WELSH DEVELOPMENT AGENCY AND DEVELOPMENT BOARD FOR RURAL WALES

HC Deb 03 May 1978 vol 949 cc317-70

'Nothing in this Act shall be construed as permitting the Assembly to exercise all or any of the functions of the Welsh Development Agency or the Development Board for Rural Wales or to dissolve either of those bodies.'—[Mr. Nicholas Edwards.]

Brought up, and read the First time.

7.30 p.m.

Mr. Nicholas Edwards

I beg to move, That the clause be read a Second time.

On the seventh day of the Committee stage of the Bill, the guillotine prevented more than a passing reference to what I described then as the abolition or extermination clause, now numbered 60 in the amended Bill. That is the clause which, through a mist of peculiarly opaque parliamentary draftsmanship, enables the Assembly, if it can obtain the consent of the Secretary of State, to assume the powers of certain public bodies listed in a parliamentary answer on 16th March and to abolish those bodies. This House will note that it is not to be consulted about the matter.

These bodies that less than three years ago Parliament was told were essential, and which it was persuaded to set up, can be swept away at the nod of a Secretary of State's head, along with a number of other quite important organisations. Despite all the special reasons given in the House during the proceedings that established these agencies, and despite the assurances, specific and oft repeated, given to the House about ministerial and parliamentary control, they can be swept aside as a result of a clause that has not even been discussed by the House of Commons.

Our new clause seeks to safeguard the position of two of them—the Welsh Development Agency and the Development Board for Rural Wales. They have been established by statute. The case for their continued existence has been repeatedly stated by Government spokesmen. In our view, they should not be threatened by this back-door process of extermination. If at some future date they no longer seem to justify their existence, they should be abolished by legislative process in this House.

In a series of reckless speeches, the Secretary of State and his colleagues seek to create the impression that it is we on the Opposition Benches who threaten these organisations, yet as they make those speeches they force through without debate a clause that allows for the dissolution of these agencies without any reference to Parliament. It is the Secretary of State who is the potential executioner, not me.

Let me make our position quite clear. We approach these agencies moderately and reasonably. If the WDA and the DBRW are doing a useful job, by clearing away dereliction, by creating infrastructure or by stimulating investment and thus job creation, if they are filling a gap that others are failing to fill, we should allow them to continue their work.

False expectations have been raised about what these agencies can achieve. We fear that too often they back losers rather than winners. We believe that from time to time they may actually destroy existing jobs, through subsidised competition, rather than create new jobs. None the less, as I made clear in a recent debate in the Welsh Grand Committee, we are relieved that the WDA has made a promising start and has gone a good way towards dispelling some of our earlier anxieties about the use to which it might be put. Both of the organisations seem to be making a determined attempt to base their investment decisions on commercial rather than political judgments. I can certainly see the advantage of seeking to operate regional policy at one remove from the political machine in this way.

As we made clear in "The Right Approach", we have no plans to abolish the WDA, though we should like to see greater safeguards to prevent the acquisition of profitable companies and to ensure the eventual disposal of shares held by the agency. I understand that these two restrictions would cause no difficulty at all to the agency as it is at present operating or as it intends to operate under its existing management.

As for the DBRW, we have never made a secret of the fact that we thought that there were disadvantages in having two separate bodies doing a job. Perhaps the hon. and learned Member for Montgomery (Mr. Hooson) will allow me to finish what I want to say about this organisation, because I want to set some of his fears at rest. We thought that there were disadvantages in having two separate bodies doing a job of a similar kind, with illogical boundaries and with a good deal of confusion and overlap.

We ourselves proposed a solution with the framework of the WDA. All that I have said is that after a year or two we really ought to look at the way it has worked in practice and see whether any changes in the boundaries or responsibilities would be sensible and would improve the effectiveness of our efforts in Mid-Wales. There is nothing sacred about the structure that the present Government have chosen, but I hold the view that once something is set up there have to be good and powerful reasons for making sweeping changes. I therefore say no more than that I think that the time may come when we shall want to see whether any improvements can be made that will benefit Mid-Wales.

I deliberately approach both of these agencies—as I did during our debate in the Welsh Grand Committee—with the hope that we can build a bipartisan approach to these matters—an approach that will endure and will therefore help to create the kind of industrial confidence that is to important for Wales and for investment in Welsh industry. That moderate and pragmatic approach has conjured up a predictable wave of hysteria and the wholly untrue assertion that we proposed to abolish these bodies or drastically to trim their functions. We have no such proposals to make. It is the Government and their Liberal supporters who, within three years of moving the Second Reading of the Welsh Development Agency Bill, are drastically changing that organisation's relationship with central Government and theatening that it will cease to exist—because that is the effect of this Bill.

Mr. Hooson

Is the hon. Gentleman able to give the House an absolute assurance that the Conservative Party has no intention of allowing the Development Board for Rural Wales to be taken over by the WDA?

Mr. Edwards

I have made my position perfectly clear. If the hon. and learned Gentleman had listened to what I just said—

Mr. Hooson

I did listen.

Mr. Edwards

I said that I think that we should see how the DBRW performs. After a period of two or three years we should consider its performance and the way in which its responsibilities relate to those of the WDA, and see whether improvements can sensibly be made. I do not propose to go further than that now. It seems to me that, on the whole, that is a sensible way for Governments to approach these matters—not to make great dogmatic assertions at the Dispatch Box, provoked by interventions or otherwise, but to look at these questions in the light of experience, to try to learn from experience and to try to improve the operations of government in that way.

Our new clause would remove the Welsh Development Agency and the Development Board for Rural Wales from the scope of Clause 60 and the threat of abolition. The Assembly, operating the investment powers of the Agency, would be bound to do so in an increasingly political manner, which would be economically damaging and likely to cause mounting dissension with the United Kingdom Government.

On Second Reading of the Welsh Development Agency (No. 2) Bill, on 26th June 1975, the Secretary of State referred to—boasted of, indeed—the powers of "general and specific direction", what he then described as "controlling powers". It is difficult to see how a Secretary of State who might exercise controlling powers in respect of an organisation for which he is responsible can exercise them without conflict when that organisation is not only possibly the responsibility of another Assembly but may actually be that Assembly itself, operating through its committee structure.

Mr. Dalyell

I am really very confused. I thought that these Assemblies were not to have anything to do with the running of the economy. I should have thought that any decision on the future of the WDA, or—I speak with diffidence in the presence of my hon. Friend the Member for Brecon and Radnor (Mr. Roderick)—the Development Board for Rural Wales was basically an economic decision. Where is the line to be drawn?

Mr. Edwards

I shall come on to that question later. I would rather wait for that point in my speech. I intend to explain just how the Government have changed their position and decided to split up the responsibility.

The only curious difference that I would draw to the hon. Gentleman's attention is that, although there is a power in the Bill for the Assembly actually to take over the operations of the WDA with the Secretary of State's consent—and even to abolish it—I do not believe that such a power exists in relation to the Scottish Development Agency. Thus, a Scottish Bill contains legislative powers but does not enable the Scottish Assembly to take over or abolish the SDA, yet this Bill enables the Welsh Assembly to act in such a way towards the WDA. That is one of the obvious curiosities of this part of the Bill.

The suggestion that the Assembly or its committees could sensibly carry out the functions of the Agency is in direct conflict with everything that the Secretary of State and his Ministers said during the passage of the Welsh Development Agency (No. 2) Bill.

I am sorry that the Secretary of State cannot spare the time to be with us tonight, because I now intend to refer, fairly extensively, to what he then said. On 26th June 1975, the right hon. and learned Gentleman said: I see the agency—and I underline the word 'agency'—as a strong executive arm, with the power to act for the benefit of Wales and with sufficient finance available to it. It is an additional piece of executive machinery". It is hard to see how one can underline the word "agency" if its functions are to be carried on by a committee of an elected Assembly. In my judgment, an executive arm of government is the political arm; it is not an agency.

The right hon. and learned Gentleman said later: The agency will be expected to act on its own initiative to seek out opportunities and directly involve itself in industry. This type of entrepreneurial role is best performed by an agency."—[Official Report, 26th June 1975; Vol. 894, c. 684, 693.] We are entitled to ask how the Assembly is to involve itself directly in industry or to undertake an entrepreneurial role.

7.45 p.m.

In the guidelines issued by the Secretary of State to the WDA, we learn that The Agency will be operating wholly in an assisted area and that a major part in the framing of its policies and initiatives will inevitably be concerned with unemployment.

The guidelines say that these policies and initiatives will have to be closely co-ordinated with those of the Government insofar as selective financial assistance under the Industry Act 1972 and other measures available to the Government for the steering of industry will frequently be involved in individual cases. One is again bound to ask how that co-ordination will take place in the way envisaged in these guidelines when effectively different Governments will be operating a divided economic responsibility.

Also on Second Reading of the Welsh Development Agency (No. 2) Bill the Secretary of State said that the agency has a big task. It will demand people of stature, strength and wide experience to carry it out. I intend that the board shall be composed of people of outstanding skills and experience rather than simply representatives of particular groups."—[Official Report, 26th June 1975; Vol. 894, c. 689.] Once again, the right hon. and learned Gentleman's words are incompatible with what is now proposed.

Indeed, it is certain that if the functions of the agency were to be taken over by the Assembly it would be impossible to retain many of its existing staff or to recruit fresh people of outstanding skills and experience. It would be impossible to form commercial judgments and make investment decisions on a day-to-day basis in the manner prescribed for the agency if it were to be run as a political committee.

When setting up these new bodies, Ministers were, at least for a time, diverted from their usual rhetoric about democratic control and brought face to face with reality. The nominated bodies that they so often condemn are frequently established, as they then admitted, for very good reasons—because of a need for expertise, because some jobs are better performed if removed from political pressure, because elected members may be the least suitable persons to perform certain tasks.

Time and again, during the passage of the Welsh Development Agency (No. 2) Bill and the Development of Rural Wales Bill, Ministers talked eloquently of the need for expertise, for small effective bodies, for new and separate instruments.

During our debate on the WDA Bill, the Under-Secretary said: The hon. Member said it was important to have a substantial measure of independence for the members of the agency. Of course it is. I do not think that anyone doubts that."—[Official Report, Standing Committee E; 24th July 1975, c. 328.] He and his colleagues argued for a small body, for a carefully selected balance of personalities, for careful selection of the best talent. They gave assurances that politicians would not be giving directions every five minutes or concerning themselves with the minutiae of the Agency's affairs.

The guidelines talk about the need for the Agency to have a large measure of operational and commercial freedom". It is shocking—it is an abuse of Parliament—that a Government should go through this extraordinary exercise of stating objectives, of setting up new organisations, of explaining and justifying ministerial and parliamentary control over these agencies, as the Government did in the case of the WDA, the DBRW and the Land Authority, at the precise moment when they are preparing legislation which would reverse or make a mockery of everything that they are saying. At the very moment that the Under-Secretary was giving us those undertakings about the future operation of the Agency he was preparing the Bill, or his parliamentary draftsmen were doing so on his behalf.

I and others, including the hon. Member for Pontypool (Mr. Abse) challenged him on this point during those debates. We suspected that we were being misled and being asked to pass legislation on a false prospectus. We received a wholly evasive response, which confirmed our fears. They are now proved to be abundantly justified.

The proceedings on the Welsh Development Agency Bill and those that established the other two bodies were misleading and disreputable. Parliament was not well treated. It is not an episode in which the Ministers involved should take any pride.

Clause 60(2) contains the astonishing provision that the Assembly, with the consent of the Secretary of State, may modify any enactment that appears to it to be necessary or expedient. Thus Parliament has lavished time, care and energy on producing legislation that it thought appropriate, but legislation that can, in connection with these statutory bodies, be swept aside by an Assembly, with the Secretary of State's consent, though that Assembly has no primary legislative function.

That subsection on its own reduces to a meaningless charade every part of the proceedings on the Bills that I have described and makes the Ministers' assurances appear entirely worthless. That subsection, with the power to modify enactments, seems to open wide the whole future role of the Assembly in economic management. Surely the implication is that the Assembly can not only take over the powers of the Agency but can seek to extend them and thus enlarge its role in economic management.

I shall be told—I have already heard it muttered from the Liberal Benches—that the Secretary of State's consent is required, but he has already shown himself to be a reed blown by the wind when he has sought to establish a firm position on the economic role of Government. He has been shifting his position, so that now it is difficult to know where he stands.

When the Government drew up the November 1975 White Paper, the intention was to build up the Secretary of State's responsibilities as an economic Minister—what the White Paper described as an enhanced and very substantial economic role". The problem was that those transferred economic powers were the very ones that the Assembly would covet most, and immediately the pressures within the Welsh Labour Party began. We know that there has been a great fight within the party on this matter. The November 1975 scheme lasted only until the following May, when the Government conceded control of the Agency to the proposed Assembly.

The economic aspirations of the Assembly will grow with time. They will not fade away. There is bound to be mounting tension in the relationship between the Secretary of State and the United Kingdom Government on the one hand and the Assembly on the other. It will arise, if for no other reason, because they are operating separate parts of an economic and industrial package—vital, integral parts, parts closely related together, as the guidelines make clear.

The aspirations of those who favour these developments were spelled out with devastating clarity by John Osmond in "Creative Conflict". In an interesting passage, he refers to some of the disputed areas of the Welsh Development Agency—its budget, its planning role, its investment and loan decisions and its return on capital—and says that they would be sure to provide wide opportunities for debate within a Welsh Assembly. The issues would be likely to be so contentious that an Assembly would not be content to allow the Agency to remain a semi-autonomous separate body. All the pressure would be for the Agency to be absorbed into the administrative machinery of the Assembly itself. This possibility was allowed for in the Devolution Bill and was canvassed by the Labour Party in Wales's Executive Committee as early as the summer of 1975". He then quotes from the Committee, as follows: It may happen in the future that the Assembly would wish to take over all functions of the Agency itself, with its actions being directly responsible to the Industrial Department and the Executive Committee [of the Welsh Assembly]. He continues: One of the strongest arguments for devolution is that it would provide a focus for the political will that is necessary to give the Welsh Development Agency impetus, power and determination to tackle Wales's economic problems. The likelihood is that the Agency would have to be absorbed into the Assembly itself to facilitate the free flow of energy required. whatever that may mean.

The concession of the Government —this is the crucial point— in May 1976 that the Agency should be an Assembly responsibility was a recognition of the economic dimension of devolution. At that point the Agency became an embryo department of an evolving Welsh government. The structure necessary to forge a Welsh economic policy was being created. Devolution is about the promotion of the political will to make the structure work. So we are dealing here with the important matters. We are dealing with the continued independent existence of these agencies, the WDA and the DBRW. Their continued existence is likely to become a crucial factor in the fight that is already taking place for economic supremacy and the control of the Welsh economy.

We believe that it is wrong that these bodies should be subject to extermination by the Assembly. They should remain responsible to the Secretary of State and, through him, to this Parliament. Economic and industrial power should remain with the United Kingdom Government, and the provisions of Clause 60 in relation to the WDA and the DBRW are incompatible with that concept. It would be gravely damaging to the United Kingdom economy and to the economy of Wales if within these islands we were to have increasingly powerful independent Governments competing with each other for limited resources and for the available jobs.

We think that our shared problems are better tackled on a shared basis. It is significant and very regrettable that a Government who have professed that they wish to retain responsibility for United Kingdom economic affairs, and have argued so frequently and so recently that the agencies are essential weapons in their armoury, should now introduce legislation that threatens both the future existence of the agencies and their own powers of economic management.

The threat is implicit in the Bill as a whole. I commend the new clause as one barrier against some of its worst effects.

Mr. Caerwyn E. Roderick (Brecon and Radnor)

I am in no doubt about the purpose of the new clause. I am equally in no doubt why I set out on the road of supporting a Welsh Assembly. The very fact that we had so many appointed bodies spurred me on to want an elected body that would bring democratic control to many of our institutions in Wales.

Clause 60 provides that the Assembly can assume—it may assume—the functions of bodies such as the Development Board for Rural Wales and the Welsh Development Agency. We in the Labour movement in Wales have for very many years been anxious to see that bodies such as these are brought directly under democratic control. They are answerable at present to a Minister. We can debate generally their functions and their activities but we are not keeping a sufficient scrutiny of the work that they undertake. We ought to have a body which has more time to look at them in greater detail.

We are dealing here simply with the WDA and the DBRW. Whether these bodies are answerable to the Assembly or whether they become an integral part of the Assembly must, in my opinion, be for the Assembly itself to decide. It should decide how to organise its work. I think that there is a case to be made for retaining some kind of board as an executive, and for that board being answerable to the Assembly. Nevertheless, I would leave the decision to the Assembly.

8.0 p.m.

I am delighted to see that the hon. Member for Pembroke (Mr. Edwards) has shifted his ground somewhat in recent days or weeks in regard to the Welsh Development Agency. After all that has been said against it, I am glad to see that he is now the first to defend it. What was said in the Welsh Grand Committee seemed to place some doubt over the future of the DBRW, and he has again shifted his ground and is anxious to defend that body.

I should like to have an assurance from the hon. Gentleman that the WDA will not suffer the same fate as the Scottish Development Agency is promised by the Tory Party, if it is ever returned to power, because I understand that the Tory Party is on record as saying that it would abolish the Scottish Development Agency. I understand that the Welsh Tories do not follow this line in regard to the Welsh Development Agency, but how can we accept their assurances? They will not be taking the decision, surely. It will be a decision taken by the national party.

Mr. Nicholas Edwards

May I make two points in response to the hon. Gentleman's remarks? First, I have not shifted my position on the DBRW. I said in the debate that we must look at the matter after two or three years' experience to see how it was working out in practice. I said something rather similar to that this afternoon.

Secondly, the hon. Gentleman is entirely wrong in his remarks about the Scottish Development Agency. There is no party commitment to abolish the agency. Indeed, there is a clear statement in "The Right Approach" and by the spokesmen on Scottish Affairs that the SDA will be retained.

Mr. Roderick

I accept what the hon. Gentleman says. I have obviously believed what I read in the Press. Certainly I am glad to have that assurance, because I would hate to think that it was Tory Party policy that the Agencies should be abolished.

As for the DBRW, I remember the hon. Gentleman trying his best to entice me into a certain Lobby one night in this Chamber to support a proposal to have not a board but rather a subcommittee of the Agency to run affairs in the rural area. It was simply to be a part of the Welsh Development Agency. I am glad that I resisted the temptation, because ultimately we had a separate board, which was what I wanted, to look after what was needed in the rural area of Wales or certain parts of Mid-Wales at least.

These appointed bodies having been set up, I felt that this was only an interim stage, anyway, and that ultimately something would have to be done about controlling them. We now have the opportunity, with the Assembly, to finalise the Act, so to speak. I know that the hon. Gentleman and I cannot possibly look at the work of these bodies in detail because we have so many other things on our plate, but I hope that the Assembly will have the time and the resources to look at these Agencies.

Sir Raymond Gower

Does the hon. Gentleman not see some difference between giving the Assembly the right of supervision over bodies such as these and giving it the right to dissolve them or to take over their functions? Does he see no distinction?

Mr. Roderick

I do, indeed. There is a big distinction. Nevertheless, if the Assembly felt that it could undertake this work, I would be quite happy for it to do so, because then there would be elected representatives running the show. We are talking about public money here. It is we, the public, who will provide the funds. Surely, therefore, these bodies must be directly answerable to the public.

I do not detract at all from the work that the Agencies are doing at present. I think that they are doing an excellent job. Nevertheless, it is difficult for the public to have any say in what is going on. This is why I would reject the new clause, and I hope that the House will reject it. I think it is important that we should go on with the work of introducing democracy at every level of our life.

Sir Raymond Gower

What the hon. Member for Brecon and Radnor (Mr. Roderick) said makes me very apprehensive indeed about the future of these bodies.

Mr. Hooson

Do not say that.

Sir R. Gower

I acknowledge that when I heard my hon. Friend the Member for Pembroke (Mr. Edwards) introducing the new clause, I though that perhaps he might be exaggerating the danger, but, having listened to the hon. Member for Brecon and Radnor, it is all too apparent to me that the danger is very real indeed, if that is the thinking behind the clause as it stands.

I had assumed that the very use of the word "may" made it unlikely that this power to take over these bodies would ever be exercised. Many of us who started off with perhaps some anxiety about these bodies—and perhaps even those who were a little more optimistic about them—have had cause to feel very gratified by the way in which the Welsh Development Agency in particular has progressed. I believe that the same can also be said of the DBRW, although I cannot speak with such authority in that respect. These bodies have laid the foundations, I believe, of some significant achievement, It is bound to be a slow job, of course.

The two bodies include persons of considerable expertise in industry and of considerable experience in the matters which have been conferred upon them by Parliament. As the months and years go by, their knowledge and expertise in the exercise of their functions will increase. It would be very foolish, therefore, to put this expertise at risk by having these bodies taken over by an elected body which may have no expertise at all. I think it has been said that the worst body to run a campaign is an elected committee. That is possibly true also of industry.

Mr. Wigley

The hon. Gentleman is aware that the Welsh Development Agency is run by a committee, and it is a committee of experts. But the point is that, although they are experts in their own fields, in individual industries and in commerce, they may not be the most expert people for deciding what is needed in each part of Wales. That is why we need a greater interface between democratic control and expert knowledge.

Sir R. Gower

I hope that they would have some prospect of continuity in their position. An elected body can never have that assurance of continuity. As I was saying, the persons on these bodies have very great experience. I have in mind, for example, Mr. Gray, who was formerly associated with the Board of Trade in Wales. These persons have very special talents in dealing with the matters which confront them, and it is desirable that they should have the prospect of continuity for some period ahead and not be limited by the exigencies of elections every three or four years.

Mr. Hooson

Surely the hon. Gentleman is confused about this matter. As I understand the position, Mr. Gray, is the Chief Executive and is in the same position, therefore, as a civil servant.

Sir R. Gower

Yes.

Mr. Hooson

The hon. Gentleman is getting confused. No one is suggesting that the Assembly should take over the job of the Chief Executive.

Sir R. Gower

I accept what the hon. and learned Gentleman said. But there are other people involved, and they have greater continuity now than they could conceivably have if they were subject to the changes of fortune of parties in an Assembly. I would have hoped that we might have an assurance that this power, even as it stands, would be used only in the most extraordinary circumstances. But it appears from the remarks of the hon. Member for Brecon and Radnor that it is very likely that at an early date the Assembly would be disposed to take over these bodies.

Mr. Roderick

I am afraid that the hon. Gentleman is putting words into my mouth. I said that it must be for the Assembly to decide. I do not know what the Assembly would do. I know what my preferences would be, but who am I to impose my will on the Assembly?

Sir R. Gower

I accept what the hon. Gentleman says, but it did not sound like that when he was making his speech.

Mr. Geraint Howells (Cardigan)

He was very convincing.

Sir R. Gower

Yes, he was very convincing about who would take them over.

I am very impressed by the management of these bodies. I am impressed by the way in which they have started. I believe that they need a long period of stability. They need to have an assurance of stability for a considerable time ahead. I do not think it is desirable that they should be buffeted and exposed to the uncertainties of management by an Assembly, because while an Assembly has the advantage of demo- critic management it will also be much more subject to the sort of pressures which are not necessarily an advantage in organisations of this kind. I am thinking of political pressures and so on.

These bodies should exercise objective rather than subjective judgments. They should not have judgments forced upon them—

Mr. Wigley

Surey the objectives of the Welsh Development Agency, it being a body in the public sector, must be objectives that are set with a total community and social measuring rod rather than a purely commercial one.

Sir R. Gower

I do not think for a moment that the bodies as they are today are using purely commercial judgments. I am quite convinced that they go well beyond that. The hon. Gentleman must surely know that they are aware of their remit, which is much wider than ordinary commercial judgment.

My hon. Friend the Member for Pembroke has expressed our anxieties as well as the undesirability of having in the Bill a clause as loose as Clause 60. It is very necessary to remove this doubt. That is why I support the new clause, which would make the takeover impossible.

Mr. Dalyell

I resisted the temptation to take part in the last debate on the Welsh language. It would have been embarrassing to have done so. But I am not in the least embarrassed about taking part in this debate, because it is a matter for any United Kingdom Member of Parliament.

I believe that we are sowing the seeds of very great trouble. This is not a minor matter. It is a deep, pivotal, basic confusion that pervades both the Scotland Bill and the Wales Bill. Indeed, it is once again a geological flaw in the Bill which again shows how its concept is built on shifting sand.

I am in no mood to be told by anybody that I am making a Second Reading speech, because this is basic to the whole question. The reason why it is basic is that the question has not been answered about the role of these Assemblies. Are they to be involved in economic decision-making or not? This is where a number of pro-devolutionists—not only hon. Friends, but others—are trying to have their cake and eat it or, to be a bit sharper about it, to speak out of both sides of their mouths at the same time.

At one level we are told "Oh, no, the House of Commons and the whole structure of British Government need not bother, because no economic powers are involved." Yet, whenever they go to a different audience—albeit an audience which is perhaps favourable to the views of the hon. Member for Caernarvon (Mr. Wigley)—these people say that the Assemblies will solve all sorts of problems, especially economic problems. I have just come from the hustings, and very interesting—

Mr. Deputy Speaker (Mr. Oscar Murton)

Order. I must remind the hon. Gentleman that we are not in Committee. I think he will understand what I mean.

8.15 p.m.

Mr. Dalyell

In one phrase I would say that you, Mr. Deputy Speaker, should have heard the claims that were made about these Assemblies. Doubtless similar claims will be made in the Coal Exchange. There was very little reticence on the part of pro-devolutionists when they made claims as to how the major problem in the minds of the Scottish people—as it is of the Welsh people—namely, unemployment, will be helped by these Assemblies.

Someone has got to get it straight precisely what the economic role is. I know there are difficulties about quoting the other place, but during a Division I wandered along there to hear the Lord Vaizey, an Oxford economist, tearing to pieces the Scotland Bill with regard to this matter. There was nothing that my hon. Friends on the Front Bench in the other place could say in answer.

The truth is that there is a basic, deep confusion about whether the Assemblies are to have an economic role. The one thing that is certain is that one cannot have it both ways. Therefore, I put a very direct question to my hon. Friend the Under-Secretary of State. Can he, on this forty-third day, clear up whether or not the Assemblies are to have an economic role? There is a very simple answer to that. It is either "Yes" or "No". Somehow we have not quite understood it.

Mr. Wigley

The hon. Gentleman said that in the elections that were held yesterday members of his own party in Scotland were pressing the strong economic powers that the Scottish Assembly will have. Does he ascribe the relative success of his party in those elections to pressing that point, particularly in the context of the situation 12 months ago when the Scotland and Wales Bill was in tatters?

Mr. Dalyell

I have to report that in my own constituency those candidates who are even more anti-Assembly than I am did extremely well at the polls. I make not too much of that. But my one colleague who was pro-devolution did not do nearly as well as the rest. I do not draw any general conclusions from that. All I suggest is that being very scathing and aggressive about the need for an Assembly did not cost my colleagues votes at the local elections. I shall leave it at that.

There is, of course, a practical consideration with regard to the Lords. I suspect that my noble Friend Lord Raglan—a Welsh Lord and chairman of a new town development corporation—will have something to say on these matters. I represent part of a new town. The question is whether the Welsh Assembly is to have the kind of economic control over new towns which has previously been associated with the Treasury.

Mr. Nicholas Edwards

I left out a passage in my speech in which I had originally intended to refer to new towns. Is the hon. Gentleman aware that under Clause 60 the Assembly may take over the functions and dissolve new town corporations?

Mr. Dalyell

Dissolving or not dissolving new town corporations is an economic act vitally affecting the United Kingdom Treasury. That is, therefore, yet another manhole and another confusion.

I turn in the friendliest of spirits to my hon. Friend the Member for Brecon and Radnor (Mr. Roderick). If he were a Member of an Assembly—being an active man and a good Member of Parliament—is it conceivable that he would not demand these powers? He tells us that we should emphasise that the Assembly "can". In this context I think that the word "can" is a euphemism, because any Member of Parliament worth his salt—and my hon. Friend is manifestly worth his salt—would assume that. He would not sit down and say "Of course, we should not have these powers." If he did, certain people in his valley would ask what he was doing.

Mr. Roderick

Does not my hon. Friend acknowledge that every conceivable kind of body puts pressure upon us for more powers? It would not be simply Assemblies that would do so. Councils do it. Pressure groups of all kinds are formed to get more powers, but they are allowed more powers only with the authority of the Secretary of State. [HON. MEMBERS: "Parliament".] The Secretary of State through Parliament. I am not afraid of the Assembly pressing for more powers.

Mr. Dalyell

I do not think that my hon. Friend is afraid of the Assembly pressing for more powers, because he might want it to do so, but I say to him in a friendly spirit that it might go a great deal further than he wants. Once one concedes certain powers in this area, one has to concede others. The return question is "All right. Where do we draw the line?" The Assembly is not a local authority. Comparisons between the Welsh Assembly and a local authority are misleading because here we are harnessing national aspirations—I do not know what else they are—which makes the Assembly very different, from a local authority.

Therefore, I stick to my point that Assemblymen, if they have half the energy and drive of my hon. Friend the Minister of State, Foreign and Commonwealth Office, or of my hon. Friend the Member for Brecon and Radnor, would hardly be content to allow a situation in which, when they were able to assume more powers, they did not do so.

I put one more question to my Front Bench. It has been revealed in another place—I had no notion of it during the passage of the Scotland Bill in this House—that of course these Assemblies can set up committees on any subject they please. When my noble Friend Lord Kirkhill was pressed on the matter—and I make no apology for repeating it—he said that the answer was "Yes". He said that the Scottish Assembly could have a defence committee or a foreign affairs committee—I do not know whether my hon. Friend the Minister of State realises that—and no doubt, if it can have a foreign affairs committee, it can have an economic committee.

So an economic committee on a non-devolved subject is thus set up. It has to justify itself. It has to have something to do. Is it conceivable that it would do other than press for precisely the kind of powers we are talking about in New Clause No. 5? Therefore, I say that this is a slippery slope stemming from a fundamental confusion in the Bill.

Mr. Nick Budgen (Wolverhampton, South-West)

One of the stranger practices of the House as I observe it is that. whenever the Government of the day appear to be handing out one of their discretionary grants, whether under the regional aid programme or under the Industry Act 1972, there is a tendency for those Members whose constituencies are the direct beneficiaries of the largesse of the taxpayers generally sometimes to thank the Minister, sometimes to complain that it is not enough, while, on the other hand, the broad mass of Members rarely seem to take any part in the discussion of the benefit that is going to any particular part of the United Kingdom.

Yet that situation seems to me wholly illogical, for a benefit to one part is a disadvantage certainly to the parts immediately around it, and is also a disadvantage to the taxpayers of the United Kingdom and, indeed, to the economy of the United Kingdom. As the hon. Member for West Lothian (Mr. Dalyell) said, New Clause No. 5 goes to the heart of our consideration of the Bill because it decides whether there should be an economic role for the Welsh Assembly.

If the Assembly is to have an economic role, as the hon. Gentleman says, no doubt it will wish to take on the role of the Welsh Development Agency and the role of the Development Board for Rural Wales. Here, I disagree in part with the emphasis put on this matter by my hon. Friend the Member for Barry (Sir R. Gower). He said that we are talking about the future of these bodies. We are not talking about the bodies themselves—we are talking most of all about the functions that they exercise. That is the thing—not the name, not even the subject, not even the experience. We are talking about their functions in potentially distorting the economy of the United Kingdom in favour of Wales.

It is their function, for example, to give extra grants to various industries in Wales. It is their function to give extra infrastructure in Wales. It will be for them to think of ways in which they can benefit even individual parts of Wales, or perhaps the whole of Wales. Yet the custom is that the general attitude of other Members in this House ought to be "Lucky old you. You have had a bit of a handout."

But the reality is that any such hand out at least has to add to the public sector borrowing requirement. If we have an irresponsible Government, that leads to more inflation because the money is printed. If we have, as I concede we have in general at present, a financially responsible Government, it perhaps leads to cuts in public expenditure, although that seems to be less likely, or to increased tax, or to higher interest rates, with all the disincentive that that brings.

So it is right that hon. Members from all parts of the United Kingdom should considers and consider carefully, any proposal to give economic advantage to a constituent part of the United Kingdom, and indeed it is perhaps right that I should be allowed to say something on behalf of my constituents, for the West Midlands has been gravely disadvantaged over the years by a succession of Governments imposing their regional policies upon it and the South-East.

It is always thought that policies designed to benefit, let us say, Scotland, or Northumberland or Durham affect only Scotland, or Northumberland or Durham. No such thing. The policy of restricting factory and office development in the West Midlands has been to give a disadvantage to the West Midlands, and, it has been hoped, a compensating advantage to those areas which were formally areas of a higher level of unemployment and a lower level of prosperity than the West Midlands.

Mr. Gwynfor Evans

Does the hon. Gentleman agree that the West Midlands, while losing as he has suggested, has gained a great deal from Wales, especially through the forced migration of hundreds of thousands of Welsh people, providing the West Midlands with labour —very often the cheapest labour that it had?

Mr. Budgen

I am a Unionist. I want the Union to continue. I applaud above all the reciprocal advantages that the Union has given to us. Of course what the hon. Gentleman says is true. We have benefited each other in the United Kingdom in peace and war, and in numerous and frequently referred to ways.

Sir David Renton

In partnership.

Mr. Budgen

Of course it is a partnership of benefit to us all. We are talking now of an Assembly which is being put forward as a means of placating the forces of separatism. Therefore, if we have to consider this on the basis of a partially separatist philosophy, those areas around Wales that are likely to be disadvantaged by any attempt to give economic advantages to Wales should consider their position.

My basic proposition is that the West Midlands have been gravely disadvantaged by regional policies in recent years. I make no party point about this. Successive Governments of all variations of political hue have damaged the West Midlands by their regional policies. But it would be even worse—it would be compounding that felony—if the situation arose in which the people of Wales, through their subordinate Parliament, their Assembly, were able to assume an economic role and to give to themselves even greater advantages than would be accorded to them by the United Kingdom Parliament.

I, as a loyal member of my party, accept that my party has said that it will accept the Welsh Development Agency and the Development Board for Rural Wales on what I hope I can reasonably describe as a provisional basis. After a couple of years we shall have a look and see, on perhaps a more practical than philosophical basis, whether those bodies have performed the functions that their proponents allege they have been set up to do.

8.30 p.m.

If those functions—and it is the functions about which I am concerned—are to be exercised at all, in fairness to the United Kingdom taxpayer and in fairness to those once-prosperous regions that are so close to the border of Wales, they should be exercised by the Secretary of State for Wales, responsible to the United Kingdom Parliament, and should ultimately be exercised not in the narrow sectional interests of Wales alone but in the interests of the United Kingdom as a whole. It is for those reasons that I support the new clause.

Mr. Hooson

The dichotomy of the Conservative Benches is very interesting. As I listen to the hon. Member for Pembroke (Mr. Edwards) and others speaking during these debates I gather that it is their view that Wales will be disadvantaged by the Assembly, and yet the view of the hon. Member for Wolverhampton, South-West (Mr. Budgen) is clearly that Wales has a potentially unfair advantage in having an Assembly. He thinks that the economic benefit that might be derived from the Assembly will be such that it will be unfair to his constituency in Wolverhampton, South-West, which is not very far from the Welsh border. I wish that Conservative Members would make up their minds which viewpoint is the official one on this matter.

I find this whole problem one of considerable difficulty. I was tempted to support the new clause, until I heard the hon. Member for Pembroke moving it. I tell him frankly that I think there is greater danger of the removal of the Development Board for Rural Wales, which is of great importance to Wales, if the new clause is carried than if it is not.

The hon. Gentleman said in the Welsh Grand Committee: The third detailed point that I wish to make is that nothing that has happened so far inclines those of us who sit on these benches to change our mind about our belief that the Rural Development Board should not have been separated as it has been from the Agency. Certainly we shall want to look at that again."—[Official Report, Welsh Grand Committee, 23rd January 1978; c. 27.] The hon. Gentleman virtually repeated that statement today, using words similar to those that he used in the Welsh Grand Committee; namely, that the matter should be looked at again in two or three years' time. The Development Board for Rural Wales is under direct threat from the hon. Gentleman, and when I interrupted him today I was hoping to have an assurance that that was not so. Had I received that assurance I might have taken a different view about this matter, but no such assurance was given.

Nothing could be worse than to make the Development Board for Rural Wales as it were a sub-committee of the Welsh Development Agency. The Board is what it sets out to be. It is specifically charged with priming the pump and developing the rural areas, particularly those in Mid Wales that suffered enormously from depopulation. The Welsh Development Agency, on the other hand, has far greater responsibilities for the industrial areas. Its slant is different. Its thrust is different, and I see no case for amalgamating those bodies or for making one a subsidiary or a committee of the other.

I know that the hon. Gentleman might not do that if he ever had the power to do so, and he has made that clear. On the other hand, he has also made clear from what he said in January and today that he would be minded to do that.

Mr. Nicholas Edwards

I really do not think that the hon. and learned Gentleman can talk about direct threats when all that I have said is that I would like to see how organisations work in practice, and in the light of their experience, see if any improvements can be made. His accusation is a gross misuse of language.

Mr. Hooson

If he had no such intention the hon. Member would not have used such generalised words. He would have been more specific. The words "to see what improvements can be made" could mean anything. And when one marries that to the actual words he used in January, that nothing had made him change his mind about the belief that the rural development board should not have been separated, as it has been, from the Agency, what other conclusion could any reasonable person reach?

Sir Anthony Meyer

Would the hon. and learned Member not concede that there are disadvantages flowing from the fact that the remit of the Development Board for Rural Wales covered only certain parts of rural Wales, whereas the problems of rural Wales cry out to be dealt with as a whole? The problems of industrial Wales are dealt with as a whole by the Development Agency.

Mr. Hooson

The Development Board for Rural Wales is young. It is all very well for the hon. Member to complain that its remit extends only to a limited area. Had it been left to his party we would not have had a rural development board at all. It is all very well now to say that its area should be larger. That was not the ground on which the Conservative Party opposed the setting up of the Board.

Mr. Budgen

rose—

Mr. Hooson

I must make some progress, otherwise Mr. Deputy Speaker will be very cross with me.

I want to look at the problem involved here, because there is a basic problem which has been little masked by what has been said so far. Clause 60 provides the powers, if the Secretary of State agreed with them, for the functions of certain of these bodies to be taken over by the Assembly.

I believe that the Welsh Development Agency should be responsible to the Assembly. It should be a separate organisation, with its affairs discussed and debated at the Assembly. It is a wrong principle that bodies like the Development Agency should go on in their own sweet way, and that the way in which they carry out their functions should not be generally the subject matter for public debate.

That is one of the functions that the Assembly could perform. There should be an accountability. Indeed, there are bodies that are accountable to this House, but we do not try to perform their functions. To whom is the Welsh Development Agency responsible? Nobody, really, except the Minister.

It might be said that it is accountable to this House. But the truth is that we have discussed the Welsh Development Agency only once in the Welsh Grand Committee. We have an annual report, I agree. But there should be at least a couple of debates each year on the functions of the Development Agency. I cannot remember our having a debate on the Development Board for Rural Wales since it was set up. As has already been pointed out, we have only once had a debate on the Arts Council in Wales in the Welsh Grand Committee.

This shows that there is a function that the Assembly can perform, and it is a very important function when related to the Welsh Development Agency and the Development Board for Rural Wales. Personally I would like to see the Development Board more accountable to county councils because of the areas in which it functions. Even Cardiff is too remote for the accountability of the Board.

Presumably, no function of the Development Agency or the Development Board can be taken over without the Secretary of State's consent. I can understand why this power is given, because, if the Welsh Assembly is to develop, it is bound to do so in a certain way. I have no doubt that before long, the Development Board will have its area extended, whatever the political complexion of the Government. These bodies are set up and they grow. When the Secretary of State first had this power he simply took over powers which had been in the hands of the Minister who was responsible for local government at the time, and various functions were added by different Governments. Health functions were added by one Government, educational functions by another and the system evolved in that way. The same will occur with the Development Agency. The fact that its powers will evolve does not mean that it will become an agency for separatism or anything of the kind.

The House would like to be assured by the Minister that the Government do not intend in the near future to consent to any such takeover of functions. It is a different matter altogether whether it will do so in five, 10 or 15 years' time. It is difficult to return to this House for powers, because one has to join the legislative queue. Therefore, I see nothing wrong in taking powers which may eventually be exercised. If the hon. Member for Pembroke were Secretary of State, I understand that he would have no intention at present of consenting to a takeover of those powers, but the position may be different in 10 or more years' time.

Sir David Renton

Has the hon. and learned Gentleman understood the full implications of his remarks? Does he not realise that by giving the Secretary of State power to hand over these two important bodies to the Welsh Assembly without having to ask this House for an affirmative resolution or giving the House the opportunity to annul the order, he is creating a situation that the House should not accept because it is this House which, in the last resort, by voting the money, will enable either the Welsh Development Agency or the Development Board for Rural Wales to carry on at all, or to enable the Assembly to carry on on its behalf? If the House is to have the responsibility of voting the money ultimately, it should meanwhile have the responsibility of saying whether such a change should take place at all.

Mr. Hooson

I understand that view, but if the right hon. and learned Gentleman stops to analyse the matter he will appreciate that we have delegated powers to many non-democratic bodies, to Ministers, their Departments, and so on, and this House never hears about those powers. But in this case we are delegating power to an Assembly. That elected Assembly will be responsible for the exercise of its functions. I know my fellow countrymen and I do not believe that they would elect to the Assembly people who will not discharge their democratic responsibility in a fair and proper way. There may be a difference of political view, but it will be no different from the position in this House. I fail to understand the fears expressed by the right hon. and learned Gentleman. He appears to be arguing against any form of devolution at any time.

Sir D. Renton

No, that is not so.

Mr. Hooson

The hon. Member for Wolverhampton, South-West said that his constituents would be at a disadvantage. I thought that he made out an excellent case for devolution to the West Midlands.

Mr. Budgen

No, I did not.

Mr. Hooson

I would have a great deal of sympathy with that view. The hon. Member suggested that the West Midlands would be at a disadvantage if Wales were devolved and the West Midlands were not.

I have said enough to make clear that I intend to vote against the amendment, although I believe the Minister should make clear the Government's view on the discharge of this function and give the Secretary of State's view about the timing of any changeover.

8.45 p.m.

Mr. Ioan Evans

I did not intend to participate in this part of the debate but I do so as certain misgivings have been aroused. When the Welsh Development Agency Bill passed through the House, there was a division among the parties. In the early stages, Conservative Members did not accept the idea of a Welsh Development Agency. However, now that the Bill has become an Act, I think that they have been persuaded to recognise that the Agency is performing a first-class function in Wales.

We should remind ourselves that its functions were

1. "(a) to further the economic development of Wales or any part of Wales;
2. (b) to promote industrial efficiency and international competitiveness in Wales;
3. (c) to provide, maintain or safeguard employment in any part of Wales; and
4. (d) to further the improvement of the environment in Wales (having regard to existing amenity)."

I believe that the Agency has performed a first-class job. It has issued its first report, which covers a period of longer than 18 months.

We have heard a great deal about nominated bodies and the need for such bodies to be more accountable. The people whom we bring to the board of the Welsh Development Agency should be those with industrial expertise. That should be the qualification. I do not think that it makes the Agency any more democratic to suggest that its board members should be elected or be candidates for election to the Assembly and then be put on the board to run the Agency.

Mr. Budgen

The element of democratic control is exercised by the Secretary of State, who has ultimate responsibility. The Secretary of State is in turn responsible to the House.

Mr. Evans

I was about to make that point. I was saying that on the board of the Agency we have people with industrial experience from trade unions, industry and the CBI in Wales. They have expertise. They have acted as a board in the year or so that the Agency has been operating. The Agency has done a first-class job. The Agency is answerable to the Secretary of State, who is in turn answerable to the House. Therefore, there is democratic accountability. If we find that the Secretary of State is exercising his powers by appointing board members whom we think unsuitable, it is up to us as Members of Parliament to let the Secretary of State know on the Floor of the House, in the Welsh Grand Committee or in correspondence that we take the view that he is not putting the best people on the board. In that sense there is accountability.

I hope that when my hon. Friend the Under-Secretary replies he will be able to give us certain assurances. It has already been suggested that the Agency should be run by the Assembly. As I understand it, it is not one of the powers to be devolved to the Assembly. I understood that the Agency would continue to be administered by the Secretary of State and that it would be answerable to the House.

Mr. Nicholas Edwards

That was the original proposal in November 1975. However, in May 1976 the Government issued a supplementary White Paper in which they handed over full responsibility for the Agency to the Assembly.

Mr. Evans

If that is so, it has not been written into the Bill. Clause 37 is headed "Industrial and economic guidelines". I accept that there are industrial and economic guidelines, but there is not the transfer of the power to administer the Agency. The Agency is responsible to the Welsh Office and will continue to be so. It will not be responsible to the Assembly.

Mr. Edwards

No doubt the Minister will clarify the position, but I think that the hon. Member for Aberdare (Mr. Evans) misunderstands it. As a consequence of this legislation, I believe that the Development Agency will be responsible to the Assembly but that the Secretary of State will still be issuing guidelines under the powers granted in Clause 37.

Mr. Evans

We need clarification about this. The whole argument has been that we could devolve certain powers to the Welsh Assembly while maintaining the economic and political unity of the United Kingdom. That is the whole purpose of the Bill. It will create a weakness if we put the running of the WDA under the Assembly.

At the moment, funds are granted to the Agency by the House of Commons. We have been in the happy situation in Wales so far—no doubt due to the good management of the Agency—that not all the funds allocated have been taken up. But in future, if the Agency has to be covered by the block grant to the Assembly, that would be a retrograde step.

We tend to think of economic and industrial investment in terms of the needs of the regions. Where the need is greater, we say that the investment should be greater. The need is certainly greater in Wales. There is also greater dereliction in Wales because of effects of the industrial revolution, because of the spoil heaps in South Wales and the slate quarries in North Wales. This adds up to a sensible argument in favour of Wales getting a higher proportion than other regions of the money provided to deal with this problem. But if the Agency and similar bodies, such as the Rural Development Board, are to be put under the auspices of the Assembly, does that mean that their financial requirements will have to be satisfied from the Assembly's block grant?

I understand the desire to make all these nominated bodies democratically accountable, but I believe that that could be done without establishing all the paraphernalia of a Welsh Assembly. The Development Agency has got off to a good start, but if we are to make it responsible to the Asesmbly we shall create unnecessary uncertainties.

Government money is allocated to Wales according to definite criteria which determine where the assistance should go. When the Assembly is established, will the allocation of funds be determined on the basis of political muscle in the Assembly? After all, the Assembly will be dominated by Glamorgan and Gwent, because that is where the majority of the population in Wales lives. Are we now to have some pressure brought on the Welsh Development Agency rather than leaving it to determine the industrial and economic criteria about where industry is to go? Are such matters now to be determined by the tact that certain people are in a position to exercise more influence on decisions?

The present arrangement whereby the Welsh Development Agency is answerable to the Government through the House has worked well. We can argue about whether certain powers will be devolved to the Assembly, but, if we are further to devolve economic powers, what financial arrangements should we make? Will it be said that the amount of finance that the Assembly shall receive will not be affected by such a decision? If so, that means that we shall have created a spending body with no ability to raise finance. We are electing people not to raise money but simply to spend it. If we are to give to the Welsh Assembly the power to tell the Welsh Development Agency what to spend, does it mean that there will not be any accountability in regard to the financial demands? This matter needs clarification. I hope that my hon. Friend the Minister can put my mind at rest.

I believe that the Welsh Development Agency is doing a good job. It would be better if the Agency were to be accountable to the House, where the funds are, just as the National Enterprise Board is accountable to the House and as, I hope, will be the Scottish Development Agency and other development agencies which might be established in other parts of the country. We should not try to constrain and confine the activities of the Welsh Development Agency by tying it to the block grant that is allocated by the House to the work of the Welsh Assembly.

Mr. Ian Grist (Cardiff, North)

The hon. Member for Aberdare (Mr. Evans), as he often does, has made a sensible speech based on sound common sense—the common sense that will mean that the entire time we have spent on the Bill has been utterly wasted.

The only thing to be said for the Bill is that it has got in the way of the Government's bringing forward other legislation which might be more damaging to the nation as a whole than that which we are debating. Nevertheless, we shall spend about £500,000 on this wretched referendum, only to arrive at the conclusion about which we all know, anyway.

The new clause and the arguments aroused by it have demonstrated why there will be a "No" vote. There is a question of conflict, which runs all the way through the Bill.

Clause 60 promotes the idea that the Welsh Assembly will be able to take over the powers of the Development Agency and of the Development Board for Rural Wales. In passing, as an indication of lack of common sense, I regret to say that the speech of the hon. and learned Member for Montgomery (Mr. Hopson) took some beating. He complained that we were not debating—at least twice a year it seemed to me—the work of every nominated body in Wales, particularly the Board. When his party had a choice of what we would debate in the Welsh Grand Committee, it chose the Arts Council, for which we have no responsibility, and did not choose to debate the Board.

As the hon. Member for West Lothian (Mr. Dalyell) said, the Welsh Assembly will demand the right to run these agencies and boards. It will have virtually nothing else to do, that is, unless it is to take over the day-to-day powers of the local authorities. We have been assured time and again that the Welsh Assembly will not take over the powers of the local authorities. What is it to do? Will not such a nationally elected body, with all its prestige, want to take over those nationally appointed bodies that come under it?

9.0 p.m.

Will the Assembly not also want to be responsible for the Welsh Development Agency? Of course it will and that will be the first pressure that any Secretary of State for Wales will be coming under.

What happens then? It is possible that he may agree to give the Assembly the powers of the Agency. We have heard from the hon. Member for Caernarvon (Mr. Wigley) how he would like to see the powers of the Agency used by a politically motivated Assembly rather than an Agency the board of which is manned by industrialists and trade unionists who are appointed for their expertise to use their overall judgment over the whole of Wales, taking note of unemployment, as one of their functions, but not favouring this or that place in Wales.

An elected political body is bound to take note of those specifics that accord with the power of individual Assemblymen, the Prime Minister or chief executive and his Ministers. I have no doubt that the power of the Agency will be used to benefit those areas where the greatest influence can be brought to bear by the politicians of the Assembly. If that happens, the question of where the funds come from arises. If the Assembly is seen to be operating in that way, this House, which will be responsible for raising the money for the Assembly, will prove particularly sticky.

What will be the role of Welsh Members in the House who will be putting forward the demands of the Assembly for money when they can see in their own backyards the misapplication of funds? It may be said that the funds will not be misapplied. If so, why should the Assembly be responsible for the Agency? It is either necessary or it is not. If it is politically necessary, I think that it is politically damaging.

There is another obvious way in which conflict may arise between the Assembly and this House. Suppose this place had a Conservative Government and the Assembly, which was not Conservative, told the Secretary of State that it wanted to take over the functions of the Welsh Development Agency. The Secretary of State would say "Not on your life. I shall not allow you to operate in the Welsh economy contrary to the economic principles and practices of the Conservative Government."

What would be the reaction of the Assembly, elected as a national body with all the prestige and power, the newness and excitement of that body? Would it not be to further the aims of nationalism and divisiveness in the United Kingdom? Is that not why, all along, nationalist Members have supported economic powers for the Assemblies in Scotland and Wales?

Mr. Dalyell

Will the Assemblies not just say that they were insulted by any decision that did not suit their interests?

Mr. Grist

Of course. That is what both these Bills are about. I believe that when the Wales Bill is put to the people, it will be rejected, and I hope, with increasing optimism, that the same will occur in Scotland. Yesterday's local government election results have set the pattern for what is coming later in the year.

What a waste of time for us all, and what a peril to the United Kingdom.

Sir A. Meyer

The debate has been remarkable for one of the rare interventions of the Secretary of State's silent nightingale, the hon. Member for Brecon and Radnor (Mr. Roderick). It is always nice to hear the hon. Gentleman, but we do not hear him very often. Indeed, his interventions are almost as rare as the appearances of the Secretary of State at our debates.

Of course, after the Secretary of State's bruising experiences when he last attempted to intervene in our debates, perhaps his absence is not so surprising. It may be that that experience accounts for the fact that we have heard little so far about the iniquity of these nominated bodies stuffed with Tory nominees and so on. I agree with the hon. Member for Aberdare (Mr. Evans) about the better way of securing democratic control over these nominated bodies. His sentiments will be echoed from both sides of the House. The way to do this is by strengthening the machinery of the House in its dealings with the activities of these bodies.

I have few words to say in this debate. The hon. Member for Brecon and Radnor let the cat out of the bag when he made it plain how much he expected the Assembly to extend its economic activities. I try to convince myself that the Assembly, exercising the economic powers which it will clearly attempt to exercise, will be better able than the Welsh Development Agency as at present constituted to uphold the interests of Wales as a whole and to forward the economic development of Wales.

If people are to be appointed to the board of the Agency on the ground of their acceptability to the Assembly rather than because of their qualifications for the job—and there will be conflicts between qualification for the job and acceptability to the Assembly—will the Agency be better able to ensure maximum development in the creation of jobs for Wales? Will such an Agency thus controlled by the Assembly have more appeal to those foreign investors who are so vital to the future of Wales?

A recent authoritative study demonstrated how many jobs in Wales come from foreign investment. Foreign investors are less concerned about whether there is democratic control over the activities of the Agency than whether it functions efficiently. I wonder whether the kind of democratic control which is envisaged by extending the powers of the Assembly will result in the Agency having a greater appeal to foreign investors.

As the Minister knows, I am also anxious about the current proposal of Hotpoint to extend its activities into my constituency and about the attempt by a number of Merseyside Members to steer this development away from Wales towards Merseyside. In such a situation, would a development agency under the control of the Assembly be better able to withstand this kind of imperialism from across the Mersey than it is now? I have grave misgivings on this score.

We are embarking on a path which will diminish the ability of the Development Agency to do its job. Like many of my hon. Friends, I have been agreeably surprised about the way in which it has set about its task. But if we do not insert the new clause the Agency will be unable to do its job in the satisfactory way in which it has done it during its brief existence.

Mr. Gow

All the way through this Bill and all the way through the Scotland Bill, my right hon. and hon. Friends and I have argued that there is a recipe for continuing conflict and disagreement between the Assemblies and the House and for conflicts between the Assemblies and the Secretaries of State. We have argued that there are vast areas of great uncertainty, particularly in the Wales Bill.

The new clause is, in effect, an amendment to Clause 60. Clause 60 is one of the most obscure and one of the most dangerous in the whole Bill. One of the extraordinary features of Clause 60 is that it does not specify the bodies to which it applies, yet it gives to the Assembly the power to take over the functions of unspecified bodies or to dissolve unspecified bodies, without the consent of this House, by a new statutory instrument not made in the way to which we have become accustomed but made by the Assembly, and the only limited extent to which this House will have control of the exercise of the powers under Clause 60 is that those powers cannot be exercised save with the consent of the Secretary of State.

It would have been incredible had it not actually been the fact that Clause 60 could have been inserted with no schedule setting out the bodies to which it relates. I tabled a Question for Written Answer to the Minister and he was good enough to answer giving a list of the bodies that might be affected. But we need to be very much more specific than giving a Written Answer in the House when we are debating legislation, and particularly legislation of a constitutional kind. Therefore, the new clause has the merit that it would at least tell us two bodies which are excluded from Clause 60, and that at least gives us some element of certainty. On that ground alone, I welcome the new clause.

However, it is not only on that ground that I support the new clause. I am no particular friend of agencies or development boards, but for the moment I shall overcome my lack of enthusiasm for organisations of that kind because I want to direct my remarks to the Welsh Development Agency.

The WDA was set up only three years ago, by the Welsh Development Agency Act 1975. Only last month there was presented to Parliament the first set of accounts of this new Agency, covering the period 1st January 1976 to 31st March 1977. We may note, in passing, that the accounts of that body were not actually presented to Parliament until very nearly 12 months has elapsed from the end of the first financial year, which was not a financial year but a financial 15 months, although I note that in passing.

However, what are the powers that are conferred by Clause 60? Without recourse to this House, and with the consent of only the Secretary of State, that Agency, set up by Parliament, financed by the consent of this House, could be dissolved or taken over by the new Assembly. These are the powers that the Government are giving to the Assembly—to dissolve the very body which only three years ago the Government told the House was essential for the economic well-being of Wales.

Within a space of three years, therefore, the Treasury Bench tells the House that that which was regarded as essential to the well-being of Wales three years ago can now be executed, can have its head and its members dismembered. Nor is that all As if to add insult to injury, there is the breathtaking provision of subsection (3) of Clause 60. That provides that before committing an act of murder upon the agency the victim shall be consulted. This is carrying the traditions of 1789 too far.

9.15 p.m.

As you will know, Mr. Deputy Speaker, because you will have seen the document, in the report of the Comptroller and Auditor General we are told what are the duties—

Mr. Deputy Speaker (Sir Myer Galpern)

As the hon. Gentleman says, I have glanced at that report, but I fail to see what it has to do with New Clause No. 5.

Mr. Gow

New Clause No. 5 would prevent the premature death of the Welsh Development Agency.

Mr. Deputy Speaker

I understand that, but what has the report to do with New Clause No. 5?

Mr. Gow

We are told in the report what are the functions of the Agency, whose death my hon. Friend the Member for Pembroke (Mr. Edwards) wishes to prevent. What I am now asserting are not the words of an unknown Back Bencher representing a seaside resort but the words in the report of the Comptroller and Auditor General. I am defending the Government's position. The Government should have welcomed this new clause. Since we are not likely to get a very credible answer from the Minister, I was offering not only my support but that of the Comptroller and Auditor General. I was arguing that he believes that the WDA is of great importance because he agrees with the Government. The Government themselves believe that the Agency is important, or they would not have set it up only three years ago.

Mr. Dalyell

Who will look after the Welsh Development Agency in future—the United Kingdom Comptroller and Auditor General, who is responsible to the Public Accounts Committee, or the Welsh Comptroller and Auditor General?

Mr. Gow

As ever, the hon. Gentleman has raised an important point. On page 51 of the Bill, in part IX of Schedule 2, there are listed the eight elements in the Welsh Development Agency Act 1975 which are excluded from the purview and responsibility of the Welsh Assembly. So not all the responsibilities under that Act will be devolved to the Assembly. That is another recipe for conflict.

The Agency's purposes, of which the Government approve, of course, are also approved of by the Comptroller and Auditor General. In his report, he said: The Agency's purposes are to further economic development; the improvement of the environment in Wales; to provide, maintain or safeguard employment there; to promote industrial efficiency and international competitiveness. Can the Government really be proposing to destroy, or to give to the Assembly the power to destroy, the very body which is carrying out objectives which on any view are intensely desirable?

The Minister and I may disagree about whether an agency is the best body to provide, maintain and safeguard employment, but that is the Government's own case. It would be wrong to transfer to the Assembly the power to make an Order in Council under Clause 60 without the consent or approval of this House. For that reason, I shall support the new clause enthusiastically.

Mr. Nicholas Fairbairn (Kinross and West Perthshire)

We have in Scotland the Scottish Development Agency. It is important to appreciate that if we are to have Assemblies, they will have political reasons to demonstrate their strength, their attitudes and their political importance. If we give the Welsh Development Agency to the Welsh Assembly, the WDA will be able artificially to promote new industry, investment, and so on, and will thereby do what the SDA is doing now, in the name and the pretence of political interest.

It is pretending to create employment, whereas all that it is doing is to move employment from one place to another and to move skilled labour from one place to another. It is bad enough that that should be done by central Government, but if it is to be done by an Assembly which has a political interest in the very pretences in which the Development Agencies are presently indulging, by God, it will reflect upon this House!

Mr. Dalyell

The hon. and learned Gentleman might reflect on the differences between the Scottish and Welsh Development Agencies. We understood very clearly from the Scotland Bill that, at any rate for the moment, the Scottish Development Agency was to be excluded from the Assembly's clutches. It was emphatically a non-devolved area. I was baffled to learn during the course of this debate how great are the powers of the Welsh Assembly over the Welsh Development Agency. It would be interesting to know the difference.

Mr. Fairbairn

I am most obliged to the hon. Gentleman for that point. In the Scotland Bill we were wise enough to exclude that—thank goodness, because it would be the most dangerous political lunacy to allow the Scottish Assembly to buy votes, to buy attitudes, by spending its money. If Wales is to be given the alternative, that is bad.

I am most in favour of the new clause, which would prevent the Welsh Assembly from using a political device, from obtaining an apparent advantage by spending money on a false and pretended political objective.

Mr. Alec Jones

I was much impressed by the new-found love of the hon. Member for Pembroke (Mr. Edwards) for both the Welsh Development Agency and the Development Board for Rural Wales. It was not a love that found expression in other debates or in the way in which the Conservative Party voted on certain occasions. But I welcome the sinner who repenteth, even at a late hour.

What the hon. Gentleman did not do—if, indeed, he intended doing it—was to allay the doubts and fears of the House, and certainly those Welsh Members who sat on the last Welsh Grand Committee, over his party's attitude towards the DBRW and the WDA. He clearly failed to give the assurances that the hon. and learned Member for Montgomery (Mr. Hooson) sought, particularly about the DBRW.

It is true that the hon. Gentleman paid tribute to the Agency's work, but I find it difficult to believe that a Conservative Government would tolerate the existence of a Welsh Development Agency and at the same time use their votes to remove a Scottish Development Agency, which the Press recently reported was the Conservatives' intention. Some of the contributions to today's debate strengthened my suspicions. I think that it can fairly be said that the hon. Member for Wolverhampton, South-West (Mr. Budgen) saw the WDA as giving an unfair advantage, to Wales. I cannot easily believe that a Conservative Government supported by that sort of view could give a strong future for the Agency.

Mr. Nicholas Edwards

I do not understand why the hon. Gentleman, who is usually a very fair and reasonable debater, thinks that he adds to his case by repeating an assertion about the Scottish Development Agency on the basis of an ill-read Press report that I have already pointed out is wholly untrue. I suggest that the Under-Secretary does not repeat his scare story when it has been officially denied from the Conservative Benches.

Mr. Jones

It may be said that it was only a Press report, but I recall the words that were used in criticising the idea of a Welsh Development Agency. It was my impression—I do not know whether I am right in this—that the hon. Member for Eastbourne (Mr. Gow) was not a lover of development agencies either, despite his representing a seaside resort.

Sir Anthony Meyer

The Minister referred to the remarks of my hon. Friend the Member for Wolverhampton. South-West (Mr. Budgen), but did he not listen to any of the speeches of his hon. Friends from constituencies in the North-East and note the views that they held on devolution for Scotland and the way they voted?

Mr. Jones

I have made a good many notes of what hon. Members have said in today's debate, and it is today's debate that I am specifically answering. I am particularly dealing with the two bodies operating in Wales.

We are discussing New Clause No. 5 and its proposals for dealing with two of the nominated bodies that are covered by Clause 60, and it is important that to put that clause in its right context. It is a clause that deals with the whole of the bodies which operate on an all-Wales basis. The new clause deals with only two of those bodies.

It would be a mistake to believe that everyone throughout Wales welcomes with open arms the existence of such large numbers of nominated bodies, and their growth over recent years. There can be very few Members of this House, and certainly very few Welsh Members, who have not criticised those bodies, either individually or collectively, over the past few years. I have heard them criticised sometimes because they have made the wrong decision. Sometimes it has been because the decision did not appear to have been justified by events. Often it has been because the decision was made behind closed doors, without people having the opportunity of knowing about or taking part in the discussions until the decision was made. It is that sort of attitude that has led people to criticise these nominated bodies.

In the Welsh Grand Committee debate only a few months ago hon. Members on both sides of the House criticised the Arts Council. The Sports Council has been criticised, because it is said that it spends too much money on golf and does not devote sufficient attention to deprived inner areas. Even the Welsh Development Agency, despite all the words of praise that have been uttered about it, has been criticised. I have heard criticisms because it has paid insufficient attention to parts of North Wales. I have heard criticisms because it has paid insufficient attention to Valley communities.

All these nominated bodies have been criticised, and continue to be criticised. Part of that criticism concerns their very non-democratic nature and the way in which decisions are made. It is no reflection on the members who serve on those bodies to focus attention on that sort of criticism tonight.

These bodies have considerable powers. Obviously, the powers vary from body to body. The two bodies that we are talking about—the Welsh Development Agency and the Development Board for Rural Wales—have economic powers now—this is part of the answer to my hon. Friend the Member for West Lothian (Mr. Dalyell)—and those economic powers will be exercised by those bodies or by some other person. We are basically concerned with who is to control those powers—whether the control of those powers shall be exercised by the nominated element or whether they will be better controlled by an elected body.

Mr. Grist

Does the Minister agree that it is he and his departmental colleagues who are responsible for these bodies? Does he feel that he is not democratically elected or is not democratically responsible to this House? Will he say in what way he would seek to improve the running of the Arts Council, for example?

Mr. Jones

In making appointments to all these various bodies which proliferate throughout Wales, my right hon. Friend and I, and my ministerial colleagues, seek, with the best will in the world, to give them the widest expression and to draw on people who will best fit the job. I would be lying to the House if I were to say that I could give a categorical assurance that we had always picked the right person for the right job. It just is not on that one human being can be infallible in that connection.

9.30 p.m.

In Clause 60 we are seeking to allow the Assembly to consider whether the present control of the Welsh Development Agency and the Development Board for Rural Wales is adequate, whether it can be improved, and, whether the Assembly ought to subsume those two bodies. Whatever the decision, that decision will be made only with the approval of the Secretary of State. Even if those bodies were subsumed, those functions would still have to be carried out within the guidelines approved by Parliament.

What I am saying is that these economic powers of the WDA and the DBRW will be exercised. Another point that I want to make is that the staff that man these bodies will still be doing that work in the future. What we are talking about is the question who shall have control of the way in which these bodies will be exercised. That is the issue that we are now discussing.

Sir Raymond Gower

Might it be deemed something of an objection that the Minister is saying that power should be democratically exercised by the Assembly although the money provided for these bodies is provided by this House? The Minister is in this House and should answer to this House rather than to someone who does not provide the money.

Mr. Jones

If the hon. Gentleman had listened, he might have paid more attention to the fact that I referred to the guidelines. The guidelines are very powerful weapons of influence and control. They are approved by this House and will remain in existence, even should those bodies eventually be subsumed.

Mr. Hooson

I do not think the Minister has quite dealt with the point that is worrying some hon. Members, namely, the interpretation of the word "functions". As I understand it, what he is saying is that bodies such as the Welsh Development Agency should be responsible to the Welsh Assembly. In that I agree with him. But it is a question of the functions now performed by those bodies. It is that word that is giving trouble.

Mr. Jones

When I develop the point I think the hon. and learned Gentleman will see exactly what I am saying. I hope that it will be of some help, although I am not sure after some of the remarks that were made earlier, but not by the hon. and learned Gentleman. We are trying to devise a scheme that will give better and more democratic control over these all-Wales bodies. These all-Wales bodies will now be able to report, and become accountable, to the Assembly itself.

What Clause 60 does not say is that the Assembly will subsume these all-Wales bodies. It does not even say that the Assembly ought to subsume them, or that it must subsume them. It can and may. That means that the Assembly can express its wish to take over part or all of the functions of such bodies. In other words, it can express its view about their future management, but always, before any decision can be made, subject to the approval of the Secretary of State.

Mr. Brittan

Will the Minister explain why it is, within the context of the measures for devolution, when the Scottish Assembly is on the whole given greater powers, that the Welsh Assembly should be able to take over the powers of the Agency whereas the Scottish Assembly is not given that power? Can there be any rational justification for that?

Mr. Jones

These questions have been asked and I am prepared to answer them. When I come to that point in my speech I shall deal specifically with the reasons for the different treatment, but if hon. Members intervene at every moment I shall never answer any of the questions. I shall be dealing specifically with that point, because it was referred to by several hon. Members.

Clause 60 gives the Assembly the powers, if it thinks it appropriate to use them, to consider and to initiate the machinery for subsuming as a means of furthering democratic and more efficient control. In my view, this does not mean abolition. It means putting those bodies under more democratic control. The WDA and the DBRW are only two of such bodies which the Welsh Assembly can consider subsuming and can even request it.

Of course, the Assembly can also decide whether to leave them exactly as they are or to carry out some other minor reforms. But there is no question of any automatic assumption merely because the Assembly would want it. It is important to realise what the Assembly will do. Most hon. Members who support devolution do so on the assumption that the Assembly will consist of responsible men and women representing the best interests of Wales.

The Assembly will want to devise the most effective tool for administering the powers of the WDA and the DBRW. It will want the most effective powers so that it can look after the interests of the whole of Wales. The first step will be to consider what action should be taken by the Assembly. The Assembly will first consider the possibilities of leaving these bodies in existence, modifying some of them, taking part powers, which the clause provides, or subsuming them.

Then there is the next step. The Assembly is obliged by the Bill to consult the bodies concerned. One hon. Member referred to consulting the person whom one will murder later in the day. But surely consultation is an important element in our modern society. When we were discussing elements of the WDA and the DBRW upstairs in Committee, the Conservatives thought it desperately important that consultation should take place. Therefore, surely they welcome this sort of consultation even if they disagree with the principle of devolution itself. Thus, consultation is the next step.

Following the consultations, the Assembly would have to make its decision as to the course of action it wished to take. It could not take that decision in Committee. It would have to take it in plenary session. Then it would have to seek the approval of the Secretary of State. That means that the final decision on whether these two bodies or any other should be subsumed will be the decision of the Government of the day. I am sure that when the Secretary of State comes to make that decision on the subsumption of any of these bodies he will not be short of advice and will not lack knowledge of the views of the bodies concerned or of Members of this House.

There will have been public debate and discussion in the Assembly. The bodies concerned will have expressed their views to the Secretary of State and to Members of this House—judging by the literature which floods through my mailbox—and because of the public discussion there will be public reaction to it. At the same time, there will be political pressure and questioning by Members in this House.

Mr. Ioan Evans

On the question of the Welsh Assembly's taking over the running of the WDA, will my hon. Friend touch on the financial arrangements that will flow? Is the financing of the WDA to come through the block grant to the Assembly, or is there to be a special financial arrangement?

Mr. Jones

We are back to phase I. This is the point that I made to the hon. and learned Member for Montgomery. I cannot answer questions straight off the trot like this. I shall be dealing presently with the point made by my hon. Friend the Member for Aberdare (Mr. Evans) and that made by the hon. and learned Gentleman. They are important.

As I was saying, even if the order is made and the bodies are to be subsumed, and if the order is approved by the Secretary of State, that does not mean that the Secretary of State or the Government relinquish all control over the WDA and the DBRW.

Several important and essential powers are retained. One, which is of considerable importance and is to be found in Part IX of Schedule 2, is the power to provide selective financial assistance under Section 7 of the Industry Act. It is remarkable that Opposition Members who make speeches and ask questions are so unwilling to listen to any of the answers. We are talking about selective financial assistance under Section 7 of the Industry Act. The Welsh Development Agency does not have those powers as of right. It acts only as agent for the Secretary of State. If the Welsh Development Agency were subsumed the Assembly could become the agent of the Secretary of State, but only with the approval of the Secretary of State.

The major restriction on the powers that will be exercised by the Assembly in the event of any subsumption of these bodies is to be found in the guidelines. The Agency at present operates under guidelines that are produced by the Government and are subject to the negative procedure of the House. Even if the Government were to agree that the Agency could or should be subsumed its operations would still be subject to those Government-provided guidelines. It is important to take into account that the guidelines have the parliamentary procedure attached to them. They are drawn up by the Government, and they will apply even post-devolution.

When it was suggested that all these tremendous functions could be taken over by the Assembly, insufficient attention was paid to the importance and restrictive nature of the guidelines. Had hon. Members paid greater attention to Clause 37 and the spelling out in that clause of what the guidelines provide they would not have made the somewhat wild accusations that were made today.

The hon. and learned Member for Montgomery asked whether we envisaged any early subsumption by the Assembly of the Welsh Development Agency and the Development Board for Rural Wales. The initiative will lie with the Assembly, but I am satisfied that a newly established Assembly will have enough on its plate to deal with the powers devolved under Schedule 2 and Clause 10, which were the subject of our previous debate, without wanting, in its early days, to bite off a lot more than it can sensibly chew.

The hon. and learned Member for Cleveland and Whitby (Mr. Brittan) does not have to accept that view, but it is my opinion, and I am as much entitled to hold my opinion as he or my hon. Friend are entitled to hold theirs. I do not deny their sincerity or integrity, and I do not see why anyone should suggest the opposite for me.

A point was made about the difference between the Welsh and Scottish Assemblies. I understand that the establishment of the Scottish Development Agency is a reserved issue, because the Scottish Assembly has legislative powers and therefore could do away with that Agency entirely, leaving no organisation to carry out the reserved and executively devolved functions of that body. That situation could not apply in Wales, because the Welsh Assembly does not have the legislative powers to do likewise with its Agency.

9.45 p.m.

Mr. Brittan

The fact that the Scottish Development Agency has been set up by statute does not alter the point. It would have been perfectly possible in the Scotland Bill to reserve that aspect of the statute while at the same time enabling the Scottish Assembly to take over the powers of the Scottish Development Agency if it wished to do so. That was not done in the Scotland Bill and it is inconsistent to do it in the Wales Bill and allow the Welsh Assembly to take over those powers. It would have been perfectly possible within our legislative framework to put both bodies on an equal footing.

Mr. Jones

Of course it would have been possible, but the decision was made early on. We decided at an early stage that there was to be a difference between the Wales Bill and the Scotland Bill. We believe that the whole process of devolution was drafted as necessary in Wales and in Scotland. Of course inconsistencies exist. They exist by the very nature of the fact that we have two different bodies to deal with.

Sir Raymond Gower

Is the Minister aware that he has not revealed any cogent reason why this should have been done. All he has said is that the decision was taken at an early stage.

Mr. Jones

I clearly said that because the Scottish Assembly had legislative powers, it could exercise those powers in such a way as to do away completely with the SDA and leave nothing behind to carry out the reserved and effectively devolved functions. That situation cannot apply in Wales because the Welsh Assembly does not have those powers.

I come to the point about the block grants. The devolved functions of both the Welsh Development Agency and the Development Board for Rural Wales will be financed from the outset from the block grant. The Assembly will decide how much and what share, but the guidelines will provide the protection for the interests of the United Kingdom as a whole. Of course Parliament will approve the total of the block grant.

The hon. Member for Pembroke referred to Clause 60(2) concerning the power to modify an enactment being limited by the words "consequential, incidental or supplementary". Despite what the hon. Gentleman feared, this modification could not extend the functions taken over by the Assembly. Further, any modifications must appear necessary or expedient or an additional limitation to it.

Mr. Nicholas Edwards

Only to the Assembly, not to anyone else.

Mr. Jones

That is so. I am trying to show that we are treating all nominated bodies in Wales in exactly the same way leaving the initiative for action with the Assembly but still keeping considerable powers with the Secretary of State and the Government.

For the Welsh Development Agency and the Development Board for Rural Wales, the powers reserved to the Secretary of State and the guidelines which are subject to the approval of this House, effectively give us the right mix. The opportunities for more democratic control of these two bodies will be achieved and at the same time there will be the retention by the Government—

Mr. Deputy Speaker

Order. There is far too much conversation going on in the Chamber.

Mr. Jones

As I was saying, I believe that the clause as it stands achieves the right mix between democratic control and the retention by central Government of the necessary powers which will prevent actions being taken by the Assembly which might be interpreted as unfair to other parts of the United Kingdom. For these reasons, I ask the House to reject the new clause.

Mr. Dalyell

Before the Minister sits down—

Mr. Deputy Speaker

The Minister has already sat down.

Mr. Dalyell

The Minister, no doubt inadvertently—

Mr. Deputy Speaker

The House is now on Report. The Minister has sat down, and the hon. Member for West Lothian (Mr. Dalyell) cannot speak twice on a clause.

Mr. Dalyell

On a point of order, Mr. Deputy Speaker. I think that I rose to my feet before the Minister sat down.

Mr. Deputy Speaker

I repeat that the Minister had already sat down.

Question put, That the clause be read a Second time:—

The House divided: Ayes 225, Noes 243.

Division No. 197]	AYES	[9.50 p.m.
Adley Robert	Fairbairn, Nicholas	Lawson, Nigel
Aitken, Jonathan	Fairgrieve, Russell	Le Merchant, Spencer
Alison, Michael	Farr, John	Lester, Jim (Beeston)
Amery, Rt Hon Julian	Fell, Anthony	Lewis, Kenneth (Rutland)
Arnold, Tom	Finsberg, Geoffrey	Lloyd, Ian
Atkins, Rt Hon H. (Spelthorne)	Fletcher, Alex (Edinburgh N)	Loveridge, John
Atkinson, David (Bournemouth, East)	Fookes, Miss Janet	Luce, Richard
Awdry, Daniel	Forman, Nigel	McAdden, Sir Stephen
Baker, Kenneth	Fowler, Norman (Sutton C'f'd)	McCrindle, Robert
Banks, Robert	Fox, Marcus	Macfarlane, Neil
Bell, Ronald	Fraser, Rt Hon H. (Stafford & St)	MacGregor, John
Bendall, Vivian (Ilford North)	Fry, Peter	MacKay, Andrew (Stechford)
Bennett, Sir Frederic (Torbay)	Galbraith, Hon T. G. D.	Macmillan, Rt Hon M. (Farnham)
Bennett, Dr Reginald (Fareham)	Gardiner, George (Reigate)	Marshall, Michael (Arundel)
Benyon, W.	Gardner, Edward (S Fylde)	Marten, Neil
Berry, Hon Anthony	Gilmour, Sir John (East Fife)	Mates, Michael
Biffen, John	Glyn, Dr Alan	Mather, Carol
Biggs-Davidson, John	Goodhart, Philip	Maude, Angus
Blaker, Peter	Goodlad, Alastair	Maudling, Rt Hon Reginald
Body, Richard	Gorst, John	Mawby, Ray
Boscawen, Hon Robert	Gow, Ian (Eastbourne)	Maxwell-Hyslop, Robin
Bottomley, Peter	Gower, Sir Raymond (Barry)	Mayhew, Patrick
Bowden, A. (Brighton, Kemptown)	Grant, Anthony (Harrow C)	Meyer, Sir Anthony
Boyson, Dr Rhodes (Brent)	Griffiths, Eldon	Miller, Hal (Bromsgrove)
Brittan, Leon	Grist, Ian	Mills, Peter
Brocklebank-Fowler, C.	Grylls, Michael	Miscampbell, Norman
Brooke, Peter	Hall-Davis, A. G. F.	Moate, Roger
Brotherton, Michael	Hamilton, Archibald (Epsom & Ewell)	Molyneaux, James
Bryan, Sir Paul	Hamilton, Michael (Salisbury)	Monro, Hector
Buchanan-Smith, Alick	Hampson, Dr Keith	Montgomery, Fergus
Buck, Antony	Harrison, Col Sir Harwood (Eye)	More, Jasper (Ludlow)
Budgen, Nick	Havers, Rt Hon Sir Michael	Morgan, Geraint
Bulmer, Esmond	Hawkins, Paul	Morris, Michael (Northampton S)
Burden, F. A.	Hayhoe, Barney	Morrison, Hon Peter (Chester)
Butler, Adam (Bosworth)	Heath, Rt Hon Edward	Mudd, David
Carlisle, Mark	Hicks, Robert	Neave, Airey
Chalker, Mrs Lynda	Hodgson, Robin	Neubert, Michael
Channon, Paul	Holland, Philip	Newton, Tony
Clark, Alan (Plymouth, Sutton)
Clark, William (Croydon S)	Hordern, Peter	Nott, John
Clarke, Kenneth (Rushcliffe)	Howell, David (Guildford)	Onslow, Cranley
Clegg, Walter	Hunt, David (Wirral)	Page, John (Harrow West)
Cooke, Robert (Bristol W)	Hunt, John (Ravensbourne)	Page, Rt Hon R. Graham (Crosby)
Cope, John	Hurd, Douglas	Page, Richard (Workington)
Cormack, Patrick	Hutchison, Michael Clark	Parkinson, Cecil
Costain, A. P.	James, David	Pattie, Geoffrey
Critchley, Julian	Jessel, Toby	Percival, Ian
Crouch, David	Johnson Smith, G. (E Grinstead)	Pink, R. Bonner
Crowder F. P.	Joseph, Rt Hon Sir Keith	Powell, Rt Hon J. Enoch
Davies, Rt Hon J. (Knutsford)	Kaberry, Sir Donald	Prentice, Rt Hon Reg
Dodsworlh, Geoffrey	Kimball, Marcus	Price, David (Eastleigh)
Drayson, Burnaby	King, Evelyn (South Dorset)	Pym, Rt Hon Francis
du Cann, Rt Hon Edward	King, Tom (Bridgwater)	Raison, Timothy
Dunlop, John	Knox, David	Rathbone, Tim
Edwards, Nicholas (Pembroke)	Lamont, Norman	Rees, Peter (Dover & Deal)
Emery, Peter	Latham, Michael (Melton)	Renton, Rt Hon Sir D. (Hunts)
Eyre, Reginald	Lawrence, Ivan	Renton, Tim (Mid-Sussex)
Rhodes, James R.	Smith, Dudley (Warwick)	Vaughan, Dr Gerard
Ridley, Hon Nicholas	Smith, Timothy John (Ashfield)	Viggers, Peter
Rifkind, Malcolm	Speed, Keith	Wakeham, John
Roberts, Michael (Cardiff NW)	Spence, John	Walder, David (Clitheroe)
Roberts, Wyn (Conway)	Spicer, Michael (S Worcester)	Walker, Rt Hon P. (Worcester)
Rodgers, Sir John (Sevenoaks)	Sproat, Iain	Wall, Patrick
Ross, William (Londonderry)	Stainton, Keith	Walters, Dennis
Rossi, Hugh (Hornsey)	Stanley, John	Warren, Kenneth
Rost, Peter (SE Derbyshire)	Steen, Anthony (Wavertree)	Weatherill, Bernard
Sainsbury, Tim	Stewart, Ian (Hitchin)	Wells, John
St. John-Stevas, Norman	Stokes, John	Whilelaw, Rt Hon William
Scott, Nicholas	Stradling Thomas, J.	Whitney, Raymond (Wycombe)
Shaw, Giles (Pudsey)	Tapsell, Peter	Wiggin, Jerry
Shelton, William (Streatham)	Taylor, R. (Croydon NW)	Winterton, Nicholas
Shepherd, Colin	Taylor, Teddy (Cathcart)	Wood, Rt Hon Richard
Shersby, Michael	Tebbit, Norman	Younger, Ron George
Silvester, Fred	Temple-Morris, Peter
Sims, Roger	Townsend, Cyril D.	TELLERS FOR THE AYES:
Sinclair, Sir George	Trotter, Neville	Sir George Young and
Skeet, T. H. H.	van Straubenzee, W. R.	Lord James Douglas-Hamilton,
NOES
Allaun, Frank	Duffy, A. E. P.	Lambie, David
Anderson, Donald	Dewar, Donald	Lamborn, Harry
Archer, Rt Hon Peter	Eadie, Alex	Lamond, James
Ashton, Joe	Edge, Geoff	Lewis, Ron (Carlisle)
Atkins, Ronald (Preston N)	Ellis, John (Brigg & Scun)	Loyden, Eddie
Bagier, Gordon A. T.	English, Michael	Luard, Evan
Bain, Mrs Margaret	Ennals, Rt Hon David	Lyon, Alexander (York)
Barnelt, Guy (Greenwich)	Evans, Gwynfor (Carmarthen)	Lyons, Edward (Bradford W)
Barnett, Rt Hon Joel (Heywood)	Evans, John (Newton)	Mabon, Rt Hon Dr J. Dickson
Bates, Alf	Ewing, Harry (Stirling)	McCartney, Hugh
Bean, R. E.	Ewing, Mrs Winifred (Moray)	MacCormick, Iain
Beith, A. J.	Faulds, Andrew	McDonald, Dr Oonagh
Benn, Rt Hon Anthony Wedgwood	Flannery, Martin	McElhone, Frank
Bennett, Andrew (Stockport N)	Fletcher, Ted (Darlington)	MacFarquhar, Roderick
Bidwell, Sydney	Foot, Rt Hon Michael	MacKenzie, Rt Hon Gregor
Bishop, Rt Hon Edward	Forrester, John	Mackintosh, John P.
Blenkinsop, Arthur	Fowler, Gerald (The Wrekin)	Maclennan, Robert
Boardman, H.	Fraser, John (Lambeth, N'w'd)	McMillan, Tom (Glasgow C)
Booth, Rt Hon Albert	Freeson, Rt Hon Reginald	McNamara, Kevin
Boothroyd, Miss Betty	Freud, Clement	Madden, Max
Boyden, James (Bish Auck)	Garrett, John (Norwich S)	Magee, Bryan
Bradley, Tom	George, Bruce	Mallalieu, J. P. W.
Bray, Dr Jeremy	Gilbert, Rt Hon Dr John	Marks, Kenneth
Brown, Hugh D. (Provan)	Ginsburg, David	Marshall, Dr Edmund (Goole)
Brown, Robert C. (Newcastle W)	Golding, John	Marshall, Jim (Leicester S)
Buchan, Norman	Gould, Bryan	Maynard, Miss Joan
Buchanan, Richard	Gourlay, Harry	Mellish, Rt Hon Robert
Butler, Mrs Joyce (Wood Green)	Graham, Ted	Millan, Rt Hon Bruce
Callaghan, Rt Hon J. (Cardiff SE)	Grant, George (Morpeth)	Miller, Dr M. S. (E Kilbride)
Callaghan, Jim (Middleton & P)	Grant, John (Islington C)	Mitchell, Austin
Campbell, Ian	Grocott, Bruce	Molloy, William
Canavan, Dennis	Hamilton, W. W. (Central Fife)	Morris, Alfred (Wythenshawe)
Cant, R. B.	Hardy, Peter	Morris, Rt Hon Charles R.
Carmichael, Neil	Harrison, Rt Hon Walter	Morris, Rt Hon J. (Aberavon)
Carter, Ray	Hart, Rt Hon Judith	Moyle, Roland
Cartwright, John	Hattersley, Rt Hon Roy	Mulley, Rt Hon Frederick
Castle, Rt Hon Barbara	Henderson, Douglas	Murray, Rt Hon Ronald King
Clemitson, Ivor	Hooley, Frank	Newens, Stanley
Cocks, Rt Hon Michael (Bristol S)	Hooson, Emlyn	Noble, Mike
Cohen, Stanley	Horam, John	Oakes, Gordon
Coleman, Donald	Howell, Rt Hon Denis (B'ham, Sm H)	Orme, Rt Hon Stanley
Cook, Robin F. (Edin C)	Howells, Geraint (Cardigan)	Owen, Rt Hon Dr David
Corbett, Robin	Hoyle, Doug (Nelson)	Padley, Walter
Cox, Thomas (Tooting)	Huckfield, Les	Palmer, Arthur
Craigen, Jim (Maryhill)	Hughes, Rt Hon C. (Anglesey)	Park, George
Crawford, Douglas	Hughes, Robert (Aberdeen N)	Parker, John
Crawshaw, Richard	Hughes, Roy (Newport)	Parry, Robert
Cronin, John	Hunter, Adam	Pendry, Tom
Crowther, Stan (Rotherham)	Irvine, Rt Hon Sir A. (Edge Hill)	Penhaligon, David
Cryer, Bob	Irving, Rt Hon S. (Dartford)	Perry, Ernest
Cunningham, Dr J. (Whiteh)	Jackson, Colin (Brighouse)	Price, William (Rugby)
Davidson, Arthur	Jackson, Miss Margaret (Lincoln)	Rees, Rt Hon Merlyn (Leeds S)
Davies, Bryan (Enfield N)	Janner, Greville	Reid, George
Davies, Rt Hon Denzil	Jay, Rt Hon Douglas	Roberts, Albert (Normanton)
Davies, Ifor (Gower)	Jenkins, Hugh (Putney)	Roberts, Gwilym (Cannock)
Davis, Clinton (Hackney C)	John, Brynmor	Robinson, Geoffrey
Deakins, Eric	Johnson, Walter (Derby S)	Roderick, Caerwyn
Dean, Joseph (Leeds West)	Jones, Alec (Rhondda)	Rodgers, George (Chorley)
Dempsey, James	Jones, Barry (East Flint)	Rodgers, Rt Hon William (Stockton)
Doig, Peter	Judd, Frank	Rooker, J. W.
Dormand, J. D.	Kerr, Russell	Roper, John
Douglas-Mann, Bruce	Kilroy-Silk, Robert	Rose, Paul B.

Ross, Stephen (Isle of Wight)	Stoddart, David	Wellbeloved, James
Ross, Rt Hon W. (Kilmarnock)	Strang, Gavin	Welsh, Andrew
Rowlands, Ted	Summerskill, Hon Dr Shirley	White, Frank R. (Bury)
Sandelson, Neville	Swain, Thomas	White, James (Pollok)
Sedgemore, Brian	Taylor, Mrs Ann (Bolton W)	Whitlock, William
Sever, John	Thomas, Dafydd (Merioneth)	Wigley, Dafydd
Shaw, Arnold (Ilford South)	Thomas, Jeffrey (Abertillery)	Willey, Rt Hon Frederick
Sheldon, Rt Hon Robert	Thomas, Mike (Newcastle E)	Williams, Alan Lee (Hornch'ch)
Shore, Rt Hon Peter	Thomas, Ron (Bristol NW)	Wilson, Gordon (Dundee E)
Short, Mrs Renée (Wolv NE)	Thompson, George	Wilson, Rt Hon Sir Harold (Huyton)
Silkin, Rt Hon John (Deptford)	Thorne, Stan (Preston South)	Wilson, William (Coventry SE)
Silkin, Rt Hon S. C. (Dulwich)	Tinn, James	Wise, Mrs Audrey
Silverman, Julius	Tomlinson, John	Woodall, Alec
Skinner, Dennis	Torney, Tom	Woof, Robert
Smith, John (N Lanarkshire)	Tilley, John (Lambeth, Central)	Wrigglesworth, Ian
Snape, Peter	Wainwright, Edwin (Dearne V)	Young, David (Bolton E)
Spearing, Nigel	Walker, Terry (Kingswood)
Spriggs, Leslie	Watkins, David	TELLERS FOR THE NOES:
Stallard, A. W.	Watt, Hamish	Mr. Joseph Harper and
Stewart, Rt Hon Donald	Weitzman, David	Mr. James Hamilton.
Stewart, Rt Hon M. (Fulham)

Question accordingly negatived.