Scottish Development Agency Bill

HC Deb 29 October 1987 vol 121 cc463-537

Order read for resuming adjourned debate on Question [21 October] That the Bill be now read a Second time.

Question again proposed.

Mr. Speaker

I have not been able to select the amendment on the Order Paper in the name of the hon. Member for Glasgow, Garscadden (Mr. Dewar).

4.5 pm

Mr. Bruce Millan (Glasgow, Govan)

I welcome the opportunity to participate in this debate. The Government brought on this important business after 10 o'clock last Wednesday night. The Bill did not begin its proceedings in the House until 11.15 pm. It is unacceptable and offensive to the Opposition that a Bill of such importance, dealing with the extremely important Scottish Development Agency, should be put down for debate at that time. If the Government felt that the Bill would somehow slip through with the minimum of debate, they obviously completely misjudged the position. I say to Ministers and to those who arrange the business that Opposition Members will not accept that type of behaviour in dealing with Scottish business.

The Minister of State introduced the Bill last week with a rather dreary and complacent speech. I do not complain about that because I did not expect anything else. Important points were made by the Opposition, especially my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). We expect full answers today to last week's and today's points. There can be no excuse for not getting full answers because the Minister has had a whole week to consider our points.

We understand that the Government originally intended to have a debate on the Scottish economy today. We are told that, because we exercised our legitimate right to discuss the Bill at some length, that debate is to be taken from us, as though we have to rely on the Government's favour to have debates on important matters affecting Scotland. We are supposed to behave in an acceptable way when considering Scottish business or, as a kind of punishment, we shall not be allowed to have the legitimate debate on the Scottish economy and other aspects to which we are entitled. That is unacceptable. If the Government believe that they can deal in that way with Scottish business, they will face considerable difficulties for a good deal longer than just this Session.

Of course I welcome the Bill and the fact that it increases the Scottish Development Agency's borrowing limit. Opposition Members appreciate the contribution that the SDA has made to the Scottish economy since the agency was established 12 years ago. I pay tribute to the work done by George Mathewson as chief executive of the agency. He did a remarkable job. We wish him well in his new appointment. I know Mr. Ian Robertson well, and I welcome him to his new appointment and wish him well in his work for the agency.

The agency has done a considerable job for the Scottish economy. Of course, it cannot provide all the answers to Scotland's economic problems. When the Bill which established the agency was before the House, the Government of the day—I piloted the Bill through the House—were criticised for making exaggerated claims about the agency. I did not make exaggerated claims about the agency, nor did I claim that Scotland's economic problems could be solved by the establishment of the agency. That was never our intention. We believed that if the tide was running generally in favour of the Scottish economy, the SDA would be able to make a considerable contribution to the solution of Scottish economic problems. We also believed that, even if the tide was running against the Scottish economy, as it has been doing for the past eight years or so, the agency would nevertheless be able to do an extremely useful job for Scotland.

In a sense, the boot is now on the other foot. Conservative Members voted against the Second Reading of the Bill to establish the Scottish Development Agency. Whenever a problem arises in Scotland, they are only too happy to rush to the SDA for assistance. Indeed, in some respects, they regard the agency as the only effective instrument for solving Scotland's economic problems. That view was not taken by the Labour Government when they established the agency. Nevertheless, over the years, the agency has proved itself to be extremely important.

Given that, by itself, the agency cannot solve all our problems, it is essential to consider the economic background against which it operates. We are faced with the immediate problem of the collapse of the stock exchange and financial markets in other parts of the world. I do not know what the Chancellor will say in his statement today about the BP privatisation, but I hope that no action will be taken by the Government to bail out underwriters. I would not shed a single tear if some underwriters were severely punished by the collapse of the stock market. In fact, it would be a salutory lesson to them and many other hangers-on in the City, many of whom have made a killing in recent years from previous privatisation measures.

Of course, there is also the problem of what a continuation of the financial crisis in the world's stock markets will mean for the real economy in this country and elsewhere. We must be concerned about the developments of the past few days and their long-term effects on the British economy and other economies.

We have seen a failure of major industrial nations effectively to tackle major economic problems on a world scale. I do not know whether it is due to the ineptitude of the present United States Administration, the failure of the Japanese Government to act quickly and strongly to reverse some trends in their trading positions, or whether it is the abject failure of the British Government to provide any lead, either domestically or in the world setting. We are paying a high price for the failure to take essential steps to deal with world economic problems over the past few years.

Another factor is the appallingly high unemployment in Scotland at present. I acknowledge that there has been some improvement over recent months, but there has been nothing like the improvement that the published figures would have us believe. I have not believed the published figures on Scottish unemployment for a considerable time. My hon. Friend the Member for Fife, Central (Mr. McLeish) has produced some telling statistics and arguments on the matter. The unemployment unit still calculates unemployment figures on the basis that operated before the Government made various adjustments to massage the figures. I shall quote figures from my constituency to demonstrate the extent to which published figures now hide the reality of unemployment in Scotland. In Govan, in July, the published figures were 6,092, and the unemployment unit's figures were 7,439. The difference is between 19.6 per cent. on the published figures and 23.9 per cent. on the real figures. Of course, I am sorry to say that the male unemployment rate in my constituency is considerably higher than that. There are parts of my constituency in which the male unemployment rate is about 50 per cent. That is absolutely appalling. The Government should be ashamed of themselves for bringing the Scottish economy to such a low level.

Scottish employment and manufacturing are in a fragile state. Our manufacturing base has been eroded. We now face a severe manufacturing balance of trade deficit. Of course, much of it has been hidden from view because of the uncovenanted benefit of North sea oil which, in any case, is a wasting asset.

Against that background, one would have thought that any Government who are sensitive to the real needs of Scotland and other areas that suffer from high unemployment would bump up—not reduce—their regional assistance. The changes in regional aid that were introduced on 29 November 1984 are having catastrophic effects on the amount of Scottish regional development grant. Of course, to some extent, the position was masked by transitional arrangements. The impact of the November 1984 changes is only now beginning to be felt. On the Government's own figures, in 1986–87, Scottish regional development grant was paid to the extent of £170 million, although there was some deferment of payment. The Government's provision for 1987–88 is only £69 million. This year, when the changes are beginning to bite in the fullest way, we shall suffer a reduction of £100 million in regional development grants to Scottish industry. That must be an extremely serious factor for Scottish industry.

The Secretary of State for Trade and Industry is threatening us with a further review of regional aid; that is, a further downward review, not one to remedy some of the disastrous effects of the changes that have already taken place. Presumably, since he will not be chairman of the Conservative party, he will have even more time on his hands further to damage the Scottish economy. That is all part of the background.

Mr. William McKelvey (Kilmarnock and Loudoun)

Did my right hon. Friend notice that the CBI said this week that it is seriously concerned that the trend that has been evident in Scotland—that more jobs are being lost than being gained—will continue for many years?

Mr. Millan

I am grateful to my hon. Friend for mentioning that. I have noted that the CBI on the whole is well disposed to Government economic policies but that even it recognises the disastrous effects those policies have had on unemployment and the continuing danger that unemployment will worsen, rather than improve. That is all part of the background against which we have to consider the SDA, the Bill and the Government's attitude towards the SDA over the past few years.

We expect answers from the Minister on all the points we have made about regional aid. We do not want anodyne assurances that nothing will happen or that, if anything does happen, it will be for the best. We have had those assurances before. When the Government were elected in 1979 one of the first things they did was to slash regional aid. After the 1983 election there was a further reduction and it appears that we shall have the same again.

Against that background, one would have thought that any Government or Secretary of State concerned with the health of the Scottish economy would increase the budget available to the SDA, which is the one instrument that is available to the Government to pick up some of the pieces created by their economic and financial policies. As my hon. Friend the Member for Garscadden pointed out last week, in recent years the Government's commitment to the SDA, even in terms of its gross budget, in real terms has been reduced, not increased. The grant in aid by the Government to the SDA, according to the 1987 accounts of the SDA, was again reduced in 1986–87 to a figure of £87 million compared with the figure of £91.4 million in 1985–86. Even in this extremely difficult period the SDA budget has been reduced by the Government, and certainly the grant-in-aid to the SDA has been substantially reduced. As my hon. Friend the Member for Garscadden said, this is completely unacceptable.

There is no doubt that the agency could spend additional money effectively and that worthwhile projects are being turned down because of a lack of finance. I am sure that all Labour Members will be able to give examples in their own constituencies of projects being either turned down or the time scale being changed because of the lack of finance. If the Government were serious about their efforts to improve the Scottish economy, they ought to be significantly increasing the budget of the SDA instead of reducing it, not only in real terms but in cash terms

I share the disappointment of my hon. Friend the Member for Garscadden about the comparatively small proportion of SDA expenditure that is directed to direct industrial investment. I appreciate the point made about direct expenditure attracting significantly greater quantities of private investment. I welcome that because, if spending £1 can produce £10 worth of benefit, it is better to spend that £1 than to spend the whole £10 out of public funds. Nevertheless, this is a disappointing feature of the SDA—expenditure and activities. Compared with the expectations that those of us who set up the agency had, it is certainly disappointing.

I welcome the emphasis that the SDA has put and continues to put on high technology. In case the Government get too euphoric about what has happened either in Scotland or in the United Kingdom, I point out that if one looks at the problem of import penetration in manufacturing over the past 10 years, the pattern in the high technology industries has been considerably worse than in the low technology industries. Whatever we have done in high technology in Scotland or elsewhere, other countries have done it more successfully. We are losing out in terms of import penetration in high technology, not only to low-cost countries in the far east but to our major industrial competitors. Although I welcome the emphasis on high technology and the efforts that the SDA has successfully made in the area, we should not get too euphoric about this because Britain is falling further and further behind.

Mr. Bill Walker (Tayside, North)

In the right hon. Gentleman's comments about high technology, is he including aerospace and avionics? The output from aerospace and avionics was £7.75 million last year, of which £4.75 million was exported. How does he equate that with his comments?

Mr. Milan

I will not weary the House by giving chapter and verse, but I can assure the hon. Gentleman that what I have said is from an impeccable source, the Midland Bank Review of August 1986. I support the aerospace industry not least because Rolls-Royce is the biggest employer in my constituency. I have always supported Rolls-Royce and the aerospace industry, with rather more enthusiasm than have the Government.

One criticism I have of the SDA is that quite often it has been rather less enthusiastic than it might have been about some of our older industries. It has rather given the impression that new or high technology is the name of the game. It is important to look after older industries as well as high technology. In terms of high technology providing new jobs in my constituency, that has not compensated for the considerable reduction at Govan Shipbuilders.

I welcome the success of the GEAR project. I launched the GEAR project, but when I read accounts of it, I wonder whether that is so because so many others claim credit for that. It was launched by the Labour Government and it has been a considerable success. The SDA 1987 annual report made the point that even with GEAR, the east end of Glasgow is still swimming against the tide of high unemployment. Area initiatives, marvellous and important as they are, cannot do the whole job against the background of an economy that is suffering from misguided economic policies, as ours has been since 1979. Of course I would like to see more of them and more money spent on them.

The Government's commitment to the inner cities is a piece of hypocrisy if ever there was one, considering what has happened about the rate support grant over the past eight years. One cannot achieve anything in the inner cities, however one defines them, without the co-operation of the directly elected local authorities. Initiatives such as GEAR have succeeded because there has been co-operation between the SDA and the elected authority as well as the Scottish Special Housing Association and other agencies.

Mr. John Maxton (Glasgow, Cathcart)

On the subject of inner cities, will my right hon. Friend comment on the Secretary of State's refusal to allow Glasgow district council to borrow £10 million to build the new concert hall?

Mr. Millan

I have put down a question about that for the next Scottish Question Time but I hope that I shall not need to ask it because the Secretary of State will have come to his senses and given his consent. It is not even additional money. It is absurd to talk about the council rushing into things when it has been trying for 25 years to replace the concert hall. Now that there is a project it is disgraceful for the Government to refuse consent.

With regard to SDA involvement in my constituency, I very much welcome the Govan initiative. The lead agency is the regional council, but the district council, the SDA and Glasgow Opportunities are also involved and the project is beginning to have a significant impact. I also welcome other initiatives, especially the training of local people, because to derive the maximum advantage from local initiatives we must providee additional training for people living in the area.

I welcome the SDA's help in providing the Govan work space, with what is now the Elder park work space. Govan workspace has brought 430 jobs for my constituents. That is an extremely useful community business. I warmly salute it and the important role played by the SDA. I hope that the agency will take a similar role in other parts of my constituency, including the large dry dock and other facilities left vacant by the Clyde Dock Engineering Company's abandonment of its interest in ship repairs. I hope that important sites such as Linthouse will be developed with a genuine industrial and manufacturing capacity, as I am worried that at a prime riverside site such as Braehead there are proposals for major retail developments dressed up with certain ancillary features but not designed to provide the boost that the area needs.

I am an enthusiastic supporter of the garden festival. Most of the site is in my constituency, the rest in that of my hon. Friend the Member for Glasgow, Central (Mr. McTaggart). It is shameful, however, for Ministers to make great claims about the festival when the SDA received not a penny of extra funding. The money had to come out of the agency's ordinary budgets which have been reduced in real terms in addition to reductions in cash terms for grant aid.

The garden festival will last only six months, so the important question is the long-term use of the site and the surrounding area. I hope that the Minister will pursue this with the SDA. The site was sold by the Clyde port authority to Laings the builders, which proposed to build a large number of houses and nothing else. It would be a tragedy if at the end of the festival everything was cleared away and we simply had a large number of new houses there, although it is important that we have some new housing as in many ways it is a prime site and much of it is suitable for housing. There is also a proposal, which I hope will never be abandoned, for a major tourist/leisure facility, but the rest of the land is in the hands of Laings.

It is my strong view, and I believe that the SDA agrees, that the future development of the site should be worthy of the unique nature of the site and retain as much as possible of the work carried out for the festival. The site must not be given back to Laings merely to build a huge number of houses, however desirable those houses may be. We must have a mixed development on the site and I hope that the Minister will do his bit to ensure that that is achieved.

Finally, I hope that the footbridge being erected over the Clyde to connect the festival with the Scottish exhibition site will be retained, either at the same location or nearby. It would be scandalous if money was spent on a footbridge which was simply taken away at the end of the festival. I believe that my views are very much shared by the SDA, but I hope that the Government will also play their part.

I have gone from wider considerations to some important constituency points and I hope that the Minister will provide answers on all those matters. I believe that the SDA has done an excellent job over the years, as the recent review acknowledged. We wish the agency every success in the future but we believe that it could do an even better job with greater commitment, especially financial commitment, from the Government.

4.36 pm

Mr. Nicholas Fairbairn (Perth and Kinross)

In this debate, it is a privilege to follow the hen that laid this particular egg, in the person of the right hon. Member for Glasgow, Govan (Mr. Millan). I am glad to say, however, that we captured the chick young before it set off on its proposed delinquent course and have put it through a good school and to a good purpose. To start from the footbridge over the Clyde, I shall distinguish our approach to the Scottish Development Agency from that of the Opposition. The footbridge about which the right hon. Gentleman is so pleased is possible thanks to the private enterprise capitalist-generated money given to Glasgow as a tribute by Bell's in my constituency. It is not a matter of letting any old taxpayer foot the bill and not caring whose budget or whose services suffer as a result.

The right hon. Member for Govan, for whom I have the greatest affection, is a chartered accountant, but when he described the Minister's excellent speech as "lacklustre" it was a case of the pebble calling the diamond grey. The thrust of the right hon. Gentleman's remarks was essentially that we should give the SDA more money. Personally, I am not keen on accounting or taxation. I understand neither and am reluctant to dabble in them. For an accountant to advise his client that he should spend more money without reference to where it is to come from, who else is to be put in debt and what company is to be bankrupted as a result seems strange professional advice. We are, after all, discussing a Bill that raises the borrowing powers of the Scottish Development Agency from £700 million to £1,200 million. Even in terms of the wealth of the Binns or Paxton estates, that is a lot of money.

Mr. David Marshall (Glasgow, Shettleston)

Fordell.

Mr. Fairbairn

I shall come to that later: it is relevant to some of my illustrations.

I was disappointed with the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar)—[HON. MEMBERS: "You were asleep."] I can assure hon. Members that I heard the beginning of that speech. I took a conscious decision to become unconscious during the rest of it. It was long and boring. It was not even controversial, because nothing without content can be controversial. Although I have the greatest regard and admiration for the hon. Member for Garscadden, I must say that it was one of his worst, longest and most tedious speeches and clearly one in which he did not believe. As he lay spreadeagled, almost as grey as the right hon. Member for Goven, in the late hours of the night, it was clear that neither the hon. Gentleman's heart nor his mind had been recruited to his case.

Another thing that I find extremely upsetting is the general negativism of speeches made in the debate by Opposition hon. Members. Putting down 2,000 questions to Ministers is not intended to achieve accurate replies—[Interruption] If the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith), who is a neurosurgeon, cannot spell "puerile", which contains the same letters as "neuro", there is something greatly wrong with the attitude of Opposition Members.

I was impressed by my hon. Friend the Minister's description of the Scottish Development Agency as now being an engine of capitalism. I noticed that that phrase was mocked by the hon. Member for Garscadden, as if capitalism were in some way a plague bacillus that was bad for employment, for Scotland, for wages and for our prosperity. That is a fundamentally wrong approach. But for capitalism, there would be nothing in Scotland and there would never have been an industrial revolution there. Capitalism is not a plague bacillus to be abhorred; it is a generous tonic and support that is to be encouraged.—[HON. MEMBERS: "Thatcherism."] Yes, we need more Thatcherism in Scotland.

When the right hon. Member for Govan proposed the Scottish Development Agency, it was to be a sort of tartan mascot of the National Enterprise Board. As the Minister correctly said, it was really intended to be a remote-controlled heather robot for nationalisation, smelling out any part of industry or commerce in Scotland that was moribund and bankrupt and feeding it with vast amounts of public money to keep vital signs of life going, whether the concern in question was good or bad.

If the same attitude had obtained when iron and steel were being developed in the last century in Scotland, when coal was suddenly seen by Victorian industrialists as viable and railways were being ploughed through the country so that Scotland at last had communications, and if that same attitude had been adopted by the national unions of cartwrights, haywainers and grooms, they would have said that the Labour SDA should keep alive for ever more the transport and industries of the past, regardless of the effect that that might have on development and commerce of the future.

I shall attempt to draw another analogy. If those who are trying to keep alive the lesser horned butterfly—

Dr. Norman A. Godman (Greenock and Port Glasgow)

Oligotrophic moss.

Mr. Fairbairn

Oligotrophic moss, as the hon. Member for Greenock and Port Glasgow (Dr. Godman) correctly recalls. An enormous amount of employment in the north of my constituency—the area is now in the constituency of my hon. Friend the Member for Tayside, North (Mr. Walker)—was frustrated because the Nature Conservancy Council said that if a fish farm was put in a loch that no-one ever visited, an oligotrophic moss that no one had ever seen, 600 ft below the surface, might be destroyed.

Dr. Godman

The hon. and learned Gentleman is too modest, for he is a botanist of some repute in Scotland. When he is not concerned with the oligotrophic moss, he scrutinises the Scottish thistle with vigour and passion.

Mr. Fairbairn

I did not hear the last word, but I am sure that it was an important botanical point.

If, in the days of dinosaurs, brontosauruses, lepidopterons, sabre-toothed tigers, mammoths and coelacanths, the conservationists—the Opposition—had wanted to stop everything and not allow the development of future species, none of the species they are now trying to protect would ever have developed.

It is exactly the same with Scottish industry. I come now to the living proof of that fact. Opposition Members constantly campaign on the issue of unemployment and call for more money to be spent to create industry and jobs. Yet, when 4,000 new jobs are to be set up in Clydebank in a private health care centre, they lose their interest in jobs, and their principles fly away. I grieve for the hon. Member for Dundee, West (Mr. Ross), for whom I have the greatest affection. When the greatest prospect for Scotland of having a commercially viable, intentionally placed motor plant for the whole future of Scotland, Europe and the world is mooted, who comes along and frustrates the greatest opportunity that Scottish employment—not only in Dundee, Tayside or Perthshire—has had in a generation? The Trades Union Congress.

Along come the unions and say, "When it comes to my membership, my self-importance, my petty-mindedness, my Socialist principles, to hell with progress, to hell with Scotland, to hell with employment. We are only interested in ourselves." After all, it is English unions with English components factories that are trying to stop Ford coming to Dundee. If we are going to have nationalist divisions and all the nonsense about devolution, let us be clear about this. The unions would rather have Dundee laid in ruins and ashes than give up their wretched membership and interest. Those are Socialist principles at work, and the Scots should remember it.

Mr. Tony Favell (Stockport)

The Labour party would do well to heed what my hon. and learned Friend says because English investors take note of what is happening in Dundee. Over the years investors have taken note of what has happened in Liverpool with the trade unions, and there is dereliction as a result. Scotland has a poor reputation for trade union relations. The English saw what happened at Upper Clyde Shipbuilders and at Linwood years ago and it is not forgotten. All the good that the SDA has done over the past 10 years will be undone if the Labour party does not encourage the trade unions in Dundeee to buckle down. What is more—[Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. This is an intervention. It should take the form of a question to the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), who has the Floor. Will the hon. Member for Stockport (Mr. Favell) please bring his remarks to a close?

Mr. Favell

Does my hon. and learned Friend agree that many parts of England, including my own constituency of Stockport, which has a reputation for engineering that is second to none and where there are excellent industrial relations, would be only too glad to welcome Ford and give an absolute guarantee that there would be no trouble with the unions whatsover?

Mr. Fairbain

I agree with my hon. Friend. It is a lesson of principle of the greatest importance that when it comes allegedly to the sacred cow—as the Labour party presents it—of employment in Scotland, and when it comes to the prosperity of Dundee, the trade unions and the Labour party unite in saying, "Ah, but there is a greater issue—the sanctity of the false creeds and gods of Socialism." If it is a matter of 4,000 jobs in private health care, better no jobs and no private health care. If it is Ford in Dundee with a single-union agreement or Ford in hell with a multi-union agreement, what is the choice? Better to have no Ford in Dundee, no employment and none of the huge spin-off benefits to Dundee, where the waterfront scheme and the Ford scheme are funded and supported by the SDA. Better to have none of them. Let this get home to the Opposition and the people of Scotland. When it comes to a choice between the things that they pretend they are fighting for and the tenets that they pretend they are not fighting for, the tenets come first.

Mr. Ernie Ross (Dundee, West)

Would the hon. and learned Gentleman care to reflect that the last time a Conservative Member made such comments about Dundee—it was the hon. Member for Tayside, North (Mr. Walker)—the Dundee and Tayside chamber of commerce had to remind the hon. Member that comments made in the House are widely read? Thus hon. Members should take great care when they speak to ensure that they do not threaten the well-being of Dundee and Tayside.

As the hon. Member in whose constituency the plant will be established, I should like to say that the fact that there is a single-union agreement at that plant is the least reason why Ford will be established in Dundee. If the hon. and learned Gentleman were to consult his right hon. and learned Friend the Secretary of State for Scotland, he would understand that a financial package was successfully put together by Locate in Scotland to ensure the establishment of the Ford plant in Dundee. Trade unions have rights and they are being taken into account by the TUC disputes committee. It would serve the interests of Scotland and Dundee well if hon. Members on both sides of the House understood that, left those matters to be discussed by that body, and concentrated instead on congratulating the Scottish economy and Locate in Scotland on capturing that plant for Dundee.

Mr. Fairbairn

I fully appreciate the hon. Gentleman's embarrassment, because he is caught between Scylla and Charybdis. The remarks that are constantly made that would cause foreign companies not to invest in Scotland are always made by Opposition Members. In his speech, the hon. Member for Garscadden constantly said that this is a rotten country with terrible industrial problems. I am saying that the Labour movement, the Labour party and the trades union movement should say, "To hell with these stupid little rules that we have. Let us welcome this magnificent prize that the Government and the SDA have won for us."

Mr. Bill Walker

With regard to the comments by the hon. Member for Dundee, West (Mr. Ross), does my hon. and learned Friend recollect that I went to the Dundee and Tayside chamber of commerce, after it made its statement, and it later apologised to me because I was telling the truth?

Mr. Fairbairn

I recollect that, but I shall move on.

Mr. McKelvey

The hon. and learned Gentleman apparently blames the decline of Scottish industries on the Socialist approach. Does he recall that there were excellent trade union-management agreements in the Massey-Ferguson plant in Kilmarnock, which was debated in the House on many occasions? There was no reason to move the plant from Kilmarnock. We lost 1,800 jobs and the economy of Kilmarnock was almost ruined. The fault lay in international capitalism, because Massey-Ferguson felt that it would make more money by moving the plant to France. Incidentally, that did not work out well, because in the end the jobs were lost in France as well. The people of Kilmarnock see international capitalism as the cause for the loss of jobs.

Mr. Fairbairn

I am absolutely delighted that they do. I understood that it was international capitalism, in the form of Ford, which was bringing this mighty prize to Scotland. The Labour party and the trade union movement are trying to stop it coming. I do not see how the workers can blame international capitalism for what is happening in Dundee.

The SDA has been transformed under the Government, as my hon. Friend the Minister said, into a company that is essentially an investment bank for prospectively or currently successful and expanding industry. Some 80 per cent. of north American firms, when asked where they would locate in Europe, said in Scotland, provided we won the election, and they were right. Four hundred firms were asked what they thought was the most successful. convincing, professional and commercially responsible development agency in Europe. Of those, 80 per cent. said the Scottish Development Agency, as now transformed.

I find it rather odd that the hon. Member for Garscadden should say: I am delighted to see any signs of growth, movement and inward investment in Scotland, such as Compaq at Irvine, Ford in Dundee"— if it comes— or the big development in Livingston wth Japanese capital by the Shin-Etsu Handotai company mentioned in the press today. I shall be delighted to see it come. However, we are entitled to protest against the way in which the arrival of an electronics company is sometimes used as an alibi for almost everything else that is happening on the Scottish industrial scene."—[Official Report, 21 October 1987; Vol. 120, c. 853.] That will not encourage inward investment. That is saying, "OK, I'm glad that the patient's temperature has gone down by 1 deg, but he is terribly ill and unlikely to recover."

Those remarks contrast phenomenally with the positive and immensely successful tour of the United States and Japan which has just been concluded by the Secretary of State for Scotland with officials of the Scottish Development Agency and other business men. There were some complaints about the Secretary of State's absence the other night, when he was in Japan and I was fearful that he might have been talent-spotted, so I was happy to see him back.

I wish to emphasise the Minister's comments. We are competing not with the past or with unemployment figures, hut with our fiercest international competitors and we cannot artificially subsidise industries which have no future. Not a day passes but the enormous, burgeoning prosperity of Scotland is re-emphasised—Butlins, Clydebank, Thorn, Compaq, Livingston, and the exhibition centre. Here I pay great tribute to the right hon. Member for Govan.

The city of Glasgow has been restored since the Government came into office. When I first went there as counsel 30 years ago, the city was in a mood of depression. It is now in a mood of hope, pride and magnificence, and the term "Glasgow is miles better" is now a proper description of the city.

Dr. Lewis Moonie (Kirkcaldy)

How many Tory councillors does the city have?

Mr. Fairbairn

The hon. Gentleman will remember that, during that period, we had a Tory council.

My hon. Friend the Member for Dumfries (Sir H. Monro) mentioned important smaller activities, such as rural commerce, development and protection. I ask the Minister to pay great attention to the points made by my hon. Friend. the Member for Dumfries about the effect of rating and planning and the interpretation of the Scottish Office circular about development in the countryside, which varies from one part of Scotland to another. Some people take it to mean that they should have no development, while others take it to mean that they can do what they like.

I have often said that I would like the Scottish Office to encourage the Scottish Development Agency to facilitate the transformation of our farmsteadings and country buildings into private dwellings and small commercial enterprises.

Mr. David Marshall

What about country castles?

Mr. Fairbairn

I shall come to country castles next.

In that simple way, we would both preserve one of the most important and neglected parts of the Scottish heritage and being vitality and population to rural areas.

Now, at last, let me deal with castles. There are, in the care of my right hon. and learned Friend the Secretary of State for Scotland, an enormous number of buildings which cost a vast amount to keep, with no roofs, a small lawn around them, a sign saying "Please keep off the grass" and 50p admission at the gate. If those buildings had roofs, it is clear that people would be living in them.

I can give plenty of examples: Linlithgow palace, Craigmillar castle and Aberdour castle. Let us take Aberdour castle. There it is, a building with a roof and another parquet floor being put down, although it is entirely empty, just so that some Ministry of Works posters can be put on the wall. To me, it seems obscene and absurd that what could be a dwelling house for people is allowed to be a charge on the public purse.

Fordell castle is protected by the Secretary of State for Scotland, because it is an ancient monument and contains some very important works of art. Had I not bought it for £100, restored it and lived in it, the castle would, like all the others, be an empty shell of no interest to anyone and a vast charge on the revenues of the Property Services Agency and the Scottish Office.

Mr. Brian Wilson (Cunninghame, North)

Does the hon. and learned Gentleman recognise that many people in Scotland, particularly those in rural areas, would be delighted to see every castle and great mansion razed to the ground'? As they stand, they are testaments and monuments to the slavery of working people and their families.

Mr. Fairbairn

I hope that everyone in Scotland is listening. The reason for building houses such as the one in which I live, which was built in 1210, was not so that certain people could rule the peasants, as the hon. Gentleman imagines, but so that the peasants would have somewhere to hide and their neighbours would not cut their heads off.

I can give Socialism a good example of the value of Fordell castle. During the miners' strike, at 11 o'clock on a Sunday night, two families—10 people—came to the castle from High Valley fields because they were seeking refuge—

Mr. Dick Douglas (Dunfermline, West)

They were my constituents.

Mr. Fairbairn

Indeed they were the hon. Gentleman's constituents and perhaps I should not mention what they said about their Member of Parliament. They had always voted Labour, but they were coming to the house of a Tory Member to seek refuge from the persecution of other members of the National Union of Mineworkers. For a week, the castle provided them with that refuge.

Mr. Douglas

Nonsense.

Mr. Fairbairn

The hon. Member tempts me to tell him what those people said, but I think that it would be indiscreet for me to do so.

I ask my hon. Friend the Minister, as all these buildings are under statutory protection, to arrange for them to be put to proper and intelligent use for the benefit of the countryside and the Scottish people. If Opposition Members really think that it is popular in Scotland to destroy our heritage, which I have been trying for 30 years to reprieve, they should say so loud and clear before the next election.

Mr. Wilson

Will the hon. and learned Gentleman give way?

Mr. Fairbairn

No. I have heard one interruption by the hon. Gentleman, and I do not believe that the next one will be much more intelligent.

I recently had to stay in Scotland with four English Members of Parliament—one from the midlands, one from the west country, one from Kent and one from the north. They had not been to Scotland before. I took them all over Scotland, and they were astonished that we had any complaints or felt jealous of those living in the south of England. After all, we have £127 spent on us for every £100 spent on an Englishman, every £80 spent on a Cumbrian, and every £70 spent on a Welshman. We have three international airports within 40 miles of one another. We have the best system of road and rail transport, except for occasional difficulties, making the English transport system look decadent and outdated. We have a tourist industry that makes the Lake District, Dorset and Devon look like a desert. We have excellent facilities. We have 80 per cent. of the inward technological investment, 40 per cent. of EEC grants, and the majority of regional aid for only one eleventh of the British population.

We also have more employed people in Scotland today than have ever been employed in Scotland, with a smaller population. [Interruption.] Yes, we also have more unemployed, and I shall give Opposition Members a typical example. Every day, on the front page of the Dundee Courier and Advertiser—which is still civilised enough to put its advertisements on the front page—we read, "Situations wanted: two; situation filled: one; situations vacant: probably 500." Turning to the back page, we see the technical vacancies.

During the election, at a meeting in Crieff, six youths who were attempting to disrupt the meeting shouted, "What are you going to do for jobs?" I said, "I shall tell you exactly what I will do. I will give you a list of the jobs available, and I will have you taken to the industrial estate in Perth." Five of them were taken on, and they had never applied for a job before. I think people should be rather cautious about their concepts of unemployment. How many people who are registered unemployed are working in the black economy? How many have taken early retirement and a golden handshake and are working in the black economy? I think that it is high time that the Government's attitude was brought forward.

Mr. Henry McLeish (Fife, Central)

In view of the extravagant claims made by the hon. and learned Gentleman, may I refer him to the most recent labour market quarterly report produced by the Manpower Services Commission in Scotland, which is an arm of the Scottish Office? The hon. and learned Gentleman asserts that more people are employed in Scotland than ever before. Let me remind him that in March 1985, 1,906,000 Scots were at work. In March 1987, the figure is 1,879,000. Will the hon. and learned Gentleman not appreciate the reality of the plight of the jobless, instead of making ridiculous claims about employment and unemployment north of the border?

Mr. Fairbairn

I do appreciate the plight of the jobless. If any Opposition Member can tell me that at an election meeting he obtained jobs for five people who had never applied for jobs, will he please stand up, and I shall give way.

There is a grave danger that Opposition Members will give the rest of Great Britain—especially English, Welsh and Irish Members of the House—the impression that they constantly girn, and therefore are eventually not to be listened to. We now have an excellent and distinguished Lord Chancellor, perhaps the most distinguished legal brain since Lord Simmons to sit upon the Woolsack. I have not heard one word from any English Member of Parliament, any English peer, or any English judge or barrister, about the appointment of a member of the Scottish bar as head of the English judiciary. Just imagine what the position would have been if Lord Havers had been appointed Lord Advocate. There would have been nothing but gurling and complaining and people saying, "Och, keep him out o' our wee patch."

Mr. Favell

As an English lawyer, may I say that I greatly respect the new Lord Chancellor. He is most welcome, and the legal profession looks forward to working with him. Furthermore, we have great respect not only for Scottish education as a whole but for Scottish legal education in particular.

Mr. Fairbairn

I am obliged for those tributes, which I have not heard from any Opposition Member, whatever his nationality.

Mr. David Marshall

The hon. and learned Gentleman expresses delight at the appointment of a Scot to the highest legal position in Britain. Why does he not express the same delight at the continuing appointment of Peter Fraser as Solicitor-General for Scotland?

Mr. Fairbairn

The two positions are not comparable. The hon. Gentleman will remember the great difficulties that arose after the first world war. The opinion, not of the late Lord Clyde, but of his grandfather, was that no person could occupy two offices. As prosecutions were conducted in their name and not in the name of the Crown, they could not be seen to be unable to undertake prosecutions.

When I listened on Wednesday night to the speeches of Opposition Members—[HON. MEMBERS: "You were asleep."] When I listened to the speeches of those Opposition Members that I had the misfortune to be unable to sleep through, I was reminded of Thomas Carlyle's remark about his mother-in-law: that she had lost the power of communication but unfortunately not the power of speech.

Dr. John Reid (Motherwell, North)

On a point of order, Madam Deputy Speaker. Is it in order for the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) to comment on speeches that he slept through during last Wednesday's debate?

Madam Deputy Speaker

That is not a point of order for the Chair. However, may I remind the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) that although this is a Second Reading debate and one can range quite wide, there has already been a very wide examination of the Bill.

Mr. Fairbairn

I am most obliged to you, Madam Deputy Speaker.

Employment on Clydebank is opposed by the Labour party on doctrinal grounds. Employment at the Ford plant is in jeopardy because of the Labour party, again on doctrinal grounds. Growth in Scotland is 4.6 per cent. compared with 3.2 per cent. in England. It is a record third year for both parts of the kingdom. Thanks to this Government, Scotland is now the trail blazer.

As originally conceived, the only purpose of the Scottish Development Agency was to give spivs such as De Lorean the opportunity to put their spoons into public funds. Under this Government, real industry has been established and developed, and in rural areas there has been the clearance of ugliness. However, the Opposition's message is that they have nothing to offer Scotland. This Government have given Scotland everything that it wants, and more.

5.20 pm

Mr. Thomas Graham (Renfrew, West and Inverclyde)

I thank you, Madam Deputy Speaker, for this opportunity to make my maiden speech as the Member of Parliament for Renfrew, West and Inverclyde. I should like to spend some time considering my predecessor, Mrs. Anna McCurley. She was a striking and popular Member of Parliament. I am sure that hon. Members on both sides of the House hold her in high regard and have some fondness for her. I share that regard since I had the pleasure of working with Mrs. McCurley when both of us were elected members of the Strathclyde regional council. At that time she demonstrated her tenacity and independence in representing her constituents. She continued to display those features during her time as a Member of Parliament.

Mrs. McCurley was the first Member of Parliament for Renfrew, West and Inverclyde when the constituency was created by boundary changes. Early in her career as a Member of Parliament she was described by The Scotsman as outspoken and formidable. She ensured that this new constituency became well known not only in the House but in the country.

I have said that among her many qualities Mrs. McCurley showed a good deal of independence. That is particularly witnessed by the fact that she was no blind supporter of the Government in either their actions or their philosophy. Indeed, she abstained from supporting the Government in 1984, when her plea to the Government not to pull the plug on Scott Lithgow seemed to be ignored. For these and many other reasons I must say to the House that while Mrs. McCurley was a member and supporter of the Select Committee on Scottish Affairs, I make no apology for the fact that I am proud to be one of the main reasons why the Government cannot now man it.

Above all, Mrs. McCurley was gracious in defeat—more gracious and honest than the Government in this continuing debate. It has been said that this debate is unnecessary and time-wasting. That is utter nonsense, because it is the Government who have caused the controversy. I agree that the Scottish Development Agency should have an increased borrowing capacity. but I am gravely concerned that the way in which this Government are directing the SDA will mean that my constituency will receive less assistance from that body than it has received in the past. Last week the Minister of State told the House that the Labour Government had created the SDA to be interventionist. It was his vain and proud boast that under this Government it has been transformed into an engine of free enterprise.

The point at issue for me and my constituents is the radical change of direction, whereby the abandonment of the sensible interventionist policies that were embodied in the Labour vision that created the SDA has led to the abandonment by this Government of constituencies such as mine.

Renfrew, West and Inverclyde is a varied constituency, stretching from the banks of the Clyde, with its traditional and still vitally important industries, through rural areas which have their own serious problems of transport and, for some, isolation, to the comparatively new community of Erskine. In each of these areas there is high unemployment—devastating and tragic in its consequences.

I was not elected solely by the unemployed. No, I was elected because people of all incomes and standing voted for me. Although they may work and own their own homes, they want decent standards of education, better health care and further education and jobs for their children. Those are the matters that concern me and my family. My constituents are also concerned about these matters. Above all, they have found Government action and the views embodied in the Minister of State's speech last week offensive to their sense of fairness, because his comments about the SDA described the Government's strategy of polarisation, of division between the haves and the have-nots, of creating a divided society which the electorate in Greenock, Gourock, Inverkip, Wemyss Bay, Kilbarchan, Houston and Erskine utterly reject.

This polarisation of the SDA away from the needs of the community, which was implicit in the words of the Minister of State, is also central to the Government's strategy in their document, "Scottish Homes," which attacks the safe tenure of thousands of my constituents. It is this polarisation between those on no or low incomes and the best off, which is central to the thinking behind the wicked and iniquitous poll tax, which will discriminate against many thousands of my constituents. That tax so offends the sense of fairness of our people that I know many of my constituents who, even though they may benefit financially, realise that their society will take yet another moral step backwards and see that the tax is a further attack upon local democracy and local councils, which are attempting to maintain essential services in the face of increasing vicious assaults from the Government.

The Minister of State said that the Bill confirms the Government's commitment to the continuing process of improving the Scottish economy. That would be laughable were it not transformed into human tragedy and waste in the lives of so many of my constituents who have become and remain unemployed. I will not give the House a litany of factory closures in my constituency. That would be as long as, if not longer than, those in many other parts of Scotland, although I am delighted with the news that Compaq today said that it will double its work force sooner than expected because of the skills in our community. That is good news and I welcome it.

I finish by telling the House about one community in my constituency which I have not yet mentioned. Linwood is not simply the area I represent, but the community in which I live. It is an area grievously injured by a massive level of unemployment inflicted by the Government. It is a community where the pride and the stamina of my people have survived despite the Government, despite low incomes, no jobs and lack of development. It is a community with such need that I hold it up to the House as a prime example of the failure on a catastrophic scale of the free enterprise approach about which the Minister of State boasts.

I say to the Minister, to the House and to my people that I will fight for all my constituents and for their children. I warn the Minister now that my constituents do not want a fast-buck society—the instant reward. They do not want a Government who think only of the present. That is why they elected me, a member of the Labour party—the party not only of the present, but of the future.

5.28 pm

Mr. Michael Fallon (Darlington)

It is my pleasant duty to congratulate the hon. Member for Renfrewshire, West and Inverclyde (Mr. Graham) on his maiden speech. He instantly captured the respect of the House by paying a generous tribute to his predecessor, Anna McCurley. She was held in great affection and regard on both sides of the House, and although we welcome the hon. Gentleman, we mourn the loss of Anna McCurley and hope that she will be back among us soon—even though we cannot predict exactly which Scottish constituency she may next represent. The hon. Gentleman made an impressive maiden speech. He spoke with great commitment and eloquence, skilfully tailoring his speech to the edge of controversy. If he was not controversial, he was certainly not uncommitted, and he made clear to the House the anxieties of his constituents. I hope that we will hear again from him soon.

A week ago, the hon. Member for Glasgow, Garscadden (Mr. Dewar) dismissed my intervention in his speech when I tried to draw his attention to the considerable increase in the financial limits of the Scottish Development Agency which the Bill represents. He tried to imply that it was an increase only in the borrowing requirement and that it meant a reduction in the agency's spending power. But the Scottish Development Agency's external financial limit includes borrowing and spending, and the Bill will authorise an increase of about 71 per cent.

That is a substantial increase in public moneys given to a specific agency of Government, and it should be clear to Opposition Members that those moneys, whether borrowed or spent, are then not available for spending for other purposes in Scotland, such as on schools and hospitals, or for spending on equivalent purposes in England. The moneys are taken from businesses and taxpayers in Scotland, but they are also taken from businesses and taxpayers in England, Wales and Northern Ireland.

Those hon. Members who seem to regard a 71 per cent. increase in the development agency's spending and borrowing as of little account should set the increase in the overall context of industrial support in Scotland. This year, industrial support in Scotland will be about £124 million. As my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) said, that means that the increase represents not only Scottish money but the application of English money. A glance at the annual territorial analysis of public spending shows that spending in Scotland is on average about 27 per cent. higher per capita than spending in England. Spending on industry, energy, trade and employment is about 90 per cent. higher per capita in Scotland than it is in England. For every £5 spent on industrial support in England, about £9.50 is spent on industrial support in Scotland.

The money about which we are talking is not simply Scottish money. It is predominantly English money raised from English taxpayers. That is why it is right for us to consider whether the resources allocated to Scotland are being allocated effectively and whether they are being allocated unfairly when one considers the regions of England which have similar, or worse, structural problems and unemployment rates. The north-east of England is one such example.

We must examine how the allocation of resources discriminates against regions such as the north-east. In 1986–87, about £107 million was paid in regional selective assistance in Scotland, whereas only £100 million was paid in the north-east. Spending on old-style regional development grants was almost twice as high in Scotland as it was in the north-east of England. Yet in 1986 Scottish unemployment averaged 15.7 per cent. and unemployment in the north-east averaged 18.5 per cent. There is a clear element of discrimination here.

I do not suggest that comparable development agencies should be set up for every region of England. There would be no point in having a development agency for every region simply competing against each other, but if this generous provision continues, and Opposition Members continue to criticise it, we in the north-east will have to see how it compares with the resources available to our agencies.

We shall examine carefully equivalent agencies such as the urban development corporations of Tyneside and Teesside and our promotional outfit, the Northern Development Company, to see what resources they have per capita compared with the resources available in Scotland. We shall continue to keep the resources that are made available in Scotland under critical review. Few hon. Members have considered the way in which the SDA carries out its functions.

Miss Marjorie Mowlam (Redcar)

Is the hon. Gentleman satisfied with the financial support that has been given to the Teesside urban development corporation?

Mr. Fallon

The hon. Lady will know that next week the House will debate a Bill to increase the financial support for the Teesside urban development corporation.

Miss Mowlam

But is the hon. Gentleman satisfied?

Mr. Fallon

No. I will not be satisfied with the support given to the urban development corporation if it continues to be far outweighed by the per capita support given to the SDA, and I hope that the hon. Lady will join me in my call for a much more even-handed approach to the allocation of public resources.

No Conservative Member disputes the importance of at least some functions of the SDA. Of course a development agency should clear away the debris of the past. We have such an agency in England—English Estates—but Scotland is treated much more generously. For land purchase in the whole of England, English Estates has a budget of about £2.6 million. The SDA, which serves only 5 million people, has a budget exactly double that amount. We in the north-east also need an agency to promote our region and to secure fresh, internationally mobile investment for the north-east, just as the SDA and Locate in Scotland try to attract investment to that country. But there is a great difference in the resources allocated. This year, the SDA will spend about £13 million on promotion and publicity. The Northern Development Company has £1 million to spend. No Scottish Labour Member can argue that resources are being allocated equally.

Another primary function of the SDA is derelict land clearance, to which it will commit £38 million this year. That represents one third of the amount spent on land clearance in Britain in a country whose population is only one tenth of the British population. Let us have no criticism of the resources being provided by the Government to Scotland. Instead, hon. Members on both sides of the House should ensure that those resources are effectively managed and efficiently applied.

I wish to consider three aspects of the Scottish Development Agency's work and the conclusions of the review group. First, the development agency should clear away the old industrial landscape and help to build more factories, refurbish the environment and carry out the environmental work that public agencies have always done. Secondly, the SDA should do its best to compete against other agencies to attract international investment. But when one considers the third function of the development agency—that of directing public investment—the questions begin to accumulate.

When we consider the figures we find that the Scottish Development Agency has made a number of rather serious misjudgments. More than 1,000 of the companies that it has backed over the past 12 years have gone bankrupt. Indeed, the review group report states that the overall rate of return on investments made in the period 1980–85 is estimated to have been about 5.4 per cent. for head office investment and negative for small business division investment. In other words, the SDA, in choosing suitable small business investments for our money, has been making a loss on that money for the past five years.

I believe that much greater clarity should be given to the development agency's investment function. Indeed, I am somewhat suspicious of the agency's aim, about which I read in its latest annual report, to increase the aggregate money income of Scotland's residents. To increase the aggregate money income of Scotland is one thing, but to do it by taking money from England and investing it in risks and enterprises which the Scots are not prepared to risk money on themselves is quite another thing.

There is a general lesson to be learnt. Scotland's residents are residents of the United Kingdom and have as much interest as the rest of us in reducing such misallocation of public money, in reducing the role of the state in risk taking and investments of that kind and in encouraging the expansion of the market sector. Scots also have an interest in lowering the proportion of gross domestic product taken in public expenditure. I remind the House that that proportion, 48 per cent., is very much higher in Scotland than it is in England.

In short, the SDA, through the investment function, is investing English taxpapers' money in risks that the Scots are not prepared to back themselves. If that were not true, we would have had some calls to privatise the SDA. Therefore, it must be true. Instead of depending on quangos such as the SDA and civil servants to take risks for them with English money, the Scots should be looking much more to their own financial institutions and asking why they are not bearing a higher proportion of the risk themselves.

Why as Conservatives do we license such a body in Scotland when we have not been prepared to support the introduction of similar bodies in equally hard-pressed regions of the United Kingdom such as the north-east and north-west? If we are to continue to support such an agency from the Conservative Benches, we must apply at least three conditions. First, the resources allocated to the SDA should not be disproportionate to the resources allocated for similar genuine public purposes in other regions of the United Kingdom.

Secondly, those resources should be used more effectively than if they were applied for the same purpose in other ways through other agencies. We should expect greater value for taxpayers' money from the SDA than we would otherwise expect from spending by Government Departments.

Dr. Moonie

Would the hon. Gentleman like to see a reduction in spending in Scotland or an increase in spending in the regions of England?

Mr. Fallon

I would certainly like a reduction in the proportion of GDP taken by public spending in all parts of the United Kingdom as a whole. I would certainly like. a much more even-handed approach to the application of public resources. I very much regret the fact that public spending in Northern Ireland, Scotland and Wales is sc. very much higher per capita than it is in England.

Mr. Sam Galbraith (Strathkelvin and Bearsden)

There is almost an implicit threat in the hon. Gentleman's comments. When he requests a more even-handed approach, is he reflecting his own views or those of the Scottish Office?

Mr. Fallon

The hon. Gentleman should not anticipate me. I will consider the Scottish Office's approach in a moment.

I have said that Conservative Members should continue to support the existence of and resources allocated to the SDA provided that the agency fulfils three criteria: its resources should not be disproportionate; the resources should be used more effectively than resources allocated in other ways; and the purpose and management of the agency should continue to be kept under very strict review.

I notice that the review group established by the Treasury and the Scottish Office made some scathing criticisms of the management of the agency. It is simply not true to say—as Opposition Members have said throughout the debate—that the agency is doing a good job splendidly. Opposition Members. have been a little taken in by the annual report. The review group did not reach that conclusion. Far from it. Paragraph 2.36 of its report states:

We have found that the Agency's stated corporate priorities do not relate well to its functions, its organisational structure or its approved budget headings and that its planning and budgeting are not well linked. Nor is there a good tie-up between the Department's planning and the Agency's planning. The Agency's budget prioritisation system … suffers from serious shortcomings. The Agency has not devoted adequate effort to assessing the impact of its activities and its financial systems do not provide adequate management information. I would not have thought that that was an outstandingly clean bill of health from the review group. I hope that my ministerial colleagues will give the commitment that they will continue to keep the management of the agency on its toes and under review.

Mr. Eric Forth (Mid-Worcestershire)

Does my hon. Friend agree that it would be helpful if we made it a condition of any additional funding for the agency that some of the serious criticisms that he has just brought to the attention of the House are corrected? Would it not be rash to pledge more resources to the agency when its control procedures are as weak as the review group has reported? How would my hon. Friend react to that suggestion?

Mr. Fallon

I am sure that my ministerial colleagues at the Scottish Office will apply that consideration when they decide how additional resources should be exercised by the agency. I am sure that we will hear how the recommendations of the review group — and there are substantial recommendations in the report—will be put into effect and how they will be monitored.

I hope that I have made it clear to the House that, speaking simply for myself, I have doubts about the SDA. However, I am prepared to trust the word of my right hon. and hon. Friends at the Scottish Office. My hon. Friend the Minister of State described the SDA last week as an "engine of free enterprise". It would seem to me that it is an engine of free enterprise liberally lubricated by public money. If my hon. Friend says that it is an engine of free enterprise, we look forward to seeing how it performs.

My ministerial colleagues have taken—as we would expect—a very pragmatic and constructive view of the operation of the agency. They are all very pragmatic and constructive people. I hope that they will seriously consider some of the criticisms.

Mr. Maxton

Would the hon. Gentleman like to say a word or two about his erstwhile political ally and ideologue the hon. Member for Stirling (Mr. Forsyth) and say whether he expects his hon. Friend to support the Bill?

Mr. Fallon

My hon. Friend's name is among the supporters of the Bill and he must justify not simply to the House but to himself the very pragmatic and constructive course that his view of public investment is taking. I am sure he will do that.

Mr. Kenneth Hind (Lancashire, West)

Does my hon. Friend agree that the clear message contained in his comments is that Scotland, relative to his region, the north-east, and to mine, the north-west, is in a privileged position? Scotland is doing well compared with the rest of the United Kingdom but more support from the Front Bench would not come amiss.

Mr. Fallon

I agree. The entire two-day debate could be condensed into two words—"Thank you".

Mr. Bill Walker

Before my hon. friend completes his interesting and stimulating address, will he comment on the Scottish National party view that all funding of Scottish expenditure comes out of Scotland and that Scotland does not enjoy a better position than the north-west and north-east of England?

Mr. Fallon

I have never been able to understand that argument. Soon we shall have the latest review on annual spending and members of the SNP, like us all, will be able to assess Scotland's relative position.

I have said that Ministers take a pragmatic and constructive view of the Scottish Development Agency. They accept that the agency must continue to exist and they accept the purposes which the agency has laid down for itself. I ask my hon. Friends to pay attention to three serious points. First, the review group recommended that the agency should re-examine its advisory services for which it does not charge. I should like many more of those services to be considered for charging. Secondly, it should be obvious to everybody that the agency's small business lending and investment operation must be examined more carefully and, as the review group said, be subject to much stricter commercial disciplines. Thirdly, it is self-evident that a higher proportion of the agency's activities should be self-financing.

Ministers have an obligation at least to consider those criticisms. After all, they are not simply Ministers in the Scottish Office but Ministers with obligations to all United Kingdom taxpayers from whom the agency is so generously funded.

5.53 pm

Mr. Alex Salmond (Banff and Buchan)

I join the hon. Member for Darlington (Mr. Fallon) in complimenting the hon. Member for Renfrew, West and Inverclyde (Mr. Graham) on his formidable maiden speech. It was a sign of great things to come. However, I could not agree with the rest of the speech by the hon. Member for Darlington. He and I went to the same university, but the fact that he seems unable to distinguish between the total financial limit of the Scottish Development Agency and the annual current grant does nothing to enhance the reputation of the institution we both attended.

When the hon. Member for Darlington was at St. Andrews he had a reputation for being an independent and moderate Conservative. I hope that that reputation does not damn his political career. I am sorry that he has fallen for the free market, laissez-faire stance which is the vogue on the Conservative Benches.

The hon. Gentleman asked about Scottish expenditure. Tories conveniently forget that they refer to identifiable public expenditure figures but we in the Scottish National party are also interested in expenditure which is not identifiable. We include items such as commuter subsidies in the south of England, an aspect which the Institute of Economic Affairs in a paper entitled, "Manufacturing-Two Nations" described as being more significant than the entire regional aid budget for the United Kingdom. We include house purchase subsidies, which are balanced towards the English economy because of higher earnings and higher house prices. We include defence expenditure. About £3 billion additional expenditure on defence alone

goes to a narrow region of the English economy. We could also include London weighting, but I shall leave the broader questions for another day.

If the hon. Gentleman conducts an exercise on the overall Scottish budget and calculates revenue and expenditure, he will find that Scotland's current budget position is in a £3.5 billion surplus. That represents a great subsidy from the Scottish economy to the English economy.

There is some consolation in the otherwise unsatisfactory framework of our debate which had to be adjourned last week: we have been able to read in the Official Report what the Minister said when he opened the debate. Indeed if it had not been for the Official Report, I suspect that the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) who has left the Chamber, leaving us sadder but no wiser-would not have been able to refer at all to last week's proceedings. We shall now be able to pin down the Minister exactly. Last week, he said of the SDA:

In recognition of that, and the increased effectiveness it has achieved in the use of its funds, we have been able to increase its budget in real terms since coming into office."—[Official Report, 21 October; Vol. 120, c 844.] From that it seems that he was talking about Government expenditure on the Scottish Development Agency, yet we know from parliamentary answers that the Scottish Development Agency's budget has decreased in real terms by 15 per cent. over this Government's term of office—from £104 million to £89 million.

Even in terms of gross expenditure, including the agency's own resources, there has been a marginal decline in real expenditure. The Minster must tell us exactly how he can justify his original comment.

There is a consistent trend in Government economic policy. When confronted with inconvenient statistics, they do not confront the problem, they change the statistics. Employment statistics are an example, as are the Minister's weasel words claiming an increase in the SDA budget when a decrease has occurred.

The decrease in the SDA budget takes place against a backcloth of radical cuts in the total United Kingdom regional aid budget. Over the last 10 years the decline in real terms of total regional aid expenditure in Scotland has been about 55 per cent. The Scottish economy has growing problems. Conservatives talk in glowing terms about successes in the Scottish economy, but that is not the overall picture.

For example, the latest statistics for the first quarter of 1987 show that the index for industrial production and construction in Scotland stood at 98.6, using 1980 as the base when the index was 100. The equivalent figure for the United Kingdom was 111.6. How can that be described either as an improvement relative to the United Kingdom or an improvement in absolute terms? The Minister must explain.

Despite its best efforts, the Scottish Development Agency has not been able to transform the Scottish economy's prospects. As evidence of the SDA's missed opportunity, I shall turn to its annual report. It shows that nearly four times more money was spent last year on its operational management than on total investment. Nearly 54 per cent. of its net expenditure was spent on environmental improvements—new land and buildings —but 2 per cent. only of its budget was spent on net industrial investment.

Thus, in a year when Scotland lost thousands of jobs in the oil, shipbuilding and engineering industries, the SDA spent the bulk of its time and money on landscaping and similar projects. But that was not the agency's fault At the end of 1985 the former chief executive of the agency said that he could effectively spend twice his budget on, viable projects in Scotland if the Government were willing to provide the funds.

In his speech last week the Minister said: The agency is now increasingly applying to the development of indigenous companies the targeted approach that has brought it success in the attraction of inward. investment."—[Official Report, 21 October 1987; Vol. 120, c. 843.] That is a welcome development. But how does the Minister think that the SDA will achieve that worthy objective when in the past 10 years the percentage of its budget spent on net industrial investment has declined from 25 per cent. to a meagre 2 per cent.? How can ii restructure the Scottish economy to the benefit of indigenous companies? It is all very well for the SDA to carry out targeted surveys and sectoral reports, but what can it do with those reports without the budget that will lead to industrial investment from indigenous companies? The Minister mentioned food processing and engineering as part of this sectoral approach, but there are many other opportunities, in biotechnology, educational supply, transport equipment, mineral resources and timber. The SDA is interested in those sectors in which Scotland has an important natural advantage. Those sectors would benefit from an adequate budget to enable industrial investment to take place.

We in the Scottish National party call for the SDA's budget to be increased by at least £50 million so that it can invest in such industries and seriously attempt to restructure the Scottish economy.

We know from the agency review of last year that the meagre industrial investment that it currently carries out has brought great success. The review estimated that in the period 1981–85, 10,000 additional jobs have resulted from that meagre investment, at a subsidy rate of about £1,000 per job. That is an excellent record, and surely it shows that the budget should be vastly increased.

Another point that many hon. Members raised, on which the Minister should give us a specific reply, related to the rural development schemes. What has happened with regard to PRIDE—projects for rural industry and development enterprises—and DRAW—development of rural workshops — over the past few months? This, subject was raised by the hon. Members for Carrick. Cumnock and Doon Valley (Mr. Foulkes), for Dumfries (Mr. H. Monro), for Gordon (Mr. Bruce) and myself. What funding will be available for the continuation of these schemes? Is the Minister prepared to deny the. rumour that is currently circulating, that grant aid for these schemes is about to be withdrawn and substituted by a loan scheme? Furthermore, will he give an assurance that the companies that undertook studies to see whether they qualified for these schemes, only to find that the schemes had been stopped, will be given priority when new applications are made?

I agree with the remarks of the right hon. Member for Glasgow, Govan (Mr. Millan), that it is extremely unfortunate that last week this important Scottish business started at 11 pm. I further agree that it was unfortunate that Scottish Members who wanted to discuss that important business had to sacrifice a wide-ranging debate on the Scottish economy. However, there is not only one explanation for the confusion over last week's debate. In particular, I mention comments that were made in The Scotsman on 23 October. Government sources claimed that when the timetable was being worked out before the summer recess, the shadow Foreign Secretary asked for the SDA debate to be moved from yesterday afternoon to Wednesday night in a straight swap for a debate on disarmament. The Government Whips agreed to the switch, on condition that the SDA debate ended at 1 am.

I do not know whether Government sources are perpetrating a foul calumny on the right hon. Member for Manchester, Gorton (Mr. Kaufman), but I say to Labour Members that it is very difficult to protest against the system, even when there is ample evidence that it is not providing proper time for Scottish debates, only to discover that the Labour Front Bench may be part of the arrangement by which such an eventuality occurred.

Mr. Harry Ewing (Falkirk, East)

I caution the hon. Gentleman, early in his parliamentary career, that it is very dangerous to draw on comments in The Scotsman, or any other newspaper, that are described as "Government sources", particularly with regard to discussions that have occurred, whether they be between the Government, the Liberal party, the Labour party or any other party. We are aware of a history of Government sources telling deliberate lies to show themselves in a better light. A similar situation arose in the Scottish Grand Committee with regard to the day on which the Liberal party had the choice of business. The Liberal party was betrayed on that day and the same attributed Government sources put out lies to the newspapers on that occasion.

Mr. Salmond

I accept that a foul calumny may have been perpetrated on the right hon. Member for Gorton, but, if so, I would have expected the hon. Member for East Lothian (Mr. Home Robertson), when he wrote to The Scotsman about other matters in the same report, to have put the record straight. The right hon. Member for Gorton still has an opportunity to write to The Scotsman to clarify that important matter.

The central difficulty that we face, despite the general agreement between the 62 Opposition Scottish Members on the direction the SDA should take—this is evidenced by the lack of numbers on the Government Benches—is how we can bring our majority will to bear on the Conservative Benches.

Mr. Bill Walker

The hon. Gentleman has drawn attention to the numbers of Members on our Benches. May I point out to him that one fifth of Scottish Conservative Back-Bench Members are here, as is one fifth of the Labour party's representation.

Mr. Douglas

The hon. Gentleman worked that out without a calculator.

Mr. Salmond

I am grateful to the hon. Gentleman for pointing out the weakness of the Conservative Back-Bench contingent. He may consider that the departure of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) represents a strengthening of his team.

The point that I was making was how to bring the majority will of Scotland to bear on the Government on the SDA issue and on every other. Until we can answer that question and solve that problem, there is little that we will be able to do about the Scottish economy or any other matter facing our country.

6.8 pm

Mr. Frank Doran (Aberdeen, South)

I am grateful for the opportunity to make my maiden speech in this debate, which is of importance for Scotland and its economy.

I shall follow convention and pay tribute to my predecessor, Mr. Gerald Malone. He earned a reputation as a Member who worked hard and industriously on behalf of his constituents and the House. Like myself, he is a Scottish solicitor and I understand that he is taking some interest in that profession. I gather that he has added another string to his bow by becoming involved in journalism. He is still interested in his political career and I wish him well in all his careers, but it would be dishonest of me to say that I wish him a speedy return to the House.

The constituency I am proud to represent makes two significant contributions not only to the Scottish economy but to the economy of the United Kingdom. It is the oil capital of Europe. The contribution made by Aberdonians and those based in Aberdeen plays a considerable part in the Chancellor's ability to reduce tax rates and masks some of the more fundamental and real problems in our economy. That is because of the contribution oil makes to the Exchequer. It is also one of the major fishing ports. About three quarters of the total amount of fish landed in this country is landed in the north-east of Scotland and a substantial proportion of that is landed in Aberdeen. I hope that in future debates on that issue I shall be able to make a speech because that, together with most of the other industries in Scotland, is suffering at the moment.

Today we are considering the Scottish Development Agency Bill and I want to say something about the considerable contribution that the SDA makes to my constituency. I am advised that about £92.400 per 1,000 head of population is invested in Aberdeen, South by the SDA. That is one of the highest rates of investment in any constituency in Scotland. It is a tribute to those who created the SDA—it has been mentioned often that it was a creation of a Labour Government—that although the Government have made at least two attempts to interfere in the real work of the SDA, it still exists and makes a valuable contribution.

On the matter of the contributions, there are some anomalies and I will give examples. In my constituency the SDA made an investment in market research and studies to the tune of about £517,000 in 1985–86. I assume that the market research and studies are an attempt to identify new areas for job creation. However, in another part of my constituency Aberdeen university, which has existed for about 500 years, has been starved of funds by another Government-funded agency, the University Grants Committee. Just yesterday the senate of Aberdeen university took a decision in relation to a paper. If that paper is implemented, it will mean the loss of 150 jobs in my constituency. It strikes me as anomalous that we should have an agency charged specifically with the task of creating employment but also have another Government agency such as the UGC, which is the direct responsibility of the Government, obtains its funds from the Government and whose policy, if implemented in Aberdeen university, will result in the loss of those 150 jobs and the closure of at least six departments. I am sure that we shall return to that subject again.

On lands and buildings in my constituency the SDA, again in order to provide job opportunities, contributed about £5,185,000 in 1985–86. It made a valuable contribution in terms of advance factory units and so on. However, the Government, as a direct result of their policy of privatisation, privatised the only remaining shipyard in the east of Scotland, Hall Russell shipyard. Because of the Government's policy towards shipbuilding, particularly in relation to defence but also in relation to the merchant fleet, the future of that yard is hanging by the slenderest of threads. About 500 jobs are at risk. The yard is currently waiting expectantly for the Government to make a decision on a tender submitted for the building of the St. Helena ferry. We have been waiting for a considerable time. The yard's future depends on the outcome of that tender. I appreciate that the Secretary of State for Scotland does not have direct responsibility for that but I urge the Government, through him, to make an early decision on that tender and on the 500 jobs.

The SDA has made a substantial contribution to the national hyperbaric centre in Aberdeen. It is a centre intended to provide jobs and develop life-saving techniques for the vital North sea oil industry. The Grampian region is no different from any other part of the country where the Health Service is under great stress with a shortage of doctors and nurses. However, there is a particular problem in Aberdeen —the lack of a specialist heart unit, despite considerable demand. Patients from the Grampian region have to travel to Glasgow for urgent heart operations and there have been deaths in the process. I call on the Government to look at that matter. I am aware that a review body has been established and that it is likely to report in the near future. However, I urge the Government to consider sympathetically the demands of the Grampain health board and others who have asked for a specialist heart unit in the Aberdeen area.

I have given specific examples of the Government's approach where there appears to be a lack of coherence. As I have said, the SDA is charged specifically with the function of creating jobs but because of Government policy we see a loss of jobs. It is difficult to understand what the Government's policy is except that it appears that what the Government giveth with one hand they taketh away with the other.

The Bill is intended to increase the financial limit of the SDA to £1,200 million. I understand that to be a borrowing limit. I have to ask; why so little when so much needs to be done? I note in the explanatory memorandum that we are advised that the Bill will have no effect on public service manpower. I have to ask the simple question: Why not?

6.16 pm

Mr. Dick Douglas (Dunfermline, West)

My first pleasant responsibility is to congratulate my hon. Friend the Member for Aberdeen, South (Mr. Doran) on his maiden speech. I also wish to congratulate my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) since I am the first Labour Member to have an opportunity to do so. The two maiden speeches from Labour Members have emphasised commitment to their constituencies and a firm advocacy of their constituency's roles and opinions. I trust that we will hear from both of my hon. Friends in further debates, not only on issues such as the SDA and the Scottish economy but on other matters in which they have an interest. I know that my hon. Friend the Member for Aberdeen, South brings to the House a considerable knowledge of oil and oil-related matters, and we welcome the opportunity to hear him.

We have heard several speeches from Conservative Members who have now left the Chamber. I want to say a word or two about the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) and his intervention in relation to a matter affecting the miners' strike in my constituency. He is fairly eclectic in his remarks, as we might expect from some lawyers. However, I remind him of a conversation in relation to the incident. I told him over the telephone to keep out of my constituency because he knew very little about what was happening in the village. If he had intervened, he would have made matters worse. Thankfully he was gracious enough to accept my strictures and to acknowledge the courtesy of parliamentary procedure and left me to deal with the matter. Happily the matter was resolved. Much of it had nothing at all to do with the miners' strike.

Mr. Fairbairn

I do not want to score points off the hon. Gentleman, but it was not me who intervened. His constituents, who told me that they had always been Labour supporters, sought sanctuary in my house.

Mr. Douglas

It will not benefit the House to prolong this matter.

I want to deal with what I consider to be the economic rationale both of this measure and of the Scottish Development Agency. Labour Members question the virtues of the market to deal with matters affecting the economy, be it structural imbalance or industries falling into decline and difficulty.

The philosophy behind the establishment of the Scottish Development Agency recognised the need for a source of countervailing power against the pull of the south-east and London. That was allied to regional policy as a whole. We had to consider how we might tilt the balance against the over-centralisation of activity in the south-east and the midlands.

We argue that the market is unfair. For the benefit of those graduates of St. Andrew's who remain in the Chamber, let me deal with the matter simply. Let us suppose that one person has an income of £100 a week while another has an income of £1,000 and a third an income of £20,000 a week. If those incomes are doubled —magically or otherwise—the effects on each person's expenditure will be different. The man with £100 might spend more on food and the man with £1,000 more on luxuries. The man with £20,000 might invest the lot.

If this were to happen in the economy as a whole, there would be a redistribution of resources.

Conservative Members—especially the hon. Member for Darlington (Mr. Fallon) — rage against the "disproportionate" amount of public expenditure that Scotland receives because that amount is quantifiable in terms of Government statistics. However, those statistics do not include the redistribution of income and wealth by, for example, the doubling of house prices in London in three or four years. Government statistics may not quantify such factors but they represent a change in the balance of purchasing power throughout the United Kingdom. That is what the so-called market does.

We argue that that is extremely unfair. It creates not only an imbalance in terms of expenditure but huge social diseconomies that are very difficult to quantify. The Government do not give comparable figures for the social diseconomies of London and the south-east. Government statistics are compiled in relation to what the Government can identify as expenditure.

Page 64 of the SDA report states: growth has been unevenly distributed within the United Kingdom, with the rapid expansion occurring in the South-East of England leading to shortages of skilled labour and housing. That is the work of the market that so many Conservative Members support. There is a shortage of skilled labour and housing in London and the south-east and there is unemployment in Scotland.

How can the Government say, "We want the SDA to be an engine of free enterprise"? Incidentally, one of the Minister's hon. Friends misquoted him as saying that it should be the engine of capitalism. If the SDA is to become the engine of free enterprise, God help us.

The SDA was established in 1979. Since then we have seen a massive sea change in the international economy. There are three elements to that change. First, as has become poignantly manifest over the past few weeks, there is a division between financial operations and real investment. Financial operations do not necessarily create real investment. The division has been exacerbated by recent technological revolutions. There has also been division between primary and secondary producers. Over the past 100 years the close relationship between those who produce raw materials and those who produce manufactured goods has broken down. There is no real explanation for that, but it is nevertheless true.

Thirdly, there has been an expansion of what we loosely call services. We are not talking about hotels and catering alone. There is a whole range of services relating to finance and banking. Indeed, the administration of the computer industry is in itself a service.

Those three elements have strengthened the need for an interventionist agency such as the SDA. I fear for the agency's future if the Government intend to stand back and use it as an instrument of free enterprise.

In our debate last week I made a somewhat fanciful interjection about the number of photographs of Sir Robin Duthie in the annual report—

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

He is a perfectly respectable-looking man.

Mr. Douglas

That is a matter of opinion.

We need a little deeper thinking. If the agency becomes tied too closely to the Government's policies, it will not do its job for Scotland. One can take different views of what should happen to Scotland and where we should be going in terms of economic and political development. Let me refer to an interview in a recent issue of the Financial Times with Professor Jack Shaw who was recently appointed to Stirling university. The piece was entitled "The special case for Scotland". Professor Shaw argued against the creation of a Scottish Assembly, saying: The trouble with a Scottish assembly is that you don't actually add to your significance that way. It would actually reduce our significance as viewed from London. That is one view. The opposite view—that taken by the nationalists — is that we should be completely independent.

I argue that the three elements to which I referred increase the need for a Scottish Assembly. We need a focus for political deliberation in Scotland allied to the agency as a source of countervailing power against the House and the dominance of the City of London. If we do not have that, the relative decline of Scotland will increase. I recognise the force of the independence argument. I do not think that we need to go that far but my experience of the past few years under the Conservatives suggests to me that we need not only economic levers in organisations such as the SDA but a political debating chamber in Scotland where we can emphasise and articulate the needs of Scotland in a Scottish context.

The agency has done a good job, despite the comments of the hon. Member for Darlington. I know that time is short and that it would be wrong to read in full the report of the review body. However, the review body gave the agency a reasonably good bill of health: Most of the considerations which led to the SDA's establishment remain valid … We recommend that there should be no change in the statutory purposes, functions and powers of the SDA. The report continues in that vein.

There are few of the SDA's functions and operations that the private sector would like to, or could, take up. Indeed, if one examines the litany in annexe 9 of the report, one can find none. A major function of the SDA is land reclamation to make up for the devastation and destruction caused by the market in the late 19th century. The same applies to its work in Glasgow.

The hon. Member for Stirling (Mr. Forsyth) should make up his mind. This is the first time that he has had his name on a Bill in the House, and it is supported by half of the Scottish Tories. There are only five Scottish Conservative Members. The hon. Gentleman should not just sit there full of humbug. If he supports the Bill, he should reach the logical conclusion and say that Scotland needs a legislative assembly with real economic powers to oversee the agency's activities.

There has been increased Labour representation in Scotland. The CBI's report on 1 October 1987 to the National Economic Development Council is called "Maintaining the Momentum of Britain's Recovery". Table 3 refers to the change in manufacturing production between 1976 and 1986 and gives the following figures: Japan, plus 56 per cent.; the United States, plus 34 per cent.; Italy, plus 15 per cent.; the Netherlands, plus 20 per cent.; West Germany, plus 18 per cent.; France, plus 5 per cent.; and the United Kingdom, minus 2 per cent. The report states: Without an internationally competitive manufacturing base, the prospects for reducing unemployment outside the south-east are remote. Whereas Southern Britain gained virtually one service industry job for every one lost … the rest of the country has gained only one for every four or five manufacturing jobs lost. The growth in self-employment over recent years has also been concentrated in the South. The manufacturing and service sectors are interdependent, to the extent that the distinction between them is meaningful at all. By some estimates, around a quarter of the output of the service sector is dependent on manufacturing industry. Consulting without clients is not a particularly rewarding pastime and whole industries have grown up providing services which were previously undertaken in-house by manufacturers (e.g. catering, workwear). That is what has happened to the United Kingdom, especially Scotland, despite the SDA's efforts. We want more of the SDA, not as "an engine of free enterprise" but as an engine of purposeful intervention controlled in Scotland by a Scottish Assembly.

6.32 pm

Mr. John McAllion (Dundee, East)

I should like to associate myself with the tributes to the maiden speeches by my hon. Friends the Members for Aberdeen, South (Mr. Doran) and for Renfrew, West and Inverclyde (Mr. Graham). I am sure that we can look forward to more excellent contributions by them.

I represent an area that has been significantly and directly affected by the activities of the Scottish Development Agency. Through the Dundee project, the SDA has formed a close productive partnership with local authorities — the district and regional councils — the private sector and trade unions. That partnership has given us a glimpse of the SDA's potential. It has shown us in a concrete way what can be achieved when public and private investment are linked—not in a purely financial relationship but in a planned programme to transform a city's economic face.

A series of initiatives has brought us well down the road towards transforming the city' face. A project in the Blackness area has transformed a part of the city which was characterised by industrial and urban decay. New businesses and enterprises have come into the area. Housing improvements have been carried out. People have moved back and there have been widespread environmental improvements. All these changes have been brought about by the determination of the SDA and the Dundee project to intervene, invest, originate ideas and bring life back into that part of the city. Had it been left to free market forces alone—as is the Minister's wont—the area would have continued decaying and the people would have been abandoned. Fortunately, the SDA, through the Dundee project, intervened and saved the area.

There have been many other projects in Dundee. The new technology park was successfully launched some years ago and has been well established by Ford's decision to locate its latest plant there in the face of fierce competition from around the world. A new £30 million waterfront development scheme will bring much-needed service jobs to the city. Some 1,100 service jobs will be provided, as well as 400 jobs during the construction stage. The development will provide leisure and recreation facilities of the first order for the Dundee people. In addition, there will be a tourist attraction of national significance in the form of Scott's Discovery and the new heritage centre.

There is also the "City of Discovery" campaign, which was begun on the SDA's initiative. Moving Scott's ship back to the city was a publicity initiative of the first order which can only be applauded. The fireworks display held from the back of a moving train on the railway bridge during the bridge's centenary celebrations was another major coup, which has helped put Dundee back on centre stage in Scotland. All these welcome developments have flowed from the partnership between the SDA and local public and private sectors. They vindicate in a concrete way the original decision by a Labour Government to establish a Government agency which would intervene in and help to direct the future shape of the Scottish economy.

Much has gone wrong with the original concept of the SDA. We should not allow ourselves to be blinded by the success of Locate in Scotland—welcome though it is in attracting inward investment—to the dangers of overdependence on foreign investment. Flags go out and there is general rejoicing when multinationals decide to invest money, to create employment, and to strengthen and widen our economic base, but the reaction is very different when the multinationals decide, for their own reasons, to uproot their businesses and pull out of Scotland, leaving workers and whole communities behind to face the economic consequences.

The Secretary of State for Scotland does not need to be reminded by me of the Caterpillar decision to abandon its work force for no sound economic reasons; nor will he need to be reminded by me of his abject weakness in the face of that decision and of his inability either to check or to control these capricious decisions by multinational companies to undermine the Scottish economy.

The answer is not to mortgage the future of the Scottish economy by leaving it mainly or wholly in the hands of multinational companies. The answer must be to strengthen and diversify our economy by investing in our indigenous companies, enterprises and industries. It is those companies that will provide the firm backbone of sound, stable and long-term economic growth.

Fulfilling precisely that role in the Scottish economy, should be the SDA's major task. Investment in indigenous industry should be, but I am afraid is not, the agency's key role. The agency has an investment arm, but it has a woeful record compared with what was first hoped for. The local experience for Dundee and Tayside suggests that the agency takes much the same short-term view of investment as the private sector has traditionally taken. Until recently, Tayside regional council's industrial office knew of only a handful of locally based companies which had ever received any direct equity investment from the SDA. In Tayside, only seven local companies have received direct investment from the SDA, and indeed, in Dundee, only one such company has done so. Therefore, it seems clear that the agency's investment policies simply do not begin to meet the needs of emerging Scottish entrepreneurs and other people who have ideas and who live in Scotland. If they were given the right kind of encouragement by the SDA, they would certainly strengthen the local economy.

Mr. McKelvey

As a former Dundorian, I welcome the money that the Scottish Development Agency has pumped into Dundee to the tune of around £40 million. Although I recognise my hon. Friend's point, will he consider that, if and when the SDA is to get more funds, areas of its choice, which have almost become pet projects, will give way to areas of deprivation, such as Kilmarnock, which have received virtually nothing from the Scottish Development Agency?

Mr. McAllion

I agree with my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey). I would not describe Dundee as a pet project of the SDA, but I recognise that, because of a lack of funding, the SDA has failed to invest to the required extent in Scotland. It strikes me that the Government are more prepared to spend more money in Scotland this year on community programmes, which are basically aimed at keeping the long-term unemployed off the unemployment register, than they are to invest in the SDA.

The new problem is a lack of investment in local Scottish indigenous industry. The Labour administration took control of Tayside regional council in 1986. It came to office believing that there was an investment gap in the local economy, as I have described. In fact, it commissioned consultants to produce a report and find out whether such a gap existed. The consultants, Coopers and Lybrand—the very same consultants commissioned by the Scottish Office to look at the SDA—looked at the problem and found that such an investment gap existed. Coopers and Lybrand recommended the confirmation of Labour's manifesto commitment to establish an enterprise board on Tayside to provide the kind of local investment that is required in Tayside to keep Tayside jobs for Tayside people. Tayside people have been let down dramatically by the Scottish Development Agency's failure to tackle the problem. Instead, it has concentrated its efforts on bringing foreign investment into our country.

The problem with the enterprise board, which I believe is one of the most hopeful things that have happened in Scotland since 1986, is that no regional council can ever have the necessary resources to provide proper investment. Regional councils could have proper resources if the SDA backed them, and I certainly call upon the Minister to consider the matter.

Mr. John Smith (Monklands, East)

On a point of order, Mr. Speaker. I apologise to those hon. Members who wish to take part in the debate for raising my point of order at this stage. You will recollect, Mr. Speaker, that, earlier today, the Chancellor mentioned a desire to be helpful to the House by making a statement at a suitable time in the course of today's proceedings. Since then, a certain amount of time has elapsed. Inquiries have regularly been made through the evening. We have had no sign of whether or when the Chancellor intends to speak this evening. Naturally, many Opposition Members consider that 7 o'clock is a possible time for such a statement to be made.

As we are approaching 7 o'clock, it would be helpful if the Government business managers would state, either on the Floor of the House or through the usual channels, some firm time at which a statement will be made. It would assist Opposition Members who wish to take part in the Scottish debate. Conservative Members who have dining arrangements will also be assisted, no doubt, by some clarification of the matter. We are not trying to be difficult; we are trying to get an orderly resolution of the problem. Will the Leader of the House state when the Chancellor will speak? Can we definitely expect a statement this evening and, if so, when?

Mr. Speaker

I am not certain whether I can help in the matter. It is not within my power to say when the Chancellor will make a statement, but I shall hear the points of order.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

Further to that point of order, Mr. Speaker. I am sure that the House will agree that it is a tragedy that, over the past week, the Chancellor has made BP the subject of a Whitehall farce. If we cannot put an end to the Chancellor, surely it is time to put an end to the farce and get a statement which will reassure investors in this country and abroad.

Mr. David Young (Bolton, South-East)

Further to that point of order, Mr. Speaker. I realise that you may not directly be able to help, but you may be able to safeguard the interests of Back Benchers and the House. The Chancellor's statement affects our constituents and the House. We ask you, if the Government dither, to do what you can in the interests of the House and of Back Benchers and in the interests of justice to those who have been placed in a difficult position in relation to the Government's share offer.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Further to that point of order, Mr. Speaker. We all recognise that this is a considerable issue which must be solved. Does it do the House or any hon. Member any credit to try to make political capital out of such a vast matter? It should satisfy the House that the Chancellor has said that there will be a statement tonight. Must we teach Opposition Members the difference between night and day? Let us leave the Chancellor to do what is right for the country.

Mr. Peter Hardy (Wentworth)

Further to that point of order, Mr. Speaker. In view of the comments made by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), the House is entitled to expect the Leader of the House to clarify the matter. Will you accept, Mr. Speaker, that, for the past seven years, the Government have allowed British industry to be sacrificed to provide the highest priority for the City of London? Is that sacrifice now to be in vain? Are the City of London's interests to be as disregarded as those of British manufacturing?

Mr. Patrick McLoughlin (West Derbyshire)

Further to that point of order, Mr. Speaker. The only people who have been trying to make political capital are Opposition Members. We have already seen that they had the chance of a Supply day last Thursday, which they refused. Further to that, is it not the constant case—[Interruption.]

Mr. Speaker

Order. I have heard other hon. Members in silence. Mr. McLoughlin.

Mr. McLoughlin

Is it not also the case, Mr. Speaker, that we have continually heard arguments from Opposition Members about a lack of time in which to discuss Scotland? When they have time to discuss Scotland, they try to bring in other issues. They show their contempt. They do not care whatsoever about Scottish issues and would rather put anything else before them.

Mr. Douglas

Further to that point of order, Mr. Speaker. We all recognise your considerable difficulties. You are not responsible for how, when and by whom statements can be made. Through you, I remind the Leader of the House that he has responsibilities not only to the Government of the day but to the House. I invite the Leader of the House to give some idea of the Chancellor's intentions. It is not our intention to make capital out of the matter—political or otherwise. The difficulties arise because of the Chancellor's haste in trying to raise revenue out of this. We ask the Leader of the House to make a statement about the Government's intentions and, particularly, on when the Chancellor will go to the Dispatch Box.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Wakeham)

This is a complicated matter which needs proper consideration. During the course of the early part of this evening, we have been trying through the usual channels, and other channels, to see whether we can fix a time. I have received a message that the Chancellor is working on the expectation of being able to make a statement at 10 pm today.

Several Hon. Members

rose —

Mr. Speaker

Order. I cannot do anything about this.

Mr. Dave Nellist (Coventry, South-East)

On a point of order, Mr. Speaker—

Mr. Speaker

Order. I cannot see that it can be a point of order for me.

Mr. Nellist

Further to that point of order, Mr. Speaker. I wish to clarify that the procedure that was established in the last Session will hold this Session, that once the Leader of the House has made a statement from the Dispatch Box in response to points of order made by Opposition Members, you will allow questions about that statement.

Mr. Speaker

If a statement is made, I will treat it as a statement.

Mr. John Smith

Further to that point of order, Mr. Speaker. The statement made by the Leader of the House gives us a time. However, many hon. Members expected a statement to be made long before now. If there can be a guarantee that the statement will be made at 10 c'clock and that there will be no attempt to either not make the statement tonight or to make it at a later time, that will help us, disappointing though the response to requests for a statement has been.

Mr. Speaker

Hon. Members on the Opposition Benches have heard what the Government Front Bench has said. I do not think that there is anything further that I can add. I do not believe that further points of order can arise. We have an important Scottish debate in which a large number of hon. Members wish to take part.

Does the Leader of the Opposition wish to raise a point of order?

Mr. Neil Kinnock (Islwyn)

Further to that point of order, Mr. Speaker. The difficulty that arises, as I am sure you understand, is the choice of words used by the Leader of the House. I am sure that he is doing his best to help the House, but he did speak of an expectation that the Chancellor had of being able to make a statement. Given that we pursued the matter on Tuesday, that the Chancellor said that he would make a statement on Thursday and that we are now going through Thursday and have been told that there is an expectation that there will be a statement at 10 o'clock, I am sure that you appreciate the anxiety of my right hon. and hon. Friends, together with the hon. Members in other parts of the House, to ensure that that expectation is realised. That is why my right hon. and learned Friend for Monklands, East (Mr. Smith) asked for a guarantee that a statement will be made at 10 o'clock. If the Leader of the House states that a statement will be made at 10 o'clock, that will clear up the matter and we can get on with this important Scottish debate.

Mr. Dennis Skinner (Bolsover)

Further to that point of order—

Mr. Speaker

Order. I think that the House realises that I cannot say anything about the matter. It is wasting time. I will hear the hon. Member.

Mr. Skinner

Further to that point of order, Mr. Speaker. My right hon. Friend the Leader of the Opposition has raised the uncertainty of a 10 o'clock statement. The whole question of the stock exchange collapse is based upon uncertainty and a lack of confidence. We have witnessed today a series of events in which the Chancellor of the Exchequer, the Prime Minister and various others, including the Leader of the House, have added to the uncertainty. We were told first of all that the likelihood was that there would be a statement after Question Time. We were then told that the likelihood was that it would take place after the stock market had closed across the road. We are now told that the statement will not be until 10 o'clock. The Government have waited until Wall street has closed. In all this dithering and uncertainty, there is half a chance that the Government will wait until the Tokyo market has closed. It is time that they were decisive. The only way the matter can be cleared up is if the Government are decisive in their actions. All hon. Members know that.

Mr. Doug Hoyle (Warrington, North)

Further to that point of order, Mr. Speaker. My hon. Friend the Member for Bolsover (Mr. Skinner) made a very good point. The delay in making a statement is not only adding to the uncertainty but is a discourtesy to the House. It does not just affect the markets. Hon. Members have been pressing all week for a statement to be made today. To save all the discussion, why cannot the Leader of the House say firmly that the statement will be at 10 o'clock?

Mr. Tony Favell (Stockport)

Mr. Speaker, on a point: of order. I have been waiting to make an important speech on the Scottish Development Agency. This is my maiden. Scottish speech. Are Opposition Members in a blue funk about what I am to say?

Mr. Bruce Grocott (The Wrekin)

Further to that point of order, Mr. Speaker. I am sure that you understand the scepticism of Opposition Members about the assurance that has been given. The Government have twice this week been less than frank in their dealings with the House and the promises they have made. The first occasion was when the Chancellor said quite plainly that he was anxious to hear the views of the House before he made any decision about the BP share offer. He has made no attempt to hear the views of the House on that. The second occasion was this afternoon, when we were told that the Government would inform the House about this in a way that was most convenient and helpful to hon. Members. The minimum requirement of all hon. Members is to know precisely when that statement is to be made, and that has not been fulfilled.

Mr. Gerald Howarth (Cannock and Burntwood)

Further to that point of order, Mr. Speaker. I, too, wish to make a small contribution to the debate that we have been enjoying on the Scottish Development Agency. Is it not irresponsible of the spokesmen on behalf of the underwriters on the Opposition Benches to demand of the Chancellor of the Exchequer that he make a statement at a time when he is considering a difficult and complex matter? It does no credit to the House to prevent the Chancellor from undertaking his responsibilities in a most careful and considered manner.

Mr. Frank Dobson (Holborn and St. Pancras)

Further to that point of order, Mr. Speaker. You are not responsible for the actions or inactions of the Government, but you are responsible for trying to maintain order in the House. Had the Government said through the usual channels that there would be a statement this evening and arranged a time, there would have been no need for hon. Members to raise points of order to find out what was going on, which has resulted in the speech of the hon. Member for Stockport (Mr. Favell) being delayed and many of my right hon. and hon. Friends from Scotland being prevented from taking part in the debate.

The Chancellor of the Exchequer has to announce a simple decision—whether he will hold the sale. He is at loggerheads with the Prime Minister about the decision. They have not yet decided. It is not a matter of him having to sort out the detail of the statement. That is very simple. If Scottish Members are to have the opportunity to continue the important debate without further interruption, the Leader of the House has an obligation to you to give the guarantee that the House is seeking that there will be a statement at 10 o'clock as to whether the sale of BP shares will continue. The Leader of the House must help you out of your dilemma and give us that guarantee, Mr. Speaker.

Several Hon. Members

rose—

Mr. Speaker

Order. Before I call further hon. Members, I repeat what the shadow Leader of the House has said. Many hon. Members from Scottish constituencies are anxious to take part in this important debate. After all, it is an adjourned debate. It would be a great pity for them and for their constituents if they were prevented from doing so because of points of order, that, frankly I cannot answer, and that the House recognises that I cannot answer.

Mr. Hind

Further to that point of order, Mr. Speaker. Is it not irresponsible of Opposition Members to demand a statement at a fixed time when the Chancellor of the Exchequer is clearly satisfying requirements for consultation in the contract with the underwriters? If he did not satisfy that requirement for consultation, the situation would be far worse because it would involve litigation about the money that is owed, in which case it would have a great effect upon public expenditure. Therefore, it is wrong to demand that he give a statement at this stage of those delicate consultations.

Mr. Galbraith

Further to that point of order, Mr. Speaker. The hon. Member for Stockport (Mr. Favell) has said that he is anxious to make a speech in the Scottish debate. I await that contribution with bated breath. It would be a great help to everyone if the Leader of the House will make it clear that there will definitely be a statement at 10 o'clock. There will then be no further delay in our hearing the words of wisdom of the hon. Member for Stockport about Scotland.

Mr. Tony Banks (Newham, North-West)

Further to that point of order, Mr. Speaker. It seems to me that political capital is about the only kind of profit that anyone is likely to make out of BP shares. Shortly before the points of order were raised, it was being claimed on the news that the statement would be made tomorrow. If the Leader of the House cannot give a copper-bottomed guarantee that the statement will be made at 10 pm today, will he give an assurance that if it is not to be made at 10 pm he will return to the Dispatch Box at that time to give us a progress report? It is quite wrong that we should be kept in the dark about this.

Mr. Andrew F. Bennett (Denton and Reddish)

Further to that point of order, Mr. Speaker. I understand that you cannot command the Government to make a statement to the House, but I understand that you are in a position to accept a dilatory motion at any time so that the matter can be debated. In the present circumstances, perhaps you would be prepared to say that if a statement is not forthcoming at 10 pm you will grant such a motion so that the issue can be aired on that basis. We should all prefer to have the statement, but it would set many minds at rest if you would make it clear that in your view the issue must be resolved today and not put off until tomorrow.

Mr. Nellist

Returning to my earlier point of order, Mr. Speaker, it is clear to me that when the Leader of the House came to the Dispatch Box his purpose was to give information, not to ask for your ruling on a point of order. In the four and a half years since I became a Member of Parliament, it has been your practice once a Minister has intervened in that way, to allow questions on that intervention on the basis that it constituted a statement. I wish to ask the Leader of the House a question if you, Mr. Speaker, will allow me to do so.

Mr. Speaker

If the Leader of the House does not answer the hon. Gentleman's question, I cannot do much about it.

Mr. Nellist

Through you, Mr. Speaker, I wish to ask whether the Leader of the House can give a cast-iron guarantee that the statement that he indicated as a possibility in three hours' time will be made first in this Chamber. In recent days, the Chancellor has been wining and dining with the spivs in the City and sharing his thoughts with them, but the elected representatives of working people who will stand to lose most from the privatisation plan are the last to be informed of the arrangements. Can the Leader of the House say whether the Chancellor will be coming here at 10 o'clock, or will the statement be made in Threadneedle street?

Mr. John Smith

The Leader of the House can see the apprehension felt about this, at least among the Opposition. He intervened in our proceedings not to make a business statement but to pass on a message handed to him by an emissary from the Chancellor saying that there was an expectation that the Chancellor might come here at 10 o'clock. The obligations of the Leader of the House are to the House and in my submission those obligations are more important than any other in these circumstances. He can solve the whole matter quite quickly by making a business statement to the effect that there will be a statement at 10 pm tonight and that it will be to this House that the Chancellor intimates whatever decision he has arrived at. I think that I can say on behalf of the Opposition that if the Leader of the House can give an assurance that there will be a statement at 10 o'clock and leave the matter at that, we shall be happy to proceed with the business before us.

Sir Peter Tapsell (East Lindsey)

It is obvious that the content of the statement is rather more important than the exact time at which it is made. The hon. Member for Bolsover (Mr. Skinner), with his usual perceptiveness, has reminded the House that the time in Washington and Tokyo is slightly different from the time in London. As we all hope that the statement will be put not just in a national but in an international context, my right hon. Friend the Chancellor may have very good reasons for not giving a precise time for his statement at this stage.

Several Hon. Members

rose—

Mr. Speaker

Order. I do not think that we can carry this matter any further. I call Mr. Favell to continue the debate.

7.5 pm

Mr. Tony Favell (Stockport)

I did not expect to make my maiden Scottish speech amid so much excitement or to be met with such transparent delaying tactics from the Opposition. It is a pleasure to address the House on this important matter. Having sat through the entire debate, I have learnt a great deal about the way in which the Labour party operates.

On the whole, the Scottish Development Agency has had a very good press and I doubt whether there are many political points to be gained by Conservative Members in attacking it.

Mr. Peter Thurnham (Bolton, North-East)

Would my hon. Friend care to comment on the possibility of setting up similar development agencies in England, including the north-west?

Mr. Speaker

Order. The debate is about the Scottish Development Agency. It should not be taken wider than that.

Mr. Favell

I am grateful to you, Mr. Speaker, for guiding us back to the important matter before us, in which there is so much interest. I shall deal very briefly with my hon. Friend's point by saying that the Scots are privileged indeed to have £136 million per annum of United Kingdom taxpayers' money spent on attracting to Scotland investment which might otherwise have gone to the north-west of England, the north-east of England or elsewhere. That money comes from taxpayers throughout the United Kingdom, not just in Scotland. Indeed, it comes mainly from England, as my hon. Friend the Member for Darlington (Mr. Fallon) made clear.

What is all that money spent on? It is spent on loans, improvement of derelict land and the provision of cheap business premises. The agency is serviced by 700 employees, all anxious to advise and assist people to invest in Scotland and not elsewhere in the United Kingdom.

Mr. Ernie Ross

I take it that the hon. Gentleman will not mind our circulating his comments, which are clearly an attack on the Scottish Development Agency, around all the constituencies in Scotland, especially those still held by Tory Members.

Mr. Favell

I am not attacking the Scottish Development Agency. It is a wonderful idea for Scotland. I am simply pointing out that it is a unique privilege enjoyed by the Scots at the expense of the English and the Scots should be grateful to the English for providing the money to pay for it.

Mr. Maxton

I wonder whether the hon. Members for Stockport (Mr. Favell) and for Darlington (Mr. Fallon) intend to force a Division and vote against the Bill in view of their great opposition to the Scottish Development Agency.

Mr. Favell

I repeat that I am not against the Scottish Development Agency. I am simply saying that the Scots ought to be grateful for it. I am happy for them. The United Kingdom taxpayer is pouring a lot of money into Scotland. The Scots should be particularly grateful because unemployment in the north of England is worse than it is in Scotland. In my area, the north-west, unemployment is worse than in Scotland, yet we do not enjoy the benefits of a development agency.

Recent statistics have shown that Scotland is more prosperous than any other region of the country, except East Anglia and the south-east.

Mr. Galbraith

Is the hon. Gentleman aware that Scotland is not a region, but a country? Will he please refer to it as a country—not as a region?

Mr. Favell

I did not refer to Scotland as a region; it is a country. It is more prosperous than any region of the United Kingdom except for the south-east and East Anglia, and good luck to it. It is also lucky for Scotland that the taxpayers are still pouring money into the Scottish Development Agency. As my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) pointed out, public expenditure per head of population far exceeds that in England. It is one third as much again. So Scotland, with its development agency, enjoys a special privilege, not only because of those 700 employees all busily working for Scotland—so they should; that is what they are there for — but because they are provided by the United Kingdom taxpayer. Let Scotland not forget that.

What is more, the Scottish Development Agency—the largest owner of industrial land in Scotland — is providing cheap industrial land, which the rest of the United Kingdom cannot have. Funded by the taxpayer, it can provide business premises at a cost that is quite impossible in many other regions of the United Kingdom. Why should the Scots enjoy that special privilege? Scotland has gone through a difficult time—

Mr. McKelvey

Is the hon. Gentleman aware — he must be as it has been mentioned often — of the disparity in numbers between Conservative and Labour hon. Members who represent constituencies in Scotland? Seventy-six per cent. of the people of Scotland voted against the Conservative Government. Does the hon. Gentleman join us, considering that he thinks we are so well looked after, in saying that we would be better off if we were granted our own assembly with tax-raising powers?

Mr. Favell

I greatly admire and love Scotland. I visit it once a year or more. I like its people, its countryside and what it has contributed to the United Kingdom. However, if Scotland chooses to separate, that is a matter for it. I would be sad if it left. As my right hon. Friend the Prime Minister said, a Scottish Assembly is the first step on the way to a separate country. I have many Scottish friends; in Stockport, there are many Scotsmen and relatives of Scots. There are Scots girls who are married to English boys, and vice versa. To pretend that the rest of the United Kingdom does not like, support or give financial assistance to Scotland is rot.

Mr. McKelvey

The Government have wrecked Scotland.

Mr. Favell

Socialism is wrecking Scotland. Scotland's greatness was built on the back of free enterprise and of entrepreneurs who travelled the world and brought wealth to Scotland. Its greatness was built through the great financial institutions that are still in Edinburgh, and that were decried by an earlier speaker, who said that they should be swept away. Scotland's greatness lies in the fact that it is a great tourist attraction. People come from all over the world to visit its castles, and to decry them is idiocy. In my part of the United Kingdom we should be only too grateful to have that sort of benefit.

I have found the squabbling over what is happening in Dundee with the unions at the new Ford plant very interesting. As someone who sits outside, I can issue a little warning. The onlooker sees all. Living as I do in Stockport I can see what has happened to Liverpool through trade union militancy. No one will invest in Liverpool because they cannot obtain co-operation from the work force. Scotland is not far behind with that type of reputation. Memories are still long of what happened on the upper Clyde and at Linwood. Gartcosh and Linwood would still exist if they had not been wrecked by trade union militancy.

Such people have only themselves to blame, and my message to Scotland is, "Stop bleating. The rest of the United Kingdom admires, your historical achievements, and the way in which you discovered and administered the empire."

Mr. Deputy Speaker (Mr. Harold Walker)

Order. The hon. Gentleman must not keep attributing all these things to me.

Mr. Favell

As a fellow Yorkshireman, Mr. Deputy Speaker, I can well understand your concern.

Mr. Deputy Speaker

Order. I am a Lancastrian.

Mr. Favell

A little friendly rivalry never did anyone any harm.

My message to Scotland is as follows: "We in England admire the way that you discovered and administered the empire and built up your great banking and insurance institutions — in other words, your great pioneering, entrepreneurial spirit. We do not like your Socialist dependence, so roll up your sleeves and get on with it."

7.18 pm

Mr. Henry McLeish (Fife, Central)

I am sure that most hon. Members will have been entertained this afternoon by English Members who have come along to lecture us, but I do not think that we have been informed about what is happening in Scotland.

I want to discuss comments made by the hon. Members for Darlington (Mr. Fallon) and for Stockport (Mr. Favell). Considering the economic problems that we have in Scotland, it angers us more than a little to listen to two hon. Gentlemen who have been wheeled in to pad out the debate for the Government. The hon. Member for Darlington suggested that the Scots are doing so well that, to quote a famous Conservative phrase, we have never had it so good. I say to him that we have major problems, and the kind of lecture that he gave us does not go down well with Opposition Members or the Scottish people.

The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) spoke too, and, on reflection, I believe that he contributed more to the previous debate when he was asleep than he did this afternoon. Once again, Opposition Members are being accused of whining, girning and whingeing about our problems. However, in Scotland there are 330,000 people, most of whom elected Labour Members of Parliament to argue cogently and constructively on their behalf in the House. The English contribution to the debate is a disgrace, given that English hon. Members are treating with contempt the major problems that face those 330,000 people.

The debate has shown that we take the matter seriously. It is unusual to have two bites at the cherry, but because of the incompetence of the Government's business managers last Wednesday we have had two opportunities to debate some serious economic issues. It would be easy to gloat about that inefficiency, but the matters before us are too serious for that. The gulf between the real economy in Scotland and the financial economy that is supported by the Government has become enormous. The gulf between the Government's claims about Scotland and the plight of thousands of Scots on the dole queue has become enormous. The gulf between the aspirations of the Scottish people and the lack of interest shown by the Government is also enormous.

At the beginning of his speech, the hon. Member for Darlington said that Scotland was doing well out of regional development grant, selective assistance and many other things. In 1982–83, on figures supplied by the Library, Scotland received £343 million in regional development grant, adjusted to 1986–87 prices. This year it is expected that the sum will be £66 million. While the Government are trying to promote their enterprise culture in Scotland with little effect or political support, they must not obscure the fact that there has been a major dininution in the amount of cash injected into Scotland to tackle some of the problems that I have mentioned.

Major areas are associated with the work of the SDA. The Opposition support the SDA. However, I reiterate that is is not unqualified support because there are many things that we should like the agency to do that it is not doing. We should like to think that if it were properly funded and supported enthusiastically by the Government the SDA could fulfil a much more adventurous and exciting role in the Scottish economy. Many colleagues have mentioned investment. The SDA must also consider employment and industrial output, which is increasing but not much above the 1979 levels.

I should like to identify some of the factors that underline the seriousness with which the debate should be viewed, and to try to focus attention on the serious problems from which the people of Scotland are suffering and which we in this Chamber are seeking to express to the Government.

It was widely believed that in view of the general election result the Government would take the problems of Scotland seriously, but unfortunately it appears that because of the result they are pushing further ahead with some policies that are alien. It seems that the Government are disengaging themselves from Scottish industry. The financial facts suggest that. They seem to be disinterested. I see that the hon. Member for Stockport has decided that a cup of coffee is more important than listening to me. That is the level that we have reached in the Chamber. More importantly, the Conservative party is now identified as the party of disinvestment in Scotland.

Mr. Bill Walker

Has the hon. Gentleman read the report in the Glasgow Herald today of the Fraser of Allander Institute, which seems to contradict much of what he has just said?

Mr. McLeish

I suggest that the hon. Gentleman reads The Scotsman of 28 October, where there is a headline: Business brisk although jobs lost". I refer him to the third paragraph in the first column of the article and the top of the second column. Business reports in the press and speculation by universities show that they have mixed views about what is going on.

Dr. Godman

May I point out to my hon. Friend that a reading of tomorrow's papers will he gloomy, especially for people on the lower Clyde? I have just been told that Scott Lithgow is to announce within the next 24 hours another several hundred redundancies. Does my hon. Friend agree that it is thoroughly repulsive and offensive when English Conservative Members say that Scotland is a prosperous nation? Areas in Scotland such as the one that I represent are suffering grievously from unemployment. From tomorrow the problems will worsen.

Mr. McLeish

I welcome my hon. Friend's intervention because it highlights and reinforces the necessity for a debate and the importance that we in the Opposition attach to it.

There are continuing job losses on a large scale. I should like to mention three or four areas that reinforce the dilemma. I refer first not to some ideologically motivated paper but to the "Labour Market Quarterly Report", which I believe Ministers in the Scottish team read. It shows a curious development over the past three years. While in the United Kingdom as a whole unemployment has been coming down—based on some spurious reasons—in Scotland there has been a small drop in unemployment. Today Conservative Members have claimed that the number of people in work in Scotland has risen. In fact, over the past three years the number of people in work in Scotland has dropped, whereas in England and Wales the number in work has increased. When one measures the diminution of employment in Scotland against England and Wales, it is clear that once again the Scottish Office does not have a great deal to be proud of. We are lagging behind.

Secondly, Conservative Members suggest that we are always talking about unemployment. Let us talk about training—effective training, not YTS or the new JTS. A recent business survey in Scotland shows that 35 per cent. of a large number of major firms argue that they have skill shortages. With 330,000 people on the dole queue in Scotland, they still have skill shortages. I ask the Minister who is to reply to the debate to comment on that problem.

The third aspect to which I should like to refer is long-term unemployment. I come back to the hon. Member for Darlington and his complacent, heavy-handed approach to sensitive areas in Scotland. There are 142,212 people who have been unemployed for more than a year. Are we just to write them off? Are we to see that against the background of the speeches that have been made tonight, or can we strike a chord with the Government so that they say, "Yes, there is a problem," and shake them from the complacency that grips them now?

Mr. Graham Riddick (Colne Valley)

Will the hon. Gentleman tell me whether he was one of the Labour Members of Parliament who opposed the investment of about £300 million for a new private hospital to be built on the banks of the river Clyde? [Interruption.] Can you tell me whether you were in favour of that or against it? It seems that members of your party opposed that investment on purely political partisan grounds.

Mr. Deputy Speaker

Order. I advise hon. Members who have not had much experience in the House that we refer to other hon. Members in the third person. The hon. Gentleman must not use the expression "you" in a way that implies that I have responsibility for things for which I am not responsible.

Mr. McLeish

I hope that I shall not need to respond as I was not asked about my views on that development on Clydebank. I was talking about young people—

Mr. Riddick

Answer.

Mr. McLeish

I was never asked about that subject.

The fourth matter to which I shall refer is young people. Is the Under-Secretary of State aware that in 1981 42 per cent. of all children who left school in Scotland found work? In 1986 the figure dropped to 25 per cent. Long-term unemployment, adult unemployment and the lack of training of young people show that the Government neither care nor have any policies to tackle those problems.

I should like to respond further to the intervention by the hon. Member for Tayside, North (Mr. Walker). CBI in Scotland, the business community, which is no great lover of the Labour party, said today that nearly one third of 120 firms that took part in a survey recently had cut their work force in the past four months and some 37 per cent. forecast that they would employ fewer people over the next four months. Is that the burning success of the enterprise culture that the Government speak of? We have a crisis in Scotland and I utterly reject the suggestion that Opposition Members are always trying to do down the country. We were sent here to undertake a task. We appreciate many of the significant developments which are taking place, but we must also advocate long-term structural employment. I say to the hon. Member for Stirling (Mr. Forsyth), who is in charge of the Government Front Bench at present, that Opposition Members understand the changing industrial structure of Scotland. Like the Scots, we understand the changing employment patterns and the impact of new technology.

It was grossly insulting when, on a recent visit to Scotland, the Chancellor of the Duchy of Lancaster hectored and lectured the Scots on being out of step. It is the Government's current fashion to claim that Scotland is out of step with reality and with the Government. Would it not be more modest to suggest that the Government are completely out of step with the needs and aspirations of the Scottish people? When the Chancellor of the Duchy of Lancaster comes up north again and enjoys his pint of beer —which he does according to recent press coverage—I hope that he will try to understand our problems in Scotland so that we do not recreate up north the debacle we have heard in some of tonight's speeches.

The Scottish Development Agency is one of our most important tools for the regeneration of the Scottish economy. Some people believe it has been emasculated and others believe that it operates without many friends on the Government Benches. The hon. Member for Darlington came as close as possible to suggesting two options — to take the SDA out of existence or to privatise it. I hope that the Minister will make it clear that the hon. Gentleman's comments do not reflect the Scottish Office view of the permanence of the SDA, as we believe that the agency should be supported.

We want the Ford development in Dundee and Japanese and American investment in our new towns. A few drops of rain will never turn a desert into a garden, but I hope that the Minister will take the message from the Scottish people and Scottish statistics, and listen to Opposition Members, and that he will accept that we must have an effective planned programme for investment, employment and training in Scotland. If he did that, he would have our support. But the Government continue to ignore with contempt the real needs of the Scottish people. Therefore, they will not receive our support.

7.32 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

The debate is very interesting for several reasons. We have heard speeches from the hon. Members for Darlington (Mr. Fallon) and for Stockport (Mr. Favell), who were not present for the earlier part of the debate. I make no complaint about that as, in my opinion, the amount of criticism that English Members receive for not religiously attending Scottish debates is overdone. The speeches made by both those two hon. Members this evening are significant because they make the Government's Front Bench declared position even more difficult to sustain.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) made the important point that there is a potential crisis of confidence within the SDA, as a result of the Government's equivocation about its future. The contributions made by Conservative Members this evening will serve only to heighten that uncertainty and anxiety. If there is an ascendant tendency in the Conservative party and throughout the United Kingdom, the hon. Member for Darlington is more in tune with that tendency, which is making progress, than is the Minister of State. The lack of enthusiasm with which the Minister opened the debate was also commented upon.

There is a need to pose the question whether the SDA will survive during the next five years the new thrust of the coming men who have taken control of the upper echelons of the Conservative party — [Interruption.] The hon. Member for Cannock and Burntwood (Mr. Howarth) makes an intervention from a sedentary position. I look forward to his comments because he is another of the same tendency, although he has relatives in my constituency who are wonderful people. That does not absolve him from advertising in his register of special interests a predeliction for denationalisation and contracting out—which is significant in itself.

If these are the young men who are the future of the Conservative party, the SDA is right to be anxious about its own future.

The hon. Member for Stockport made a very bad speech. I do not often say that about hon. Members' speeches, but I think that that speech will read very ill in the Official Report. He may have left the Chamber to go and correct it. If so, we are grateful for small mercies.

The hon. Gentleman, and other hon. Members, must be careful about using statistics as holy writ as they appear to have been doing. Of course an argument can be made from the official figures on those in work and claiming benefit that, while the Scottish trends are bad, they do not compare all that unfairly with some in other parts of the United Kingdom. However, the bald statistics of unemployment are not in themselves a conclusive indicator to take when we are discussing the need for action on industrial regeneration and development. Social factors and environmental conditions are just as appropriate and important. We all know of localised areas, hidden within the national figures, which show Scotland as the worst affected in Europe—indeed, the European Community explicitly recognises that. However, Conservative Members may not recognise the special remit and important role of the SDA in environmental work and land reclamation.

For those reasons, as much as any others, we deeply resent the gratuitous attacks made by English Members. If we were debating Teesside, or even the leafy suburbs of Stockport, I would not glory in telling hon. Members representing those areas that they were better off than we are in Scotland. I hope I would appreciate that they, too, have problems, and seek to get together to solve them as best we can.

It is perfectly legitimate for the people of Scotland to give a higher priority to industrial development and regeneration. If we had a Scottish assembly—in which case the hon. Member for Cannock and Burntwood would not be trammelled with Scottish business in this House —we would give such matters much higher priority. I accept that the public purse is not unlimited, but we would make it a priority to achieve industrial and environmental regeneration in Scotland—certainly if we had the kind of assembly that we feel is necessary to meet the needs of our time. The tone of the debate took an unfortunate turn when English Members contributed. I say that not because they are English, but because they are ignorant.

Other hon. Members have said that we should acknowledge that the agency is in new hands. Let me therefore refer to Ian Robertson, the new chief executive, and Professor Neil Hood, the director of Locate in Scotland. We wish them well in their new functions in future. In my view, if the agency did not exist in Scotland, we should have to take steps to create it.

This debate is principally about financial allocations and limitations. However, it is not only about money, but about the style and approach adopted by the agency since 1975. Its present approach is based on partnership, and that sits comfortably with my party's political philosophy. I appreciate that one of the things that have bedevilled the SDA since its inception is the changing economic climate. Plainly, that has a bearing on what it does. However, there has also been a change in political climate. There have been speeches on the Left-wing side of the argument, such as that from the hon. Member for Dunfermline, West (Mr. Douglas), who clearly wanted a much more interventionist agency. That received the inevitable knee-jerk or Pavlovian response from the Conservative Benches that this was unfettered Socialism and therefore, by definition and in principle, to be rejected out of hand. Conversely, the Minister of State, when he opened the debate, talked about the free engine of capitalism, which was his perception of what the agency should be doing. That in turn was rejected by Labour Members as out of hand.

It may be said that this is a typical Liberal position, but I believe that there is a very positive and sensible intermediate stage. Indeed, the agency has adopted such an approach in practice, and it has patently been successful. A sensible measure of partnership provides a balance between public funds and private money. However, such a partnership is important for more than just economic reasons. Those of us with constituencies north of the border have all witnessed how the SDA can provide a focus for all sorts of different agencies—voluntary organisations, statutory bodies, such as the Historic Buildings Council for Scotland, local authorities and, indeed, individual entrepreneurs. It can come in and seize the opportunity to crystallise a development as no other agency or organisation easily could. I think that the style of partnership achieved by the agency is splendid. It should be promoted and built upon.

The flexible. innovatory and pump-priming role that the SDA has had since 1975 gives it the opportunity to make an impact over wide areas of interest which are of crucial importance to the economic life of Scotland. They include the key functions of creating jobs and dealing with urban decay. The Prime Minister, trailing her handbag around the urban wastelands of Britain, has got it substantially wrong—as experience has proved—if she believes that every £1 of public money can be expected to generate £10 of private investment. We have seen from the SDA's operations in the Leith project and many others that, while it is true that public money can seed private investment, substantial urban regeneration cannot possibly be taken on with such a ratio. If the Prime Minister expects the SDA to deliver on that basis, she will almost certainly be disappointed.

I was sorry that the Minister of State did not say a bit more, as he had the opportunity to do, about the support for indigenous companies. When we are discussing job creation and the eradication of urban decay, indigenous companies can become rather lost in the argument about introducing new companies and inward investment. One of my most positive experiences in my previous incarnation as a solicitor was helping to set up a community business. No hon. Member has said anything about community businesses, but the SDA has played a positive role in seeding and promoting such businesses. Community businesses are non-profit-making charitable trusts, companies limited by guarantee, which provide jobs from within the ranks of the unemployed. Again, such enterprises need to be seeded by professionals who can give a lead. However, I believe that there is a great future, and unrealised potential, especially in urban areas, for the development of community businesses.

I began by talking about job creation and urban decay because I recognise that the main burden of work must fall in those areas. However, it would be silly of me not to acknowledge — especially representing the constituency that I represent — that vast tracts of Scotland suffer from problems which, which they may not be of the same magnitude in relative terms are no less great for that. Substantial problems face those who live in rural areas.

There is confusion about the provision of assistance in the Minister of State's own part of Scotland. The south-west and the south-east of Scotland, as he knows, are not covered by the Highlands and Islands Development Board or by the SDA. The focus of its activities lies in the central industrial belt. Rural areas such as Galloway and Upper Nithsdale and Roxburgh and Berwickshire are not development areas and are in limbo. Earlier in the debate the hon. Member for Dumfries (Sir H. Monro) argued in favour of the establishment of a rural development fund. My hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) made the same point. It is essential to increase the agency's funds, if for no other reason than to seed more rural initiatives.

We have had the benefit of DRAW and PRIDE, but such initiatives have come and gone, and there is uncertainty whether the outstanding schemes that are on the Minister's desk will be approved. I join other right hon. and hon Members in asking the Minister to make a statement about that tonight. If he does not, it will be remiss of him and it will cause a great deal of anger among those who are still waiting for the go-ahead for their projects.

With a modest amount of money there is a great deal of scope for the SDA to provide rural development in Galloway and Upper Nithsdale as well as in Roxburgh and Berwickshire. It could, for example, promote small businesses and tourism, in conjunction with the Scottish Tourist Board. It could also engage in land renewal projects, of which there are many at planning stage waiting for finance.

The Minister referred to the fact that the SDA will be very much involved in engineering and food processing. Local authorities and many other people in rural areas realise that there is much to be gained from the processing of agricultural produce in rural areas instead of sending it to industrial areas to be processed. That could generate considerable wealth for rural areas. If that is true of agricultural produce, it is also true of fish processing. The fish-catching industry continues to experience difficulties, but in my constituency, elsewhere along the coast of eastern Scotland and in the islands there is a massive potential for the development of the fish-processing industry. The injection of a modest amount of Government money could lead to the creation of wealth within those areas.

The regional council in the Borders has found that industrial building has been gradually siphoned off and withdrawn since its industrial development status was withdrawn. It has now to rely exclusively on private investment to meet that need. Rural initiatives that are set up and established by the SDA cannot be maintained by the local authorities, because they do not have sufficient money. The right hon. Member for Glasgow, Govan (Mr. Millan) said that the cuts in the rate support grant had had a major bearing on such initiatives.

Furthermore, the SDA cannot take properly into account all the social factors. That puts areas such as my own and the Minister's constituency at a disadvantage. There are many land renewal schemes, such as that in Hawick. If additional funds could be made available to the SDA, such ambitious but modest plans would transform the biggest town in my constituency. When rural development status was taken away from my area in 1984, it thought that it would continue to enjoy some priority of funding from the SDA, but it does not now think that it enjoys that status.

The key question is whether the SDA's potential is being fully realised. The debate about whether Government funding of the agency is increasing or decreasing is, to an extent, academic. I am on the side of the hon. Member for Garscadden. There is a great deal of confusion about this, and if the Minister could clarify the position it would be helpful.

A point that has not been mentioned so far is that the SDA appears to be under a great deal of pressure to realise its assets in order to make up the shortfall in its budget. That, if true, is a short-term policy and ties in with what I said earlier: that when its assets are sold off the SDA's very future existence will be in doubt.

I reinforce the point that was made earlier about the uncertainty that has been caused by the current review of regional aid. According to the Chancellor of the Exchequer, during the next five years the Government will have a great deal of money to spend, but we shall have to wait for another two and a half hours to find out whether or not his forecast has changed. The injection of sensible—not extravagant—amounts of public money over the next five years would provide us with the opportunity to tackle unemployment in Scotland and to support the new industries that are needed to regenerate our environment and restructure and modernise our economy. I am in no doubt that the result of a moderate but continuous increase in funding would lead to significant progress being made in all these areas.

7.52 pm

Mr. Jimmy Hood (Clydesdale)

I came into the House half way through the speech of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn). The good news was that I was late; the bad news was that I had to listen to the other half of his speech. I was reminded of what I said during my maiden speech: that we should savour such moments as when the hon. and learned Member for Perth and Kinross addresses the House. I said also in my maiden speech that at the next general election the Scottish Tory will be no more. I made that forecast on 8 July, at three minutes past eight in the evening. The speeches I have heard so far from colleagues of Scottish Ministers with constituencies south of the border will certainly add to the demise of the Tory party in Scotland.

It is interesting that I should be following the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). I have nothing against him personally, but when my little daughter went through my diary and found that I intended to speak on the Scottish Development Agency—she is eight years old in December — she said, "Father, I'm beginning to worry a bit about you since you've gone down to that place. What are you doing discussing the Severely Divided Alliance?" I said to her, "It's not that at all, my young, little, loving daughter. You know that your father would not engage himself in such indulgence." She had been looking through "Dod's Parliamentary Companion" and had found that the hon. Member for Greenwich (Mrs. Barnes) and I have two things in common: first, that we are not over-impressed with the present leader of the Social Democratic party, the hon. Member for Caithness and Sutherland (Mr. Maclennan) and, secondly, that we share the same birthday. I am not giving any prizes to hon. Members who guess which one is two years younger. I assure all hon. Members, and my little eight-year-old daughter, that this is where the resemblance finishes.

I watched the Front Bench, and in particular the Under-Secretary of State for Scotland the hon. Member for Stirling (Mr. Forsyth) listening to the speeches of the hon. Members for Darlington (Mr. Fallon) and for Stockport (Mr. Favell). I saw the Minister's split personality; part of him wished he was saying those things —he certainly supports that type of nonsensical philosophy — and part of him was embarrassed, as indeed he should be.

It is regrettable that the Government ran away, as they have done on so many occasions, from the real problems of the Scottish economy. One may ask why they ran and the answer is that the Tory Government are the cause of the rundown of the Scottish economy. When I hear the nonsense from Conservative Members about how well off we are in Scotland, it is clear that they do not see the misery and the deprivation that exists in my constituency, which is no different, and in some cases, not as bad as other constituencies in Scotland. I am sure that the old-age pensioners who have spent years on waiting lists for hip operations, the kids of 19 or 20 who have left school and have no jobs and the people who have been subjected, as they have all over the country, to rising crime rates, will be interested to hear such speeches from Conservative Members, telling us how well we are doing in Scotland. That is absolute nonsense.

This Government have devastated Scotland's industrial base. They have destroyed the coal and steel industries, the fishing and shipbuilding industries. My constituency is in a large rural area destroyed by rural deprivation, by the cuts in the public transport system, the post office and school closures. This Government have destroyed community life as we know it.

Not satisfied with their sadistic monetarist dogma, their continual obsession is to take away from a community education and health services that are based on the needs of the community and replace them with education and health services that provide for the needs of those who can pay for them. That is a nonsensical and indeed a disgraceful state of affairs. As I said to the Government last week, "Shame on you," because we could be discussing Scottish industry in more detail today if we had been allowed to continue last week's debate.

When I saw the hon. Member for Stirling rise to the Dispatch Box to make his first speech and move the closure I was upset, to say the least, because it was the same hon. Member who not only hid from the real debate last week—that was bad enough—but who was sitting on the SHARPEN report. Hon. Members may now be aware of that report. I received a late copy, which the hon. Member for Stirling was keeping from the House, and from the Scottish health boards and the health councils. Had it not been for my intervention last week, the Sharpen report — the "Scottish Health Authorities' Review of Priorities into the Eighties and Nineties" would still be under wraps.

There are 11 hospitals and four health centres in my constituency, all of which provide health care for a wide population. In employment and health care terms, we need direct investment from the Government and indirect investment from the SDA. The House can imagine my anxiety and anger on discovering that not only were the Government refusing to answer the needs of my constituency, but they were secretly planning to destroy the Health Service in Scotland. Their proposals would affect my constituency more than most.

The report recommends that expenditure on the mentally ill and mentally handicapped should be reduced. It also proposes the amalgamation of maternity units in general hospitals which have fewer than 1,500 deliveries a year. That proposal would immediately threaten with closure or partial closure the William Smellie Memorial hospital in Lanark and the Motherwell maternity hospital. The report recommends a programme of fostering the elderly and other groups in the community. Last week, I described that as the Tories' "Foster-a-granny programme". Instead of providing proper health care for the elderly, we have the obnoxious prospect of foster parents for grannies. It is outrageous, and I look forward to the day when we can debate it more fully.

The Government's proposals for the Scottish Health Service must not be carried out. I accuse the Government of duplicity in their attempt to keep the report secret. I believe that they intended to present the report in legislation as a fait accompli. I assure hon. Members that the Scottish people and Labour Members will oppose this iniquitious report and expose it for what it is: another disgraceful piece of the Prime Minister's experimental, dogmatic monetarism, with no regard for the health care of the poor and sick.

The speeches that we have heard from Conservative Members tonight provide a good argument for devolution. But the Ministers here tonight are the lackeys of the people who make the decisions, and the Prime Minister has more in common with those who are attacking Scotland than anyone else. I look forward to hearing the Minister's reply to the debate and I hope that the day will come when we hear from some of those—I understand that there are one or two on the Government Benches— who care a little bit about Scotland, even if only through self-interest. As I said the other night to the hon. and learned Member for Perth and Kinross, and the others who make up the 10 Tories out of the 72 Scottish Members, if the Government do not respond to the needs of the Scottish people, the Scottish Tory will disappear after the next general election.

8.3 pm

Dr. Norman A. Godman (Greenock and Port Glasgow)

It is savagely apposite that I am talking about the Scottish Development Agency and the Inverclyde initiative at a time when hundreds of families in my constituency are discussing fearfully the rumours and speculation surrounding Scott Lithgow. Tonight on the Scottish television programme "Scotland Today" it was claimed that hundreds of men will be made redundant at Scott Lithgow very soon. That is sombre news, and it has more strength than unconstructed press speculation. I left the Chamber to make a telephone call to a constituent who works at Scott Lithgow. He said that that was the rumour circulating throughout the yard late this afternoon.

As the Minister knows, the yard has only one contract, to build the Britoil rig Ocean Alliance, which is due to be floated out of the yard within the next fortnight to the tail of the bank so that the final work can be carried out on the rig. Then she will leave the Clyde for ever, and my deep fear is that the jobs of 1,200 men will go at the same time.

Ministers despise the honestly awkward critic in the Opposition as much as they deplore the awkwardly honest critics on their Benches. I plead with the Minister to give emergency help to the people in my constituency—to those honourable, decent, fine men who work on the Britoil rig.

he Scottish Development Agency has an important role to play in the revival and growth of the Scottish economy. Its role becomes increasingly significant day by day in my constituency. It has to reactivate and, in some cases, to resuscitate the local economy. Against the background of the impending redundancies and the massively high unemployment in my constituency, I wish to discuss the role of the SDA — in the shape of the Inverclyde initiative—in the revival and growth of the economy of the lower Clyde.

In his annual report for 1987, that famous Greenockian, Sir Robin Duthie, the chairman of the SDA, said this about the Inverclyde initiative: Based in the community, the Inverclyde Initiative is supported by local government and the Agency, and spans the full range of economic development. Now in its second year, the Initiative has made substantial progress towards its goal of revitalising the area by broadening its economic base. Progress has been made in three major areas—commercial property development, factory provision and training. With respect to Sir Robin, I must disagree with what, in today's circumstances, is an over-optimistic view of the Inverclyde initiative.

The report may contain a coded message for Scottish Office Ministers. I hope that they are listening. The Inverclyde initiative is changing character. The original idea of the initiative being steered or driven by the private sector has been a failure. That realisation must be a bleak disappointment to those who put forward the concept of private sector involvement. Over a period, the initiative has developed into a traditional public sector activity increasingly dependent upon the SDA, the Inverclyde district council and Strathclyde regional council. The initiative's changing role takes place amidst the deeply disturbing economic circumstances of the lower Clyde. The industrial structure of Inverclyde has experienced and suffered major changes in the past 10 years. Manufacturing employment has declined from over 50 per cent. of total employment to below 35 per cent. Shipbuilding employment has fallen from more than 9,000 in 1977 to fewer than 2,600 today. If the stories about Scott Lithgow today are accurate, that low figure will be much lower early in the new year.

In 1979, Scott Lithgow employed fully 7,400 men. Some of the rumours circulating in Greenock and Port Glasgow today speak of the yard being put on to a care and maintenance footing early in the new year. Inverclyde is now dominated by a very small number of large employers — IBM, Scott Lithgow with its precarious future, National Semi-Conductor and Playtex.

Since March 1985, when the Inverclyde initiative was set up, the local economy has declined further. Twenty-one companies have closed with the loss of more than 1,000 jobs. Notified redundancies from January 1985 to August 1987 amounted to almost 3,000. Unemployment in the Greenock travel-to-work area is well over 9,000 and seems likely to increase. That represents an unemployment rate now, using the Government's figures from the local jobcentre, of over 20 per cent. That figure can be compared with 18.1 per cent. in Strathclyde, 13.4 per cent. for Scotland as a whole and 11.5 per cent. for Great Britain. Male unemployment in my constituency now is about 25 per cent. Indeed, I can be a little more accurate. The latest figures that I have seen from the jobcentre show a male unemployment rate based on Government figures of 24.8 per cent.

Against that bleak backdrop, the Secretary of State for Scotland encouraged the SDA to consider giving further support in Inverclyde. As a result, one more official was appointed to the team. That is a tiny addition in the light of what needs to be done by the Inverclyde team. I must state here and now that the Inverclyde team is made up of very hard-working, honourable and decent public officials. I have enormous respect for Donald Draffen and his too small team with its inadequate budget. The Secretary of State has declined to give the Inverclyde initiative an identified budget and argued that, if appropriate development is identified, finance will be made available. That added finance is desperately needed, given the economic problems facing the lower Clyde.

There is at the moment a small advance factory building programme under way in Port Glasgow. However, the scale of that development is wholly inadequate in terms of the problems facing the communities. It is essential that Inverclyde is identified as a prime location for inward investment and recognised as a priority by Locate in Scotland. I believe that the investment that has taken place in recent years has gone to areas identified by Locate in Scotland and not to areas identified by incoming investors. I have to say that with deep regret. Some of the inward investment should have come to Inverclyde over and above what has come our way in the form of assistance with the National Semi-Conductor and other developments.

The scale of the problem is immense. The Government have rejected out of hand setting up a fund for the retraining and redeployment of redundant shipyard workers. There has been discussion between the Inverclyde initiative and British Shipbuilders Ltd. with a view to further activity in Inverclyde, but to date that has not led anywhere. Again, that is a matter for regret. We should have something analogous with the British Shipbuilders Ltd. enterprise agency. That is desperately needed in Inverclyde.

It is also now essential that a part of Greenock or Port Glasgow be declared an enterprise zone. I have no doubt that the financial and economic benefits of an enterprise zone supported by the resources of the SDA would reactivate the Inverclyde economy. I sincerely hope that the Secretary of State for Scotland supports the case for the Inverclyde enterprise zone. I fear that his Cabinet colleagues are less than enthusiastic supporters of any form of regional assistance. Their indifference or hostility may harm the chances of an enterprise zone being set up in Greenock.

It is important to create new jobs. I look forward to the day when the Inverclyde initiative or the Minister from the Dispatch Box announces massive inward investment to Inverclyde in the shape of a factory with several hundred permanent jobs. As important as the creation of new jobs, however, is the retention of the jobs already in the constituency in places like Scott Lithgow and Fergusons at the Newark yard and Clark Kincades. It is absolutely essential that orders be found for those three establishments. Ministers may boast about new jobs coming to Inverclyde by way of the initiative—albeit slowly—but at the same time they regret the redundancies among existing employers.

I have said that I am deeply concerned about the worsening circumstances at Scott Lithgow. At the moment the yard does not have an order to replace the Britoil rig Ocean Alliance. The yard desperately needs an order or two. I sincerely hope that the Scottish Office will give the yard all the help that it needs to pull in orders from the offshore sector, perhaps including Ministry of Defence orders. For example, the contract for the floating jetty for the Clyde submarine base will be going out to tender in the very near future. I know that that contract has nothing to do with the Scottish Office as it is an MOD order. However, it is a massive order, perhaps in the region of £20 million, whether it is a concrete or a steel structure. Whether it is concrete or steel, the best place for it to be built is on the other side of the Clyde. I know that the order relates to the Trident programme. However, I am desperate to find work for my constituents and the Government are, unfortunately, here for another four years. I am a realist in these matters. I know that the Conservatives are in terminal decline in Scotland and I hope that that disease is contagious and we get rid of some of these English filibusterers.

Scott Lithgow is the place for the floating jetty contract, especially if it is to be constructed of steel.

Mr. Bill Walker

indicated assent.

Dr. Godman

I am glad that at least one Conservative Member has some sympathy for what I have to say, even if this point is ignored by his English colleagues.

Mr. Walker

I shall go further and join the hon. Gentleman in any deputation he cares to organise. Provided that the floating jetty can be built at competitive prices, the lower Clyde is the obvious place to build it.

Dr. Godman

That is a qualified offer of help which I accept—with some qualifications. I am not as cynical as my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) and I would go with the hon. Member for Tayside, North (Mr. Walker)—provided that he kept quiet.

The hard-working and honourable officials of the Inverclyde initiative have been set an almost impossible task by a careless and indifferent administration in the Scottish Office. Everyone on the lower Clyde knows—including Inverclyde initiative officials — that the allocated budget is inadequate. The idea that the enterprise should be privately led has failed. It has become a traditional public activity, with the two mainstays, apart from the SDA, being the two local councils—Inverclyde and Strathclyde. That is a disgrace because the opportunities are there, particularly now that the SDA has acquired certain sites in Port Glasgow. Much more must be done. The Locate in Scotland bureau must attract new business to Inverclyde.

The people of Greenock and Port Glasgow, and elsewhere in Inverclyde, desperately need the Government's help. However, in the years that I have represented an Inverclyde constituency the Government have failed the people whom I represent, the people who were represented so ably by Mrs. Anna McCurley and who will be represented with equal ability by my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham).

Greenock and Port Glasgow is experiencing one of its blackest hours since the war. The Government are a minority in Scotland, but they must show some magnanimity, humility, sympathy and compassion for the people of the lower Clyde.

8.22 pm

Mr. Gerald Howarth (Cannock and Burntwood)

I am sorry for the hon. Member for Greenock and Port Glasgow (Dr. Godman) on two counts. I am sorry that his constituents have suffered so many redundancies, but he is not alone in that. Most hon. Members have experienced redundancies in their constituencies. My constituency recently suffered 300 redundancies at a major motor component company. I shall try to illustrate how we view such matters in other parts of the United Kingdom.

I am also sorry for the hon. Gentleman because he thinks that any hon. Member who does not represent a Scottish constituency is an English filibusterer. As members of the United Kingdom Parliament we are fully entitled to participate in debates which concern the raising of revenue from our constituents to finance projects, in whatever part of the kingdom.

Hon. Members are lucky to have had two bites at the cherry. We do not have debates about the west midlands in Government time and we speak for a population almost the size of that of Scotland.

The Bill seeks to raise the SDA's financial limit from £700 million to £1,200 million—a substantial sum. I do not wish to be anything other than constructive because I realise that sensitivities are great. I am sorry that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) is not in his place as he paid a kind tribute to his constituents, my relatives. His remarks will have been heard better than he appreciated.

This debate is similar to that which we enjoyed on the coal industry, when the Government sought to increase borrowing limits, financial assistance and so on. The Opposition have been hard pressed to decide whether to attack the Government for lack of support or to support the Government. It would be interesting to know whether the hon. Member for Glasgow, Cathcart (Mr. Maxton) intends to vote. I see that he does not, so all his hon. Friends' disparaging remarks about the Government's performance are not sufficient to make Opposition Members vote against the Bill.

Mr. Maxton

Of course none of my hon. Friends will vote against raising the borrowing powers of the Scottish Development Agency which, after all, was established by a Labour Government and is supported by the Labour party in Scotland. What we object to is that it could be used so much more in Scotland as an interventionist, economic agency than this Government allow.

Mr. Howarth

I hope that that will be noted. It is at least support for what the Government are trying to do in raising the limit and increasing funds.

A substantial point of principle divides the two sides of the House. There is a strong belief that Government intervention is the only way. The history of the modern Labour party shows that it sought consistently to spend more and more of the taxpayers' money in the hope of reaping benefits. That did not succeed, but prudent spending by the Conservative Government means that we do not have to face the problems currently experienced by the United States which, no doubt, will be the subject of further exchanges in the House tonight.

This nation of ours—not just Scotland but parts of the English regions — is littered with evidence of Governments' failure to take good investment deisions and direct other people's money into sensible places. I mention some examples: The refusal by the Labour Government to give industrial development certificates attracted industries away from areas where they could enjoy the security of labour supply, skill and funds. Speke and Skelmersdale are in the litany of their disastrous policies.

I urge the Opposition not to ignore the facts. The facts are that where there has been major Government intervention problems have occurred, but the invisible hand of some of my right hon. and hon. Friends has worked and contributed to results.

Mr. McAllion

The hon. Member asks us not to ignore the facts. Does he concede that the refusal of the Labour Government to give industrial development certificates encouraged companies such as Veeder Root, which originally wanted to locate in the south of England, to go to Dundee? It has been there now for 40 successful years and has added to the prosperity of the area. All this is a result of a Labour Government's policy. I have that on the authority of the manager of the company.

Mr. Howarth

I am delighted that the hon. Gentleman can produce a success story. But I understand that that company came from outside the United Kingdom; it was not an indigenous company, so that was inward investment, which is a different story.

The Government have clearly demonstrated that they have the right view of the SDA. In his speech last week my hon. Friend the Minister outlined the role of the SDA as furthering the economic development of Scotland, improving international competitiveness and improving its environment. These it accomplishes through a variety of functions, including the provision of finance, premises, advice and counselling, sectoral advice, redevelopment of land and property and bringing derelict land back into use." —[Official Report, 21 October 1987; Vol. 120, c. 841.] That is something about which no one could conceivably disagree, but what is significant about the Government's contribution is that the SDA has been used not as an engine of intervention but as a catalyst to attract private sector funding, and that has marked the successful administration of my hon. Friend.

The SDA is now attracting more money than ever before and with regard to industrial investment every £1 of public money attracts £13.50 of private sector investment, compared with £5 only two years ago That marks a substantial difference in opinion and philosophy between Opposition Members and my hon. Friend the Minister — [Interruption.] If the hon. Member for Cathcart wants to challenge me on that fact I will give way. He should tell us whether he sees the SDA as being an engine of Socialism or an engine with which free enterprise can be powered.

Mr. Salmond

Does the hon. Gentleman consider that, under the present Government, the SDA has been able to fulfil its statutory purpose No. 2?

Mr. Howarth

If the hon. Gentleman would care to remind me of statutory purpose No. 2 I would be delighted to give my view.

Mr. Salmond

I am sorry that the hon. Gentleman appears to have forgotten statutory purpose No. 2 for the moment. For his benefit I shall read it. The functions shall be aimed at carrying on, or establishing and carrying on, whether by themselves or jointly with any other person, industrial undertakings.

Mr. Howarth

I would not rate that purpose as a high priority; some of the other objectives of the SDA are rather more important.

Apart from emphasising the catalyst role of the SDA it is important to note that it has achieved a degree of success in the creation of jobs. As an English Member I am delighted to see that public money is producing such a result. The review of the agency estimated that over the period 1981 to 1985 net additional output in the Scottish economy from the agency's investment function was about £275 million, with the creation of some 10,400 jobs. Obviously, any reduction in unemployment is welcome.

It is apparent from Scottish debates that Scotland is constantly bemoaning the fact that it is worse off than the rest of the kingdom. If hon. Members will bear with me, not in a spirit of hostility but I hope in one of enlightenment, I shall consider whether that statement is true. There is no question but that Scotland is favoured in comparison with other regions of the United Kingdom, particularly the west midlands. I remind Opposition Members that no area of the United Kingdom has seen such a change in its fortunes as the west midlands over the past 10 years, when it went from the top of the earnings league to the bottom. The good news is that it is coming back, which is why I, as a Conservative, am in this House and will remain here. It is a testimony to the success of the less interventionist policy of the Government.

Opposition Members' constituencies are in direct competition with my region for jobs. The extent to which companies are benefiting from SDA funding is of great interest to my constituents, particularly my industrial constituents. I shall consider three points and see how Scotland compares. My first point concerns regional aid. The hon. Member for Fife, Central (Mr. McLeish), who is not in the Chamber at the moment, said that there had been a diminution in regional aid. According to statistics that have recently been made available to the House, expenditure, at current prices, has increased since 1977–78 from £134.8 million to £241.6 million. No doubt my hon. Friend the Minister will confirm whether that is so. That is the largest level of aid for any part of the United Kingdom, including Northern Ireland, and it compares with a meagre £9.8 million for the west midlands, which has suffered substantial unemployment.

Mr. Alistair Darling (Edinburgh, Central)

rose—

Mr. Howarth

I hope that the hon. Gentleman will forgive me if I press on. In comparison with my own region, Scotland is doing better with regard to average earnings. It is true that, in comparison with the south-east of England average earnings in Scotland are very much lower, but average earnings in the west midlands are lower than those in Scotland. I shall give Opposition Members the figures. In April 1986—the latest available figures—the average earnings of a man working full-time in Scotland was £201.3p; in the west midlands the figure was just under £194. Apart from London and the south-east, the average full-time earnings of men in Scotland are higher than any region of the United Kingdom.

Mr. Bill Walker

It is also a good place to live.

Mr. Howarth

With regard to the share of public expenditure, apart from Northern Ireland, Scotland scores the highest. In Scotland the identifiable public expenditure per head of population in 1986–87 was £2,518.50 in comparison with £1,967.5 for England. Scotland is receiving these amounts of money, yet all we hear from Opposition Members is griping. They say, "We want more money, we are making a mess of it, we want yet more money."

Mr. Darling

rose—

Mr. Howarth

I will not give way to the hon. Gentleman.

The hon. Member for Roxburgh and Berwickshire said that it was only with regard to unemployment that Scotland was scoring, yet all the major indicators show that Scotland is doing better.

I hope that Opposition Members will not say that I should come and see things for myself, because I have been to Scotland. I visit my hon. Friend the Member for Stirling (Mr. Forsyth) from time to time. I hope that we can devise some means of educating Opposition Members. We are not getting through at the moment, but the message will get through eventually. Scotland is a great nation; we know that Opposition Members are capable of more and we will help them to achieve it.

When I visit Scotland I am always struck by the fact that there is much development taking place and that all is not as grim as it is painted. The hon. Member for Clydesdale (Mr. Hood) said that he has four hospitals in his constituency. I am still fighting for one in mine. Therefore, it is not true that Scotland is completely alone in a sea of deprivation. Scotland has many natural advantages, not the least of which is its countryside, which attracts tourists from all over the world. The Scotch whisky industry, so ably represented by my hon. Friend the Member for Tayside, North (Mr. Walker) and others, is a worldwide and popular industry. The people of Scotland are, by and large, friendly. Clearly, there are some exceptions, but they are getting better. Scotland enjoys an identity that is not enjoyed by England. The same is true of Wales. There is not a national English identity in the same way as there is a Scottish identity. I do not have an English tie to wear but I have my Douglas tie and when I wear that I know that I am wearing my Scottish tie and I am conscious of my Scottish ancestry.

Mr. Maxton

Patronising.

Mr. Howarth

It is not patronising. The hon. Gentleman, throughout his parliamentary career, has been trying to promote the essential Scottishness of Scotland but when I wish to allude to it he is agin it.

Scotland has a tremendous amount going for it. I am alive to the concerns of Scotland but Scottish Labour Members persist in running down their own cities and towns. If I were an investor I would be turned off the idea of investing in Scotland after hearing the comments of Labour Members. In the west midlands the people have suffered greatly but they have rolled up their sleeves and got on with it. Unemployment is now falling fast and business is booming because those people got on with it. Labour Members will find that their hon. Friends who represent seats in the west midlands will attack the Government but they do not spend all their time running down their towns and cities.

Mr. Hind

My hon. Friend will no doubt have noticed the marked contrast that exists between the positive approach of the SDA in going out into the world and attracting new business to Scotland, under the aegis of the Scottish Office, and the carping and undermining of Scotland that we hear so often from Labour Members.

Mr. Howarth

My hon. Friend has made a good point. Essentially hon. Members are undermining the work of the agency they are so keen to support. They are also undermining the work of Locate in Scotland. I welcome my hon. Friend's point.

I urge Labour Members to recognise that they can do more by writing up their own area than running it down. The statistics that show that Scotland is not as badly off as they maintain and that it enjoys favoured conditions in comparison with other parts of the country. I urge them not to ask for an enterprise zone because businesses outside the enterprise zone may well be put out of business. The way in which the Secretary of State and my hon. Friends on the Front Bench have used the SDA as an instrument of furthering free enterprise to promote the greater economic development of Scotland is a first-class tribute to their work and to the work of the Government as a whole.

8.44 pm

Mr. Tony Worthington (Clydebank and Milngavie)

I shall give some facts about the level of assistance going to Scotland. Industrial support under the Scottish programmes, through regional development grants, the regional selective agency and the budgets of the SDA and the Highlands and Islands Development Board, will have fallen by 20 per cent. in real terms between 1979 and 1989–90. As a share of the Scottish Office budget it will have fallen from 3.7 per cent. to 3 per cent. in that time. Therefore, it is not a picture of more and more money being devoted to Scotland.

We can take that a little further and put the sums in context. The budget of the London Docklands development corporation will be increased by £25 million in 1987–88. If one adds to that the £127 million spent on the rail link to the city of London, about £500 million on road improvements in and around the Isle of Dogs and a 100 per cent. tax allowance on all buildings constructed by 1992, it contrasts strongly with the total Scottish aid budget of £120 million.

I am speaking as a fan of the SDA. I have always supported it and have a great admiration for it as an essential component in the restimulation of the Scottish economy. I must pay tribute to the role of the SDA in my constituency, especially Clydebank. Without the SDA I dread to think what would have happened after the closure of the Singer factory in that area.

It is strange that there is often a reference to Clydebank being an enterprise zone, but that is of much less importance than the fact that it is an SDA task force area. I listened with interest to my hon. Friend the Member for Dundee, East (Mr. McAllion) who spoke about enterprise zones. The enterprise zones that have been backed up by the SDA have had some success. If it had been left to private industry, one would have found rotting areas all around Clydebank, and I am sure that the same would have applied to Dundee. The private sector would not have rescued the area.

The enterprise zones now are a far cry from what was suggested by the present Foreign Secretary when he was Chancellor of the Exchequer. The idea originally was an enterprise zone that would simply let the market rip. We now have the reverse of that. We have enterprise zones backed up by state intervention offering tax incentives and rate-free periods. That is essentially what the Labour party would urge ought to be done in areas having particular problems.

In the enterprise zone area in Clydebank, in my hon. Friend's constituency of Dundee, East and in the Glasgow eastern area renewal—all areas with which the SDA has been involved—there is superb co-operation between the SDA, regional councils and the district councils. That is extremely important. I hope that we have none of the nonsense spreading up from England where there is replacement of local authorities by Government quangos. We have proved that the operations we have in Scotland can work perfectly well.

Mr. McAllion

Will my hon. Friend concede that it is not just a matter of co-operation between the SDA and the regional and district councils? In the Dundee project there was the further co-operation of the private sector and the trade union movement. In the Dundee project the trade unions are represented and they make a vital contribution to the prosperity of Dundee through that project.

Mr. Worthington

I am indebted to my hon. Friend for adding to my point.

I am pleased to see the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) back in his place as I now pay tribute to one of the smaller involvements of the SDA—its support of community businesses. I hope that this peculiarly Scottish initiative will receive strong support from hon. Members on both sides of the House. Last week the Scottish community business convention, held in Glasgow, revealed that there are now over 100 community enterprises with £10 million turnover and that 3,000 jobs and training opportunities are now available because local people have got together to try to create jobs in their areas.

It is important to note that, particularly in my part of Scotland, the areas that are being assisted most by community businesses are the most deprived and threatened areas, which no one else is helping in any way. It is striking that if there is any upward turn in the economy, there is little downward turn in unemployment in areas with 40 and 50 per cent. unemployment. The SDA put only £40,000 a year into the Strathclyde community business, which I was privileged to chair for four years. It is important to have support for this major Scottish economic initiative taken by local people. I am thinking especially of the work spaces idea, security firms in areas such as Borrowfield and Possil in Glasgow as well as of environmental work.

We must face the fact that none of the initiatives taken by central or local government, which are topped-down initiatives, succeeds in reaching those most in need of employment. One must get in among the people and work for a period of years before those initiatives really take off. I am sure that the hon. Member for Western Isles (Mr. Macdonald) will confirm that fact in relation to the co-operatives operating in his constituency. I have listened to Conservative Members who have now discovered community businesses and enterprises not just in the economy, but in housing. It worries me that they seem to think that one can simply turn on a co-operative or community enterprise and it will succeed. It will not. Unless we can learn to work with community enterprises over a period of years, there will be some disasters.

I turn with regret to the involvement of the SDA and the Scottish Office in an initiative in my area. I refer to a project that has attracted much attention in Scotland—the proposal by Health Care International to site an international hospital in Clydebank. It is a vast project worth £120 million and promising 4,000 jobs. To give the House some idea of the scale of the project, I point out that about 6,600 patients would go through it each year. The project has been seven years in the development and was greeted with glee and enthusiasm by the outgoing chief executive of the SDA, Mr. George Mathewson, as easily the biggest project with which he had been involved.

Why should one have doubts about the way in which the project has been dealt with? First, it has become a regular feature of Scottish Office initiatives in recent times that, even with projects that take seven years to develop, the public and health agencies and others are given six weeks in which to respond. I hope that we will return to a realistic time scale for public consultation.

My second reason for questioning the involvement of the SDA is the proposal to site the project on what is known locally as the asbestos site. When the old Turners asbestos firm left the area, it left vast amounts of asbestos with which the local authority had to deal. The asbestos area is now about 1,000 yd long, 40 yd wide and 7 yd deep. Not counting asbestos left in maturing tanks built under the factory, there are 280,000 cu yd of waste. Seven years ago the district council buried the waste at a cost to itself of £380,000. It dealt with the health hazard to the people of Clydebank. Now the SDA, at a rumoured cost of £2.5 million, is to dig up the asbestos and move it a little way down the road to deep-bury it in a basin.

The Minister of State, Scottish Office (Mr. Ian Lang)

Perhaps it would help the House if the hon. Gentleman would clarify precisely where he stands on this project. Does he want Health Care International to come to his constituency to build its hospital?

Mr. Worthington

I have made my feelings on the matter perfectly clear on previous occasions, and I shall do so again. However, I should like to follow the thread of my argument before I do so.

The SDA wishes to spend £2.5 million on digging up asbestos and moving it a few hundred yards to another part of the site. On being questioned about the site, the present chief executive of the SDA said that it was the only suitable place in the enterprise zone with access to the airport, to communications. I find that deeply ironic. Enterprise zones are supposed to provide freedom from bureaucratic rules. However, we are now to see the insertion into the enterprise zone of this massive proposal when just down the road around Old Kilpatrick there is a vast site which could accommodate the hospital. Because of a line drawn on the map by the Scottish Office, £2.5 million is to be spent. One must ask whether that is a sensible use of public money, given that £385,000 was spent on burying the asbestos on another occasion. Have not the Scottish Office and the SDA become too close to the project and the developers? I query the connection with the World Health Organisation. In the early stages of the project I hesitated about making my feelings clear because the World Health Organisation was referred to.

Health Care International, with the support of the Scottish Development Agency and Locate in Scotland, made the following statement: The applicant has worked closely over the past six years with the WHO. The WHO views the project as being particularly beneficial to developing nations which can save precious health care funds by sending their patients to the proposed hospital rather than building such facilities themselves. In those cases, developing nations cannot economically justify or appropriately staff and maintain their own tertiary care hospitals. The proposed hospital would enable developing nations to access excellent tertiary care at reasonable cost without the capital outlay. I was hesitant about responding to a project that seemed to have goals very much in line with my aspirations—that one should use the resources of the medical infrastructure of the west of Scotland to help poorer people in poorer countries. I asked whether the project was along those lines. I wrote to the deputy director general of the World Health Organisation, and received the following reply: The truth of the matter is that the World Health Organisation is not backing Health Care International in any way. I know of their plans and they have always kept in touch with us, and the only reason which has kept my interest alive is their commitment (at least they say they are committed) to using their facilities for the training of Third-world medical and health scientists to work with them and gain experience. We have permitted them to attend the World Health Assembly meeting essentially for their 're-education' and to see that emphasis is indispensably laid on primary health care, the only strategy to reduce the present inequitable distribution of health service and social injustice in health. This project is certainly not suitable for the Third world because of the heavy cost and the fact that it would only provide care facilities for a small percentage of any population, and certainly not the poor. The project was vetted by the SDA but, as I found by simply taking the initiative to write to Geneva, the WHO disavowed any commitment to it. I feel that some people have been misled.

The primary role of the Secretary of State is to act as the guardian of the Health Service and to judge whether, under the terms of the National Health Service (Scotland) Act 1978, the development would to a significant extent interfere with the performance by him of any duty imposed by that Act or to a significant extent operate to the disadvantage of persons seeking or afforded admission or access to any accommodation. The Secretary of State has not kept that duty paramount. I believe that our representations to him were a waste of time. This project involved an in-house application to the Secretary of State. He was virtually applying to himself for permission. It is unbelievable that the present Secretary of State and his predecessor did not know about this project for several years.

Dr. Mathewson said that this was easily the biggest project with which he had been concerned, in terms of inward investment. It is inconceivable that this project was not brought up and discussed at the regular meetings between Dr. Mathewson and Locate in Scotland and the Secretary of State. If the Secretary of State was not aware of the project, it shows incompetence either by him or by Locate in Scotland and the SDA in not letting him know what was happening. If the right hon. and learned Gentleman was informed about the project, what was his response? Did he encourage it? What did he say? I challenge him to say when he first knew about the project. I am convinced that the likelihood of the right hon. and learned Gentleman turning down the project was as great as the likelihood of the Prime Minister acquiring a sense of humour.

Mr. Bill Walker

How would the hon. Gentleman feel if the people who are coming to his constituency or those who are listening to him thought that they might be better off going to Perthshire? We have plenty of space and would be delighted to have them.

Mr. Worthington

I thank the hon. Gentleman for his intervention. My feelings will become clear later.

How did the Secretary of State deal with the project? There was united professional and political concern about the initiative, which was centred on the 600 nurses required to staff the project. There was concern because, in the west of Scotland as elsewhere, there was a falling birth rate. Many of us wished that the UK 2000 proposals for nursing care would be brought into operation. There is also a poor skill mix within the Greater Glasgow health board. Too many of the nursing staff within the board, compared with elsewhere in the United Kingdom, are not within the upper range of nursing skills.

The Coopers and Lybrand independent report was then produced, and it is now being used to support the project. Because of its shallowness, the report is disgraceful. It was conducted within about three weeks. In no way is it an independent report. Those who conducted the report gave back to their sponsors what they thought the sponsors wanted to hear. The report has been quoted as evidence that the National Health Service would not be damaged. Paragraph 104 states: We would stress that we have not validated any of the main assumptions on demand levels or pricing policy or the estimates of construction, equipping and operating costs of the step-down facility. It is difficult to think of what is left.

All sorts of false assumptions are made about the need for nurses. For example, to establish the hospital, 60 of the nurses are to be brought from the United States of America. There is no reference to the fact that they will have to go back. There is also the possibility of attracting some of the 2,000 nurses who move to the United Kingdom and who have fullly acceptable professional qualifications. Fifty nurses constitute only 2.5 per cent. of one year's inflow, but they would have gone to the National Health Service if it had not been for the existence of the private hospital. There is then a vague reference to the fact that about 100 could be attracted to work at HCI from the pool of nurses not working. It is thought that 120 to 130 nurses who presently are not employed could be attracted there. Why are they not employed at present? It is because inadequate resources are made available for the Greater Glasgow health board. There is the admitted problem that perhaps 60 nurses would be of the higher skill category.

The Secretary of State did not respond with the required rigour and duty to guardianship of the National Health Service. He was much involved in support of the project. He sees health care following electronics as the next job growth sector within the Scottish economy. I am certainly not against jobs for Clydebank. I am fully aware of the value of such jobs. I regard health care as a sensible sphere into which to move. The sponsors of the project, either prompted by the Secretary of State or on their own initiative, have done a great deal to lessen some of the damage to the Health Service in terms of paying wages, Whitley council rates, and so on. I am appalled at the way in which the Secretary of State has dealt with the application, because I believe that applications such as this could be dealt with in a way that is not damaging to the National Health Service. As the local Member of Parliament, why am I put in the position where I have to choose between either jobs or the National Health Service? If there was suitable investment in the National Health Service, possibly this would not be a damaging project.

Mr. John MacKay, a former Member of the House and former Scottish Minister with responsibilities for health, now the chief executive of the Scottish Conservative party, said: Let's get more youngsters into training for nursing and all the other skills and professions which will be needed so that we will have enough for this project and the NHS. The message behind that is that this is a damaging project to the NHS. Mr. John MacKay said that if he was the Scottish Minister with responsibilities for Health, he would augment the training and supply of nurses in that sector. It is a pity that the Secretary of State did not take a similar attitude.

The Secretary of State for Scotland (Mr. Malcolm Rifkind)

The hon. Gentleman promised that he would clarify his position before he sat down. Will he now indicate whether, if he had been in my position, he would have turned down the application that was made knowing that, among other things, that would have led to the loss of 4,000 jobs in his constituency? Will he give us a straightforward answer?

Mr. Worthington

I thought that I had given a quite clear answer on that. It would be possible, if I had taken the unanimous feelings of the Greater Glasgow health board, the local health councils and the trade unions seriously, to put extra investment into the NHS to make the project one that did not damage the NHS. The Secretary of State ignored his obligation to defend the National Health Service. My response would have been very different.

9.12 pm

Mr. Alistair Darling (Edinburgh, Central)

Throughout the course of the debate, we have heard Back-Bench Conservative Members say that those of us in Scotland ought to be grateful that expenditure per head in Scotland is higher than in other parts of the United Kingdom. It really does not matter in which part of the United Kingdom the expenditure is raised. It does not matter whether money raised in Scotland is spent in England, provided that it is spent properly, or whether money raised from operations offshore of Scotland is spent in England or other parts of the United Kingdom, provided that it is spent properly. The argument that somehow the expenditure per head in Scotland is more than it is in England does not impress anybody at all and creates a conflict where none exists. The United Kingdom will either survive in its entirety or sink in its entirety. One cannot divorce one part of the United Kingdom from other parts.

The arguments that we have heard deployed by those Conservative Members, who have given what I must say is grudging support to the Scottish Development Agency, make no sense at all. It has been interesting to hear from hon. Members on the Back Benches. many of whom I understand attended St. Andrews university. Why on earth that university should have turned out so many people who have a narrow economic view of life I do not know, but we have heard from many of them that they do not support the Scottish Development Agency, despite the fact that they are loyal Government supporters and support everything that is said from the Front Bench, except perhaps the remark made by the junior Minister when he opened the debate about a week ago when he praised the SDA and endorsed the philosophy that public expenditure creates jobs. That philosophy is wholeheartedly endorsed by Opposition Members. When the Minister replies, perhaps he will tell us whether the sentiments that he expressed are to prevail in the next four years or whether the attitude of those Back Benchers who wish the role of the SDA to be diminished or even privatised is dominant in the Government.

I do not deny that parts of England, Wales and Northern Ireland are in desperate need of public expenditure but it is certainly not our aim to run down Scotland, as suggested by the hon. Member for Cannock and Burntwood (Mr. Howarth) who is unfortunately no longer present. We argue that Scotland has structural problems which require public expenditure to put them right. That is why we welcome the work of the SDA, even with the limited role that it performs in some parts of the country, in starting to create jobs and a climate in which Scottish industry can be rebuilt. It is not a matter of Scotland against England, or of suggesting that Scotland is incapable of generating its own wealth. We are perfectly capable of creating our own wealth, given the right economic conditions.

More often than not, private initiative and private enterprise need public expenditure to get them going. In the debate surrounding the Chancellor's statement in an hour's time it is argued that large sums of public money have been spent to prime the pump to allow the Government to sell off BP. Conservative Members certainly believe in public expenditure when it assists private enterprise. The public subsidy poured into industries to be privatised has been phenomenal compared with the amounts made available to regenerate those parts of the economy and the United Kingdom which have not experienced the growth that has taken place in the southeast corner.

I wish to make two points about the SDA. I agree with just one comment made by the hon. Member for Darlington (Mr. Fallon)—that some elements of the agency's expenditure were misplaced and should have been subjected to greater scrutiny. I believe that the SDA has put money into some projects when it should not have done so. My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) has described the problems in his constituency and the amount of money that the SDA is putting into the private hospital there. Opening the debate last week, the Minister said that the SDA was responsible for creating an image of Scotland. I pointed out that that image should not be one of making profits out of private medicine but of providing medicine on the basis of need.

I bitterly resent the fact that £20 million of public money is being poured into the coffers of Health Care International to enable it to make a profit from private health care when Edinburgh royal infirmary in my constituency is in desperate need of funds. More than £8 million is required to bring the infirmary up to 1987 standards. One operating theatre cannot be used because it is no longer hygienic and two others will have to close unless money is spent on them. The accident and emergency department will not be able to cope with the work load expected in the next two or three years and a whole series of wings need massive expenditure to make the heating safe and to remove various health hazards.

Lest anyone misunderstand me, I should make it clear that the infirmary is one of the best providers of health care in Scotland and one of the most renowned teaching hospitals in the world. It is a tragedy that, when the Government are providing £20 million to encourage medicine for profit, they are not prepared to spend money on bringing the Edinburgh royal infirmary up to date, let alone to bring it into the 21st century. The junior Minister responsible for these matters, the hon. Member for Stirling (Mr. Forsyth), during a brief visit to the infirmary said that the health board would have to find the resources from its present allocation, but that is simply not possible unless Lothian health board stops development of all other hospitals and all other major programmes. He will have to face the fact that, within the next few months, the Government will have to commit substantial sums to replace that hospital if it is not to to be the scene of major trouble and disquiet.

Great play was made a few moments ago by the Government Front Bench about whether jobs were to be provided in Clydebank because of the Health Care International hospital. Lothian health board is being told to save £7 million this financial year, and because of that, all hospitals in Lothian are short-staffed. The royal Edinburgh psychiatric hospital is now involved in a major dispute because of staff shortages. If the Government are serious about creating jobs, jobs are waiting to be created in the Health Service. If they were serious about providing health care jobs they would start putting money back into the Health Service. That would create jobs in the caring services and in building, when it comes to replacing hospitals. At the same time, it would provide a valuable service.

I have one other criticism of the SDA. It concerns something that is not entirely the fault of the SDA, but is certainly that of the Government's current philosophy. Scotland's problems will not be solved by the Scottish Development Agency lending money to firms on a small scale, no matter how helpful or laudable that is. As in many other parts of the United Kingdom, most of the financial centre of Scotland is located in its south-east corner. There is a ridiculous situation in this part of the world, in which house prices and rents are extortionate. It is difficult for people to move down here to fill the jobs that are being created. I cheerfully admit and am glad to hear that they are being created here; at the same time, there is a rundown in the economy in the northern half of Britain and in Scotland.

The tragedy of Guinness breaking the promise it made at the time of the takeover bid for Distillers—to come to Edinburgh—was not only that job opportunities were lost by not moving Guinness's head office to Edinburgh, but that if there had been a major United Kingdom industrial company operating throughout the world and based in Edinburgh it might have attracted other companies there too and broken up the cosy insularity that prevails in this part of the world among industrialists. Some companies, to their credit, have decided to stay in Scotland and operate on an international and national basis from there, but Guinness broke the stock exchange motto—"My word is my bond"—and decided to stay here. That is the tragedy of the Guinness affair.

Until Scotland attracts firms of the magnitude of Guinness it will always be the first to feel the effects of any recession and the last to feel the benefits of an expansion in the economy. The Government could put that matter right if they were prepared to address themselves to the fact that the market mechanism will not ensure that jobs come to Scotland on a long-term basis. Instead, there will be satellite developments, and we shall not be able to play our part in generating the wealth that would benefit the people of Scotland and of the whole United Kingdom. We need an end to the lopsided development in this country; it is something the Government must put right.

9.23 pm

Mr. John Maxton (Glasgow, Cathcart)

This has been a long debate, lasting more than a week, and there have been many contributions to it. The number of contributions from the Opposition Benches shows by how much the Labour party is the majority party in Scotland. The Government, by contrast, could muster only three Back Bench speeches in all the hours of the debate.

I pay tribute to the three maiden speeches made by my hon. Friends. Perhaps my hon. Friend the Member for Glasgow, Rutherglen (Mr. McAvey) has forgotten his, which he made last week, because the weekend and the entire week have intervened. His was an excellent speech, in which he paid a warm, well-deserved tribute to our good friends Gregor and Joan Mackenzie. My hon. Friend also referred to his constituency, part of which I used to represent. We still share the large housing scheme of Castlemilk and sit on many committees together. Great work is done by the local council, Strathclyde regional council and, to a lesser extent, the SDA, but little is done by private enterprise in such an area. We are totally reliant on public expenditure.

My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) made an excellent and powerful maiden speech and paid a warm and generous tribute to his predecessor. Perhaps not all of us would have paid such a warm tribute to Mrs. McCurley. My hon. Friend referred to the enormous problems of his constituency, particularly in Linwood, where he lives. He mentioned that the Government have created enormous problems of unemployment there and have done little to solve them.

I am delighted to see both my hon. Friend the Member for Renfrew, West and Inverclyde and my hon. Friend the Member for Aberdeen, South (Mr. Doran) in the House because, unlike my hon. Friend the Member for Rutherglen, who took over the seat from a sitting Labour Member, they both won seats from sitting Tory Members. The speeches by my hon. Friends were extremely good, but even if they did not make a speech at all, we would still welcome them because they got rid of Tory Members of Parliament.

My hon. Friend the Member for Aberdeen, South also paid a generous tribute to his predecessor, Mr. Gerry Malone, and the work that he did in the House of Commons. My hon. Friend showed his expertise in the oil industry. I know that all three of my hon. Friends will play a great part in our debates over the next few months and years.

I should like to refer in passing to what happened late last Wednesday evening and Thursday morning. It is important for us to try to put some of the record straight. I should like to start with the part played by the two trivial parties, the irrelevancies in Scottish politics, the Scottish National party and the alliance. There are three minority parties in Scotland, starting with the Tory party with 10 seats, the alliance with nine and the SNP with a mere three. The alliance and the SNP seemed unwilling to say exactly where they stood. During the debate on the motion to adjourn the debate, the hon. Member for Moray (Mrs. Ewing) said: We are willing and able to stay here for as long as is necessary to complete the Second Reading of the Bill. The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said: I oppose the Government's motion because it sets a worrying precedent to start interrupting and adjourning Second Reading debates. Opposition parties have precious little weaponry available to them in their armoury in any case." —[Official Report, 21 October 1987; Vol. 120, c. 875–879.] And then what do I read in the Glasgow Herald on Friday morning but the fact that Mrs. Ewing who christened the Labour MPs the 'feeble 50,' said that early-morning manoeuvres and Westminster parlour games had cost MPs the opportunity for a vital debate on all aspects of Scottish economic and industrial life. That is slightly different from what the hon. Lady said the evening before, that she would fight the Bill to the bitter end. The hon. Member for Roxburgh and Berwickshire, making the same point, said: The Labour Party substantially overplayed its hand and did not exercise proper judgment. If it is really intent on taking every issue to the parliamentary brink, we will all suffer. Mr. Dewar was unable to control his young, raw, rooky recruits.

Mr. Norman Buchan (Paisley, South)

My hon. Friend is referring to me.

Mr. Maxton

I would like to refer to my hon. Friend as one of the young, raw rookies, but, although he is still young at heart, he is neither raw nor a rookie.

What became apparent during that debate was that the two minority parties—the third and fourth parties in Scottish politics—are now more concerned with attacking and fighting the Labour party than they are with fighting the Government who cause the problems. It would make a good deal of sense if, during debates on Scottish affairs, they sat on the Benches opposite. We should then have the majority party on this side of the House, with the three minority parties facing us.

What is the role of the Government in all this? Of course, there was a lot of briefing from the Scottish press office. It was unofficial, but we now know that it was being done by a man who, at least, will now be paid honestly by the Tory party for the job that he has been doing for the past five or six years. [Interruption.] My hon. Friend the Member for Clackmannan (Mr. O'Neill) says that that may be described as a Government cut, but at least there is a certain honesty about the Conservative party paying Mr. Alec Pagett's wages, rather than the taxpayer doing so. After all, he will be doing exactly the same job as he was doing before.

The debate that was supposed to take place tonight was always a Government debate. It was in Government time, and the Government wanted it—although, of course, the Labour party was delighted, and we would have played our full part in it. We could have had the debate on Thursday morning, later than it eventually finished, if the Government had been prepared to keep it going. If the Whip had moved the closure at, say, 3 o'clock—four hours into the debate—your Deputy, Mr. Speaker, would probably have looked on it very sympathetically.

We would have voted against it, but at least the Government would then have used their troops. Instead, we continued until 3.30 am debating an Adjournment motion simply to satisfy the pigheaded stubbornness of the Government Whips, because they believed for some reason that there was a deal.

It was obvious when the friends of the Under-Secretary of State, the hon. Member for Stirling (Mr. Forsyth), the graduates of St. Andrews university, moved in to "support" him—he must at times have wished that he did not have their support—that the Conservative party is schizophrenic about the Scottish Development Agency. Here we have an economic interventionist agency, designed to bring jobs into being in the Scottish economy, and to use public money to create wealth in Scotland. Although they voted against the original concept, the Conservatives now welcome it and want to use it. Nevertheless, it runs against everything that they believe in.

Let me return to what my right hon. Friend the Member for Glasgow, Govan (Mr. Millian) said about Glasgow. Here is a perfect example of what happens there. I found it extremely insulting, as did the lord provost and council of Glasgow, that the Prime Minister, representing the whole country, should make an official visit to the city of Glasgow, be 300 yards from the city chambers and not even bother to tell the lord provost—his is not a political appointment; he is the official head of Glasgow—that she was doing so. She then makes great claims about how all the work being done in Glasgow, all the enormous achievements there, are down to the Secretary of State for Scotland and to private enterprise. However, the Opposition know that Glasgow has become the shining light of inner-city regeneration and that that is due to the work of Labour-controlled district councils, Labour-controlled regional councils and the state intervention of the Scottish Development Agency.

Mr. Nigel Griffiths (Edinburgh, South)

My hon. Friend will no doubt welcome reinforcement of that point. Edinburgh district council and the Lothian regional council, both of which are Labour-controlled, have an excellent record. In 1986, when they were under Conservative control, the electorate gave its verdict by turning them from Conservative into Labour-controlled councils. Moreover, the recent five by-elections in Edinburgh turned marginal seats into very safe seats for Labour.

Mr. Maxton

My hon. Friend is quite right. Throughout Scotland Labour now controls the authorities. In conjunction with the SDA and the district and regional councils, Labour is creating jobs and wealth for Scotland.

Having praised the socialist weapon of intervention that the SDA ought to be, the Minister has a responsibility to answer some of the questions that were put to him by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). The Minister deliberately misled the House about the amount of money that is available to the SDA. There is a contradiction between what the Minister said in his speech and what has been said by his right hon. and learned Friend the Secretary of State. He also has a responsibility to set out the Government's position on regional aid. My hon. Friend the Member for Garscadden quoted from an interview on "Good Morning Scotland" by the Secretary of State for Scotland. Referring to the threats and rumours of cuts in regional aid he said: there might be concern if it was true but it is not true. I am able to repeat to you categorically what I believe Ian Lang has also said: that there is no question of these resources available for regional aid in Scotland being reduced. Every Opposition Member wants the Minister to repeat that categorical assurance. The rumour of cuts has been repeated yet again in today's edition of The Guardian. I am not saying that it is true, but there is a very strong rumour that Lord Young and the Chancellor of the Duchy of Lancaster are intent on carrying out yet another review of regional aid. We need to know whether that means more cuts for Scotland. I hope that the Minister will answer that question.

The Minister also has a duty to say whether there has been a change of policy in terms of who is in charge of regional aid in Scotland. The Secretary of State said that it would not be for the Department of Trade and Industry to make that decision—that the DTI may be responsible for regional aid in England, and that that is reasonable and proper, but that he and his colleagues are responsible for regional aid in Scotland. He went on to say that he believed that a reduction in the level of regional support was not being considered. That is not correct. I accept that the Secretary of State is responsible for the administration of regional aid, but he is not responsible for deciding what sums of money will be made available for regional aid. [Interruption.] That is very interesting. I am sure that the Department of Trade and Industry will be very keen to know that. That is not what it believes to be the case.

Mr. McLeish

While my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) was speaking, the Secretary of State for Scotland suggested that he was incharge of distributing the money that is spent in Scotland. If that is the case, does my hon. Friend accept that the figure of £343 million that was spent in 1982–83 has been reduced to £66 million and that the Secretary of State is therefore responsible for that significant cut—not the Department of Trade and Industry in London?

Mr. Maxton

That is right. Perhaps the Secretary of State would like to take the blame for the cuts that he made in regional aid instead of passing the buck to the Department of Trade and Industry, as he usually does.

Whether or not we like it, and whatever smooth words we may hear from the Minister about the SDA, we are now in the third term of a Tory Government who were not elected in Scotland. The Government are becoming increasingly Right-wing and are increasingly taking the monetarist line which we heard from the hon. Members for Darlington (Mr. Fallon) and for Cannock and Burntwood (Mr. Howarth). Indeed, the Secretary of State is going increasingly down the Right-wing route. Although he did not speak from the rostrum at the Conservative party conference at Blackpool, I believe that he spoke at a meeting of the latest Right-wing pressure group called the Committee for Free Britain. It is probably the most extreme Right-wing organisation that is allowed within the bounds of the Conservative party without going down into neo-Fascist roots. The Secretary of State, who used to be considered a liberal in the Tory party, is now speaking at such rallies.

Yesterday, when he opened the London office of the Northern Development Company, Lord Young criticised the Scottish Development Agency and the Welsh Development Agency. Clearly, he does not believe in the concept of aid to regions. He does not believe in the SDA. After the disastrous election results for the Tory party in Scotland, Lord Young is much more powerful in the Cabinet than is the Secretary of State for Scotland, and if there was a fight between the two over continued assistance to the SDA, I believe that Lord Young would win. That would be a disaster for Scotland, just as the Government are a disaster for Scotland.

9.42 pm

The Minister of State, Scottish Office (Mr. Ian Lang)

With the leave of the House, Mr. Speaker, I will reply to the debate. This has been an interesting, if somewhat disrupted debate, and I shall try to answer as many points as possible in the time available.

First, I join the hon. Member for Glasgow, Cathcart (Mr. Maxton) in welcoming the maiden speeches that the House was privileged to hear during the debate. The hon. Member for Glasgow, Rutherglen (Mr. McAvoy) paid a glowing tribute to his predecessor, Mr. Gregor MacKenzie, with which all Conservative Members would wish to be associated. We held him in high regard and in some personal affection, and we were sorry that he had to miss his farewell party because of the storms. The hon. Gentleman demonstrated a knowledge of and concern for his constituency which will have impressed the House.

The hon. Member for Renfrew, West and Inverclyde (Mr. Hood) has the challenging task of succeeding our good and sadly missed friend, Anna McCurley. As he said, she is a lady of some independence—I say that with some feeling, having been her Whip for some time. While she was a Member of the House, Anna McCurley was a brave spirit whose dedication to the interests of her constituents was unrivalled. She will be a hard act to follow, but we noted the hon. Gentleman's forceful personality today. I hope that he is as pleased as we were by the announcement from Compaq, the computer company in his constituency, that it will double the size of its investment in Erskine and bring forward its plans to create more jobs in the area.

The House will also have been impressed by the maiden speech of the hon. Member for Aberdeen, South (Mr. Doran). We noted his close knowledge of and considerable interest in the problems of Aberdeen. Like the hon. Gentleman's predecessor, Mr. Gerry Malone, the hon. Gentleman is a solicitor and in his maiden speech he showed the same degree of knowledge and dedication to his constituents as that shown by Gerry Malone. The hon. Gentleman's speech was interesting and informed and the House will look forward to hearing more from all those hon. Members who made maiden speeches today.

After the drubbing that the antics of Opposition Members received in the press in recent days following the muddle that they got into with all the own goals that they scored as a result of their behaviour last Wednesday, which was a repeat of their behaviour in Scottish Question Time in July when the left hand did not know what the left foot was doing, I prefer to accept the verdict of just one newspaper. I settle for the comment in The Sunday Times, which described the Opposition's behaviour as "wretched ineptitude". That comment was written by Mr. Alan Massey, an independent-spirited journalist.

The hon. Member for Glasgow, Garscadden (Mr. Dewar) was quoted as saying that he was happy with what had happened. If the expression that I saw on his face after what happened last Wednesday night was happiness, I would hate to see him when he was miserable.

Mr. Kirkwood

Irrespective of the views that we take of last week's events, it is important that the Minister of State should use his good offices to ensure that the day's debate that we lost on the Scottish economy, for whatever reason, is very speedily rectified.

Mr. Lang

The hon. Gentleman is aware that that is not a matter for me, but I am sure that the usual channels will be listening attentively to his every word.

I want to deal directly with one of the recurring topics during the debate—the budget of the Scottish Development Agency. There is no need for any doubt in the minds of Opposition Members about the budget. The hon. Member for Garscadden, the right hon. Member for Glasgow, Govan (Mr. Millan) and the hon. Member for Banff and Buchan (Mr. Salmond) all raised that topic. The total spent within the agency this year will pass £1 billion for the first time. That is a remarkable achievement.

I can give Opposition Members the budgets at 1986–87 or 1987–88 prices. All the figures show an increase in real terms. At 1986–87 prices the budget was £124.5 million in 1978–79 and £130.9 million in 1986–87. The original budget for 1986–87 represents a 9.5 per cent. increase in real terms.

Of course it is true that the net budget is lower this year than in some previous years. Less of the taxpayers' money is being put into the agency because less money is needed to help the agency meet its gross budget. To suggest that that is a sign of failure is extraordinary. That implies—and perhaps this is the Opposition's policy—that success can only be judged by the amount of taxpayers' money that is poured into something. That is preposterous. If we simply stuffed the boilers of the SDA with £5 notes, that would be very costly for the taxpayers, but it might make Opposition Members feel better. I suppose that Opposition Members might believe that British Steel was most successful when it was subsidised by the taxpayer to the tune of about £1 million a week. That is blatantly absurd. The gross budget is what matters. The fact that the agency's net budget is now lower is a sign of success and that should be warmly welcomed for the taxpayers' sake.

Opposition Members also raised the question Of industrial investment. They took no account of the fact that investment income can be recycled within the SDA. There is no lack of funds for suitable projects and the agency will confirm that to Opposition Members any time they care to telephone. The agency has 30 per cent. of its budget designated for environmental projects.

Mr. Donald Dewar (Glasgow, Garscadden)

I will, of course, be following the figures very carefully. Is the Minister maintaining that all the projects submitted to the agency and that it believes are worth while and worthy of support can be supported by the agency?

Mr. Lang

The agency has not been constrained in any way through lack of funds. As I was about to say, the environmental projects budget is one in which the investment budget can intrude in the event of a desirable investment project arising towards the end of the year when the investment budget is insufficient to meet the need.

The agency now has investment in 700 companies, worth more than £40 million. It is generating more and more of its own funds and that catalytic role in bringing private investment into the sphere of its investments is particularly encouraging. The ratio of private investment to agency investment is now 13.4:1.

Mr. McAllion

Is the Minister saying that he is happy that the Scottish Development Agency's net investment is now only 2 per cent. of the total budget?

Mr. Lang

The hon. Gentleman is distorting the agency's investment role and activities. The agency's industrial investment function is only a small part of its contribution to the Scottish economy's industrial sector. Almost all the agency's budget has an effect upon Scotland's industrial well-being. Given that the agency's budget has increased in real terms since this Government came to office and given the improved leverage of private investment, our commitment to the agency is self-evident and wholly demonstrable.

The right hon. Member for Govan suggested that the unemployment figures for his constituency had been massaged. That is not true. The unemployment rate for adults, seasonally adjusted, is very close to the OECD standardised definition, although it is calculated differently. The latest comparable figures for August 1987 are 10.2 per cent., according to the United Kingdom definition, and 9.8 per cent. under the OECD definition.

Dr. Godman

Will the hon. Gentleman give way?

Mr. Lang

I must move on. I hope to reply to the hon. Gentleman's speech in due course.

The right hon. Member for Govan asked about regional aid as though it were some dramatic new departure from Government policy. He referred to a broadcast by my right hon. and learned Friend the Secretary of State across the Atlantic. The right hon. Gentleman tries to make bricks without straw. There is no cause for alarm. My right hon. and learned Friend's position is clear. The policy for administering regional aid in Scotland is entirely my right hon. and learned Friend's responsibility. The policy formulation is a matter for the Government collectively. My right hon. and learned Friend has a strong interest and he constantly assesses and reassesses its impact on Scotland. My right hon. and learned Friend has no plans to cut the funds for regional assistance in Scotland—[Interruption.]

Mr. Douglas

On a point of order, Mr. Speaker. Although the Minister's reply is inadequate, it is difficult to hear.

Mr. Speaker

Order. Will hon. Members kindly attend to the debate? I do understand the situation.

Mr. Dewar

Which is the lead Department in charge of the formulation of the criteria and policy framework for regional aid in Scotland?

Mr. Lang

The formulation of policy, in which my right hon. and learned Friend has an important role, is done collectively by the Government. A large proportion of regional assistance comes to Scotland. About 65 per cent. of Scotland's working population live in a development area, compared with 35 per cent. in the United Kingdom as a whole. My right hon. and learned Friend has made his position absolutely clear and he is correct. The policy is working extremely well, is continuing to attract new investment into Scotland and is creating new jobs in considerable numbers.

I welcomed the right hon. Member for Govan's reference to the Govan initiative and to GEAR although I do not understand his grudging support for the involvement of the public sector. I have paid tribute to the regional and district councils in that respect.

The right hon. Gentleman also referred to the garden festival and asked whether additional funds were being made available specifically for that. No additional funds are being made available, but the budget for the garden festival was taken into account when allocating resources to the agency. I note what the right hon. Gentleman said about the long-term use of the site. I assure him that the matter is being examined, not only in the context of housing to which he referred, but also in relation to tourism, light industry and office-based activity. The garden festival preparations are going well and over 75,000 season tickets have been sold.

The hon. Member for Garscadden seemed to think that he had an important point about Locate in Scotland when he spoke last week. It was one of the weakest parts of his argument. Perhaps that is why he compensated with much banging of dust-covered tomes. He implied that I was unsympathetic to Locate in Scotland and its objectives. When we debated inward investment in the Select Committee I took one view on what the appropriate solution would be and the hon. Gentleman took another. At that time I doubted the capacity of the SDA, as it was then constituted and with its record, to deliver the sort of improvement in inward investment that we all sought. I am delighted that it has proved so effective. Like the hon. Member for Gardcadden I saw an opportunity to attract more inward investment and I was keen to see that coming to Scotland. I recognised the shortcomings of the existing arrangement and the need for a more one-door approach.

The success of the agency is self-evident. I commend my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) on his reference to the survey of American companies that paid tribute to Locate in Scotland. They warned that the one thing that would put many of them off coming to Scotland would be the return of a Labour Government. I would take the strictures of the hon. Member for Garscadden on low pay in Scotland more seriously if he welcomed the arrival in Scotland of Health Care International and the hospital that will create 4,000 new jobs in Scotland.

The hon. Member for Edinburgh, South (Mr. Griffiths) also referred to that point and complained about funding being diverted from the Health Service, which is nonsense. The figure of £20 million that the hon. Gentleman mentioned was pure speculation; no discussions have taken place. Lothian is one of the best-funded health authorities in Scotland.

As to Guinness and the location of its headquarters, the hon. Gentleman should look at the headquarters of the Scottish Development Agency. He claimed that it was in his constituency, but his constituency is not in Glasgow; it is in Edinburgh.

The hon. Member for Clydebank and Milngavie (Mr. Worthington) made one of the most lamentable contributions to the debate. Until my hon. Friend the Minister had approved the location of the hospital at Clydebank the hon. Gentleman sat on the fence. When he thought he was safe and that he could satisfy the dogmatists in his party, he turned against it. It is a major achievement for Locate in Scotland. It will bring 4,000 jobs to Scotland and it should be warmly welcomed.

My hon. Friend the Member for Dumfries (Sir H. Monro) referred to the importance of the rural activities of the agency. This measure will help to develop the rural strategy of the agency. A replacement scheme for the PRIDE and DRAW schemes will be introduced. I hope to be able to announce details of that scheme very soon.

My hon. Friend the Member for Darlington (Mr. Fallon) gave the House a timely reminder that support for the agency comes from the United Kingdom taxpayer. Scotland's needs are fully recognised in the relative advantage of the allocation of resources. The return on funds is an important point to consider, and my hon. Friend was right to draw attention to the record of the agency, which is certainly patchy. The agency has a vital role to play, operating at the difficult end of the market, with small businesses in particular.

Return is improving and the Treasury review decided that no change should be recommended in the powers, functions and purposes of the agency. I believe that we are right to continue on that basis.

Dr. Godman

rose—

Mr. Lang

The SDA has changed out of all recognition since its inception in the far-off days of 1975, when it was considered that the answer to any problem was to throw taxpayers' money at it. Over the past seven years the agency, under the guidance of the present Administration, has become more receptive to the needs of the market and conscious of the need to involve the private sector in the economic development of Scotland. As a result, the agency has become more efficient and, more importantly, has made more effective use of the money provided to it by the Government. The agency's more effective use of public resources can be clearly seen, for example, in its provision of grant aid for private development projects in rural and urban areas.

The agency has recently faced the challenge of a searching scrutiny of its activities that was carried out by a joint Scottish Office and Treasury team. It emerged well and demonstrated the value of its catalytic and innovative approach to the problems of Scotland's economic development and environmental improvement. It now looks forward to different challenges. The international economy offers threats and opportunities and the agency's activities, which are clearly set out in its latest annual report, seek to minimise the threats and maximise opportunities for Scottish industry by helping Scotland's industries to improve their efficiency, improve their products and processes and increase their already enviable excellent performance. The agency can play its role as a major instrument of the Government's industrial policy. The Labour party's instrument of acquisition has now become our engine of enterprise. Its ugly Socialist duckling is our beautiful free-enterprise swan. I urge the House to support the Bill so that the agency can continue with its fine work.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).