§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dorrell]
12.47 am§ Mr. Archie Kirkwood (Roxburgh and Berwickshire)My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) and I wish to raise the issue of rural development in the Borders in this, the last Adjournment debate of this parliamentary Session.
The significance of the subject goes beyond the Borders region. I am sure that the Minister knows that the European Parliament meets later this week to decide a new set of criteria for the distribution of European Community structural funds to rural areas throughout the EC. The final policy will be ratified by the Council of Ministers by the end of this year. It is therefore important that the House should know what view Scottish Office Ministers will take on assistance to rural areas.
We all recognise that the Government's guiding economic philosophy is a free rein for market forces. Presumably that also applies to rural economies. The difficulty is that areas almost identical to the Borders, such as the Highlands and Islands, have assistance and support via a combination of private and public bodies and authorities. In such areas, help is not only available; it is proving extremely successful.
The first question for the Government is: why is the Borders region being left out? Our needs may be different from those of inner cities or of peripheral housing estates in the central belt, but they are no less great and are not substantially different from those of areas such as the Highlands and Islands.
A number of very worrying trends are appearing in the economy of the Borders. Local agriculture is beset with uncertainty about the future. As the Minister is aware, the changes in the system of support for beef and sheepmeat, moving away from support for the finished animal to premiums for breeding sheep stock and reared cattle, is causing widespread insecurity among the farming community in the Borders.
It is now being said that in western Berwickshire today one can drive for 30 miles through farms that are for sale. More than 60 farm units have been sold this calendar year in the region. The upland units—those between the hill farms and the lower ground units—are no longer viable. Those farms carry livestock and have no viable alternative sources of income. The uncertainty of the European Community changes in the variable beef premium and the sheepmeat regime is certainly taking a very heavy toll of the industry, which forms the backbone of our rural communities. Some of those communities are now at risk.
Do the Government recognise the problem? If they do, what steps are in hand to compensate the agricultural community for the inevitable reduction in European Community support in future?
In the commercial and industrial sectors, the situation is not much more secure. The combination of interest and exchange rate fluctuations and the imminent prospect of a uniform business rate is causing problems. Everyone in the Borders recognises that manufacturing capacity is far too heavily concentrated in textiles and electronics, and there is an urgent need to diversify employment opportunities, with all the consequences that would flow from that in 882 terms of education and training. If the knitwear industry went into recession, the economy in major centres of population, such as Hawick, would collapse.
What are the Government doing to co-ordinate and assist the work of the various agencies, public and private, that already carry out such work? The Borders region has no urban programme assistance, no "Business in the Community" organisation and no enterprise trusts; it relies exclusively on the work of the local authorities and the Scottish Development Agency.
If it is difficult for manufacturing industry, it is even more difficult for the self-employed and those who run small rural businesses. In addition, the demographic change in the age structure of the population will exacerbate the difficulties. A smaller proportion of the work force will be economically active and there will be greater demand for local health and social service systems for the elderly who live in the more remote parts of the area with little or no public services.
The whole rural infrastructure of the region is under increasing pressure. The regional council is undertaking a survey of local shopping patterns. Small high-street shops and post offices are threatened. Control of Lowland Scottish may leave the area if the bus group privatisation plans amalgamate the company with Eastern Scottish. Local school rolls are falling, and school transportation generally presents difficulty for families in country areas.
Those are all classical examples of a situation which produces depopulation, which is evident in my constituency in areas such as Cranshaws and Craik, Liddesdale, Hutton and Paxton, and which is causing concern locally.
I recognise the work done by the regional council planning department in conjunction with the recently devolved local Scottish Development Agency office. I commend the work that they do. They work well together and the people are of a high calibre. They have made considerable strides in the right direction. They are certainly aware of the problems, but they have limited means and a restricted remit.
What needs to be done can only be done by the Government, acting within the framework of a rural development agency which would be given specific power to operate in rural areas to retain the services and facilities that still exist, to take initiatives to help pump-prime new small businesses and to oversee future major developments. There are dozens of examples to illustrate what could be achieved in the Borders and is being achieved in other areas.
At local level, the post office at Roberton in the Borthwick valley is rumoured to be threatened by a substantial reduction in its hours of opening. A rural development agency could find quick ways to ensure the survival of such a vital service.
At regional level, there is a demonstrable need to maintain and repair timber extraction roads. Previously, European grants were available. Because we no longer have development status, the grants are no longer available. A rural development agency could make specific grants where timber extraction accelerated the need for road repairs.
At national level, there is a need to extend Eyemouth harbour. That would be a considerable asset to the entire Scottish fishing fleet. Pressure already exists in the local coastal communities on the Berwickshire coast, where the way of life is being threatened by diminishing catches and 883 financial returns. The inshore fleet and the shellfish sector would benefit, as would the storage and processing industries, if the new harbour were to be built. A rural development agency could contribute to making that new harbour a reality.
Other examples in tourism and food processing could be quoted. For example, there is a worthwhile plan doing the rounds in the agricultural community in the Borders region, the object of which is to set up a Borders sheep marketing group. It could lead to the setting up of some meat processing facilities which could have a major and positive impact on the local economy. The list is almost infinite. I could rehearse many ideas and examples from discussions I am having within the Borders region with the various interest groups. Those that I have mentioned should suffice to make the point.
I advocate making the Borders region a rural development area. I know that the Minister has corresponded with the convenor of the Borders regional council and that his hon. Friend the Member for Dumfries (Sir H. Monro) and his regional council have played a notable part in arguing for a rural development fund to be set up in their areas.
If the Government set their face against that and refuse to concede some such status, they will have to say why. They will also have to say why we, in the Borders, are being treated differently from other similar areas in the United Kingdom. There is a strong case for the Borders region to be a potentially eligible area, under objective 5b of the new formula, for European structural funds. If the Government refuse to back the region's claim, they will have to explain why they consistently fail to recognise the need to co-ordinate and fund an integrated plan to rejuvenate rural life in the Borders region and to counter the real threat of rural depopulation.
§ Mr. David Steel (Tweeddale, Ettrick and Lauderdale)I commend the persistence and initiative of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) in securing this Adjournment debate, and I am grateful to him for allowing me two or three minutes to underline one of the points that he made and to add two others. I wholly support his plea for the Borders to be granted rural development status. Much more immediately, the Government must give a positive response to the Community's revisions of its structural funds.
The Minister will appreciate that, since the removal of development area status in 1980, we have suffered from the fact that development area status exists in high unemployment areas. It is therefore difficult to compete for the attraction of new industry. Considerable opportunities are offered in the Highlands and Islands by the development board, and excellent work is being done in Northumberland by the Development Commission. We are landed between those opportunities, attempting to compete for economic development with no outside assistance. We are placing high hopes on the new wider definition of objectives and we look to the Scottish Office to push the case for the Borders which has been well prepared by the Borders regional council.
I do not want to dwell on this in my brief intervention, but the closure of the mill at Walkerburn in my constituency showed that it is difficult to get a quick response from the Scottish Development Agency because 884 its powers are severely limited. I shall say no more about that because negotiations for purchase of the mill are at a critical stage.
I wish that we could wring from the Government an undertaking for which we have asked several times—that when the South of Scotland electricity board is privatised there will be the same policy requirement in the south of Scotland as there is in the north for common pricing in rural areas. Without such a guarantee, the cost of electricity supply and repair; in rural areas is likely to be greatly increased. I cannot understand why rural areas in the north of Scotland should be treated more favourably than those in the south. I hope that the Government will eventually give that undertaking.
The Minister will know—he gave me a long written answer on Friday— that I am concerned about the way in which, suddenly, factoring of Scottish special housing in the Borders has been removed from local authorities, without any reason being given, and handed over, in my constituency, to a trust that does not yet exist. It is a most extraordinary procedure. I am pursuing the matter with the Scottish Special Housing Association and do not expect the Minister to reply to it tonight.
Housing is the main function of district councils in the Borders. They do not enjoy the powers of other district councils in Scotland. To continue eroding the powers and authority of local government is a mistake when we are looking forward to the possibility of assisting the growth and development of the Borders economy with the help of local authorities and through the previous co-ordination that we had for the development of new housing where it is needed. I am concerned that the drift to the private sector may rob local authorities of the chance to direct housing as part of economic development in the rural areas in the future.
§ 1.3 am
§ The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton)I congratulate most warmly the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on obtaining this Adjournment debate. He has raised a number of issues on behalf of his constituents and I shall attempt to respond to all of them. I have made the Secretary of State aware of the points that he made about bus privatisation. Between 1981 and 1987 the population of the Borders increased substantially.
The right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steele) mentioned housing. I shall follow up the point that he made about the South of Scotland electricity board and ensure that he receives a letter about it.
There has been no disposal of housing, as the right hon. Gentleman acknowledged. The SSHA has agreed in principle to enter into arrangements with Waverley housing trust only for the management or factoring of its Borders stock. These changes do not require the approval or consent of the Secretary of State. I was, of course, advised of the nature of the arrangement proposed, because of the wider policy implications, and have been assured that the SSHA council of management has satisfied itself that the arrangement will constitute good value for money.
Secondly, final decisions on the financial arrangements have not yet been made and will depend on the total 885 number of houses managed by Waverley housing trust at any time. The cost will, however, have to take into account the very different nature of the arrangement proposed by Waverley housing trust, so that this provides good value for money in relation to the standards of service to be provided for the tenants. I understand that there has been wide dissatisfaction among SSHA tenants in the Borders area about the standard of service provided in the past. I can therefore confirm that we are prepared to respond, through an adjustment to the grant in aid for Scottish Homes, to meet any modest increases in the cost of new management arrangements which might prove more satisfactory.
Thirdly, there is no question of the association being required to consult the tenants on a change in the factoring or management arrangements. The association has statutory responsibilities as landlord towards its tenants. It is for the SSHA, as landlord, to make appropriate management arrangements so that these obligations are fulfilled, and it is not customary to consult tenants on such matters.
In that respect the proposed arrangement between the SSHA and Waverley offers no firm commitment on future purchase of the housing stock. Any such proposals would be a matter for the SSHA or Scottish Homes in the first instance, but would also require the consent of my right hon. and learned Friend the Secretary of State. I can assure the right hon. Gentleman that such consent would be withheld unless the principles set out in the guidelines by the Scottish Development Department on voluntary disposals of stock by local authorities were properly reflected. In particular, my right hon. and learned Friend would be concerned to be assured that the tenants had been fully consulted in accordance with the provisions set out in clause 135 of the Housing Bill, which is likely to become an Act tomorrow.
Finally, I have made it clear that neither the provisions of the Housing Bill nor the separate provisions in the Housing (Scotland) Act 1988 in any way derogate from the current rights of secured tenants of the SSHA or any other public sector landlord. The new legislation will have specific safeguards by ensuring that tenants are fully consulted and have the opportunity of presenting their views.
The hon. Member's speech tended to dwell on what he sees as limits in the region's ability to diversify its economy, rather than on its potential and how best to exploit its natural assets. For example, he referred to the Borders status as a non-assisted area.
As the hon. Gentleman knows, the purpose of the Government's regional policy is to stimulate enterprise and wealth creation and to reduce inequalities in employment opportunities. Regional assistance is therefore directed to areas of greatest relative need as identified on the assisted area map. Assisted area designation is based mainly, but not wholly, on unemployment factors, and it is against such criteria that the Borders do not have assisted area status. The unemployment rates in the Borders, at 6.9 per cent., are well below the Scottish average of 12.8 per cent. and below the current average of 13.8 per cent. for assisted areas with intermediate status. There is therefore no strong case for amending the present designation.
886 I know that one of the attractions to the region of securing assisted area status is the belief that it would render the area eligible for support from the European Community's regional development fund. The new regulations governing the structural funds are currently the subject of intense negotiations in Brussels and we are negotiating hard to protect our interests. The Borders region has asked for a case to be presented to the European Commission in support of its claim for Community assistance as a rural area under the new regulations. We shall consider these claims, and those of other non-assisted areas, once the new regulations have been finalised. Funds available for such areas will, however, be limited—some estimates suggest 2 per cent. of the structural funds—and concentration on the most needy areas will inevitably be necessary.
As an alternative to assisted area status, it has been suggested that the entire Borders region be designated a rural development area. The hon. Gentleman echoed that argument in making a plea for a rural development agency. The benefits are usually seen as providing access to further financial assistance from the Government or the European Community and ensuring closer co-operation between those public bodies active in encouraging economic development. But we must be extremely clear about what additional benefits we hope to gain before we could be justified in following the rural development area route.
I am sceptical about whether such a designation would have any relevance in Scottish circumstances, even if the entire region could qualify. Unless it was combined with designation as an assisted area, rural development area status would not render the Borders region eligible for any more Government or EC support than it already receives, and, as I have already suggested. there is no compelling case for adjusting the present assisted area map.
As to improving the co-ordination of development effort in the region, I would, in principle, welcome any such improvement, but I must ask why that cannot be done within the existing mechanisms. What is to prevent the local authorities, the Scottish Development Agency and others from building on the existing relationships to improve the service to rural communities in the Borders?
§ Mr. KirkwoodThey have no money.
§ Lord James Douglas-HamiltonThe Scottish Development Agency has substantial funds, and I shall give the House some examples of what it is doing. We have often stressed the importance that we attach to the agency playing an active role in rural areas, and I know that that is acceptable to the agency's board.
The recent reorganisation of the SDA on to a regional basis is intended to improve the delivery of its services to its customers. A new expanded Borders office was opened in the summer by the right hon. Member for Tweeddale, Ettrick and Lauderdale. That office provides a one-door approach to all the SDA services: access to the agency's business development activities, investment functions, enterprise initiative schemes, property development and management, improving derelict land and other environmental work. Individual projects include its work at Newcastleton, in the hon. Gentleman's constituency, where it is working with the local community to reverse the 887 decline in population and improve the local economy by improving the environment and supporting local businesses.
In Berwickshire, the agency is working with the regional council to identify and encourage areas of economic growth. In Galashiels, those partners are looking at ways of improving the physical and business opportunities in the town centre. Throughout the region, the agency, the regional council, the Scottish tourist board and others are studying how to exploit the tourism potential of the area. The agency owns and manages more than 50 properties in the Borders, working with the local authority on specific accommodation problems. An example is the estate at Tweedbank, where all the units have been allocated, with a similar development expected to begin construction in early 1989.
The hon. Gentleman mentioned Eyemouth. The agency maintains a close interest in the proposals for the redevelopment of Eyemouth harbour. I note the hon. Gentleman's strong support for the project. The application for assistance has just been submitted to the Scottish Office for support. It is under active consideration.
The hon. Gentleman also mentioned food processing. I understand that the Borders regional council and the SDA have examined the scope for providing added value to the region's agriculture industry by introducing food processing industries. The study's findings are under consideration by both bodies, but it shows the close co-operation that already exists.
Those are just some examples of how the SDA is working to improve the Borders economy and the close links that it enjoys with the local authorities and others—
§ Mr. KirkwoodBut it does not have any money.
§ Lord James Douglas-HamiltonI am aware that the hon. Gentleman is worried about the funds. I shall draw that point to the attention of the SDA.
The SDA is well placed and well equipped to perform the tasks that it has been given by the Government, enabling it to work with the local community in promoting the Borders economy. It will be happy to give advice and assistance, where appropriate, to small businesses in the region. I hope that the extensive range of support that is available will be of great assistance.
The hon. Gentleman mentioned training. The Training Agency is actively working to increase the level of training throughout the country, and I am sure that it will be interested to learn of any specific problems affecting rural businesses. I suggest that the hon. Gentleman's constituents might like to contact the nearest Training Agency office, whose staff will be happy to solve any problems. Both the SDA and the Training Agency are there to help.
888 The provision of general infrastructure is largely a matter for the local authorities. The particular needs of rural areas are recognised in the allocations that they receive. In the present year, the Borders region's capital allocations total some £8 million and are projected to rise to £9.3 million by 1990–91. We fully acknowledge the special problems of housing in rural areas. That is why rural authorities already receive a greater share of resources available, compared to the scale of their housing stock, than do others. However, in these areas, more than anywhere else, local circumstances have to be considered and it is for local authorities, housing associations and others to determine how best to meet the needs of their areas.
It is refreshing to see how much the population in the Borders region has grown. In the perids 1971 to 1981 and 1981 to 1987, even in Roxburgh district, where the population fell slightly, the rate of decline was less than for the whole of Scotland. I acknowledge that specific problems remain, but depopulation is no longer a serious problem, except in the remote parts of the area, where there continues to be some difficulty. The Borders region is extremely attractive to tourists, and I hope that tourism will be strongly encouraged. This is one of the most beautiful parts of the world.
The Government are aware of the process of change affecting the Borders region and other rural areas. Our task is not to resist such changes, but to manage them to the benefit of the people who live and work in rural areas. That challenge is being met through agricultural diversification and the resources provided to the Scottish development agency, the local authorities and others to promote the growth and diversification of the rural economy. The mechanisms for support are well placed to help the Borders region develop its economy from the strong base that it currently enjoys. I would encourage local people to make full use of those mechanisms to secure the future of their communities.
Under the rural transport innovation grant scheme, the Secretary of State may authorise grants for the establishment, continuance or improvement of public passenger transport services for the benefit of a local community. Two applications have been received from the Borders region. One of these, the Southdean and Hobkirk community bus, was successful, and received a small capital grant. We are now actively considering with colleagues in the Department of the Environment, who administer similar schemes, how to achieve greater take-up of the resources available. If the hon. Gentleman has any ideas about this, I strongly urge that they be followed up.
§ The motion having been made after Ten o'clock on Monday evening, and the debate having continued for half an hour, MADAM DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at seventeen minutes past One o'clock.