Development Agency (Hansard, 18 October 1989)

§ 3. Mr. Foulkes
To ask the Secretary of State for Scotland when he last met the chairman of the Scottish Development Agency; and what issues were discussed.

§ The Minister of State, Scottish Office (Mr. Ian Lang)
My right hon. and learned Friend met the chairman and the agency board on 22 May and discussed a range of issues of mutual interest.

§ Mr. Foulkes
Is the Minister aware of the surprise and dismay throughout Scotland at his unprecedented attack on the staff of the Scottish Development Agency? Is he further aware, as I am from my discussions with the chairman of the SDA, that the agency faces two real problems—first, the feeling of total uncertainty because of the Government's uncertainty about Scottish Enterprise, and secondly, the lack of funds to meet the commitments, need and demand throughout the country as identified by the officers of the agency? Both those problems lie at the door of the Secretary of State and the Government, and not with the staff or the SDA board.

§ Mr. Lang
I am surprised and dismayed that the hon. Gentleman should think that I had launched an attack on the chairman or the management of the SDA. I have done no such thing. The SDA's recommendations about Scottish Enterprise were largely in tune with the proposals that the Government have since brought forward. I would have thought that today, of all days, the hon. Gentleman might have found it in his heart to stand up and welcome the SDA's decision, announced only yesterday, to launch the Cumnock and Doon Valley initiative in his constituency, to which the agency is committing £9 million over the next five years. It is a useful economic regeneration and environmental measure that would be of great value to the hon. Gentleman's constituency.

§ Sir Hector Monro
Does my hon. Friend agree that the residents of Cumnock and Doon Valley are extremely fortunate in what the SDA has done? However, does he accept that there is some disquiet in Scotland about some financial arrangements between the SDA, local authorities and private industry which now seem to be in doubt? Can he assure me that those arrangements will be fulfilled in the current financial year?

§ Mr. Lang
My hon. Friend is absolutely right to suggest that there has been some concern about the funding of certain commitments by the agency. Indeed, I expressed that concern to senior agency personnel earlier this year. I am confident that, in the light of the decisions and steps that the agency has since taken, it has the matter under control. By proper prioritisation of the apportionment of funds, it should be able to meet its commitments.

§ Dr. Godman
At the meeting was there any discussion about the Inverclyde initiative? Is there not a great deal of concern that the Scottish Office intends to extinguish the initiative in March next year? Will the Minister assure me that the Inverclyde initiative will continue under the 129 umbrella of Scottish Enterprise? Does he not agree that it is an important local initiative which should continue beyond March 1990?

§ Mr. Lang
I am not aware of any proposal by the agency to discontinue the Inverclyde initiative. Inverclyde is certainly an area in need of specific help, which is why the agency launched the Inverclyde initiative. As the hon. Gentleman knows, we have also created the Inverclyde enterprise zone, which has a 10-year life span. The measures that we are taking are beginning to generate results, which is encouraging for the people of Inverclyde.

§ Mr. John Marshall
When my hon. Friend met the chairman of the SDA, did he discuss the fear of the Confederation of British Industry that devolution would lead to less investment in Scotland and therefore fewer jobs?

§ Mr. Lang
No, Sir, that was not an issue discussed at that meeting. However, we did discuss a number of issues, on which total agreement was reached about the beneficial effects of the Government's various economic policies on the Scottish economy.

§ Mr. Dewar
Is the Minister aware that the Opposition are astonished to hear him say that he has not criticised the top management of the SDA? Did he see the report in The Scotsman on 11 October, which quoted him as being seriously concerned for some time about the way the SDA had been handling its budgets. Did he see the further report that the SDA chairman, Sir David Nickson protested bitterly to Ian Lang, the Scottish industry minister, about his public attack on the agency's chief executive. Will that do anything for morale in the agency? Why did the Minister decide to air his views in such a public way rather than take his concerns to the agency on a private basis in the hope that something could be done if the criticisms were justified?
The Scotsman report specifically states that the Minister, in arguing for enterprise companies, did so in terms that implied that the case for them was his critical view of the SDA's financial performance and the need to remove most of the agency's projects and place them under the tighter financial control that should come with enterprise companies. Is that an accurate reflection of the Government's position?

§ Mr. Lang
I did not attack the SDA's chief executive, nor did its chairman protest bitterly to me. I expressed concern to the agency earlier this summer about the possible overcommitment of agency funds, and the hon. Gentleman would have been the first to criticise me if I had not done so. As a result of steps that the agency has taken, I have every confidence in its capacity to put its house in order and to administer its funds properly.
The agency and the Government are of one mind on the suitability of local enterprise companies within the Scottish enterprise proposals. The reference in the quotation from which the hon. Gentleman drew was to the fact that each local enterprise company will have its own budget within its own enterprise company area, which will lead to tighter control on a regional and local basis than has been exercised in the past under the overall umbrella of the agency's budget.