THE DEVELOPMENT COMMISSION

HC Deb 12 April 1983 vol 40 cc689-705 4.50 pm

Mr. Robin F. Cook (Edinburgh, Central)

I beg to move amendment No. 1, in page 2, line 5 at end add— `(3A) The Secretary of State shall lay before each House of Parliament a copy of any advice relating to the economic and social development of rural areas tendered by the Development Commission under subsection (3) above.'. Before I deal with the substance of the amendment, I should like to refer to a letter that the Minister has sent me since the Committee stage in which he has generously corrected a slight misrepresentation of the state of the law in relation to loans from the Development Commission to shop properties in rural areas. When the Minister replies to the amendment, will he put on the record of the House what he said in that letter so that we may correct the Committee record and thus leave no doubt about the position? I think that the truth has turned out to be halfway between what I thought it was and what the Minister thought it was. I am quite happy to call quits on that basis.

The amendment is modest and would oblige the Government to publish advice that they receive from the Development Commission relating to the social and economic development of rural areas. I believe that the amendment is now more desirable and more necessary than when I first tabled it a fortnight ago, because in the interval I requested the Library to carry out a trawl of literature and articles on social and economic development in rural areas. Both the Library and I were surprised and mildly distressed to discover how meagre is the available literature on the social and economic development of rural areas. I am increasingly fortified by that experience in suggesting that the amendment will go some way to plug what is at present an obvious gap in the market.

It would appear that those hon. Members who represent rural districts with social and economic problems of development do not share the same compulsion as those of us who represent the urban areas to communictate these problems by way of written article and written pamphlets, but the absence of literature does not imply that there is not a problem of social and economic development in those areas.

Deprivation may have a different meaning in the rural areas from the urban areas, but, nevertheless, it is very real. It is particularly severe in the more remote areas, where the phenomenon of social disintegration has become identified, where there is a decline in population, particularly of young people, and where, as a result of that decline in population, there is a decline in services, be they commercial services or public services such as schools, which in turn leads to a vicious circle as the decline in the services and amenities drives away an even greater proportion of the population and thus reinforces the decline in the services available. I can sympathise with that pattern because, although I represent a different type of constituency, it has a problem of declining population resulting in a decline in services to local residents, which in turn makes it less attractive as a residential area.

I am glad that the hon. Member for Truro (Mr. Penhaligon) has taken his place for the debate. I recollect that in Committee the hon. Gentleman and I had a mild disagreement of emphasis on the importance of public transport services. After I had berated the Government for endangering public transport services, the hon. Gentleman suggested that the issue was perhaps not of such keen concern to his constituents because most of them had been obliged to purchase private motor cars.

Although the hon. Gentleman and I may have differed in emphasis, we would not differ over the fundamental importance of public transport services for those members of a household who are deprived of the use of a car because another member goes to work. Nor would we disagree that the cost of maintaining private transport to offset the decline in public transport services in rural areas imposes an additional burden on households in rural areas, which are very often on low incomes. Poverty in rural areas is often caused by those on lower incomes having to face the higher costs of coping with the deprivation of living in remote areas.

As an urban dweller, and as one who represents an urban constituency, I must say that one of the fascinating aspects of rural society, when viewed from the strength of labour organisations in the city, is the remarkable contrast between farmers, who last year, according to the Government's White Paper, secured a 45 per cent. increase in income, and farm workers, who secured a 6 per cent. increase and are rightly and properly seeking this year to remedy that position.

The Development Commission is excellently placed to monitor the problems created in the rural areas by issues of social and economic underdevelopment. It is excellently placed to note the problems of poverty and of coping with those higher costs. It is excellently placed to note the decline in public services such as transport and education and to monitor how that affects local communities. It is excellently placed to advise the Government on those issue and those aspects of life in the rural areas.

In Committee we tried to insert into the Bill a provision which would specifically charge the Development Commission with tendering that advice to the Secretary of State. The Minister advised us—I felt at the time that it was paradoxical advice, and I am still of that opinion—that to insert such a specific written instruction would weaken rather than strengthen the right of the Development Commission to do it. As reasonable members of the Committee, we wished to expedite the procedure and we accepted that advice. Nevertheless, having resiled from our original position that we should insert in the Bill a specific charge on the Development Commission to advise the Minister, I think there would be merit for the House to take the precaution to state in the Bill that any such advice must be published.

I could not have hoped for a better curtain raiser to the debate than the exchanges on the preceding statement, which once again demonstrated that we have a Government who are prepared to take a robust view of non-governmental organisations which may offer critical advice and critical statements or may support individuals who make critical statements of the Government. It is to the credit of the Development Commission that it has been prepared to make statements which could certainly be read as critical of the Government's record on public expenditure as it affects the rural areas.

In Committee the hon. Member for Truro made a shrewd statement which, if he will allow me, I shall share with the House as a whole rather than merely with those who had the misfortune to sit on the Committee. The hon. Member for Truro observed: One is always suspicious of such organisations"— organisations appointed by the Government— because, when it comes to the crunch it is the Minister who appoints those who sit on them. He will not go out of his way to seek out views on the importance of developing services which may be diametrically opposed to the view of the Government of the day."—[Official Report, Standing Committee A, 24 February 1983; c. 18] Whether the Government would go out of their way to seek such advice from the Development Commission on the social and economic development of rural areas is one matter, but it would be an elementary precaution for the House to provide in the Bill that, should the Development Commission, either at the prompting of the Government or on its own initiative, tender to the Government advice that the Government found unpalatable, based perhaps on an investigation and analysis of the effect of Government policy which the Government found embarrassing, it would be prudent for us to ensure that the legislation obliged the Government to publish that advice so that the House would have an opportunity to see it and so that we could use it in our debates in a way that is denied to us at present because of the lack of available literature on the subject.

I therefore propose the amendment as a modest step towards open government. It would provide a greater opportunity for informed debate on the economic and social development problems of rural areas and, knowing as I do that those areas are overwhelmingly represented by Conservative Members, I am sure that they would recognise that it is even more in their interests than in ours to accept this modest step towards open government. I look forward to a positive response from the Minister.

5 pm

Mr. David Penhaligon (Truro)

This is an interesting amendment. It would certainly bring the problems of rural areas to the attention of the House on a regular basis. I have been a Member of Parliament for about eight and a half years, but I recall few occasions on which rural issues as such have been discussed. Ours is an urban dominated society and I realise that that dominance is bound to be reflected in the views expressed here. Nevertheless, given the severity of the problems that many rural areas now face, it is remarkable that so little time is devoted to the subject in this Chamber. Indeed, one suspects that the Government prefer not to have too much discussion of these matters in order to avoid embarrassment to themselves. I do not make that as a party point. Some inner city problems were not discussed as fully as they might have been under the Labour Government, for the same reason. Nevertheless, although my area may be an extreme example, the problems of the rural areas are now such that it is truly remarkable how little time is devoted to them in the Chamber.

Looking at my own area, I sometimes wonder what effect all the years of central government in this country have had. The economy of Cornwall is based on mining, fishing, farming and tourism. I am not sure whether any Government could claim credit for that. There is mining because we have china clay and tin in the ground. The fishing industry reflects the fact that there are fish in the sea—or there were, until various Governments allowed over-fishing to such an extent that even the mackerel is becoming an endangered species in my area. The farming industry reflects the fact that the soil is fairly fertile, the temperature fairly mild and there is certainly plenty of rain so that the grass grows rapidly. Finally, tourism derives from the fact that the county is extremely beautiful and has a mild climate by United Kingdom standards. That being so, I sometimes wonder what effect Parliament has had on the remoter parts of the country over a long period.

It is noticeable that virtually all the services in my county—I suspect that this applies to most rural areas—are administered elsewhere. To take up a detailed point about health administration in my constituency I have to write to somebody in Bristol. If I wish to take up an issue related to industrial development I have to write to somebody in Plymouth or, more likely, a Minister in London. I am sure that many Members representing rural constituencies are familiar with the phenomenon that the decisions affecting our daily lives are generally taken at some distance from the area. In this context, although I am not greatly optimistic, the Development Commission may help to bring those who make such decisions and those who reflect upon them rather closer to the areas about which they pontificate. Personally, I am inclined to support the amendment as it might help in that respect and direct the attention of Parliament to the unique and specific problems of rural areas.

The hon. Member for Edinburgh, Central (Mr. Cook) referred to a slight disagreement in Committee about transport. To put the record straight, I did not disagree about the importance of public transport. Perhaps I expressed myself badly. I simply said that I wondered whether the traditional subsidised bus service was now the best solution for areas such as mine. I am not against subsidies. Indeed, I could argue for greater public transport subsidies. As the hon. Member for Edinburgh, Central said, people who have retired and those who are not old enough to drive are at an enormous disadvantage in the remoter parts of the country. They are trapped in their villages. Often the position is worse than it was 100 years ago. Even my dear and long dead grandmother, who lived in remote Zelah in my constituency, enjoyed a regular pony and trap service into Truro in her young days, which provided a better public transport service than many villages in the area now have.

I have often put this point in debates, and, to be fair, the Government have made some progress. We need a regime of experimentation in transport—with subsidy—to see how the daily problems of those who live in remote areas can best be solved. I had not intended to raise the matter today, but I wish to put the record straight. I am not against subsidising public transport. I simply question whether the standard bus solution is best for some of the remoter parts of the country.

The economy of rural areas is largely overshadowed, by poverty—that is perhaps too strong a word—or at least by low incomes. The really rural areas such as the far south-west, parts of Devon, Cardiganshire and northern Scotland are very low income areas. When speaking at Liberal party meetings out in the sticks, one of the best ways to bring the audience to attention is to tell them the latest average wage. To my constituents, £150 per week seems incredible. I can tell the Minister that if someone offered my constituents—or, no doubt, those in Cardiganshire and the north of Scotland—jobs at that wage the queue would be so long that it would take him the rest of his life to interview and service all the applications.

In my constituency, £100 per week is regarded as extremely good pay and many people work for much less. I once sponsored a pamphlet by the Low Pay Unit, which carried our a survey of average wage levels in the far south-west. It concluded that the average there was 25 per cent. lower than the national average. In reality, the situation is even worse for many people because those working for the state in its broadest sense—teachers, local government administrators, and so on—are paid more or less the national average for their skill. Thus, the people out in the real world working for those who can pay only what they can afford often receive far lower wages.

I should like the Development Commission to make representations to the Government about, for example, the importance of some wages council legislation. There is no doubt that wages councils prop up basic levels of pay in areas such as mine. I do not defend every aspect of the wages councils' operations. I believe that some of the youth rates that they set work against the interests of some of my young constituents. Nevertheless, the general principle of the legislation is very much in the interests of my constituents, and its abolition, as threatened by the Government, would have a dramatic effect on already inadequate incomes in the remoter rural areas. The Development Commission could study and analyse matters of that kind and make submissions to the Government in London, who sometimes give the impression that no one actually works for the minimum wages set by wages councils. That is the kind of problem that should be brought to the attention of the House and on which legislation is certainly justified.

There are many other issues. The hon. Member for Edinburgh, Central referred to population decline in rural areas. I do not wish to be aggressive, but such generalisations about rural areas often turn out not to be true when one analyses the statistics. Some of the fastest rates of population growth in this country are taking place in rural area. The population of Cornwall has increased by 20 per cent. in a decade. I am sure that the hon. Member for Honiton (Sir P. Emery) would agree that, although the figure for Devon is a little lower, the increase is of a similar order. Yet there is a general idea that there is a great population drift out of the rural areas. In some areas, of course, that is true, but one of the difficulties of arguing the rural case is that generalisations of that kind are presented as though they were true of all places, when in specific areas that is by no means so.

The population increase in my county has created a massive housing problem. I sometimes hear Members from urban constituencies talking about "hard to let" council houses. When I asked my hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton) what on earth that meant, he said that it meant houses that nobody would take. He went on to say that there were about 2,000 empty houses in Liverpool. That is certainly not a problem in my part of the world. People are prepared to accept any kind of council property. They would not dare turn down the offer of a house, because if they did they would be put at the bottom of the list and there they would stay for a long time. I do not wish to underestimate Liverpool's problems, but we have a physical housing shortage. It is different, but that does not mean that the problem is not real and that it is not getting worse.

I hope that the Development Commission will have some sharp things to say about our train service. Many Conservative Members represent the rural and remoter parts of the country. They might be considering a June election. I hope that by that time, for their own sakes, they will have succeeded in getting the Secretary of State for Transport to be a little more forthcoming than hitherto on the Government's view about the Serpell report. If those who represent areas such as mine are mad enough to go to the electorate when there is a serious possiblity of closures such as the railway line terminating at Exeter, they are likely to be in for a rough time. If some railway lines were closed that would create economic disadvantages for some of the remoter areas and it would appear to those who live in the rural areas that the Government had given up any hope of overcoming some of the economic difficulties such as the 21 per cent. male unemployment in my county. How closing railway lines can help tourism, which is one of our useful and vital industries, I do not know. If the Development Commission had been in existence it would already have sent a sharp rejoinder to the Minister about what those who live out in the sticks think of the possiblity of closing railway lines.

There is plenty that the Development Commission could do. It may give advice to the House, but the Government may ignore it, whatever their colour—the Government might be formed of myself and my colleagues. One never knows. If the advice is ignored, I hope that there will be an opportunity for debate and for hon. Members to concentrate their minds on the subject. For example, one would expect the Development Commission to comment on the fact that my county council, which is the second lowest spending county authority in the United Kingdom, is being fined £800,000 this year for overspending. It is an example of how embarrassing facts are hardly ever mentioned in the House. The Cornwall county council is being fined £800,000 for overspending when, according to the Government's own statistics, it is the lowest or second lowest spending authority in the United Kingdom. That is beyond the belief of anyone in my area who has examined the matter and gone through the machinations and the figures that produced such a conclusion. One hopes that the Development Commission will ask the Government why a school should be stolen from Cornwall and why an old folks home should not be built when the county is a low spender.

There is much that the Development Commission could do. The biggest single thing would be to increase the awareness of the House of rural problems. It would bring them to the attention of the House on a regional basis. It would not pretend that Cornwall was the same as Caithness, as is the tendency at the moment. It would bring the problems of particular regions to the attention of the Minister and the House, on which debates could take place.

If the Minister does not come up with superb reasons, and if the hon. Member for Edinburgh, Central does not withdraw his amendment, I might be tempted to go into the Division Lobby with him in the hope that his amendment will be passed. Better than that would be for the Minister to say that the amendment is acceptable. I can see no reason why not, especially if the Government have as much interest in rural problems as they claim.

5.15 pm

Mr. Don Dixon (Jarrow)

I wish to take up one point that was made by the hon. Member for Truro (Mr. Penhaligon) about the wages councils. He said that some people may lose their jobs because of the rates laid down by the wages councils. I hope that, if the Development Commission reports, it will refer to the number of prosecutions against employers who have paid wages below the wages council minimum. Those minimum wages are £52 and £62 a week. Last year I asked a question about the wages council that covers licensed nonresidential establishments. It was discovered that 1,728 establishments were underpaying their employees and that the amounts totalled almost £500,000.

It is wrong to say that a wages council is putting the wage level too high, when one considers people in areas such as the one that the hon. Member for Truro represents. Hotel staff, barmaids and so on are badly paid. Not only are they badly paid, but the minimum wage set by the wages council is very low. Also, many employers are being caught with their fingers in their employees' wage packets. They are not even paying them the minimum wage.

Mr. Penhaligon

The hon. Gentleman is making an interesting point. He is backing what I was saying, which is that, without wages councils, some workers would be paid even less than they are now.

Mr. Dixon

I accept the hon. Gentleman's point. I was under the impression that he said that the wages councils' minimum wages were deterring some employers from employing youngsters. I disagree. The minimum wages laid down by the wages councils are too low, and also in some cases they are not even being paid.

The Government have already cut the number of wages inspectors by one third, which means that establishments that were being visited once every five years are now being visited once every 10 years. I shall take the argument to a logical conclusion. In 1982, 1,728 establishments were found to be stealing, robbing and getting their fingers caught in their employees' pay packets, with the amounts totalling almost £500,000. They were robbing the people on the lowest wages in the country. One hopes that the Development Commission will say that it wants something stronger from the Government to ensure that anyone who is found to be paying below a wages council's minimum wage will be automatically prosecuted. That is the sort of thing that I would look for from the Development Commission to be set up under clause 1.

The Minister of State, Treasury (Mr. John Wakeham)

This has been a short but useful debate. In his amendment, the hon. Member for Edinburgh, Central (Mr. Cook) seeks more information. He believes that as a result of more information better decisions will be made and more assistance will come to the rural areas. I am happy enough with that as a general proposition. I have no particularly strong views on whether that assistance comes from the private sector or from public provision. I think that both sides of the House want to see development in the rural areas as opportunities to do so arise, and to do what we can to promote that development centrally.

The hon. Gentleman referred to the letter that I wrote to him between the Committee stage and today. He kindly said that he thought that the result of the correspondence was a match draw. I was tempted to say that he was right in theory and that I was right in practice, but that might have a political connotation, which perhaps we should not pursue.

However, the hon. Gentleman asked me to say specifically what I told him in my letter. I am happy to do so. We were discussing loans to village shops. I said that it was not possible for the Development Commission to make the loans, and added: The position is that loans can be made, but that they cannot be made at concessionary rates of interest which are available to small manufacturing and service firms. In practice, I understand that no loan has been made so far, and that policy has been to find commercial sources for financial needs. The position is broadly the same for the Scottish Development Agency, the Highlands and Islands Development Board, and the Development Board for Rural Wales. They all have powers to make loans to retailers, but tend not to use them. The hon. Gentleman is right to say that there are many difficulties in rural areas and that no part of the country can be immune from the problems of the recession. Perhaps rightly, we probably hear more in the House about difficulties in city centres and urban areas than about rural areas. It is right that we should concentrate on rural areas for a while.

The Development Commission is supported by both sides of the House and has been supported by successive Governments. It is not necessary for me to go over the financial support that it has been given, save to say that it has increased. The commission has not found itself short of money. Rather, it has not spent all of the money that the Government have allocated to it recently. As to the future, although no commitment can be made at this stage, if the commission runs into difficulties, the Government have made it clear that they will do what they can to ensure that the commission's work programme does not suffer.

The Bill already requires the Secretary of State to present to Parliament the major piece of advice that he receives from the Development Commission. I can imagine nothing of substance that the commission would not include in its annual reports to the Secretary of State which he must lay before Parliament. Paragraphs 9 to 11 of schedule 1 deal with accounts and information. Paragraph 11 specifically requires the commission to report annually to the Secretary of State about the exercise of its functions during that year. The Secretary of State has no choice but to lay that report before Parliament. Moreover, he cannot tell the commissioners what they should and should not say in their report.

I shall illustrate that by quoting from two reports. The first is that for 1977, which says: At the time of writing, however, (August 1977) the Commissioners' long-term financial position is far from clear and the Commissioners wish to record their dissatisfaction at the absence of a long-term financial commitment by the Government to support the Commissioners' increased efforts to help the deprived rural areas of England. Of course, that report was written during the time of the previous Government. In last year's report, referring to the enterprise allowance scheme, the commissioners wrote: The scheme is similar to one that we have ourselves proposed and we welcome the decision to introduce it. We were, however, disappointed that the areas selected for the trials were all urban. We have urged the Government to introduce a fourth pilot project in a rural area. It would be wrong and inaccurate to suggest that the commission's reports express any political bias. It is clear from reading its reports that it does not mind expressing its views and does so strongly. The right way in which to meet the perfectly legitimate point of the hon. Member for Edinburgh, Central is to encourage the commission to continue to do what it has done in the past through its reports.

The Government believe that it is right that the commission's reports should cover all its functions and that the present pattern of reporting to Parliament gives a rounded and valuable perspective on what is happening in rural areas. The commissioners have never been shy of expressing their views about Government policy and action in rural areas.

Paragraph 11, without specifically mentioning the word "advice", undoubtedly lays a duty on the commission to record its views, especially when such advice has not been accepted or acted upon. We accept that the independence and integrity of the commission should be preserved. The duties in clause 1(3), the powers in clause 1(4) and the reporting requirements of paragraph 11 of schedule 1 achieve that. The additional reporting requirements proposed in the amendment are not needed and could distort the commission's duties and powers and add unnecessarily to the paper that we all have in sufficiency, if not excess.

The best way in which to achieve what the hon. Member for Edinburgh, Central wishes lies in his not pressing his amendment but joining me in telling the commissioners that we welcome their reports, even if they are sometimes not unstinting in their praise of the Government and, indeed, are critical. Their right and duty to continue to report on the rural scene as they see it is the best safeguard to achieve what the hon. Gentleman wants.

Mr. Cook

I entirely concur with the points that my hon. Friend the Member for Jarrow (Mr. Dixon) rightly and forcefully made. The existence of wages councils poses something of a dilemma to those of us who are anxious about low pay. We recognise that if the wages councils and the legislation that underpins them were removed, people who are employed in the bulk of the industries that are covered by wages councils would find themselves worse off.

Even if people who are employed in the relevant industries succeed in getting the full rate prescribed by the appropriate wages council—my hon. Friend the Member for Jarrow pointed out that many do not—no one who studies the rate of pay that is provided by wages council legislation can regard even the full wage as an adequate living wage. There is a dilemma here. It must be admitted in all candour that no previous Government have had an integrated and coherent policy on low pay. The Government have one, but it is designed to make the problem of low pay worse. One way in which to make it worse, as my hon. Friend the Member for Jarrow said, is to reduce the number of inspectors employed by wages councils. They already make far too few inspections of the industries that are covered by the legislation.

The reflections of my hon. Friend the Member for Jarrow were prompted by what the hon. Member for Truro (Mr. Penhaligon) said about rural poverty. I entirely accept the sense of what he said. It is disturbing that no less than 18 per cent. of people who claim family income supplement are farm workers. That is an alarming figure, which demonstrates the problem of poverty on the farm.

I was struck by an article in a Sunday newspaper last month which dissected the economies of one farm and discovered that farm labourers who each shifted £180,000 worth of output received £5,000 in wages. There is a disproportion between the output of and the wage received by the worker. As the hon. Member for Truro said, such poverty sets the tone for wages in the rest of the rural community and lies at the bottom of many of the other social and economic problems that he isolated.

I should like to put it to the hon. Member for Truro, in the same spirit as he put to me our difference of view about transport policy, that there is no dispute between us about the decline in population. It may be that some regions with large rural areas have increasing populations but that often masks a substantial population shift in the region and conceals a substantial depopulation in the more remote areas. In the Highland region there has been an increase in population, although not perhaps as marked as that in Devon and Cornwall, which conceals a real depopulation in areas such as Lochaber. The success of the urban nodes in the region is, on the other side of the coin, a problem for the remote rural areas., whose population is attracted to the developing urban nodes. Within those declining areas there is an increasing spiral of deprivation and decline as services chase the population and the population then chases services.

5.30 pm

The Opposition have shown a lively awareness of and anxiety about the problems, and a desire for additional information. I endorse the Minister's statement that both sides of the House support the Development Commission's work. I have not made a similar statement yet today, because I did so on Second Reading and in Committee, but I am happy to repeat it now that the Opposition fully support the commission's excellent work. It would be strange if we did not do so, because in 1975 the Labour Government sponsored a review of the commission's work, which resulted in a substantial expansion of its role in industrial promotion. My research during the passage of the Bill has left me impressed by its work and by the quality of its productions. That has not been the case with every body that has been scrutinized during the Bill's progress. I shall have something to say about the Crown Estate Commissioners when we reach the relevant clause.

I endorse the Minister's statement that in the past the commission has had little hesitation in criticising the Government of the day. As the Minister quoted from the reports, I shall share with the House my favourite statement from the latest report: The Government's call for further reductions across the board in local government expenditure has therefore hit the rural areas particularly hard. In an earlier passage the commission states: We have to recognise that: the statutory authorities who are charged with providing the main services cannot meet all the needs of the community. With increasing pressure on their resources many are cutting back. I agree with the Minister that there is good evidence that the commission is willing to criticise Governments of the day, including this Government. It is regrettable that the Government are not responding to those criticisms. It would be nice if that advice were taken on board by the Government.

The Minister said that the amendment was unnecessary and undesirable because it would place a procedural straitjacket on the commission, which could in any event include advice in its annual report. I am reluctant to divide the House, which would delay our proceedings by a further 15 minutes, but, as there is no great gulf between us in principle, I put it to the Minister that there may be occasions when the commission tenders advice to the Government in fuller detail than can be summarised in a paragraph of an annual report. Before I withdraw the amendment, will the Minister give an undertaking that he will impress it upon his colleagues at the Department of the Environment that where any such report is provided under the clause the Department will give favourable consideration to publishing it and should, in general, publish any advice received from the Development Commission rather than leave it for internal consumption? If he cannot give that undertaking, I shall be tempted to join the hon. Member for Truro and a few other hon. Members in the Division Lobby.

Mr. Wakeham

The report of the Development Commission is its concern and the Government cannot influence what should be put in or left out. However, in the spirit in which the hon. Gentleman raised the question, may I say that it is right that the commission should continue to include in the report any relevant and important information—if it is too long for the report it should find some other way of publishing its views—that is of sufficient substance for public debate. I do not wish any action of the Government to be construed as wishing to hold back the production of valuable information.

Mr. Cook

I am happy that that is now on record. I assume that the implicit undertaking contained in that statement is that the Minister will make his colleagues aware of it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Cook

I beg to move amendment No. 2, in page 2, line 25, leave out `with the approval of the Treasury'.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

With this it will be convenient to take the following amendments:

• No. 3, in page 2 line 29, leave out 'and the Treasury'.
• No. 5, in clause 2, page 3, line 8, leave out subsection (3).

Mr. Cook

This group of amendments raises a point that we discussed in Committee, albeit in relation to clause 2 rather than to clause 1. Although it is raised in relation to clause 1, it is effectively the same point and a similar amendment to clause 2 is grouped with it.

Both clauses explicitly require Treasury approval for the payment of grants. As clause 1 is drafted, the Secretary of State for the Environment can give a grant to the Development Commission only with the approval of the Treasury, and the commission in turn can give financial assistance only on arrangements approved by the Secretary of State for the Environment and by the Treasury. Similarly, under clause 2, the Secretary of State for Industry can make a grant to any of the named or unnamed bodies only with the explicit approval of the Treasury, and he needs Treasury approval for any conditions that he may attach to the grant.

The Committee recognised that those elegant phrases in the clause are the result of a drafting convention. Many Committee members were not entirely convinced of the need for the drafting convention.

The Minister and officials of the relevant Department will have approved the grant and any conditions attached to it. The Minister and especially his officials are better briefed to judge the details of the grant, its desirability, and the conditions that are necessary and desirable than is the Treasury. None of those grants is likely to result in runaway public expenditure. They require modest sums of public money. The Secretaries of State for Industry and for the Environment must operate within a budget and are subject to cash limits. If they spend more on grants under these clauses, they will have less to spend for other purposes.

In fairness to the Minister, it must be said that, when we discussed the matter in Committee, he admitted that he was not entirely persuaded of the strict necessity for those references. At one point he rebutted our amendment on the ground that there was no difference of opinion between the Secretary of State for Industry and the Treasury, so I asked, logically and reasonably, "Why have them in the clause?" The Minister replied: That is by far the most difficult question to answer."—[Official Report, Standing Committee A, 1 March 1983; c. 49.]

Sir Peter Emery (Honiton)

Quite candid.

Mr. Cook

Yes, it was a candid statement.

The Minister, in making that statement, was aware of the difficulty of explaining the need for the drafting convention, which sprinkles references to the Treasury throughout the legislation. He then undertook to reconsider whether the reference to the Treasury in clause 2 was necessary. We have tabled the amendments at this stage because we do not wish the House to be deprived of the fruit of the Minister's consideration. I hope that he will either produce a more compelling reason for the references or accept that the Bill will be that much shorter, but none the worse, for removing them.

Sir Peter Emery

I am grateful to the hon. Member for Edinburgh, Central (Mr. Cook) for moving the amendment because the third one allows me to raise a point that I raised in Committee and it would be useful if it were raised on the Floor of the House. The amendment is important as it relates to grants that may be made by a Government to areas where development is to be encouraged and is required, as set out in clause 2, but which have received no financial assistance from Government to encourage industry to go into those areas.

It is not surprising that I wish to refer to the east Devon district council and the eastern part of Devon, which are in my constituency, because until now east Devon has received no Government assistance, either as an intermediate area or as an assisted area by which funds could be used to attract industry to the area. East Devon and similar areas in Scotland and the north that are on the fringe of assisted areas find that their levels of unemployment are just as great as those in assisted or intermediate areas.

There has been criticism that Governments have been unwilling to be open-handed in their assistance. I understand the problems that Governments have in this regard. Lines must be drawn somewhere or the entire country would become an assisted area, with the exception of London and the south-east. I do not wish to embarass the Government, but it is important that the Minister should be able to give the House the assurance that he gave in Committee, that the grants from the Treasury under clause 2 will apply to all the development bodies named in the Bill, or subsequently authorised by the Minister.

Money granted to the Devon and Cornwall development bureau should be used to encourage development in those two counties and not just that area of the county or counties which until now has been designated under assisted area legislation. That means that for the first time Government money would be used in east Devon to attract industry and to develop east Devon, which has not previously received Government assistance. I welcome that. I seek the complete assurance of the Minister that my interpretation of the facts is correct.

There are two further questions that I should like to ask about the grants being given by the Government and the independence or otherwise of the development bodies. I shall use the Devon and Cornwall development bureau, referred to in clause 2, as an illustration. I am certain that most hon. Members in this packed Chamber will know that the officials who run the Devon and Cornwall development bureau are joint directors. They are the chief planning officer for Cornwall and the estates officer for Devon and have joint authority. There are two offices; there is a staff of about 10, which is divided equally between the two counties.

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There is little doubt that the bureau has done a good and sensible job. The expenditure that it was able to use until last year was £120,000. This will be increased, because of an increase in Government grant, by nearly 100 per cent.—by an extra £ 100,000—to £220,000 for the coming year. It is interesting that 50 per cent. of the money comes from Government aid, and the counties of Devon and Cornwall give 25 per cent. each.

With the new money more staff will be needed. As this is a local authority body, the recruitment of staff will naturally have to go through the normal county council staffing committees. Those bodies, in their desire to meet levels of staffing, economies in expenditure and the requirements of the Secretary of State for the Environment, are attempting to cut their staffing numbers. The recruitment of extra staff in this area may be damaged by the overall edict that throughout the country the numbers of local government employees should be reduced. I seek an assurance from the Minister that in this instance, and where increased grants have been given, the Government should not restrict staffing because the bureau is run by the local authority.

Mr. Deputy Speaker

Order. I am sorry to interrupt the hon. Gentleman, but he seems to be referring to the Devon and Cornwall development bureau, which is mentioned in clause 2, whereas the House is dealing with clause 1.

Sir Peter Emery

I have in front of me a paper stating that amendment No. 5 is being discussed with amendments Nos. 2 and 3, and amendment No. 5 relates to clause 2. I had hoped, rather than repeating my speech, that you, Mr. Deputy Speaker, might deem that I was in order.

Mr. Deputy Speaker

What the hon. Gentleman says is correct, but perhaps he is going a little wide of this amendment.

Sir Peter Emery

I have no desire to widen the debate, Mr. Deputy Speaker. Perhaps I may refer to the Treasury grant, which may be raised in a debate on amendment No. 3. I seek an assurance from the Minister that he will discuss with the Secretary of State for the Environment the problem of the staffing factor under the grant.

Should the bodies referred to in clause 2 be entirely dominated by local authorities or should they be entirely independent? A former Socialist Minister, Mr. George Chetwynd, headed the development corporation in the north-east and made it independent of full-time local authority officers, whereas the two local authority officers in Devon and Cornwall are giving part of their time to the development bureau.

Do the Government have any views in forming and pressing forward with the work of these development bodies—be they bureaux or corporations—as to whether there is advantage in the head of each body being an independent person of some standing who can devote himself fully to its work? That may not be possible with a local authority officer who has other responsibilities apart from those imposed by the development corporation.

I am not criticising the two local authority officers in Devon and Cornwall, because I believe that they have done a good job. However, I ask the Government to ensure that, when development bodies go overseas to attract industry into their respective localities they are in some way co-ordinated.

I shall use the same illustration again and again. As a member of the Industry and Trade Committee I went to Japan 18 months ago. The Committee was considering imports and exports in relation to Japan. We went round the Nissan motor car factory. At that time Nissan's project in Britain was in the forefront of all our minds. We were informed that 47 British development bodies of one sort or another had been to Japan to attract the Japanese investment into their respective localities. The Japanese told us that we must be mad. Obviously, when there is Treasury grant—as outlined in amendment No. 3—

Mr. Deputy Speaker

Order. The hon. Gentleman's remarks are very wide of the amendments under discussion.

Sir Peter Emery

The grant comes under amendment No. 3.

Mr. Deputy Speaker

The hon. Gentleman's remarks about Japan are rather wide.

Sir Peter Emery

The way that the grant is used must come under the control of the Treasury. I am arguing that, if bodies will not listen to the Government's advice about going overseas to Japan or anywhere else, the Government should think twice about the way in which the grant is given. The present situation does no service to this country and makes us a laughing stock among those who might otherwise invest in this country.

One of the most interesting factors is that, although Plymouth and other local authorities have their own development organisations, any move to attract overseas investment has been made by the Devon and Cornwall development bureau, and the local authorities have agreed. Will the Minister make it clear to those bodies—as I know that the Government would like to do—that there should be co-ordination between them when they go overseas to attract foreign investment to ensure that many of them are not doing exactly the same thing?

Mr. Wakeham

My notes are headed "the importance of Treasury consent", and I suppose that that is inevitable. I think that the hon. Member for Edinburgh, Central (Mr. Cook) will agree that the amendments are not fundamental to the Bill, but they are nevertheless important. In Committee, I said that it was difficult to justify when Treasury consent was used and when it was not used. However, I shall try to give the best explanation that I can.

Although I do not have the great experience of my hon. Friend the Member for Honiton (Sir P. Emery), I shall try to deal with the Treasury matters that he raised so ably a moment ago. In the Treasury's view and that of the Government, a body such as the Devon and Cornwall development bureau is expected to promote the activities of the area covered by all the constituent local authorities. There can be no question of any doubt as to whether that promotion should be restricted to only part of the area which has development status. I noted my hon. Friend's point about the possible difficulties in obtaining the right level of staff within those bodies because of their close association with local authorities, which might make it difficult for them to attract staff with the right professional expertise and experience. In addition, my hon. Friend feared that they might be too closely associated with particular programmes that were being run down as a result of tighter financial control. I shall draw those points to the attention of my colleagues, because we want properly qualified staff, who are adequately paid, to do this important job.

I know that my hon. Friend the Member for Honiton has personal experience of this issue. He mentioned George Chetwynd who was the director of the North-East development council some years ago. The Government want the best qualified person to be in charge of such bodies. Indeed, my hon. Friend the Minister of State, Department of Industry would be likely to discuss that sort of issue with the bodies when the annual discussion takes place on the levels of Government support. However, I do not wish to criticise any of the existing chief executives, or the way in which any of the bodies conduct their affairs. Nevertheless, I am prepared to agree with my hon. Friend that there may be occasions when an independent chief executive would make the body most effective. The Government would certainly want that wherever possible.

My hon. Friend the Member for Honiton mentioned the proliferation of bodies going overseas to promote inward investment. That is of concern to the Government and we have pointed out to such bodies that it is not only a waste of resources, but counter-productive, for many competing bodies to go, for example, to Japan. The overseas firm may well consider that, with competition from so many areas, they can seek a level of Government assistance way above that which the Government are prepared to give. As a result of over-zealous enthusiasm on the part of competing bodies, the project may fall by the wayside. There is a danger of that happening, and my colleague in the Department of Industry is anxious to avoid that. He has pointed out to several bodies the dangers of too many competing organisations going to such places as Japan and the United States of America.

Following our discussions about the use of the words "Treasury consent", I considered the matter in some detail, as the hon. Member for Edinburgh, Central will be pleased to know. In considering it in detail and taking some time over it, I have probably failed to do things that he might have considered more damaging. However, I shall begin by giving some background. The importance of a requirement of Treasury consent under certain circumstances has consistently been recognised by both Labour and Conservative Administrations. Examples under a Labour Government include the Scottish Development Agency and Welsh Development Agency Acts 1975, the Development of Rural Wales Act 1976 and the Commonwealth Development Corporation Act 1978. Examples under this Administration include the Housing Act, and the Local Government, Planning and Land Act 1980.

We are talking about the difference between two kinds of Treasury control: that which is secured by the statutory requirement of Treasury consent to the decision of a Department; and that which is secured by the merely implicit requirement of Treasury consent under the sanction only of the authority which the Treasury is acknowledged to have in matters of finance and establishment. There is no detailed black and white statement of doctrine on when the statutory requirement of Treasury consent should apply, and I could not say that the position was absolutely consistent in every case. However, it is clear from my researches that the need for the express requirement of Treasury consent arises whenever Parliament, by placing a responsibility on a departmental Minister, appears to reduce the authority of the Chancellor of the Exchequer in some matter of finance or establishment. To attempt to establish beyond that a set of principles by discovering and investigating the reasons for every example of this statutory requirement, and the reasons for omitting it where such provision might have been made, would be a monumental task.

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In theory, one might argue that the Chancellor's authority is protected by the collective responsibility of Ministers, and, in the case of Government Departments, by the granting of supply according to Estimates presented by the Financial Secretary to the Treasury. However, in practice, mistakes and misunderstandings between Departments can occur, with the result that the Chancellor may be inevitably committed to honour a proposal that he would not have authorised. The requirement of consent completely protects his authority. This is necessary because, with the best will in the world, there could be cases in which the use of powers given to a departmental Minister to execute his departmental policies might be inconsistent with Treasury policy. The examples that I have quoted show that Governments of both parties have been aware of this.

The Treasury therefore sees considerable advantage to the smooth conduct of business in being able to rely on specific statutory provision instead of on a general doctrine about interdepartmental consultation. Any erosion of the classes of case for which in future the requirement of consent should be included would not, in our view, improve relationships with Departments, and because of the difficulty of definition could increase departmental doubts about the need for Treasury approval. Indeed, to accept these amendments—to change doctrine now—would be to give a misleading signal. Departments might construe what looked like a declared change of practice as a waiver of the need to consult the Treasury at all. It is a presupposition in cases such as this that the Treasury should be consulted. The question at issue is simply whether the need for consultation should be given specific statutory expression, and, for the reasons that I have outlined, I firmly believe that it should be given in this case.

Mr. Cook

We have moved a little since Committee when the Minister relied on tradition as the basis for the existence in the clauses of the phrases that the amendments seek to strike out. The Minister does not now rely on tradition, which he did not seek to defend in any strong or vigorous terms today. Now he relies on the fact that changing tradition could be dangerous and convey—if I have the words right—the wrong signal to the appropriate Department. I am encouraged to discover that in the Departments of Industry and of the Environment large numbers of senior civil servants are straining outside the windows in search of the appropriate signal from the Treasury that they are free from Treasury control. Frankly, I doubt whether many civil servants in either of those great Departments would be encouraged recklessly to throw abandon to the wind as they disbursed grants because the Minister had accepted my modest amendment.

I appreciate that the Minister has carried out some research into the matter, but, as he candidly said, it requires further research. Perhaps in one of our great universities, which has not been entirely truncated by expenditure cuts, an aspiring PhD student could consider the matter. I put forward the possibly unworthy thought that the Bill may be peppered with these phrases in a way that other Bills with similar provisions are not because this measure is promoted by the Treasury. Doubtless that is an unworthy consideration that does not adequately explain the high issues of policy that caused the phrases to be put into the Bill.

The Minister stated at the outset that my amendments were not absolutely fundamental to the purposes of the Bill. It would be an onerous requirement on any Opposition to table amendments that were not only in order but absolutely fundamental to the purposes of the Bill. I am content that my amendments were not defective, without seeking also to make them absolutely fundamental. I admit that in a way their purpose was to tease the Minister, and I have had some satisfaction in that respect. Therefore, I am happy to withdraw the amendment and to content myself with the knowledge that I have diverted the Minister from more damaging activities into the harmless contemplation of this issue.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.