Scottish Enterprise (Hansard, 6 December 1988)

§ The Secretary of State for Scotland (Mr. Malcolm Rifkind)
With permission, Mr. Speaker, I should like to make a statement about the White Paper on Scottish Enterprise, laid before Parliament today. The proposals set out in this paper will further strengthen the Scottish economy to meet the challenges of the 1990s by integrating the Government's support for training and for enterprise creation into a new body, Scottish Enterprise.
The Government have already transformed the British economy and given new confidence to industry, commerce and, indeed, the whole business community. We have reformed industrial relations legislation, stimulated increases in productivity, pushed forward a programme of deregulation, and opened up many sectors of the economy to competition through our privatisation programme and by other means. As a result, unemployment is now in sharp decline and enterprise is flourishing.
As these processes have gained in momentum, our two main instruments of direct support to the business of wealth creation in Scotland have seen a change of emphasis. The Scottish Development Agency, in its early years preoccupied with the problems of declining and elderly industries, now has the more positive purposes of accommodating, advising, informing, financing, attracting and developing enterprise, as well as a continuing commitment to renewing our environment. The Training Agency has coped admirably with the difficult and demanding task of alleviating the worst ills of unemployment, but it is now increasingly engaged in the aim of uprating and updating the skills of new entrants to the labour market, of unemployed adults and, indeed, of those in jobs.
As we enter the 1990s, two challenges face us. One is that of international competition, typified by the single European market in 1992. Skills of the highest order will be required at every level as firms increasingly look outward. The other challenge is the prospect of skill shortages. Continued growth is offering the unemployed wider opportunities, while the number of young entrants to the labour market is set to decline in Scotland, as elsewhere.
These challenges are combining to bring into sharp focus the need for a new and integrated approach. Enterprise creation and the growth of existing businesses are inextricably bound up with developing the skills of the work force. Industry is now prospering and able to shoulder its full responsibility for investing in the skills of its work force. Employers have to rediscover fully a sense of ownership of the system of training and enterprise creation. It is my hope that the proposals I am announcing today will constitute a quantum leap forward in this process.
Our proposals involve the creation of a new national body, Scottish Enterprise, whose main role will be to consider strategic issues relating to enterprise, employment creation and training and a network of employer-led local agencies, which will be responsible for stimulating the growth of self-sustaining enterprise, encouraging the creation of viable jobs and improving the skills of the work force in each area.
Scottish Enterprise will be a powerful agent for change. The statutory functions and powers of Scottish Enterprise 188 will be broadly like those in the Scottish Development Agency Act 1975, as amended, together with the powers in the Employment and Training Act 1973, as amended. Consequently, Scottish Enterprise will have a wide-ranging remit to enable it to continue the process of building the enterprise culture in Scotland.
It will continue the vital ongoing work of the SDA, but in addition, and for the first time, training in Scotland will be delivered through a Scottish body, working within a training policy framework for Great Britain agreed with my right hon. Friend the Secretary of State for Employment, but answerable to and provided with its resources by the Secretary of State for Scotland. Broadly speaking, Scottish Enterprise can be expected to receive the level of funding which would otherwise have been provided both for the Scottish Development Agency and for training programmes in Scotland. In the current year, that would amount to the best part of £500 million. The challenge for Scottish Enterprise and for the Scottish Office will be to use this enhanced role to meet the needs of business in Scotland in the 1990s.
A radical feature of our proposals is the creation of a comprehensive network of employer-led local agencies. Such local agencies will offer a one-door approach to employers and the wider community and will enable provision to be more closely attuned to the needs of the local labour market. They will allow local employers and others a much greater say in the delivery of services in their areas for training and enterprise creation. The opportunity is there to forge strong partnerships at local level and to provide a powerful focus for effecting local change. Local agency functions will include analysing the local labour market, developing training plans, subcontracting training work and monitoring performance, encouraging employers to increase their investment in training and providing business advice and support. Local agencies will, therefore, be responsible for the delivery of training tailored to meet local needs while operating within the framework of national policy.
Once local agencies have gained in strength and confidence, and shown themselves capable of taking on wider responsibilities, certain functions at present carried out by the Scottish Development Agency may be devolved to them. There are attractions in delegating as much authority as possible to the local level. However, in certain of its areas of operation, a national remit and powers have proved a major strength of the agency. A balance will have to be struck between local and central powers which enables the retention of present strengths as well as the desired improvement of local delivery. The Government have not yet come to a conclusion as to where this balance should lie and would welcome the views of all those concerned.
To set up the local agencies proposed, the Government will issue a prospectus inviting local employers to come forward with others from the community, such as people from enterprise trusts, colleges, training providers, trade unions, local authorities and voluntary organisations, to form the board of management in each area. We would expect two thirds or more of the membership to come from the senior ranks of private sector business. The Government are committed to giving the employers who will lead local agencies real responsibilities and the power to take the main decisions within a framework that ensures 189 public accountability. We are confident that within each community there are local employers and others who can rise to this exciting new challenge.
I am aware that these proposals will touch directly the lives of many people in Scotland: trainees, trainers, those already involved in enterprise support and, of course, the staff of the two bodies that are to merge. The success of Scottish Enterprise and of the local agencies will depend greatly upon the quality of their staff. For that reason, the Government believe that many of the staff in both the SDA and the Training Agency will choose to continue their present work with either Scottish Enterprise or the local agencies.
I should now like to draw attention to the position in the highlands and islands. We have in mind that the same principles outlined for Scottish Enterprise and the local agencies should apply there. Local employers should be given the opportunity to take a similar role as elsewhere. Of course, the geographical and economic characteristics of the north and west are different and we recognise the distinctive value of the contribution made by the Highlands and Islands Development Board to the regeneration of its area. We take the view that future arrangements must build on success to date. This points to the retention of a distinctive body for the highlands and islands and we put forward three options: to set up a new body, Highland Enterprise, incorporating the HIDB's functions together with responsibility for training; to retain the HIDB as it is and invite Scottish Enterprise to set up local agencies for training services in the highlands and islands; or to invite the HIDB to act as a local agency with Scottish Enterprise for training provision. We look forward to hearing the views of those who live and work in the highlands and islands on these options.
In conclusion, I take pride both in pointing to the achievements of the past and in presenting a White Paper which opens up challenging new vistas for the future. In so doing, I pay tribute to the contribution of Bill Hughes of the Scottish CBI who has stimulated public interest and debate in these ideas. I have been delighted by the widespread interest and enthusiasm for these proposals already obvious in public and private comment over recent weeks. It is clear that the people of Scotland are attracted to the new opportunities offered by this approach to training and enterprise creation. Important new responsibilities are proposed for the Scottish Office, for the staff of the Scottish Development Agency and for those involved in training, and especially for the Scottish business and industrial community.
We have not sought to answer all the questions at this stage. There will now follow a full consultation period until the end of March. I hope that everyone concerned with training and enterprise in Scotland will take the trouble to comment on these proposals so that together we can produce the best possible Scottish solution to Scottish needs.

§ Mr. Donald Dewar (Glasgow, Garscadden)
I cannot remember any announcement that has been so well trailed and heralded. When we received it, the statement had been well decorated with public relations copy, including a fetching picture of a well-known Glasgow public house. The Secretary of State has done well in the cliché business in the past few minutes. There was one really purple 190 passage at the beginning, which says something for the right hon. and learned Gentleman's courage, or at least for his brass neck. However, it is not clear how much substance there is behind the style. I suspect that those who were alarmed by the advance publicity will be at least temporarily relieved and that those who wanted a real attack on the problems of industrial training will be bitterly disappointed.
I shall start with the positive, because there is a positive side. I agree with the Secretary of State and welcome the need for a Scottish dimension to training. There should be a means of tailoring schemes to our needs in Scotland. I welcome the transfer of responsibility to the Scottish Office, although I note that the Department of Employment will still call the shots on national schemes. Will the Secretary of State note that one test for the new organisation when it is in being will be its ability, working with the Scottish Office, to influence the development of employment training and new training schemes?
There is an assumption in the White Paper that training is done for, not by, industry. There is no attack on the sad failure of industry in this country, which has left us trailing so far behind our principal competitors. At some point the Government must think seriously about the responsibility of industry, not just in terms of seconding an occasional executive to a local agency, but of tackling training in its own plants and factories with determination and the necessary resources.
The Secretary of State said that local agencies will be employer-led. We will expect them to represent the community generally. There must be a partnership, and few of us are convinced that there is an army of bright business men ready to enrol. In any event, whatever contribution employers may make to the new structure, they cannot have exclusive jurisdiction. The trade unions and local education authorities must have their place—not just a nod in passing.
There was also an assumption in the White Paper that the new structure will be funded simply by aggregating the existing budgets of the Scottish Development Agency and the Training Agency in Scotland. I take it from that that there is to be no new money to back the new proposals. The Secretary of State must accept that adequate funding is essential if the quality is to be established and maintained. Our European competitors do that and do it well. Why should we not do the same? The Secretary of State talks about the challenge of 1992, but there will simply be window dressing if the investment is not made.
Training will obviously impact heavily on the Scottish Development Agency. Many of us feel that the case for combining the SDA and the Training Agency is not proven. Does the Secretary of State recall that the Opposition set down a number of tests which should be met?
I should like to ask the Secretary of State a number of specific questions. Will Locate in Scotland be affected in any way by the new arrangements? Will the ability of the Scottish Development Agency to stimulate investment, back growth and provide risk capital be in any way inhibited? Will the agency be able to mount local task forces and initiatives, linking with local authorities and the community, such as we have seen in Dundee, GEAR, Greenock and the Garnock valley? What happens to the Scottish Development Agency's decentralised structure? Will it continue, given that the agency's functions appear to be largely unaffected, at least at this stage? Does the 191 Secretary of State accept that we shall want to look closely at the impact of any transfer of function to local bodies, which may be proposed at some future date? Finally, will the Secretary of State give an assurance that, whatever option is selected, the Highlands and Islands Development Board will be in a position to carry on with its distinctive and valued work?
The Secretary of State made a lengthy statement, full of complex hints and suggestions. Inevitably there are worries about the loss of the SDA name—a trade mark built on years of well-tried success. The House is entitled to ask the Secretary of State why we should fall into line with the copywriters of his noble Friend Lord Young at the Department of Trade and Industry and why we should accept that sort of Thatcherian rhetoric in Scotland? I should have thought that the name Scottish Development Agency might have been preserved, even if the restructuring was to go ahead.
We are entitled to look closely at what we are getting in return. It may simply be a minor reform of the training structure—perhaps more of a lost opportunity than anything else. Does the Secretary of State accept that, despite its title, his White Paper says nothing about enterprise creation and says less on training than had been promised? The Secretary of State described his scheme as "a quantum leap". Whatever it is, it is certainly not that.

§ Mr. Rifkind
I thank the hon. Gentleman for at least a good proportion of his response, which has consisted of some perfectly relevant questions that I shall now seek to answer. I thank him especially for his welcome of the proposal in the White Paper that there should be a Scottish dimension to training and that responsibility for training in Scotland should become part of the responsibilities of the Scottish Office.
The hon. Gentleman made one point with which I entirely agree—that training should ultimately be the responsibility of industry itself, and that Scottish industry, and industry in the United Kingdom as a whole, has been sadly reluctant to acknowledge its responsibilities in that sphere to the extent that is found in other countries in Western Europe. It is enormously encouraging that many of the ideas in the White Paper have come from Scottish industry and the chairman of the Scottish CBI, and that those representing industry in Scotland have already stated publicly that they welcome the idea of industry being expected to take more responsibility for the provision of training. That suggests that in Scotland industry is well aware of the relevance of the points raised by the hon. Gentleman, and that points the right road forward.
The hon. Gentleman asked about the composition of the local agencies and whether local authorities would have a role to play. He will see from the White Paper that that point is specifically covered. It states that, of course, local authorities as employers may have a contribution to make in their locality and that there is nothing to stop them and other bodies from coming forward, together with the private sector, and putting forward proposals for the creation of local agencies.
The hon. Gentleman asked about funding. He will agree that the funding of Scottish Enterprise, which is to be about £500 million, is not exactly small beer. It is an enormous sum, of which £350 million represents what is currently being spent on training in Scotland. That 192 illustrates the seriousness with which the Government have approached the needs of training in Scotland over the past few years.
The hon. Gentleman asked specifically about Locate in Scotland. I can give him a categoric assurance that the work of Locate in Scotland will not be affected by any of the proposals in the White Paper. Locate in Scotland is concerned with inward investment, and its role and the way in which it operates will not be in any way diminished, damaged or affected by the proposals.
The hon. Gentleman asked whether the decentralised structure that the Scottish Development Agency has introduced in the past 18 months will be affected by the proposals. It is unlikely that it will be, but that will be a matter for the agency to decide in the next few months. The agency has chosen to decentralise its responsibilities to a more local level, and that has been widely welcomed. As the hon. Gentleman recognised, there is nothing in the proposal that need interfere with that process unless the agency itself were determined, for some reason, to choose otherwise.
In both the statement and the White Paper, I specifically acknowledged the hon. Gentleman's point about the Highland and Islands Development Board. I shall simply add that the principle behind the proposals is to encourage local diversity with regard to the provision of training. There is no reason why training in Dundee should be identical to training in Aberdeen or in Glasgow, because in many respects it is important to identify the needs of local economies within the national framework so that local training can be tailored to those requirements.
If that is true of individual localities in the central belt, the same principle clearly has to apply when considering proposals for the highlands and islands which have an economic framework and sparsity of population which is peculiar within the United Kingdom, never mind within Scotland. From that it follows that, although the same principles might be relevant in the highlands and islands, we are as anxious as the hon. Gentleman to ensure that the community in that part of Scotland should make its own contribution to identifying the way in which these principles can best be adapted to the economic circumstances of that part of Scotland.

§ Sir Hector Monro (Dumfries)
Does my right hon. and learned Friend agree that, in the context of a fall in unemployment of 70,000 in Scotland in the past two years, that will provide a tremendous opportunity for youngsters and people of all ages to take a leap forward in training and skills and that it will accelerate the opportunity to provide more jobs in Scotland?
In the context of devolving Scottish Enterprise to the regions, will my right hon. and learned Friend say a little more about the integration of the enterprise trusts, the Scottish Development Agency regional offices, the Training Agency and the regional councils' economic development and planning committees? Are they to work together to provide more jobs, bearing in mind that in doing so they will need largely increased financial resources?

§ Mr. Rifkind
Of course I pay tribute to the work of the enterprise trusts. When I visited my hon. Friend's constituency and met members of his local enterprise trust in Dumfries, they said that they were very excited about the ideas that were then being discussed in the press—ideas 193 of a kind similar to those that I have set out today. I have no doubt that the success of the enterprise trust movement throughout Scotland illustrates that large numbers of people who are actively involved in industry are both willing and enthusiastic about making their contribution to the economic development of their localities. This proposal will provide them with an opportunity to have not merely an advisory role but a role in the execution and implementation of training in their localities. That can only benefit the local economy.

§ Mrs. Ray Michie (Argyll and Bute)
Does the Secretary of State accept that training that is employer-led—presumably by many friends of the Government—does not mix well with the development role of the Scottish Development Agency? Scotland will be worried to hear that the Scottish Development Agency's name and reputation, which have been built up over the years, are to disappear overnight. Will the Secretary of State also make a commitment that the Highlands and Islands Development Board will remain master in its own area and will not lose its social commitment to the people of that area?

§ Mr. Rifkind
On the first part of the hon. Lady's question, I think that she might not have properly understood the proposals. I suggest that she ought to read the White Paper before suggesting that employer-led local agencies do not mix well with the development role of the Scottish Development Agency. Over the last few years, the SDA has made it clear that it sees the encouragement and development of local, employer-led initiatives in the localities within the various parts of Scotland as crucial to its objective; otherwise, it will be wasting its time. I am quite sure that that is its view now.
We recognise that there is a continuing need for a distinctive body, such as the Highlands and Islands Development Board, to serve the needs of the highlands and islands. When the hon. Lady has had an opportunity to read that part of the White Paper which deals with the matter, I think she will acknowledge that that requirement and that concern have been fully met.

§ Mr. Bill Walker (Tayside, North)
Is my right hon. and learned Friend aware that many people in Scotland will welcome the statement? Those who have been involved in training and in the running of businesses will regard it as the first sensible approach that there has been for a long time towards meeting the needs of industry. The divorce of training from the development of an industry has meant that bureaucratic machines have been dealing with two interrelated activities that were dependent on each other. The proposal will remove that problem, and it is to be welcomed.
During the consultations on the future role of training in the Highlands and Islands Development Board area, will he bear in mind that a large part of the Scottish highlands is not included in the HIDB area? Those who live south of the Drumochter pass in my constituency will expect training activities, incentives and management to be the same on both sides of the Drumochter pass.

§ Mr. Rifkind
On the latter part of my hon. Friend's question, we have said that the same principles should apply. We shall examine whether it will be possible, in the 194 much more sparsely populated areas of north and west Scotland, to have the same structure of local agencies as might be appropriate either in the central belt of Scotland or even in constituencies, such as that of my hon. Friend, which, compared with parts of Sutherland or Inverness-shire, are more populated. Moreover, the structure of their local business communities is much more substantial. We hope that the same principles will apply. We shall seek the views of those who live in the highlands and islands about how best these principles can be adapted to their circumstances.

§ Mr. Ernie Ross (Dundee, West)
The Secretary of State pays tribute in the statement to Bill Hughes for his initiative, but the right hon. and learned Gentleman knows that the original idea came from the private industry councils in the United States, where the main thrust of private industry councils is training. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, we welcome the determination to bring training back into the Scottish forum.
In his statement the Secretary of State refers to a "one-door approach." He must know that the Dundee project is a one-door approach. I remind the House that that project was started by a Tory-controlled regional council, a Labour-controlled district council and the Scottish Development Agency. It is one of the best examples of how industry can be encouraged to come into an area. Will the Secretary of State assure us that the one-door approach of the Dundee project will not be lost in this initiative?

§ Mr. Rifkind
I can give the hon. Gentleman that assurance. I envisage that Scottish Enterprise will be directly involved in matters of national Scottish significance and that it may also be directly involved at its headquarters with projects which, although they may have only a local, geographical remit, may be of such significance to the overall Scottish economy as to justify that degree of involvement. Proposals about decentralising the functions of the SDA will continue with Scottish Enterprise unless and until it is demonstrated that they could be more sensibly dealt with at purely local level. We want to examine the best ways of delivering locally those services that can benefit the local economy. However, important projects will continue to have the same opportunities as they have now.

§ Mr. Alex Salmond (Banff and Buchan)
Does the Secretary of State understand the concern that, under the guise of the welcome devolution of Training Agency functions to Scotland, we may be seeing the filleting of the Scottish Development Agency and perhaps of the Highlands and Islands Development Board? What core functions and how many jobs does the Secretary of State expect will be held at the centre of what succeeds the SDA and even, perhaps, the HIDB? Will the Secretary of State either confirm or deny that recruitment for the membership of local agencies is already under way? If not, what status does Sir Hector Laing's letter to enterprise boards, looking for likely candidates, have? Does he understand that there is a great deal of concern that the professionalism of the SDA and of the HIDB may be replaced by the patronage of the Conservative party?

§ Mr. Rifkind
On the hon. Gentleman's latter point, I have not seen any such letter, nor was I aware of the 195 possible existence of such a letter until I saw a newspaper report which, in every other respect, was inaccurate and which, for all I know, may have been inaccurate in that respect as well. Sir Hector Laing is involved with Scotbic, which has been involved with an enterprise trust. I suggest that the hon. Gentleman ought to address that question to Scotbic and find out what letters may or may not have been sent. I have no idea whether such a letter exists. I have not seen such a letter. The only knowledge that I have as to whether such a letter might exist is certain newspaper reports, which I presume are the source of the hon. Gentleman's information. Scotbic is not part of the Scottish Office. If it wishes to send letters, that is entirely a matter for Scotbic. No doubt it can provide the hon. Gentleman with the information that he seeks.
As for the staff who now work for the Scottish Development Agency and the Highlands and Islands Development Board at their headquarters, the hon. Gentleman will be aware that over the last year or so the number of staff has been reduced—in the case of the SDA, because it decided to decentralise some of its functions to its regional offices in various parts of Scotland. I do not envisage any of the proposals in the White Paper as likely to have a direct effect on the number of staff employed in the headquarters of the Scottish Development Agency.

§ Mr. Tony Favell (Stockport)
Does my right hon. and learned Friend agree that the spirit of enterprise comes from within and that it is difficult to impose it from without? For that reason, may I urge my right hon. and learned Friend to make the local agencies independent? Four years ago in Stockport the president of the chamber of commerce, a Scotsman, Ernest Petrie, started our local enterprise agency. Since then, there has been a burst of activity in Stockport and jobs and self-employment have been created. There has been no grant and no development agency, and unemployment is now less than 6 per cent. If there are 10 Scotsmen half as good as Mr. Petrie still in Scotland, that country has a great future.

§ Mr. Rifkind
I thank my hon. Friend, and, in answering his remarks, I shall also deal with the point raised by the hon. Member for Banff and Buchan (Mr. Salmond) who talked about patronage. Contrary to certain press reports, the Secretary of State for Scotland will not appoint either the chairmen or the members of the local agencies. They will come fron the local community. As I understand it, that is how they operate in my hon. Friend's constituency.

§ Mr. Dick Douglas (Dunfermline, West)
Will the Secretary of State reflect a little? In a way we are all indebted to Bill Hughes for launching this venture. Those of us who have had discussions with Mr. Hughes recognise that his views were extremely embryonic. However, the responsibility for the White Paper lies with the Secretary of State alone. Will he reflect on the fact that one of the difficulties of employer-dominated training is that employers tend to train for jobs as they are, not jobs as they are likely to be? For example, if we had had employer-dominated training in Clydeside, we might still be training riveters if there were ships to build, and in Dundee we might still be training jute workers. The relationship between training, education and the future development of industry must be discussed, and there is little in the White Paper about that.
Does the Secretary of State accept that it is extremely difficult to reconcile the two roles of initiating new 196 ventures and training? Those two matters are not as co-related as they appear to be in the White Paper. Will the Secretary of State address that issue; and does he accept that, although we welcome the devolution element, we are anxious to see more money and effort put into it?

§ Mr. Rifkind
I understand the hon. Gentleman's point. He said that he did not believe that training should be left to employers. However, he will recall that his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that industry should accept responsibility for providing training for its employees. That view is certainly shared throughout Western Europe. We acknowledge that training must be provided, and we believe that a partnership of the type proposed is the best way to do it. In addition, we envisage local agencies preparing economic profiles of their localities showing the likely skill shortages over the next few years and identifying—at a time when demographic changes will lead to fewer youngsters being available for employment—the type of training necessary to ensure that the youngsters and other local people get the jobs available and that local industry obtains the people with the necessary skills.
For example, it is worrying that, with continuing high unemployment, a recent survey by the Scottish CBI identified that 15 per cent. of its members report skill shortages and an inability to recruit those with the necessary skills. That problem must be eliminated.

Several Hon. Members
rose—

§ Mr. Speaker
Order. I shall endeavour to call all those hon. Members who are rising, but will they please ask briefer questions because that leads to briefer answers?

§ Mr. Alexander Eadie (Midlothian)
The right hon. and learned Gentleman must be aware that nobody could quarrel with some of the language in the White Paper—for example, where it says that we should be prepared for the future, where it refers to "Scottishness," and so on, and, on page 27, where it says that the document is for discussion by the general populace in Scotland. Does the right hon. and learned Gentleman agree that it would be a good idea to help to retain the industry that already exists in Scotland? Is he aware that for the first time in a hundred years the Scottish coal mining industry is depleted and that all the planning, engineering and service industries will be dealt with south of the border? We have lost the Scottish coal mining industry as an indigenous industry for the first time in a hundred years. Will the Secretary of State look into that?

§ Mr. Rifkind
I am delighted that the hon. Gentleman was unable to find anything with which to quarrel in the White Paper, because on other occasions he has not found that too difficult. It is true that the deep-mined coal sector has been going through a difficult time. However, I am sure that the hon. Gentleman will acknowledge that there has been more growth in opencast mining in Scotland than in any other part of the United Kingdom and that it is now responsible for half the coal produced north of the border. Therefore, even within the coal industry, which has difficulties and problems, there have been areas of significant growth.

§ Mr. Adam Ingram (East Kilbride)
Only a few weeks ago the Secretary of State issued a consultative document on the future of Scotland's new towns. Does not today's 197 statement prejudge the efforts that have been made in looking for suitable alternatives to replace the new towns as job attraction agencies?

§ Mr. Rifkind
I hope not. If the hon. Gentleman is concerned that it might, I should be delighted to hear the detailed reasons for his worry. I see nothing in the White Paper that is incompatible with the consultative document.

§ Mr. Dennis Canavan (Falkirk, West)
How can the Secretary of State expect us to believe his assurance that Scottish Enterprise will be broadly based in view of the blatant abuse of patronage powers by the Government to invent what looks like a job creation scheme for failed Scottish Tory Members of Parliament, such as Ancram, Fletcher, Anna McCurley, Peter Fraser and Uncle Tom Cobbleigh and all?

§ Mr. Rifkind
The hon. Gentleman finds it difficult to accept that appointments to important public positions in Scotland should go to those best qualified to occupy them.

§ Mr. Norman Hogg (Cumbernauld and Kilsyth)
Will the Secretary of State explain how the local agencies will relate to the enterprise trusts and the development corporations, to which my hon. Friend the Member for East Kilbride (Mr. Ingram) referred? It is important that that should be clarified.

§ Mr. Rifkind
The hon. Gentleman has raised important questions. Clearly, the enterprise trusts have been successful in attracting a significant number of people in local industry to serve in the local community and identify opportunities for economic growth and development. I am sure that many of those people would wish to serve on the local agencies. It might be that some of the enterprise trusts would put themselves forward as possible local agencies. We would like to explore those ideas with people who have experience in those matters.
As regards new towns, the responsibility for training has until now been the responsibility of the Training Commission—now the Training Agency—on a national basis. Clearly, if training is now to be delivered locally in the way we have suggested, there is no reason why that could not apply equally in the new towns. I accept that the new towns are in a special position and, as I said to the hon. Member for East Kilbride (Mr. Ingram), I shall be happy to hear the hon. Gentleman's views on any particular problems of which we should be aware.

§ Mr. John Home Robertson (East Lothian)
Will the Secretary of State, for once, acknowledge the excellent work being done by local authorities in many parts of Scotland, including my constituency, in promoting industry and enterprise in their areas? I accept that the new training agencies may need to be slightly more broadly based than the local district council areas in Scotland now, but does he accept that the suggestion that Edinburgh and East Lothian should be regarded as a local area for enterprise creation in the future may not be greeted enthusiastically in my constituency?

§ Mr. Rifkind
Those who draft the boundaries for the local agencies will be happy to hear the hon. Gentleman's views. I am happy to acknowledge the contribution of local authorities. Indeed, it is referred to in the White Paper, which says: 198 it is encouraging that many local authorities are already increasingly choosing to work in partnership with private sector interests to generate local economic development.

§ Mr. James Wallace (Orkney and Shetland)
As well as training duties, the Secretary of State has said that he sees local agencies as having a role in providing a local economic audit or profile. How does he see the local area agencies, particularly in areas such as mine, being resourced for an administrative purpose.

§ Mr. Rifkind
We anticipate that the bulk of their funds—in some cases a high proportion of funds—will come from Scottish Enterprise. The local agency will present to Scottish Enterprise its proposals on the needs and training requirements of the local economy. If Scottish Enterprise were satisfied that the local agency consisted of people who were fit and proper to be responsible for the implementation of training policy and that they had sensible proposals which would involve the proper use of public funds, Scottish Enterprise would enter into a contractual relationship with the local agency for the delivery of the services.

§ Mr. Nigel Griffiths (Edinburgh, South)
Is the Secretary of State aware that the White Paper is testimony to the lamentable record of the Government over nine years of failing to train people? Not only have they given training opportunities at a lower rate than the United States, France and Germany, but they have provided fewer than even Taiwan and South Korea. Will he tell the House what in this vacuous paper gives hope to the 6,000 youngsters who are currently unable to be offered YTS places by his Government?

§ Mr. Rifkind
As the level of resources and training provided during the past 10 years was light years in excess of anything provided by the last Labour Government, any defects in the United Kingdom in regard to training certainly did not begin in 1979.

§ Dr. Lewis Moonie (Kirkcaldy)
Among the clichés and half-truths of the statement and the Minister's waffle today, there are one or two real nuggets of wisdom. The White Paper, in page 9, states: Efforts to date to persuade the private sector to take greater interest in and responsibility for training have had disappointing results … Even though skills shortages in some sectors are already becoming apparent, industry as a whole is still insufficiently aware of the key changes ahead in the labour market and so is not planning ahead to cope with future needs. What makes the Minister think that people who have failed to plan for their own needs are in any way capable of planning for everyone else's needs?

§ Mr. Rifkind
That is a perfectly reasonable question. I make two points in response to the hon. Gentleman. First, Scottish industry and the Scottish CBI have said that they wish to be given the responsibility for the provision of training and for developments described in the White Paper. Industry would not have been calling for that a few years ago.
Secondly, in the past few years there has been the very welcome development of the enterprise trusts which have similar activities, which owe their genesis to the private sector in Scotland, and which now cover virtually the whole of Scotland. The fact that hundreds of local business men throughout Scotland have given their time, effort, enthusiasm and sometimes their resources not for the 199 immediate benefit of their own companies—although their companies often indirectly benefit—but to identify the local economic requirements of their community and to act in a responsible and constructive way in developing the potential of their locality is a very good reason for believing that they will respond to these new opportunities as they have said they will.

§ Mr. Calum Macdonald (Western Isles)
I welcome the Government's admission that the Highlands and Islands Development Board, which the Parliamentary Under-Secretary of State for Scotland described from the Front Bench in a Scottish Grand Committee debate on 14 July 1988 as a Bennite instrument of state intervention, has been of central importance to improving life in the highlands and islands in the past 20 years. Will the Secretary of State answer the question that he failed to answer from the hon. Member for Argyll and Bute (Mrs. Michie) and give an assurance that none of the three options will in any way diminish the unique social remit of the Highlands and Islands Development Board?

§ Mr. Rifkind
As the hon. Gentleman knows, there are lots of hens in the highlands and islands of Scotland, and I am sure that a good proportion of them have the unqualified admiration of all my hon. Friends. I am happy to give the assurance that the hon. Gentleman seeks. We recognise the distinctive contribution of the HIDB in the highlands and islands. We look forward to a contribution from the HIDB and from those who live in the highlands and islands on the sort of structure that they believe would be relevant in their circumstances.

§ Dr. Norman A. Godman (Greenock and Port Glasgow)
Will the Secretary of State give an assurance that the SDA's area projects will not be diminished or adversely affected in any way by these proposals? More particularly, will he give the people of Inverclyde an assurance that the Inverclyde initiative will continue with its work? I remind him that annex A on page 29 contains an admission that Greenock, together with Irvine, exhibit a very high rate of unemployment. Does he agree that the Inverclyde initiative, which has not done a great deal until now, requires more resources than the threat of being shifted to Irvine or some other place?

§ Mr. Rifkind
I assure the hon. Gentleman that there is no danger of the Inverclyde initiative being shifted to Irvine. He will be aware that I had a meeting with representatives of the local community in Inverclyde, who gave me a number of examples and suggestions as to what they believe should be the structure and format of the Inverclyde initiative. We have been able to respond positively to all of them, including the most important of all—the creation of the enterprise zone.

§ Mr. Thomas Graham (Renfrew, West and Inverclyde)
I am quite surprised at the Minister. It was a lovely package but it says nothing because the most important element is missing—new money. There is no new money here. There is nothing to tackle the crisis that is about to arise in my constituency with the closure of the Bishopton royal ordnance factory.
The Minister mentioned employer-led initiatives. There are nearly no employers left in my constituency because the Government have done their best to close them. The most recent occurrence, at CalMac, is to move 200 jobs from Gourock to Oban. What does the Minister propose 200 to do about the workers who will not move there? Is he going to retrain them? Nearly every penny that is committed here could be spent on the 1,100 jobs that will be lost in Bishopton. My constituents will see this as a fancy package with poison inside it. No one wants it unless it produces the goods. It does not produce the goods for Scotland. We need new money—a massive injection of cash—without it being frittered away by the Government.

§ Mr. Rifkind
That was a splendid, if not predictable, contribution from the hon. Gentleman. I appreciate that his solution for every problem in Scotland—and no doubt anywhere else in the world—is more money, but he does not appear to have worked out what he would do with it if it were provided. As Scottish Enterprise will have resources of £500 million, which represents the current resources of the Training Agency and the SDA, he can hardly suggest that it will be skimped for ways of ensuring that the needs of his constituents and of those in other parts of Scotland will be fully satisfied.

§ Mr. Tony Worthington (Clydebank and Milngavie)
When the Hughes plan was mooted, I welcomed it because it would return training to Scotland and to Scottish control, but that is not what is proposed here. The White Paper states that the Department of Employment will remain the lead agency and that it will set the national framework. At the moment, if one wants to change the employment training scheme or the youth training scheme, one writes to the Department of Employment in order to get to the organ grinder, but one is referred back to the monkey. Will the Secretary of State confirm that nothing in the proposal will allow any Scottish alteration of the employment training scheme, the youth training scheme or any other scheme?

§ Mr. Rifkind
The hon. Gentleman has entirely misunderstood what is in the White Paper. I would advise him to read it more carefully before he jumps to conclusions. The White Paper and my statement today say that the national training policy will be decided jointly by the training Ministers. Obviously the Secretary of State for Employment, whose responsibilities cover 45 million people in the United Kingdom, is the lead Minister. It would be very odd for it to be otherwise. Training policy will be determined by the Ministers who are responsible for training, and in future the Secretary of State for Scotland will be responsible for training policy in Scotland.

§ Mr. John McAllion (Dundee, East)
The Secretary of State said that he expected two thirds of the local agencies to consist of the senior ranks of private sector business. Will he expand on the role that he envisages for local authorities in the agencies, and in particular the mechanics for securing local authority representation? It is only a matter of weeks since his hon. Friend the Minister of State, Scottish Office came to Dundee and sang the praises of the local authority-led Tayside enterprise board as representing all that is best in co-operation between the public and private sectors. Why does he disagree with his ministerial colleagues in this matter?

§ Mr. Rifkind
I have already said that local authorities, as employers in their areas, together with other employers, will be perfectly free to come forward with proposals for local agencies. The primary purpose of the initiative is wealth and job creation. That must clearly be the primary 201 responsibility of those in manufacturing industry and in commerce and business generally. Therefore, any initiative that is not led by those who are essentially involved in the business of wealth and job creation would fail from the start. Local authorities have a contribution to make, as have other non-industrial organisations referred to in the White Paper, but it would be quite unrealistic to pretend that their responsibility in this area of policy should be the same as or greater than that of local industry.

§ Mr. Charles Kennedy (Ross, Cromarty and Skye)
Further to the question by the hon. Member for Western Isles (Mr. Macdonald), may I say that the Secretary of State is quite right to point out that there are many bens in the islands and highlands, but there are also a few buts. One of them is on page 29. The White Paper seems to equate the social and economic features of Skye and Wester Ross with those of Sutherland, which would be true to an extent, and of Thurso and Wick. Surely the Secretary of State must concede that the economic base of northern Caithness is substantially different from those of Skye and Wester Ross. Looking to the future—it is a gloomy one—the only similarity that I can see is that, if the potential threat to Dounreay, as outlined by the Secretary of State for Energy, ever comes to pass, both areas will share in a sad major industrial rundown. In Skye and Wester Ross, it will involve the Kishorn yard, and, in the Caithness economy, it will involve Dounreay. What is the other basis on which it is a manageable area in terms of the similarities that the White Paper seems to suggest?

§ Mr. Rifkind
I shall be happy to hear the views of the hon. Gentleman and of those who live in those areas. If there is to be a structure of local agencies in the more sparsely populated parts of Scotland, clearly such areas cannot be so small as to be unlikely to provide those who will actually be responsible for running the local agencies and supervising the implementation of training policy. There is a certain minimum area size for an agency to be viable.

§ Mr. Kennedy
It is enormous.

§ Mr. Rifkind
It is certainly enormous in geographical terms, but it covers a total population of 55,000—[Interruption.] No one is questioning the importance of it. As I said, these are not final conclusions on the areas of the local agencies.
The hon. Gentleman must consider whether an area as small as Skye or as small as Skye and Wester Ross—[Interruption.] In terms of population, it is very small—can provide the personalities and the framework that would enable a local agency to carry out its responsibilities. The hon. Gentleman will not be serving the interests of his constituents if he puts forward proposals which, by their essence, are non-viable. This is not a conclusion; it is a suggested framework of proposals, and the hon. Gentleman might like to bear that in mind.