Inward Investment (Hansard, 2 December 1997)

§ 3. Mr. Baldry
If he will make a statement on the interdepartmental concordat relating to inward investment in respect of Scotland. [17092]

§ 10. Mr. Gray
What discussions he has had recently with the President of the Board of Trade on inward investment matters. [17099]

§ Mr. Wilson
The Government undertook in our White Paper "Scotland's Parliament", Cm 3658, to produce a concordat on common guidelines and consultation arrangements on the handling of financial assistance to industry. Discussions are proceeding among interested Departments.

§ Mr. Baldry
Is not the concordat really a con on the people of Scotland? The Government are seeking to give the impression that a Scottish Parliament will have control over inward investment into Scotland when the reality 145 is that under the dead hand of the Treasury control throughout the United Kingdom will be transferred to the President of the Board of Trade. Far from more influence being in Scotland, more influence will be exercised by Ministers in London. Is not one of the reasons why it has taken such a long time to publish the Bill on the Scottish Parliament the fact that it is difficult for even the most creative parliamentary draftsman to produce a Bill that is not entirely transparent in terms of the con on the people of Scotland?

§ Mr. Wilson
I can understand the attractiveness of that line of argument to the hon. Gentleman. However, the timetable is bang on schedule. That is a tribute to the draftsmen and to everyone else working with them, and one that refutes the hon. Gentleman's implied criticism. It is entirely proper, and much in Scotland's interests, that a concordat should be in place and that there should be a set of rules.
Locate in Scotland has done very well over the years because it is extremely good at what it does. It is not in Scotland's interests to have a state of affairs where various agencies are bidding against one another, expensively and unproductively. That is why it is right to have rules and a concordat and on that basis Scotland will continue to do very well with inward investment, which is in the interests of Scotland and the United Kingdom as a whole.

§ Mr. Gray
Will the Minister pay tribute to the record £5 billion of inward investment that was achieved under the Conservative Government? Does he agree that that record achievement stands a good chance of being undermined by the triple whammy of the Scottish Parliament, the social chapter and the minimum wage?

§ Mr. Wilson
The brief answer is no, but I will make a slightly fuller reply in response to the earlier point. Yes, I pay tribute to a great deal of the work that was done. I pay tribute to some of the decisions that were taken and to the continuing work of Locate in Scotland throughout that period. I do not pay tribute, however—I do not attribute this to the hon. Gentleman—to hon. Members, perhaps from other parties, who welcome job announcements, but who at the first whiff of grapeshot and difficulty start to condemn and say things that are very different from what they said when the announcements were greeted. We have seen examples of that in recent days in relation to the reports on Hyundai.

Mr. O'Neill
Does my hon. Friend agree that although the success of Britain has been considerable, as a share of the European total the number of jobs and projects that Britain has achieved has fallen, that it is essential that there should not be wasteful competition between the various parts of the United Kingdom, and that for that reason as much as for financial concerns we need a proper concordat between the English regional development agencies, when they arrive, and the Parliaments in Scotland and Wales and the Northern Ireland Development Office?

§ Mr. Wilson
My hon. Friend speaks with authority on these matters, and is absolutely correct. It is a paranoid response to believe that rules will always work against us. That is not the case. The political situation is changing, 146 and there will be devolved Parliaments in Scotland and Wales. At the same time new agencies with their own ambitions will emerge in England. It is entirely right within those circumstances that there should be rules that are simple to understand and enforceable, but in which flexibility, which has ensured the success of agencies such as Locate in Scotland, is maintained. That is simple, it is in Scotland's interests and it is what we hope to achieve.

§ Mr. Connarty
Is my hon. Friend aware of the excellent joint ventures across borders between, for example, Elf of France and BP in my constituency at Grangemouth, or Toatsu of Japan and Zeneca in my constituency, or Rhom and Haas and its Japanese partners? Does he agree that it is the stability of the relationships between Scotland and the regions of England that has created these? In fact, in the chemical industries people do not talk about Scotland, England or other parts of the UK, but about east coast Britain, which goes from Teesside to the Don in Aberdeen. Does not the small-minded and hypocritical approach of the Conservatives merely continue the attempt to divide people and to prevent decent partnerships from being put together between the private and the public sectors, which has always been their strategy?

§ Mr. Wilson
I agree with the thrust of what my hon. Friend says, although I do not associate the last charge with anything that we have heard from hon. Members today. My hon. Friend is absolutely right that part of Scotland's strength as an inward investment destination is its place within the United Kingdom. In a recent visit to the far east, I had excellent assistance and co-operation from UK representatives abroad. There is, of course, a crossover between what we can do for Scotland directly and our inward investment effort for the United Kingdom as a whole, and long may that continue—it is very much in Scotland's interests.

§ Mr. Wallace
Does the Minister agree that, as well as the important job of attracting inward investment, the Scottish Parliament will be wise if it tries to devise strategies to promote indigenous companies in Scotland? It might equally be wise to enter into a concordat with other development agencies in the rest of the United Kingdom to try to prevent—I think that these were the Minister's words—the expensive and unproductive outbidding that there has been? Will the Minister assure the House that that will be a decision that the Scottish Parliament can freely make and not be bound beforehand by any decision of the Secretary of State?

§ Mr. Wilson
The Scottish Parliament's responsibilities in this area are clearly set out in the White Paper and will be translated into legislation. They are easily understood and must be enforceable. I have no doubt that the political focus that the Scottish Parliament will put on issues of economic development and inward investment will be beneficial for Scotland. I must make it clear that we are completely evenhanded. I am very anxious to stress again the support that is available to indigenous companies. No case has been brought to my attention in which indigenous companies have been refused assistance because resources were unavailable through the investment that was made in attracting companies coming into Scotland. The happiest arrangement of all is for 147 inward investors to stabilise, expand and become indigenous companies. The sooner we stop making these false distinctions the better.

§ Mr. Alasdair Morgan
Given that Locate in Scotland is one of the most successful inward investment agencies in Europe, will the Minister explain why new rules are necessary at this stage? Furthermore, as Scotland usually competes not with the north-east of England but with the Czech Republic or the Irish Republic, is there not a danger that new rules will reduce the total amount of inward investment into the United Kingdom rather than transfer it to somewhere else in the United Kingdom?

§ Mr. Wilson
Let us be clear about this: Locate in Scotland does better for Scotland within the United Kingdom than any other development agency in Europe, and that is how we intend to keep it. The hon. Gentleman asked why we needed to change or update the rules. It may have escaped his notice that major constitutional change is taking place. There will be a Scottish Parliament and a Welsh Parliament, and there will be a group of powerful economic development agencies in Europe. The hon. Gentleman should understand that rules can work in Scotland's interests. The idea that someone is always trying to steal our piece and working against Scotland is ridiculous. I welcome the rules, and we shall work with other Departments to bring them to fruition.

§ Mr. Ancram
Why were these important and totally foreseeable inward investment issues not resolved before the devolution referendum, which has given them such unhelpful exposure? Does the hon. Gentleman agree that the unseemly Cabinet row that is now raging is very damaging to inward investment not only in Scotland but in the rest of the United Kingdom? Does he share my fear that if his right hon. Friend the Secretary of State and his colleagues in the same Cabinet find it so difficult to agree on such matters it will be well nigh impossible in the future for a Scottish Parliament, a Welsh Assembly and a queue of English regions to do so? Is that what his right hon. Friend meant by devolution strengthening the United Kingdom?

§ Mr. Wilson
The right hon. Gentleman should not always believe what he reads in the newspapers. There is constructive dialogue to produce the best possible solution for Scotland and for the United Kingdom as a whole. That is our aim, and that will be our achievement.