Scottish Enterprise (Hansard, 26 July 1989)

§ The Secretary of State for Scotland (Mr. Malcolm Rifkind)
With permission, Mr. Speaker, I should like to make a statement. Last December, I published the Scottish Enterprise White Paper on my proposals to integrate the functions of the Scottish Development Agency, the Highlands and Islands Development Board and the Training Agency in Scotland. I invited comments by 31 March 1989.
I have been delighted by the volume and constructiveness of the 420 responses and by the extent of support demonstrated. In reaching my decisions, I have sought to build on that support. There was overwhelming agreement for the principle of creating two new bodies, in which the functions of the Scottish Development Agency and the Highlands and Islands Development Board would be integrated with those of the Training Agency in Scotland.
Many welcomed the name "Scottish Enterprise", but some called for the retention of the names "Scottish Development Agency" and "Highlands and Islands Development Board", and there was strong insistence from the north, whatever title was chosen, to retain the word "Islands". We are creating a distinctive new structure which will be more than the sum of its parts and which requires a new identity. I have therefore concluded that the new bodies should be called Scottish Enterprise and Highlands and Islands Enterprise respectively. The SDA and HIDB logos are widely recognised, and I see merit in retaining them to provide an element of continuity, but that will be for the new bodies to decide, as will the way that they market themselves abroad.
There was virtual unanimity for the proposition that the network of local agencies, or enterprise companies, as we now intend to call them, should have a contractual relationship with Scottish Enterprise, in keeping with their private sector focus. The constitution of the companies means that there are important issues of public accountability, propriety, control of public expenditure and value for money to resolve, and I have asked my officials to seek ways of ensuring that public funds are properly safeguarded.
In the light of comments received, I am now proposing a network of 12 companies in the lowlands and eight in the highlands and islands. I have made available a map showing the proposed areas for each company, but where consortia feel that the map that I am proposing does not fit in with their ideas, I should, of course, be willing to consider specific proposals for variation. As regards functions, I can confirm that the full range of statutory powers that the SDA and HIDB now possess will be available for Scottish Enterprise and Highlands and Islands Enterprise, and I accept the recommendations that the latter should discharge the environmental role in the Highlands and Islands currently undertaken by the SDA.
I was impressed by the extent of support for devolving substantial powers relating to enterprise creation to the local enterprise companies from the outset, and against that background, my proposals now involve a major step in the direction of local delivery of economic as well as training functions from the start. We shall, of course, continue the SDA and HIDB policies of withdrawing in favour of private sector provision wherever that is practicable and sensible.
1037 I found it a great attraction as an initial step in the SDA's approach that the enteprise companies should operate within spending limits that would enable them to take responsibility for the great majority of projects, and that responsibility for major projects outside those limits should he retained at the centre. I intend to apply that principle to both Scottish Enterprise and Highlands and Islands Enterprise. I intend also that the extent of delegation to local enterprise companies should be increased progressively.
The central bodies will have a strong strategic role and will therefore set the policy framework and monitor the local companies; design, develop and secure the implementation of projects and programmes, particularly in industry and enterprise development with an applicability across their areas; approve major projects that fall out with the companies' competence; and handle certain functional activities including major investments, inward investment attracted by Locate in Scotland, marketing and the design and implementation of major physical programmes. They will ensure that the Government's Great Britain-wide training policies and priorities are pursued and Government guarantees fully satisfied. They will also ensure that programmes in support of enterprise delivered on behalf of the Department of Trade and Industry are being satisfactorily discharged and provide central support services.
Local enterprise companies will have the following functions, depending on their capability and the spending limits agreed. In the Scottish Enteprise area, large and strategic projects apart, they will have SDA functions in respect of the development of property, land reclamation and environmental improvement projects, advice and assistance to business, and urban renewal. In the highlands and islands area, the same approach will apply to the range of HIDB functions. In both areas they will carry out the range of training functions presently delivered by the Training Agency's area offices and seek to stimulate greater involvement by employers in training. They will also have the scope to devise specific initiatives to meet local needs.
There will be differences in approach between the Scottish Enterprise area and the Highlands and Islands Enterprise area, reflecting their different population, geographical and other characteristics, but there will be an underlying consistency. I have asked officials to work up proposals to ensure that there is a clear framework within which the local enterprise companies are to operate, and that the companies have maximum flexibility, compatible with public accountability, to tailor their activities to local circumstances.
In the light of the comments received on two of the programmes at the interface between industry and education, I have concluded that the Training Agency's technical and vocational education initiative—TVEI—should now move to the Industry Department for Scotland and that PICKUP, the professional, industrial and commercial updating programme administered by the Scottish Education Department, should transfer to Scottish Enterprise and Highlands and Islands Enterprise.
The resources for the new bodies will initially be broadly those that would have been made available in total to the SDA, HIDB and the Training Agency in Scotland.
Turning now to management, many have suggested that an increase to 12 for the Scottish Enterprise board would offer considerably more scope, while retaining the 1038 efficiency advantages of a compact board. I propose a board of not less than nine and not more than 12 members inclusive of the chairman and the chief executive, who will be an ex officio member. I propose a similar approach to Highlands and Islands Enterprise but, in recognition of the fact that the number of those able to serve will be circumscribed by distance and sparsity of population, I propose a 7:12 formulation. There is broad support for our proposals that two thirds of the board should be drawn from the private sector and members of both boards will be chosen on a personal basis, for the contribution that each can make. We need the best people in their own right.
With regard to the boards of the local enterprise companies, we shall wish to see directors chosen for their individual contribution, reflecting the range of local interests. Two thirds will come from the private sector, and there will be a board of not fewer than nine or more than 12 in the Scottish Enterprise area and between seven and 12 in the Highlands and Islands.
However, the bigger the range of local interest that supports the company the better. I have been pleased by the enthusiasm expressed by the local authority sector, by education and training specialists, the voluntary sector and the trade unions for the objectives of Scottish Enterprise and their desire to be involved.
As regards staffing, it is important that staff are given a clear indication about their future. There are three aims to be fulfilled: Scottish Enterprise should have a single ethos and staffing structure, as should Highlands and Islands Enterprise; local enterprise companies should have as much freedom as possible to choose their own staff; and the arrangements should meet the best interests of existing staff.
I therefore propose that every member of staff employed by the Scottish Development Agency should be offered, three months before the establishment of Scottish Enterprise, employment on no worse terms with Scottish Enterprise, with scope for voluntary secondment to an enterprise company. I propose a similar approach for HIDB staff, As regards the training agency, every member of staff employed in Scotland should be offered, three months before the establishment of the new bodies, the choice either of employment on no worse terms with Scottish Enterprise or Highlands and Islands Enterprise as appropriate, with scope for voluntary secondment to an enterprise company, or alternatively of secondment to Scottish Enterprise or Highlands and Islands Enterprise, with up to three years to decide whether to transfer on the same basis permanently or to return to Civil Service. I am sure that the local enterprise companies will recognise the value of taking most of their staff on secondment terms from the skilled and experienced pool of existing staff, but they will also have scope to employ their own staff.
Finally, let me say how I now see the way ahead. I shall seek an early opportunity for legislation to bring Scottish Enterprise and Highlands and Islands Enterprise into being as soon as possible. As there is overwhelming enthusiasm for our suggestion that it might be possible to go ahead with some local enterprise companies in advance of legislation, within the next few weeks I shall be launching a prospectus which will invite the business community to form consortia to bid to become local enterprise companies in lowland Scotland. That will be followed by a prospectus for the highlands and islands. The companies will operate within existing legislative 1039 powers and within existing public expenditure provision. The number of consortia to be given the go-ahead at this time will depend upon the quality of bids. Consortia throughout Scotland are already making plans in the hope that the Government will take this approach. Their commitment has been a major factor in confirming to me the fact that our proposals for Scottish Enterprise are soundly based.
It gives me great pleasure to commend to the House these proposals, which have caught the imagination of the people of Scotland.

§ Mr. Donald Dewar (Glasgow, Garscadden)
That statement might be described as hard going; it reminded me of stirring very thick porridge. The rather natty, glossy brochure containing the Secretary of State's statement also contains a photograph of the right hon. and learned Gentleman with the legend "The way ahead is clear". He could have fooled all of us this afternoon.
I accept that the statement contains important issues and deals with a part of our economy in which there is no doubt about the scope for improved performance. But as the Minister knows, Opposition Members have doubts about the structure of Scottish Enterprise and the decision to merge training and the key role of the SDA in one body.
Let me make it clear to the House that those doubts remain, but there is some evidence in the Minister's statement—if one reads it carefully—that he has listened, and it would be churlish not to acknowledge that. We will, however, want to be satisfied that the role of Scottish Enterprise will not blur or blunt the enterprise and investment role pioneered by the SDA in recent years. If the Government press ahead, it will be important to ensure that the enterprise companies are a success and bring about the revolution in training that is so clearly needed. We should certainly want to see that achieved.
It is right that the right hon. and learned Gentleman has agreed that Highlands and Islands Enterprise should be created on the lines outlined and that the environmental role should be transferred to it from the SDA.
I welcome the guarantees given to the staff who, I suspect, will nevertheless face an uncertain period in the months ahead.
I have one or two specific questions. The new boards are to be based on private sector involvement, and I note the Secretary of State's statement that there is "broad support" for that principle. I suspect that that is largely confined to the private sector itself. We now know that two thirds of the board directors are to come from private industry. Does the Secretary of State accept that there is real and understandable concern about the involvement of other interests? Does he accept that there is a genuine role both for local authorities and for trade unions? I note that there were some nods in that direction in his statement, but will he undertake that the participation of those other sectors will be a key factor in deciding on the suitability of a bid?
Will the right hon. and learned Gentleman note in passing the distinction between local authority involvement as such and simply the recruitment of a local authority figure to give colour to a board? Will board members be salaried, as recommended by the SDA in its representations? Will he also say more about the realities of the power structure? We understand that Scottish 1040 Enterprise will monitor the activities of the enterprise companies locally. Will they be allowed to take over the assets and investments of the SDA and Scottish Enterprise, as it will become, as the consortium bidding for the Lanarkshire franchise has requested?
I understand that there will be a delegation of projects to the enterprise companies below a certain cut-off point. What will that be? Will it be roughly along the lines presently operated for the regional bodies of the SDA? Will the right hon. and learned Gentleman also comment on the level of independence in policy making that will he given to Scottish Enterprise?
In defining the new body's duties, the right hon. and learned Gentleman said that it will ensure that the Government's Great Britain-wide training policies and priorities are pursued and Government guarantees fully satisfied". Does that mean that the Department of Employment, as the lead body, will lay down all training policy? Will the local enterprise companies—I believe that this is very important—be able to tailor employment training and YTS to local needs? Without that flexibility, many people will think that all the talk about the practical devolution of power is no more than a sham.
Will the right hon. and learned Gentleman explain the remit of the national training task force and how it impacts on Scottish Enterprise, reporting, as it does, to the Department of Employment? Will he accept that the test will be what is delivered? We strongly support a Scottish solution to training policy, but we are not convinced that the independence of action that is required has been wrested from the Department of Employment by those plans. There must also be a willingness to fund innovation and local initiatives. Does the right hon. and learned Gentleman really believe that the present standstill budget, simply amalgamating the existing budgets, can do the job?

§ Mr. Rifkind
If my statement was a hard slog, the contribution of the hon. Member for Glasgow, Garscadden (Mr. Dewar) was a forced march. Nevertheless, I welcome the generally constructive tone of the hon. Gentleman's comments, and I will respond to his points.
I am happy to confirm that we see a genuine role for local authorities and trade unions; I referred to that specifically in my statement. We hope in the generality that salaries would not be required by the members of the boards in question, but there may be particular circumstances in which some flexibility would be appropriate, and we will consider them on their merits.
The hon. Member for Garscadden asked whether the enterprise companies would own the assets currently owned by the SDA in their localities. We certainly envisage that they will be able to have effective control of those assets. Whether the legal ownership should transfer to them is a more difficult matter, which we are considering at the moment.
The hon. Gentleman asked what would be the cut-off point for delegation to the local enterprise companies. I can confirm that that would be broadly compatible with the existing delegation that the SDA gives its regional offices. He asked whether the Department of Employment would be laying down policy on national training. The Government will lay down the policy and the Department of Employment and the Scottish Office will together determine the national framework of training policy. The national task force, to which the hon. Gentleman referred, 1041 answers both to the Department of Employment and to the Scottish Office in its advisory role. We certainly envisage that the local enterprise companies should have a significant flexibility and autonomy within their frameworks.
It would appear that the only major difference remaining between the Opposition and the Government is over the fundamental question as to whether the SDA and the Training Agency should be merged into a single body. The hon. Gentleman said that he has doubts about that structure and he said today, as he has said on a previous occasion, that the Labour party would prefer two free-standing bodies in Scotland instead of a single agency. He is in very lonely company in respect of that view.
The House might like to know that 297 respondents to the White Paper favoured a combination of the SDA and the Training Agency into a single agency and only 17, including the Labour party, expressed the view which the hon. Member for Garscadden has professed today. Therefore, the hon. Gentleman will agree that, although he is entitled to his view, it is not shared by Scotland. The overwhelming response from right across the industrial, political and economic spectrum in Scotland supports the Government's proposition and disagrees with the view that was expressed on behalf of the Labour party.

§ Mr. Allan Stewart (Eastwood)
Will my right hon. and learned Friend agree that the hon. Member for Glasgow, Garscadden (Mr. Dewar) found it difficult to criticise his first statement and finds it impossible to criticise his second? I warmly congratulate my right hon. and learned Friend on spelling out in detail the Scottish Enterprise proposals which will be warmly welcomed in Scotland. What does he envisage as the role of enterprise trusts? There is considerable scope for enterprise trusts to continue their excellent work under Scottish Enterprise. Will my right hon. and learned Friend say how they will work?

§ Mr. Rifkind
Yes, I certainly see a continuing role for enterprise trusts. As my hon. Friend will be aware, they essentially deal with much smaller localities, rather than the larger geographical areas that are covered by enterprise companies. I have no doubt that the enterprise trusts, as they have already publicly said, will wish to be involved in encouraging local consortia to come forward, and be involved in other ways in continuing to stimulate the local economy in the constructive way that they have already demonstrated.

§ Mr. Tom Clarke (Monklands, West)
May I ask a constituency question first? As it is not clear what local enterprise companies Strathkelvin district council may be associated with, will the Secretary of State clarify the matter? Secondly, as the Secretary of State referred to the halcyon days when he arrived at St. Andrew's house as a young Minister, pro-devolution and all the rest, he might recall that, at about that time, there was a committee called the Stodart committee, of which I was a member. Based on the evidence that it received, it strongly supported the role of local government in industrial promotion and enterprise.
Has the Secretary of State received any evidence to the contrary? Does he accept that many local authorities in Scotland, including Monklands district council, feel that they have a contribution to make, that the Government are deliberately ostracising that contribution, that that is 1042 not in the interests of Scottish Enterprise or Scottish industry, and that the Stodart committee could have told the Government so?

§ Mr. Rifkind
On the two points that the hon. Gentleman has raised, first, Strathkelvin district council would come under the proposed Dumbarton enterprise company, and that is made clear on the map that is available to hon. Members. On the hon. Gentleman's second point, his comment is not fair. He will recall that, in the allocations that we gave local authorities for the current year, there was a particularly generous increase in the general services allocation for the purposes of industrial workshops in their areas. If that was not a recognition of the contribution that can be made in matters referring to the local economy, it is difficult to know what would be.

§ Mr. Alick Buchanan-Smith (Kincardine and Deeside)
I welcome my right hon. and learned Friend's statement for the very constructive and full way in which he has responded to the representations that he has received. Will he say a little more about training? Does he acknowledge that there is not only a shortage of skills but a need for new skills in Scotland and that, in the midst of all the new business enterprise, the importance of training should be given a high priority? Is my right hon. and learned Friend getting a constructive response from the Convention of Scottish Local Authorities and the Scottish Trades Union Congress for his efforts?

§ Mr. Rifkind
Clearly, training is important. There are clear signs from the STUC and from the Convention of Scottish Local Authorities that, despite their original proposals to boycott the new training scheme that was introduced by the Government, they will seek to become involved in the enterprise companies, in the knowledge that that will involve co-operation in the delivery of training on the basis of the Government's current training policy. I welcome what appears to be a change of heart in that respect.

§ Sir Russell Johnston (Inverness, Nairn and Lochaber)
Is the right hon. and learned Gentleman aware that both his statements have been incredibly long-winded? It appears that he has a future as a speaking clock, because the enormity of the statements was barely concealed by the rapidity of his delivery.
I ask two questions. First, on the availability of business men to serve on the boards that are to be established, is he satisfied that there are enough competent people to go around and to make them work properly? Secondly, on Highlands and Islands Enterprise, is he satisfied that the differential that can now be provided is sufficient to make the area genuinely attractive to industry?

§ Mr. Rifkind
The speaking clock is universally recognised as both accurate and of great public benefit, so I am happy to be compared with it, if the hon. Gentleman chooses to do so.
In response to the hon. Gentleman's detailed questions, the original concern or scepticism of some people about whether the business community would come forward has been completely overtaken by the evidence now available to us. Even in anticipation of the statement, consortia throughout Scotland were already being formed with a view to coming forward as soon as the Government invite them to do so. That is extremely encouraging. The new 1043 opportunities available in the highlands and islands where, for the first time, training will be controlled locally by the Highlands and Islands Enterprise and local enterprise companies, are a dramatic change in the opportunity for the north of Scotland to control its own destiny.

§ Sir Nicholas Fairbairn (Perth and Kinross)
May I congratulate my right hon. and learned Friend on his excellent statement this afternoon, even if it was a little complicated and long for the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) to understand before he fell asleep? Will he note that the new Perthshire enterprise venture set up with such enthusiasm in a partnership between private and public enterprise is an example of what his policies are achieving? Will he remind the House again this afternoon, and unceasingly, that these excellent advantages can be maintained only if we do not drive away investment—from wherever it comes—by having an Assembly, separation or differential taxation?

§ Mr. Rifkind
I certainly congratulate the Perthshire venture. It is an excellent example of the local business community and others coming together to help the local economy, and it is to be welcomed. My hon. and learned Friend's remarks are also correct. Clearly, anything that discourages investment is to be deplored and my earlier statement today on business rates will be another way in which the potential disincentive of higher taxation will be removed, to the benefit of our economy.

§ Mr. Ernie Ross (Dundee, West)
Exactly what will happen to the Dundee project, which is the only example in Scotland of a one-door approach to incoming industry within this new framework? It would be an absolute disaster if the project were simply absorbed into Tayside. How many of the 297 responses to the White Paper did not suggest that an emphasis different from the national emphasis on training was needed in Scotland, particularly given the experience of the previous mode B young people who find it extremely difficult to stay in training employment as it is presently structured?

§ Mr. Rifkind
I, too, am happy to acknowledge the great importance of the Dundee project. I sought to make it clear in my opening remarks that, apart from the matters delegated to individual enterprise companies, certain projects would continue to be dealt with by Scottish Enterprise, either because of their national significance or because of the size of the resources involved or the scale of the project. We shall consider existing projects and decide which should be in that category. Dundee may be one, but I should not like to come to a conclusion on that without studying the scale of the resources involved and other matters.
On the hon. Gentleman's final point, the 297 representations on the White Paper were about the basic question whether the Scottish Development Agency and the Training Agency should combine into a single agency. Two hundred and ninety-seven said that they should, and 17 said that they should not.

§ Mr. Adam Ingram (East Kilbride)
The Secretary of State said that his announcement would catch the imagination of the people of Scotland, but that will not be the case in the new towns in Scotland. Two weeks ago, the Secretary of State announced his intentions about the 1044 future of the new towns. It will be a matter of some concern in the new towns that no mention was made today of the relationship or the role of the new towns in these new enterprise agencies. Will the Secretary of State explain how the new towns will interface with the new enterprise agencies? Which body will have responsibility for the on-going development of the new towns prior to the dissolution of the development corporation boards?

§ Mr. Rifkind
I am sorry, but I am not sure that the hon. Gentleman is entitled to say that the proposals have not caught the imagination of the people in the new towns, because as far as I am aware they have been welcomed there as well. With regard to the precise implications—[Interruption.] I am talking about the responses to the White Paper. On the precise implications, the new towns and their successor local development companies may seek to join a local enterprise company as participants in a consortium, or may act as sub-contractors to local enterprise companies to provide specific local economic development services or, at the instance of Locate in Scotland, they may contract with Scottish Enterprise direct to provide sites for inward investment. Therefore, there are equally exciting and important opportunities for the new towns as well as for the rest of Scotland.

§ Mr. Mike Watson (Glasgow, Central)
Does it not make a mockery of the so-called consultation process when, as the Secretary of State has said, after several hundred responses, it is clear that many of them have been ignored, and when he confirms that the boards of the local enterprise companies—as we hear they will now be called—are to comprise two thirds private sector nominees? Is it not far more important that the recommendations that were made in many of the responses to the consultation process, calling for local authorities, trade unions and the voluntary sector to be involved, should have been taken on board, and should that not happen before a Bill is brought to the House? I noticed that the Secretary of State referred to the general role of trade unions and local authorities, but will he spell out what that will mean, because I fear that that role will be woefully inadequate?

§ Mr. Rifkind
I am afraid that the hon. Gentleman is misinformed. There has been a wide welcome for the principle that local enterprise companies should have boards with two thirds of the members drawn from the private sector. That has not been a matter of controversy. The overwhelming number of representations received has supported that view. There has also been the view, which the Government have also accepted, that local authorities have a legitimate role to play in the enterprise companies. My statement acknowledged that point. I expect that, when consortia approach Scottish Enterprise in most of Scotland, they will come primarily from the private sector, but I shall be surprised if they do not also include local authorities, the voluntary sector and possibly trade unions and others.

§ Mr. William McKelvey (Kilmarnock and Loudoun)
Will the Secretary of State take steps to ensure that the mangement boards are not loaded in the same fashion as the health boards in Scotland have been loaded with Conservative or former Conservative supporters? Will he guarantee that a maximum will be set so that only two thirds of the management boards will be drawn from the private sector? I hope that the members of the 1045 management boards who are drawn from the private sector will he Scottish business men who live and work in Scotland.
On the point about the area enterprise boards overseeing certain projects, what would the Secretary of State consider to be a large project that would not necessarily be in their domain? Can he guarantee—I should welcome the formation of the enterprise areas a little less cautiously if he could do this—that the Cinderellas who have suffered under the redistribution of SDA grants and moneys before, such as Kilmarnock, will no longer fail to receive their fair share of the budget that is available centrally?
There should be two separate training bodies. One reason why we want a separate body for training is to ensure that training is properly carried out and, most importantly, that the business men who so anxiously want to manage these enterprises have the opportunity to play their part in what should be proper training. Furthermore, those who are training should be paid the appropriate trade union rates.

§ Mr. Rifkind
I agree with the hon. Gentleman that industry should be prepared to make its contribution to the cost of training. That is something that one hopes that industry will acknowledge and to which it will respond. On the hon. Gentleman's point about the membership of the boards of the enterprise companies, I agree that what we are looking for are senior figures from Scottish industry who will he able to make a major contribution to the work of the enterprise companies in their locality.
The hon. Gentleman asked for an example of a project which, despite its local impact, might be considered more suitable to be retained for central control. The Glasgow garden festival is an example. If the festival had been coming into existence under the future structure, although its impact was intended to be within Glasgow, the scale of the project would have justified its being dealt with by Scottish Enterprise rather than by individual enterprise companies. We shall have to consider individual projects and determine that issue on the basis of such criteria.

§ Mr. Alex Salmond (Banff and Buchan)
Yes, but why has the Secretary of State maintained the two-thirds business majority on the boards against calls for a genuine partnership between the public and private sectors, especially when those calls have come not just from every Opposition party but also from the National Federation of Self Employed and Small Businesses Ltd. and from Mr. Ron Lander, the chairman of the CBI's training committee in Scotland? Does not the fact that the Secretary of State has maintained the two-thirds majority betray the political bias behind the plans and show that they are a Tory solution to Tory needs rather than a Scottish solution to Scottish needs?
Why did the statement make no mention of the European dimension? Is it not the case that the Department of Employment processes applications for the European social fund, which is a major provider of training funding? Why has that role not been delegated to the Scottish Office or Scottish Enterprise? In the light of the Secretary of State's earlier remarks about the relative positions of the Scottish Office and the Department of Employment in relation to training, does he not remember 1046 that the White Paper announcing these proposals described the Department of Employment as the lead Department in these matters? Has anything changed?

§ Mr. Rifkind
It was described as the lead Department because it is the lead Department. There has never been any secret of that fact. It would be odd if it were not the lead Department, given that it covers such a large proportion of the population of the Unied Kingdom. This is not the occasion to have a debate on European matters, but I believe that my statement is free-standing in its own right.
In response to the hon. Gentleman's initial points, I advise him that he should study the representations before he makes a slight fool of himself——

§ Mr. Salmond
I have the submissions here.

§ Mr. Rifkind
In that case, the hon. Gentleman has even less excuse for the questions that he has asked—[Interruption.] Yes, indeed, but the two-thirds private sector ratio has been widely accepted right across the spectrum of opinion. What people were quite properly——

§ Mr. Salmond
What about Mr. Ron Lander?

§ Mr. Rifkind
The hon. Gentleman refers to one individual, as if one individual out of 420 should determine the course of the Government's response——

§ Mr. Salmond
Mr. Lander is the chairman of the CBI's education and training committee.

§ Mr. Rifkind
Well, the CBI strongly supports what is in the White Paper. The fact that the hon. Gentleman has identified one individual who takes a different view shows the paucity of his case. The balance that the Government are proposing in the White Paper has been welcomed right across the political and industrial spectrum. The hon. Gentleman may not like that, but I am afraid that he will have to live with it.

§ Mr. Norman Hogg (Cumbernauld and Kilsyth)
Will the Secretary of State return to the point made by my hon. Friend the Member for East Kilbride (Mr. Ingram), and will he undertake to write to the chief executives or the chairman of the Scottish new town development corporations setting out in some detail the precise relationship between what is proposed and the existing development corporations? Could he then go a little further and deal with the question of the new development companies so that there is absolutely no doubt about the role of the new towns in the new context?

§ Mr. Rifkind
Yes, we will happily give such advice to the new town development corporations. The answer that I gave the hon. Member for East Kilbride (Mr. Ingram) related both to the existing new town development corporations and to the future local enterprise companies. We shall happily discuss the matter with the new towns so that there is a clarity of understanding about this matter.

§ Mr. Charles Kennedy (Ross, Cromarty and Skye)
If I followed the Secretary of State's statement correctly, he suggested that, as well as its training function, Highlands and Islands Enterprise will take on the environmental function from the SDA. Will he give an absolute guarantee that it will have a requisite increase in its finances for both those functions, so that its prime and legislative 1047 development role is not undermined or diluted as a result of the greater range of activity that it will have to undertake?
Secondly, I stress to the Secretary of State that at the weekend my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston), in anticipation of this week's statement, met representatives of the CBI in the highlands and islands of Scotland. [Interruption.] I assure hon. Members that it was a perfectly open meeting. Those representatives of the CBI were exactly the kind of business men to whom the Secretary of State will be looking to make this a success. One issue about which they were anxious was whether this would lead to a diminution in the almost unique status of the existing HIDB within Scotland, as it is brought more on a par with Scottish Enterprise generally, and whether the potential is there for this to be a long-term disincentive or disadvantage for the highlands and islands as a whole. Will the Secretary of State address himself to that, too?

§ Mr. Rifkind
Yes. We have said that the initial funding of both the new agencies would correspond to the funding that currently goes to the various bodies that deal with those matters. In the case of the highlands and islands, if one combines, for example, the existing funding of the HIDB with that of the Training Agency in Scotland, we are talking of funding of about £50 million. I take the hon. Gentleman's point about the environmental aspect. We essentially wish to start from the position of replicating the existing funding in the highlands, wherever it comes from, and that will go to Highlands and Islands Enterprise.
On the hon. Gentleman's second point, I believe that he can be greatly reassured, because, far from being to the disadvantage of the highlands and islands, we are saying that major areas of policy and resources, which up to now have been carried out within the highlands from outside, will in future be determined within the highlands and islands themselves. For the first time, Highlands and Islands Enterprise will have many millions of pounds to spend on training in the highlands and islands—training which up to now has been run from Sheffield. That will now be with the local enterprise companies. There is the point, too, about the environmental functions of the SDA now being controlled from Inverness rather than from Glasgow. The hon. Gentleman and his colleagues can properly recognise what is being proposed as an exciting and substantial decentralisation of power to the highlands and islands.

§ Mr. John McAllion (Dundee, East)
The Secretary of State has tried hard to give the impression this afternoon of an entirely Scottish approach to the important area of training. Will he tell us whether the Department of Employment will continue to have a remit for training provision in Scotland, and, especially, whether the pilot schemes for the workfare-type jobs interview guarantee scheme will continue to go ahead under the Department of Employment, or whether it will be transferred to Scottish Enterprise? In any case, whoever has responsibility, will the Secretary of State guarantee that there will be comprehensive consultation with the local communities before implementation of that scheme?

§ Mr. Rifkind
There will be relatively few residual functions of the Department of Employment in Scotland, 1048 but, overwhelmingly, its current responsibilities are being transferred, with the appropriate resources, to the Scottish Office. There will be a continuing joint responsibility for national training standards in the United Kingdom as a whole, where both Departments will liaise in order to identify Government policy. Within that national framework, we accept that, both at Scottish level and in the various parts of Scotland, there will be substantial flexibility and local autonomy that has not existed up to now and will be a major feature of future arrangements.

§ Mr. Harry Ewing (Falkirk, East)
Does the Secretary of State understand that these are very wide powers, which have been given to a very small number of people, drawn from a very narrow band of Scottish society, over a wide area of Scottish society and highly unrepresentative of Scottish society? That in itself requires the most extensive debate. The Secretary of State mentioned public accountability, but to whom will those local enterprise companies be publicly accountable? Will it be the local authority or the Scottish Office and, through the Scottish Office, the House? The Secretary of State did not mention Locate in Scotland, possibly because nothing is happening in relation to it. I would be grateful if he could confirm that. Finally, if legislation is required—when?

§ Mr. Rifkind
I shall take the hon. Gentleman's points in reverse order. My statement said that I envisaged early legislation to create Scottish Enterprise. However, even in advance of that legislation, much will be able to be achieved under the existing statutory position.
I am happy to confirm that Locate in Scotland is not affected in any way by the statement. Enterprise companies will be accountable to Scottish Enterprise in the first instance and, through Scottish Enterprise, to the Scottish Office and thereby to Parliament as a whole.
The hon. Gentleman said that those powers will be used by unrepresentative individuals. I ask him to compare what we propose with the existing situation and to see which he prefers. At the moment, the training powers are carried out by people answerable to the Training Agency's headquarters in Sheffield, while the SDA powers are exercised by officials of the SDA in the localities in question and are rarely considered in any depth by SDA headquarters. Compared with the status quo arrangements, a local enterprise company, which consists both of the private sector, and I am sure of local authorities and other local interests, will be considerably more representative and able to identify the needs of the local community than the existing arrangements, which, of course, have existed for a good many years.

§ Mr. Dick Douglas (Dunfermline, West)
Will the Secretary of State acknowledge that one of the intriguing aspects of discussing this initially with Bill Hughes was the fact that he suggested that money should be taken down to the local level? What appears to be happening is that we are creating multifarious bureaucracies. The real danger is that money, especially for training, will not get down to local level. How does he propose to devise a mechanism to obviate that?
Will the Secretary of State give us some indication of how those local companies will be registered? Will they be companies registered by guarantee, and will we, additionally, have an annual report on Scottish Enterprise and on Highlands and Islands Enterprise, too, so that we 1049 might have an opportunity of discussing those matters, appropriately in Scotland? One thing that we should keep an eye on and ventilate in Scotland is this proposed set-up.

§ Mr. Rifkind
I am happy to pay credit to Mr. Hughes for the stimulation that he, as well as others, gave to these ideas. These proposals represent a massive transfer of resources to the local level. At the moment, the effective decision on training are taken in Sheffield and those on the functions of the SDA in Glasgow. We are proposing a contractual relationship with enterprise companies, which have been brought out by the local communities, where they will not be carrying out simply a policy laid down by Government as agents. We would clearly not attract people of calibre to carry out someone else's policy. They will be given real decision-making powers in important areas, which is why the business sector and others have already responded so enthusiastically to what is proposed. I agree that those matters should be debated and discussed, for which there will be many opportunities. What is encouraging is that the public response to the White Paper has given rise not only to so many comments from so many quarters, but such a unanimous endorsement of what is proposed.

§ Mr. Dennis Canavan (Falkirk, West)
When does the Secretary of State expect Scottish Enterprise to achieve a reduction in Scottish unemployment to the level which existed at the time when the Scottish Development Agency was set up by the last Labour Government?

§ Mr. Rifkind
The hon. Gentleman will recall that, after the SDA was set up by the last Labour Government, unemployment—no doubt for other reasons—substantially increased during the remaining period of that Labour Government. It increased further during the early years of this Government, but I am pleased to say that it has been dramatically falling over the past two years and looks set to continue to fall. The Scottish CBI's latest survey shows substantial optimism in Scottish industry. No doubt that is because of a clear realisation that the hon. Gentleman is unlikely to be sitting on this side of the House in the foreseeable future.

§ Mr. Bill Walker (Tayside, North)
My right hon. and learned Friend will be aware that Scotland has a unique history of skill training—that, certainly during the industrial revolution and afterwards, Scotland led the world in its level of skill training. Will my right hon. and learned Friend confirm that this new training arrangement will allow training to be conducted in such a manner that, if one wished, one could extend the training period to three years or more to give the opportunities for the levels of skills that are required to meet the needs of the future?

§ Mr. Rifkind
We certainly envisage that, increasingly, Government requirements will not be expressed so much in terms of the procedure and the detailed way in which training is delivered, as in terms of output and the results. If we are satisfied that enterprise companies are producing the results, the out-turn and the quality of training that is required, we shall be happy for them to have a significant flexibility and autonomy as to how they do that throughout Scotland.