate at Candersyde.

§ Mr. MacKenzie
I am not prepared to accept what my hon. Friend says. In addition to the normal industrial investments by the SDA, which account for about £30 million, there has been a factory programme of £44 million and another scheme of about £43 million for environmental improvements. I am sure that Hamilton benefits as much as anywhere else.

§ Mr. Fairgrieve
I have two short questions for the Minister. Is there any reason why the SDA cannot do the job that it was set up to do without taking a 51 per cent. equity stake in firms? Secondly, will the SDA be prepared to sell back into the private sector firms that it owns?

§ Mr. MacKenzie
The SDA does exactly the job that it was set up to do. It was set up to be not just a Government Department. It was set up with the necessary guidelines, which we have all discussed, to have an entrepreneurial role in the regeneration of Scottish industry. 420 Therefore, it has the role of industrial investment and environmental improvement, and advance factory building.
On the second part of the hon. Gentleman's question, concerning properties taken over by the SDA and investments, some properties have already been sold back to private companies.

§ Mr. Beith
Is the Minister really happy about the fact that the SDA should have put over £800,000 into an entirely unsuccessful attempt to prop up the Scofisco project, with the result that fish processing firms in my constituency continue to work at well below capacity?

§ Mr. MacKenzie
This is something that we must put into perspective. The hon. Gentleman has mentioned the prospects of other companies in his constituency and elsewhere. Of course, objections were received from a number of these not disinterested people. But the SDA has a role, as have the Welsh Development Agency and the National Enterprise Board, to promote companies that it thinks will be successful and will give a good return.

§ Dr. Bray
Is the Minister aware that it is open to any firm to apply for SDA support and that most hon. Members on this side of the House want to see the SDA pursuing a much more vigorous policy in the development of new jobs? Will he ask it to approach all Scottish-based enterprises and ask them what obstacles there are to expansion, and how these can be removed by SDA action?

§ Mr. MacKenzie
The people to whom my hon. Friend refers, who want to expand, can go to the Secretary of State's Scottish Economic Planning Department, which offers benefits in the form of regional development grants and selective financial assistance. We encourage this by seminars and publications. The SDA has taken on a number of investments where it thinks that there is a good chance of viability and profitability and an opportunity to encourage more jobs. The Chairman of the SDA said recently that, taking all these functions together, there is a prospect of saving and promoting about 30,000 jobs in Scotland—and 30,000 jobs is nothing to be sneezed at.

§ 17. Mr. Alexander Fletcher
asked the Secretary of State for Scotland if he is satisfied with the financial control 421 exercised by the Scottish Development Agency.

§ Mr. Gregor MacKenzie
Yes, Sir.

§ Mr. Fletcher
Is the right hon. Gentleman aware that the SDA is not at all sure what its financial responsibilities are and what sort of control it should be exercising, and that it has taken more than five weeks to reply to a letter of mine on that rather important if simple point? Further, is he aware that in evidence to the Expenditure Committee last year it was said that the NEB and the SDA would operate as first-class companies? In these circumstances, is the SDA taking responsibility for the creditors of its subsidiaries that go into liquidation? If so, how much has been paid out so far?

§ Mr. MacKenzie
The hon. Gentleman is well aware that some time after we set up the Agency industrial guidelines were agreed and published. Those are the guidelines that the Agency now operates. The hon. Gentleman has said that it takes many weeks for the Agency to reply to a letter, but clearly that is not a matter for me.

§ Mr. Buchan
Does my right hon. Friend accept that financial control by the House is important but that more important is the success of the SDA, which depends on the extent to which it can involve itself with firms either by part-share public ownership or by full public ownership? Is it not gross hypocrisy on the part of the Scottish National Party to claim that it supports the Agency when it attacked it and tried to extract any teeth it had by attempting to remove the parts of the Bill providing for public ownership and public investment?

§ Mr. MacKenzie
The SDA has been much maligned by both the Opposition and the SNP. In fact, I believe that the Agency does a worthwhile job in Scotland. I have already indicated in answer to an earlier Question that it has an important factory role, an important environmental role, and an important role in industrial investment. Although we have heard a great deal about two or three disappointments, it is worth bearing in mind that there are 26 or 27 companies where the Agency has had success, notably with Cummins, and has 422 safeguarded and provided a considerable number of new jobs for the people of Scotland.

§ Mr. Crawford
Does the right hon. Gentleman agree that the Conservative Party should stop the monstrous and scandalous vilification of senior personnel of the Agency? Were not the Conservatives being totally hypocritical when they voted against the establishment of the Agency?

§ Mr. MacKenzie
In the Estimates debate last year I said that leading members of the Conservative Party were much more concerned about the size of the lavatory of the chairman of the Agency than about the valuable work that the Agency was doing. I continue to maintain that stance.

§ Mr. Buchanan-Smith
Bearing in mind that it has ben reported that Scofisco will suffer a loss of about £750,000, will the right hon. Gentleman acknowledge that many people in the fishing industry stand to lose something as a result? Will he say what consultations took place with those with experience in the fishing industry and in fish processing before the Agency became concerned with that firm? Is he aware that many of those concerned in the industry were worried that insufficient homework had been done in relation to that enterprise?

§ Mr. MacKenzie
Before the SDA makes this or any other kind of investment, it listens carefully to outside advice. It employs independent consultants, who do a first-class job on matters of this kind.
The hon. Gentleman will recall that there was very strong pressure from many fishermen in Scotland for the SDA to take the action that it took. If it had not taken that action, many of the fish processors and the fishermen would have been out of jobs a long time ago.

§ Mr. Sillars
Does the Minister of State agree that we should deprecate this constant sniping at the SDA by Conservative Members who do not have the guts to say that they would repeal the legislation and declare it null and void?
Will he confirm that if the Scottish Development Agency is to achieve a high success rate, it must take risks, and that we in the House of Commons must accept the odd failure? Will he convey to the 423 board, the Chief Executive and the Chairman of the SDA that the Scottish Socialist movement has a great deal of confidence in the Agency and that we hope that it will not be inhibited by the one or two errors that have recently been made?

§ Mr. MacKenzie
I am glad to hear my hon. Friend say just that. It is discouraging to the Chairman, the Chief Executive and the board of the SDA if they are constantly being sniped at for the few disappointments they have had and if they are given no credit by any Opposition Members for their remarkable achievements in this sphere.

§ Mr. Teddy Taylor
Does the Minister agree that he and the Labour Party have a record of which to be ashamed in the provision of jobs in Scotland? The job of the House of Commons is to make sure that public money is well spent. Does he accept that, whether we have one view or another about various activities, it is important to make sure that public money, taken in taxes from profitable, successful firms, is wisely used?

§ Mr. MacKenzie
I agree that it is important that taxpayers' money should be well spent and that it should be spent on providing jobs. I hope that the hon. Gentleman will take that message very much to heart. If the Opposition had had their way we would not have had the jobs in British Leyland in Bathgate, in shipbuilding, or in Chrysler, and we would not have had many of the jobs provided by the Scottish Development Agency.