HC Deb 14 December 1990 vol 182 cc1298-306

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kirkhope.]

2.30 pm
Mr. Archy Kirkwood (Roxburgh and Berwickshire)

I invite the House to turn from the urgent need for action on overseas development to the need for action on rural issues in the United Kingdom and in particular in the Borders. I hope to illustrate the need for a more co-ordinated Government approach to rural development in the Borders, but the argument can be extended and a similar case made for other landward areas of Scotland furth of the highlands and islands. Some may argue that it could also be extended to the Highlands and Islands development board because the landward areas in the whole of Scotland require urgent examination from time to time. Since 1979 that task has not been addressed with sufficient urgency by the Government.

The Borders covers an area of 1,820 sq m. It has a population of 102,000 and is therefore one of the most sparsely populated regions in Europe with an average of 122 people per sq km. Interestingly, that compares with the average figure for Scotland of 65, a United Kingdom average of 231 and a European Community average of 142 people per sq km. The dispersal of population affects every aspect of public policy. It affects transport in terms of access and cost, the provision of education, and especially the provision of adequate primary schools in rural areas. It has consequences for the cost of living, given the increased costs of transport and other factors.

The rate of pay in manufacturing industries in the Borders is low. The dispersal of population also affects social work provision, planning development and housing. The provision of services in the area cannot ignore that spread of population and the difficulties of topography and geography.

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

My hon. Friend's argument was given further weight by this week's report from Shelter, which campaigns for the homeless, saying that homelessness has risen faster in the rural areas of Scotland than in the urban areas because of the lack of rented housing.

Mr. Kirkwood

I am grateful to my right hon. Friend, who succinctly raises a matter that I intended to mention. It is worrying that problems which were previously considered urban are now being visited on people in rural areas. The Government will ignore that at their cost. Anyone who sets out to paint a fairly bleak picture of the Borders would not have to look far for evidence to suggest that things could get extremely bad.

Agriculture is currently facing a great deal of uncertainty. The Borders have less-favoured area status and receive special provision. The livestock sector in the Borders is suffering great uncertainty and has experienced substantial reductions in net farm incomes over the past 12 months. We are apprehensive about the hill farm review, which is due out in the next few weeks and may be able to do something about that problem. In the short term, the Government should increase support in the hill livestock compensatory allowance for the livestock industry so that it can see its way through to next year, never mind the years beyond. The arable sector is also waiting with bated breath to learn its fate at the hands of the GATT negotiations. That is a changing situation. The talks broke down last week and are to be resumed next year, but there is a widespread feeling that the Government were all too willing to sell the industry short. Despite the position taken by British Ministers, the EC Commissioner for agriculture, Mr. MacSharry, has bought some valuable extra time to ensure that a living can be made in the arable sector.

It is not an exaggeration to say that if farmers cannot make a living in areas like the Borders, those areas cannot prosper, farming will suffer, and the whole rural economy in the landward areas of Scotland will be in danger of collapse. The importance of a sustainable agricultural sector in such areas cannot be overstated. If agriculture were to fail, the consequences would be great. The same can be said of the future of the fishing industry. The coastal communities that I represent on the eastern seaboard of Berwickshire are uncertain about their future. Towns like Eyemouth depend on the continuing prosperity of the catching sector of the inshore fleet and on the onshore processing industry. They ask me what future they are likely to have. Even now, the community is considering greater restraints on the fishing industry for 1991. The total allowable catches may be cut, the capacity of the fleet may be cut and the supplies of raw material to the fish processors will decrease so much that it will make it almost impossible for them to plan processing profitably unless they turn to fish imported from Canada, Iceland and elsewhere.

The fishing and agriculture sectors are under much pressure and the textile industry is facing a testing time. The Minister will know that in the past few weeks, three factories in Hawick in my constituency have closed, with the loss of hundreds of jobs. The latest is the closure, announced yesterday, of Hawick Co, with the loss of 80 jobs. The textile industry is trying to cope with difficult circumstances, including climate changes, changes in fashion and style, increases in the price of raw materials, high interest rates and fluctuating exchange rates. It is waiting with bated breath to learn what agreement, if any, the GATT round will achieve in the transitional phasing-out of the multi-fibre arrangement, linkage of strengthened rules and disciplines within the new negotiating process in the GATT talks and the all-important access that it needs to third-country markets. In addition, the electronics industry is experiencing ever-greater pressure from overseas suppliers and is having to contend with high interest rates and fluctuating exchange rates.

The future does not look good in terms of the established, stable base and methods of producing wealth, creating employment and sustaining jobs in the Borders. A gloomy picture could be painted, but, while none of that is scaremongering and all of it is realistic, the future need not be grim. With a fair wind and sensitive support from central Government, working in co-ordination with the local authorities, the future of the Borders could be rosy. I do not want to denigrate the Government's provisions. They have put extra money into roads and electrifying the east-coast route, and into other departmental budgets in a helpful way. Unless there is a more co-ordinated approach to the way that the problems interface in a rural area as disparate as the Borders, the future will be more bleak than it need be.

We must remember that since 1979 there has been a systematic withdrawal by central Government of a whole series of regional support measures. The start of the withdrawal of assisted area status began in 1979, and it was eventually phased out in August 1982. If that package of regional support existed today, the job creation capacity and potential of the Borders region would have been much greater. In support of that agreement, I quote evidence produced by the Industry Department for Scotland in a research paper published in July 1988. It concluded: Had the package remained in effect, the study area would contain more enterprises better able to compete and provide more jobs than they are likely to do. I subscribe strongly to that view.

The Borders region no longer has any sort of development status, and potentially serious consequences flow from that. We are no longer eligible for any assistance from the European regional development fund in Brussels. In April 1985 we lost priority status for the European social fund, so we are denied access to that potential source of assistance. We have no access to any structural fund, although I am aware that there are discussions about the criteria for that. We made an application the last time the list was published for the areas that were eligible, but the Borders region was not accepted for that initial list. We shall continue to argue that we should be on the list. Almost by definition, we do not have access to urban aid and the systems of support that are used to great effect in the central industrial belt of Scotland.

The main justification for removing assisted area status, which has left us with no assistance at all, appears to be based on the fact that the Borders region has relatively low unemployment. The Government must reconsider the criteria for determining which areas are suitable for assistance. There is an acute shortage of officially published statistics for rural areas. There is no accepted series of statistics and data that have any appreciation of rural factors and indicators. The latest example of that, which has caused much public discussion, is that the Department of Employment has been unable to tell us the average income in the Borders region. I understand that there are technical problems because the Department does not have a large enough base from which to draw the data. That means that the Borders region is the only mainland region that does not have access to figures showing the average net income figure. It leaves the Government in a difficult position when trying to judge whether the Borders region is eligible for the different sorts of assistance. The Government are relatively ignorant of rural problems, as are associated public bodies and agencies.

The SDA has done much valuable work in terms of environmental improvements and support services, but there have been great constraints on the economic instruments that it has been able to use in rural areas, particularly in the Borders. For example, the valuable scheme to sponsor the development of rural workshops, which provided conversion grants for rural properties so that they could be transformed into industrial premises, has been withdrawn. I emphasise the potential in the Borders for local enterprise companies, and I certainly wish them well. However, when Scottish Natural Heritage starts in April, it might be much more effective if Government and EEC funding were made available to it.

There is concern about incomes in the Borders, but I have already referred to that in passing and will not dwell on the point. My right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) talked about housing, and I wanted to mention the increasing homelessness that we have been suffering recently. Access to transport is also a great problem, particularly for those living in the Borders region, and I cannot see it getting better.

I say in a non-partisan way that the Government must confront the cost of fuel and, for environmental reasons, they must impose constraints on the extent to which people use petrol and diesel. That will create major problems for people living in disparate areas. Under a simple price mechanism, some people will have to pay through the nose. A solution that might suit Trafalgar square could be unacceptable in the Borders.

Does the Minister acknowledge that rural needs cannot be measured simply by unemployment rates, and will he take other indicators, such as income levels, into account in the future? Does he accept the need for a rural areas strategy, with proper co-ordination of all Government agencies? Does he accept that the programmes of publicly funded rural workshops and factories are essential if jobs are to be created? Does he acknowledge the vital importance of the social aspect of the economic work of the LECs and other agencies? Community facilities are just as important as economic measures in rural areas. Finally, does the Minister accept that local authorities and rural voluntary agencies have a continuing and vital role in providing a successful rural development programme in the Borders and elsewhere?

2.47 pm
The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton)

I congratulate the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on his success in achieving this Adjournment debate. It feels like an annual progress report, because the hon. Gentleman's previous debate was on 28 July 1989. Nevertheless, I am glad to respond today.

The right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel)—who had to rush off for another engagement—mentioned housing. We have put in place Scottish Homes' rural strategy, and all aspects relating to rural areas, including homelessness, will be addressed. Also, the Tweedbank development will assist in the provision of housing for rent in the central Borders. That is another major project under way by Scottish Homes. I strongly recommend that the councils keep in close touch, which I am sure they will.

I am aware of the redundancies mentioned by the hon. Member for Roxburgh and Berwickshire, but there is also good news. Slumberdown International of Hawick has announced a £2.5 million joint venture that will provide 40 new jobs immediately and 100 over the next two or three years, which is encouraging. As to Tweeddale, Ettrick and Lauderdale, Shanks and MacEwan has won orders worth £51 million, most of them concerned with road and bridge building works, and other new book orders are worth £4.5 million. One must take the whole picture into account.

I pay tribute to Borders regional council, which has taken a far-sighted attitude to the region's development. It mounted a three-day conference, "Rural Development: Future Strategies", at which the right hon. Member for Tweeddale, Ettrick and Lauderdale and I both spoke. That conference and the comments made by the Member for Roxburgh and Berwickshire today suggest that there is a considerable consensus on what requires to be done to secure the future of rural communities, especially the Borders.

We might identify three main elements of that consensus. First, we agree that development must be sustainable, meaning that the local community and its culture should, if at all possible, be enhanced by development and certainly not damaged. Secondly, decisions should be made by local people. They are aware of the particular opportunities available to the community, and the strengths of the community, which can be exploited to the advantage of all who live there. Thirdly, there should be a co-ordinated framework of policies within which those decisions can be made. I shall return to that point in a moment.

We believe that the Scottish Office has taken significant steps to ensure that those elements are in place. At the end of his speech on 28 July the hon. Member for Roxburgh and Berwickshire gave me a stern warning that he wished to see a strategy for rural development. We have done much since then towards developing that aim. The Secretary of State gave me the task of co-ordinating our policies for rural areas and I have adopted the following objectives: To establish a coherent and integrated policy framework within which those who live in rural areas can derive improving standards and quality of living by using the local resource base in a sustainable way while maintaining the environment. Within the Scottish Development Department I have a small but high-powered team assisting in that task. I am watching all the policy initiatives within the Scottish Office to ensure that they conform to the ideas set out in that aim. Other departments and bodies, such as the Forestry Commission, the Countryside Commission for Scotland, the Nature Conservancy Council, the Scottish Development Agency and the Highlands and Islands development board are aware of the vital need for a co-ordinated response and approach.

I recognise that there are continuing calls for the Government to set out a rural strategy. Such calls suggest that it is possible and sensible to identify common features in rural areas in all parts of Scotland. In many ways that is a difficult task. While rural areas share the characteristics of low population density and an economy in which agriculture figures large, they have as many features that differentiate them as those that join them. The highlands of Scotland and the Borders are both rural areas, but obviously have different outlooks. In my view, the right approach is to establish a unified policy framework, involving not only Scottish Homes but local enterprise companies and Scottish Natural Heritage, each of those bodies with a local network working closely in co-operation with local authorities. In other words, since our previous debate we have been thinking of developments and developing strategies to meet the needs at local level.

For those reasons we have placed an emphasis on creating enabling frameworks, so that local people can tackle the issues facing their areas in their own ways. The local enterprise companies which are now being set up, will provide the ideal medium for grasping local employment and training opportunities. We made it clear to Scottish Enterprise that we expected to develop strategies appropriate to rural areas, in consultation with the local enterprise companies. Most of the activities will be undertaken by local enterprise companies, in partnership with local communities, to identify the needs, opportunities and priorities for their areas. To help them achieve that, local enterprise companies will have a significant amount of delegated responsibility to commit public expenditure—up to £250,000 on any one project—and discretion to devise specific initiatives to stimulate development, reflecting local circumstances. We believe that that local involvement is the best way to stimulate development in the rural, as well as the urban areas. Scottish Enterprise and the local enterprise companies will ensure that appropriate account is taken of rural communities. We expect that local enterprise companies will provide assistance and advice tailored to the needs of their areas.

Locally based help will also be available from the new bodies that we have set up and those to come. The new Scottish Natural Heritage body is at present being considered in another place. When it begins operations in April 1992, it will have a network of local offices that will enable a sensitive and practical approach to be developed at local level. It will operate in partnership with the many bodies having an interest in the natural heritage, which is a major concern in rural areas. It will create better opportunities for positive action in the use and management of Scotland's natural heritage, and it will seek to promote the sustainable use of that heritage.

In housing, too, Scottish Homes has been active in considering the interests of rural areas. From its beginning, it has adopted a devolved system of offices and a matching system of devolved decision-making. The hon. Gentleman will recall pressing such ideas in Committee on the Bill setting up Scottish Homes. We agreed that this was the way forward. Recently, Scottish Homes published its rural housing strategy, which will be fundamental to matching up housing provision to the needs of the rural community.

I am pleased that we have been able to approve the general thrust of the Scottish Homes' rural housing strategy. I accept that in some areas the scale of need may be such that grants are required on a small scale. I have also been able to approve the proposals for grants to individuals and to make such adjustments as were required to the guidance on planning controls. Further work is required on some of the issues identified during the consultation period, but I am confident that the funds that we were able to provide will mean that there is no delay in beginning action now to improve the housing conditions of many people in rural areas. The Scottish Homes' district plan for the Borders will help identify priorities across the housing spectrum. I am, in particular, pleased that a major central Borders project is under way—the Tweedbank development, which I mentioned previously.

In common with a number of successful Scottish rural areas, the population of the Borders is growing. Between 1971 and 1989, the Borders region grew by 4.7 per cent. while Scotland as a whole showed a reduction in the population of 2.8 per cent. The flight to the cities has been stopped and reversed. Over the same period, the Berwickshire and Tweeddale districts grew by over 11 per cent. People now recognise that life in rural areas has attractions, and not just for "get away from it all" city folk. Happily, local people now tend to stay as opportunities for employment grow and that benefits everyone.

The level of unemployment in the Borders has consistently been well below the rate for Scotland. It peaked in 1987 and now lies at 3.5 per cent. compared with 7.7 per cent. for Scotland as a whole. Within the Borders, rates are as low as 2.9 per cent. in the Galashiels travel-to-work area. After a period of decline, the Borders region has performed much better than many other parts of Scotland, as measured by a range of economic indicators. Borders industries have shown themselves well able to weather downturns and to do so better than their counterparts in more industrialised areas. New industries have come, but the area still depends for much of its prosperity on traditional agriculture, wool textiles and knitwear. The way forward must lie in seeking to build on the base that the traditional industries provide and to diversify, exploiting the natural resources of the area in skills and in the natural heritage.

The twin elements of skills and natural heritage are well used in tourism, which is and will continue to be important to the development of the Borders economy. Many visitors pass through the area, although I acknowledge that a good proportion of them are heading further north. A key aim for the tourist industry must be to entice more of those visitors to stop in the Borders, to stay longer and to spend more. While the natural beauty of the area may be enough for some, others need more facilities and attractions to persuade them to stay. The Scottish Office very much supports the efforts of the Scottish tourist board to encourage new developments with advice and, where necessary, financial assistance. Marketing, too, is essential. I am delighted that the Scottish Borders tourist board, as part of a consortium of southern Scottish tourist boards, recently launched a car touring guide aimed at the European market. I am sure that that initiative, which was supported by the national tourist agencies, will give a significant boost to the number of foreign visitors to the area.

With Europe in mind, I should mention the Government's continuing efforts to secure eligibility of the Borders for European Community support under objective 5(b). We put forward a strong case to the Commission in 1989. It is disappointing that the Commission has not been able to offer a positive response. We shall continue to press the case whenever the opportunity arises for a further review of eligibility.

While tourists appreciate the open roads and scenic routes of the Borders, local people are rightly concerned, as the hon. Gentleman suggested, with local transport. Our bus policy was to promote sustained and fair competition in the interests of the bus user. The hon. Gentleman came to see me on that subject. He will be pleased to hear that the local management-employee buy-out team was successful and that Lowland Scottish Omnibuses Ltd. is locally owned and operated extremely successfully.

Forestry is a major industry in the Borders, and I have said on previous occasions that I believe that it provides many opportunities for invigorating the economy of the Borders. To take best advantage of sometimes remote forests, we have to provide access roads and the Government have been generous to the Borders regional council in giving it substantial enhancements to its capital allocations for that purpose. Those allocations demon-strate our commitment to providing the quality of roads required for the extraction of timber. The council's programme, as agreed with the Forestry Commission, will be taken fully into account in determining capital consents for future years. Those will, of course, be assessed in light of the overall resources available for allocation.

I shall study the hon. Gentleman's speech with great care. If there are several points that have not been dealt with fully in my response, I shall make sure that I write to him about them.

The motion having been made at half-past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Three o'clock.