HC Deb 03 December 1997 vol 302 cc290-312

11 am

Mr. Alex Salmond (Banff and Buchan)

This subject covers a wide canvas. I shall concentrate on the real concerns of many people in Scotland that the Government's plans amount to the sabotage of the most effective inward investment agency in Europe. They are a betrayal of the spirit of the devolution process. I hope that that is an unwitting move by the Department of Trade and Industry. Perhaps the Minister will be able to put at rest some of our real concerns about the trend of events and the Department's plans on inward investment.

The starting point should be the existing arrangements. Some remarks on inward investment in recent months have suggested that there are no arrangements to cover competitive inward investment across the United Kingdom. That is not the case. Rules are in place to prevent the poaching of jobs from one nation or region of the UK and moving them to another. If an inward investor does not have a preferred site in the UK, the industrial development unit in the Department of Trade and Industry reviews the case and sets the level of regional selective assistance available for whatever part of the UK becomes the preferred site.

Mr. Michael Fallon (Sevenoaks)


Mr. Salmond

I should like to develop my points before I give way. I shall be fascinated to hear the Conservative party's position on this, as it seems to be going through a phase of development. The hon. Gentleman will have a chance later.

The only flexibility available to local bodies is in the package of site preparation, training and after care. There are European Union limits on the total value of any inward investment package offered. If those rules are broken, as has been alleged, the Treasury and the National Audit Office have the power to investigate, to monitor abuses and to do something about it. My first question for the Minister is whether she believes that the present rules are not working. If she does, what evidence is there and what have the Government done about those supposed breaches?

If an inward investor has no other preferred sites, the local agency, such as Locate in Scotland, acts directly with that investor, with the approval of the Government. There are strict financial limits to ensure that excessive grant packages are not offered.

I shall quote several authorities on the issue to show the range of concern in Scotland. The first is Neil Hood, a former director of Locate in Scotland. He pointed out the current situation in The Herald on 20 November: In effect the distinctive competence of bodies such as Locate in Scotland is less in differential financial assistance than in customer care and attention; effective co-ordination of resources; and high levels of after care for existing investors whose expansion projects now account for some 60 per cent. of total inward investment. There is a concern that the concordat will restrict the independence and the ability of Locate in Scotland to do its job. What is wrong with the existing arrangements? Allegations have been made against Locate in Scotland by Sir George Russell, chairman of the Northern Development Company, also known as the chairman of Camelot, who was appointed by the Tories in 1995. Sir George has accused Locate in Scotland of attempting to poach Interconnections Systems from Tyneside, saying that it was offered large sums to move its head office and other operations to Scotland.

The Minister for Education and Industry, Scottish Office, who is present today, has denied the allegations and described them as "black propaganda" and has published transcripts of the dealings with the company to set the record straight. The second question for the Minister is whether she accepts her colleague's version of events or the version put forward by Sir George Russell.

There seemed to be a large streak of envy running through Sir George's evidence to the Trade and Industry Select Committee. Perhaps Sir George should understand that inward investment is not a lottery. It is a reward for those with the techniques and ability to seek out investors and to do the job properly. There is no licence to print money. Inward investment is a competitive environment, unlike the monopoly that Camelot enjoys. If the Scottish Office is correct in saying that Sir George's allegations are no more than "black propaganda", why has he, as a public official, not been censored by the Government? Why has he not been brought to book? Has the Minister had any conversations with Sir George, in the light of his evidence to the Select Committee, to ask him to mend his ways and not make unsubstantiated allegations against other inward investment agencies?

Other unsubstantiated allegations have been made. Given that Locate in Scotland attracts 20 per cent. of the investment coming into the United Kingdom, we must ask whether the allegations represent envy of Locate in Scotland's success and its ability to produce packages to encourage investment. Would it not be better if those in the various agencies in the north of England examined how to build organisations in their area with the same expertise and ability as Locate in Scotland? Government thinking appears to be to drag down Locate in Scotland's ability, autonomy and success.

I should like to examine the arrangements in the concordat between the Department of Trade and Industry and the Scottish executive and its Welsh equivalent. I do not understand how a concordat, which was suggested in the devolution White Paper, can come into place before the Scottish Parliament and the Welsh Assembly. The bodies involved have to come into being before the arrangements can be agreed. If the arrangement is to be imposed on the Scottish Parliament and the Welsh Assembly, it is not a concordat, but a diktat. There cannot be negotiations to produce an agreement before one of the parties to that agreement exists. My third question is how it can be in the spirit of the devolution White Paper to have an arrangement between the Scottish Parliament, the Welsh Assembly and the DTI before the bodies have come into existence. Is there not a risk of the concordat neutering the effectiveness of Locate in Scotland?

Mr. Norman A. Godman (Greenock and Inverclyde)

The people of the west of Scotland want to ensure that the autonomy of Locate in Scotland is not diminished. I remind the hon. Gentleman that my constituency has benefited enormously from inward investment. The two biggest employers are National Semiconductors and IBM. The latter came to Greenock through the exertions of the Labour Member of Parliament, Hector McNeil.

Mr. Salmond

I appreciate the hon. Gentleman's concern. It might be argued that my constituency is less directly concerned, because it depends, not so much on inward investment, as on resource-based industries, such as oil and fishing. However, in many constituencies in Scotland, inward investment is a very important part of the economic structure. I am sure that the hon. Gentleman will also be concerned when he reads the concordat, two sections of which—10 and 12—cause me great concern about whether the autonomy and success of Locate in Scotland in his constituency and elsewhere can be repeated.

Section 10 of the concordat reads: national co-ordination of the promotion of the UK to foreign investors will be maintained and will continue to' be the responsibility of the UK Government. Is that really in the spirit of the devolution White Paper? It stated that inward investment including the functions of Locate in Scotland was a devolved matter for the Parliament to legislate on. There seems to be a direct contradiction between whether the United Kingdom will be marketed internationally as a single entity, presumably by the Invest in Britain bureau, and whether the ability of Locate in Scotland to identify specific investments and attract them to Scotland will be maintained.

Perhaps even more seriously, section 12 of the concordat seems to introduce binding cash limits across the United Kingdom, extending the present controls from regional selective assistance to include all elements of the financial package on offer, including site preparation, training deals and after care—in which Locate in Scotland specialises and is the reason for much of its success. Will that not undercut Locate in Scotland's ability to act as a one-stop agency in negotiations with inward investors? The concordat states: There will be common financial limits covering major schemes of financial assistance to companies administered directly by the UK Government". Crucially, it states that those limits apply to the total of public sector assistance. I intend to place a copy of the concordat in the Library, because it would be helpful if all hon. Members, from Scottish constituencies and elsewhere, could see the terms of the negotiations apparently taking place between the Department of Trade and Industry and the Scottish Office.

Alf Young is probably the most respected industrial journalist in Scotland. He has followed the activities of Locate in Scotland from its birth in 1981 and charted its success—not always uncritically, because he is no mere cheerleader for the agency. His bona fides as an expert commentator would be accepted. Therefore, when he describes the arrangements, as he did in The Herald on 13 November, in the following words, we should all be greatly concerned: At no time has the word veto appeared in any of the negotiating documents. What Mrs. Beckett, or, to be precise, Mrs. Beckett's officials have proposed, is a central clearing house for all major packages—by which they mean any offer where assistance is over £5m—based in her own Industrial Development Unit. No Agency, not even Locate in Scotland after devolution, would be able to make its own approach to a potential investor and shape its own offer. That is seen by LiS and others, not as a veto, but as an attempt to shut them down. I know that the Ministers in the Department of Trade and Industry have presented an entirely different picture. They say that the new arrangements have to be introduced because of the emerging regional development agencies in the United Kingdom. Would it not be better if the model for those new agencies—further details of which were, I understand, to be unveiled this morning—followed the successful model of Locate in Scotland. Ministers should ask why Locate in Scotland is successful and see whether the new agencies could emulate that success in the competitive environment of inward investment, instead of running the risk of neutering that very success by circumscribing the autonomy and ability of Locate in Scotland to negotiate directly with its clients.

Nor is it the case that the experts in inward investment believe the scare stories, emanating from people such as Sir George Russell, that huge evidence of poaching exists. Neil Hood has written: It would be perverse in the extreme to argue for some form of rigid pan-UK control of all inward investment attraction on this type of evidence. Are not the Government's proposals an unnecessary reaction, using as an excuse a problem that does not really exist? If the Minister tells me that the problem exists, I expect her to examine closely the various allegations that have been made and consider whether they can be substantiated. The Minister should also say why the arguments of her Scottish colleagues—that descriptions of the problem are "black propaganda"—are not valid.

Other experts in inward investment have also made key criticisms of the concordat. James Scott was the last chief executive of the Scottish Development Agency, before it became Locate in Scotland and Scottish Enterprise. He points out that what is happening is not new, but a recurring nightmare for Scotland. Attempts by the DTI to put the hems on Locate in Scotland date back to its inception in 1981—including attempts made under Lord Young and Lord Tebbit. James Scott argues that the concordat is unclear on whether investors interested only in a Scottish location in the United Kingdom will have to go through the Department of Trade and Industry. My fourth question to the Minister is a request for clarification of whether that fear is justified. Under the concordat, will an inward investor interested only in a Scottish location have to go through the Department of Trade and Industry?

Fifthly, there is no clear information in the concordat—I know that the Minister for Small Firms, Trade and Industry is especially interested in this point—on whether reinvestment cases, which are about 60 per cent. of new investment coming into Scotland, would have to go through the DTI clearing house. The fear is that the arrangements and the concordat would place unnecessary additional bureaucracy on Locate in Scotland and could mean that it would lose out internationally.

Thus far, much of the debate has concentrated on the impact in the United Kingdom. It might be useful if we could raise our sights and see how the debate—and what is seen as an attack on Locate in Scotland and its ability to perform its job—is seen elsewhere by its real rivals in inward investment attraction in Europe. One of Locate in Scotland's key rivals is the Irish Development Agency, or IDA, which has a superb record of success in attracting key investments to the Republic of Ireland. The business section of The Sunday Tribune in Dublin last Sunday carried an article, headlined "IDA gains in curb on Scottish rival". The article stated: IDA Ireland is poised to gain a decisive upper hand over its main international competitor in the battle to attract foreign inward investment following an attempt by Margaret Beckett, the president of the British Board of Trade, to shackle the jobs agency of Scottish Enterprise, Locate in Scotland. The article went on to quote Irish Government sources as saying: the implications for Ireland will be monitored by industry experts. I bet they will. I am sure that the IDA and other sources in Ireland must be rubbing their hands at the apparent possibility that their main rival and competitor in Europe will run the risk that its ability to attract inward investment projects will be shackled by the DTI.

Mr. Bernard Jenkin (North Essex)

I have listened carefully to everything that the hon. Gentleman has said, but do not the new rules and concordat for Locate in Scotland issued by the DTI arise as a direct result of his support for the Government's devolution proposals? The hon. Gentleman should explain to the Scottish people why devolution will put Locate in Scotland at a new disadvantage.

Mr. Salmond

Unfortunately for the hon. Gentleman, I have a longer memory, having been in the House longer and having been involved in inward investment longer than he has. The attempt to shackle Locate in Scotland is nothing new for the DTI. It was tried at least three times in the 1980s.

Mr. Fallon


Mr. Salmond

I will come to the hon. Gentleman in a second.

The best example is 1981, when the Tory majority on the Scottish Affairs Select Committee suggested doing exactly what the Government propose now. Members of the Conservative Government, who are no longer with us, because they lost their seats—perhaps this is why—proposed in 1981 to do exactly what is being done now.

Mr. Jenkin

Will the hon. Gentleman give way?

Mr. Salmond

If the hon. Gentleman can contain himself, I want to cite a few more examples before giving way again.

The plan in 1981 was stopped by the then Secretary of State for Scotland, Lord Younger, although it was supported by another former holder of that post, Ian Lang, who is now Lord Lang. What we are witnessing is nothing new. The DTI has tried for some years to put the hems on Locate in Scotland. The responsibility lies with Ministers, who have the ability, just as George Younger did in 1981, to stop this attempt if they so choose.

The argument that Scotland is getting an unfair advantage because Locate in Scotland is successful is advanced by Labour Members from the north of England and was urged on many occasions by the hon. Member for North Essex (Mr. Jenkin) himself, before he became parliamentary private secretary to the previous Secretary of State for Scotland.

The Conservative party's anti-Scottish reputation is at risk of being transferred to the Labour Government, and the result will be exactly the same: the demolition of Labour Members in Scotland.

Mr. Jenkin

Whatever tensions have existed within a Government about the rules constraining Locate in Scotland, they have always been contained and resolved within government, within the constraints of collective Cabinet responsibility, behind which some fudges and discretions can be allowed to a Secretary of State for Scotland, who has all the powers and responsibilities of that post and can answer for policy in Scotland. The rules are a direct consequence of a new locus of power created in the Scottish Executive, outwith the collective responsibility of the Cabinet. The hon. Gentleman cannot have his cake and eat it: Scotland is losing out as a result of the devolution proposals.

Mr. Salmond

The concordat makes proposals not for after the devolved Parliament is established but for now, while collective responsibility still applies and the Secretary of State for Scotland retains the whole panoply of his powers and ability to fend off such attacks from his colleagues. If the Government do not want to behave in an anti-Scottish manner, as the previous Conservative Government did, all that they have to do is to stop the attacks on Locate in Scotland.

Mr. Fallon

Will the hon. Gentleman give way?

Mr. Salmond

I have given way very generously to Conservative Front Benchers. If the hon. Gentleman is persistent, he will catch Mr. Deputy Speaker's eye, but for the moment I want to make some progress.

It is a poor allegation to make of the Government that their pattern of behaviour in this matter is exactly the same as that of elements in the Conservative party over the past 16 years. I have heard some remarkable statements from the Conservative party in recent weeks. For example, on benefit cuts for single mothers, the Conservatives' main argument is that it is outrageous that the Labour Government should be doing exactly what they wanted to do in government.

The real agenda is that there has been resentment of the success of Locate in Scotland since its inception. DTI Ministers say that the emergence of new development bodies in England makes new arrangements necessary, but the real agenda is a repetition of the DTI's attempt, made many times over the past few years, to gain control of key inward investment decisions.

The DTI objective, as reported in the press—perhaps the Minister can deny it—is to gain "proportionality" throughout the country in the number of jobs attracted by inward investment. In that case, Scotland would get only half the inward investment jobs that have been achieved over the past five years. Locate in Scotland has managed to attract about 20 per cent. of the total inward investment in the United Kingdom. Proportionality would have cost Scotland about 7,500 jobs in the past year alone and would cost us about 30,000 jobs over the next five years if Locate in Scotland maintained its success rate.

Scottish Office Ministers have been complacent. I do not accuse them, or even the incoming DTI Ministers, of knowing that a plan, now re-emerging, had been hatched in the past to threaten Locate in Scotland's ability to attract inward investment; but all expert opinion in Scotland, be it Neil Hood, James Scott or Alf Young, sees in the proposals a challenge to the success of Locate in Scotland.

Does the Minister—with the Scottish Minister for Education and Industry sitting beside her—believe that the allegations made about Locate in Scotland and the specific inward investment project in the north of England were no more than "black propaganda"? If so, what measures has she taken to bring the relevant people to book and to challenge Sir George Russell about statements that he made to the Select Committee on Trade and Industry?

Does the Minister accept that what I have cited is indeed a proposed concordat between the DTI, the Scottish Executive and the Welsh Assembly? Does she appreciate that it is difficult for us to understand how such a document can be produced before those bodies are established? There is an inconsistency in saying that an agreement will be made before the parties to that agreement have even come into being. Does she accept that that is a betrayal of the devolution process?

Does the Minister accept what I said about sections 10 and 12 of the document? Will Locate in Scotland lose the ability to promote Scotland directly to inward investors and will the responsibility be given in all cases, regardless of whether they are specific to Scotland, to the Invest in Britain Bureau? Does section 12 extend the present guidelines beyond selective assistance, to all parts of the package, and especially to those parts in which Locate in Scotland has been so spectacularly successful in recent years?

Does the Minister accept that there is a genuine reaction in Ireland from the Irish Development Agency, a body which Conservative Front Benchers might consider to be one of the most successful in Europe and that has at its disposal powers that Locate in Scotland will not have, even when there is a devolved Scottish Parliament? That reaction, as reflected in the Irish press, shows that Locate in Scotland's major rivals for investment projects see an opportunity in the DTI's plans.

Can all the concern in Scotland be based on nothing more than rumour and speculation or is there real concern in the inward investment agency itself that the DTI plans go far further than merely making agreements between Locate in Scotland and the new agencies emerging in England, and strike at the heart of Locate in Scotland's success in recent years?

Can the Minister confirm the existence of a letter from the President of the Board of Trade to the Secretaries of State for Scotland and for Wales, laying out the plans in stark detail and making it clear that she expects the industrial development unit in the DTI to take control of key inward investment decisions?

If such a letter exists, will the Minister place a copy in the Library, as I intend to do with a copy of the concordat? Does she accept that there are real concerns in Scotland about a betrayal of the devolution process, amounting to the hamstringing of Locate in Scotland's ability to attract inward investment?

Has the Minister noted the delighted faces on the Tory Front Bench because her Government are apparently bringing into being something that many elements in the Conservative party, including many of the most anti-Scottish elements sitting on that Front Bench, wanted to do for many years? Does she not find it extremely ironic that her Government are introducing policies which even that anti-Scottish Conservative party were unable to push through in the past 18 years? Above all, can she not see that the opportunity to create new development agencies throughout England is an opportunity to release them from the control of the dead hand of the DTI and offer them the same success and opportunities that Locate in Scotland has enjoyed in the past 17 years?

In an attempt to reflect some of the attitudes that have prevailed in Scotland in the past 17 years, I should like the Minister to consider a report by Alf Young which appeared on the front page of yesterday's edition of The Herald. He wrote: Daewoo, the industrial conglomerate reportedly seeking a site for an 800-job glass plant in Scotland despite the economic circumstances engulfing its native South Korea, rejected Scotland as a location for the same project only last year. Instead, after bungled negotiations by the Department of Trade and Industry's industrial development unit which infuriated senior players in the Scottish inward investment effort, Daewoo decided to take its planned investment to France. If it is the Government's objective to neuter Locate and drag it down to the same level as the less effective inward investment agencies, is there not a real risk that the end result of that centralising process will not just be the loss of jobs from Scotland, or the transfer of them to the north of England and elsewhere, but the loss of jobs from the United Kingdom? The beneficiaries will be locations in France, Ireland and elsewhere in Europe. That is what will happen if one of the major contributors to inward investment has its activities hamstrung by the misguided, anti-Scottish actions of the DTI.

11.31 am
Mr. Ian Stewart (Eccles)

I am grateful, Mr. Deputy Speaker, that I have been allowed to make my first formal contribution on such an important issue. It is sad to note that not a single Conservative Back Bencher has seen fit to come to the Chamber to take part in this important debate.

I believe that tradition is an important anchor of our culture and I am conscious of the fact that it is the convention of the House that hon. Members should keep their first contribution light and complimentary to their constituency and predecessors. I intend to adhere at least to the spirit of that convention.

The constituency of Eccles consists of seven areas—Swinton, Pendlebury, Eccles, Winton, Barton and Irlam and Cadishead. Each has its own distinctive history and features. My right hon. and hon. Friends will be relieved to know that throughout my speech I shall refer to all those areas collectively as the constituency of Eccles.

I am proud to make the first maiden speech for the Eccles constituency for 33 years. My predecessor was Joan Lestor, who represented the seat with distinction between 1987 and May 1997. She had previously represented the constituency of Eton and Slough between 1966 and 1983. After a four-year sabbatical, she returned to the House with her maiden speech well behind her, and she remarked that after 17 years of Mars bars—the factory that manufactures them is based in Slough—she hoped to have 17 years of Eccles cakes. She had 10 good years, and I hope that she thoroughly enjoyed our local speciality. I am pleased that she is now Baroness Lestor of Eccles, and I am confident that she will make a significant contribution in the House of Lords before she votes for that institution's democratic reform.

In her work with children, Joan Lestor epitomised the caring face of the Labour party and in her work for overseas development she represented our internationalist face. The Government's recently published, and welcomed, White Paper on overseas development bears proud testimony to her work as shadow Minister for Overseas Development before her retirement from the Labour shadow Cabinet in July 1996. I am pleased to say that, in common with Joan, I have an interest in both those subjects. Although I met Joan on only a couple of occasions before my selection, I have always held her in high regard and I am sure that the House will join me in wishing her well in another place.

The Eccles constituency is the geographic centre of the three seats in the metropolitan borough of Salford. The constituency is a suburban, industrial, working-class area on the north bank of the Manchester ship canal, due west of Manchester city centre. The boundary changes at this year's election significantly changed the shape of the seat. Its centre of gravity has moved outwards, south-west, away from the inner city, following the loss of the ward of Weaste and Seedley to the seat of my hon. Friend the Member for Salford (Ms Blears). It gained the more outlying wards of Irlam and Cadishead, where I have lived for 35 years, from the constituency of my hon. Friend the Member for Worsley (Mr. Lewis).

My hon. Friend the Member for Salford has highlighted some of the rich heritage of the metropolitan district of Salford which is also shared by my constituency. In addition to the examples that she gave, I can tell the House that Eccles has been at the forefront of design and technological development. For example, at Barton in Eccles we had the world's first combined aqueduct and rail viaduct over a road. Now we have the largest area of development land available in Greater Manchester at the Barton special economic zone.

Eccles also has a proud cultural heritage. The artist L. S. Lowry lived in the town of Pendlebury in my constituency. His appeal as a graphic illustrator of the grit and wit of Eccles and Salford people endures today, as demonstrated by the record price paid last week for a Lowry sold at Sotheby's. It is well known that he painted matchstick men and matchstick cats and dogs. It is possible that, if he were alive today, an urban fox or two would make it into his landscapes, and in the Eccles constituency they would be well protected. It is definitely true, however, that, if he were painting the same landscapes of my city today, much of the heavy industry and mills would have disappeared, only to be replaced by derelict corner shops and holes in the road, the size of craters.

Hon. Members should be aware that the roads in my constituency are among the oldest and most used industrial roads in the world. I see it as part of my job to ensure that the Government understand the problems faced by areas such as mine, which have suffered horrendous industrial decline and job losses in the past 25 years or more.

Having said that, Salford and Eccles folk are resilient and fine people. They have had the wit and ingenuity to devise appropriate plans that will reverse the worst of the industrial devastation and the resultant breakdown in social cohesion which we experienced under the Conservatives.

My city and my constituents need the Government to do what the previous Government failed to do—acknowledge our problems and offer encouragement and backing to the city council and other partners who are working so hard towards a better environment and a more secure future for all our people. I congratulate Salford city council on making job creation its No. 1 priority. I fully support its strategy of partnership and I am working closely with it to attract inward investment, particularly to the manufacturing sector.

In the past quarter of a century, my constituency has suffered many industrial closures and job losses. The British Steel works at Irlam, the Royal Ordnance factory at Patricroft, Agecroft colliery, the power station at Swinton, and many more have shut their gates.

The male unemployment rate is 6.2 per cent. and female unemployment is 2 per cent. One third of all households are council tenants. The level of car ownership is 10 per cent. below the national average, at 57.6 per cent. My constituents warmly welcome the Government's initiatives to improve public transport and implement an integrated transport service and they look forward to the extension of the successful metrolink from Manchester to Eccles. In the 1991 census, the proportion of residents reporting long-term illness was 15.9 per cent.—higher than the 12 per cent. average in England. The proportion of lone-parent families, at 24.3 per cent., is higher than the UK average of 19.1 per cent. I warmly welcome the Government's planned extension of child care, but I also want there to be adequate benefit levels.

In the statistical jargon, my constituency is under-represented in the professional, managerial and technical classes, but please do not think that we have placidly accepted that situation. Salford city council and other organisations have had some success in fighting back, with a strategy based on collaboration and partnership. In line with that, a key interest of mine is education and training, and I want to help the local authority, the Employment Service and other agencies to achieve their continuing aims of boosting the aspirations of the people of Eccles, raising their achievement levels and improving access to jobs and training. I am excited about the opportunities offered by the new deal and confident that my constituents will gain skills, confidence and real employment prospect from Labour's policies—by God, people in the disadvantaged areas of my community and in others parts of the country need a way out of what we, in a sanitised way, call social exclusion but is more commonly known as poverty. Those people need and deserve a measure of positive prosperity and a safe environment in which to live.

There are two main aspects to inward investment—macro-economic issues and micro-economic arguments—but we must also remind ourselves of the importance of generating indigenous investment. I shall confine my comments to the extent of my personal experience of and involvement in working collaboratively with my local authority, the Salford city council, Salford university, Salford further education college and other agencies to secure investment in our city in general and in my constituency of Eccles in particular.

The figures on inward investment provided by the House of Commons Library show that the north-west of England, together with some other English regions, has not gained any of the large-scale inward investment projects since 1993. In 1996–97, we had 40 projects, just short of Wales's total of 45; and the investment in those projects safeguarded 2,256 jobs in Wales and 1,929 jobs in the north-west, so the figures are similar. However, there is a crucial difference in the outcomes in the two regions. In Wales, the investment led to nearly 10,397 new jobs, but in the north-west it brought only 1,402. It is the quality and not the volume of inward investment projects that is vital to the development and reskilling of our industries and our work force.

That is not an argument to deprive any other region of its success, but it is a call for the Government to adopt a more sensitive and strategic approach to the needs of bodies in the English regions that are trying to do their best for their communities in the absence of a strategic tier of regional government. A north-west regional development agency will go some way toward helping my region to champion its attractiveness and strengths to potential investors. Having said that, I welcome the statement of the Minister of State, Department of Trade and Industry, my hon. Friend the Member for Makerfield (Mr. McCartney), that the Government are working toward "common UK guidelines" for inward investment, which will address the concern that public money should not be used to finance competition between different parts of the country."—[Official Report, 20 November 1997; Vol. 301, c. 281.] I agree with that statement. I do not want a wasteful Dutch auction between regions—I just want a level playing field. However, I am keen to participate in the redefinition of the shape of the playing field, as I am a firm believer in the need for a strategic tier of regional government in England. Such an authority would draw down powers from Whitehall and would operate according to the principle that local services should be decided and delivered at the most local level possible. That would reinforce the role of unitary local authorities, but allow for a regional body with responsibility for strategic issues such as the environment, transport, economic development and, of course, investment.

Since becoming a Member of Parliament, I have worked hard with Salford city council to generate and create "a Salford package" with other social partners. I have been negotiating with representatives of major international investors from one of the more stable areas of south-east Asia, with a view to arranging a trade delegation to Salford next spring. That early experience has taught me that English areas such as Salford are at a disadvantage when it comes to grant aid and assistance, which tends to negate any arguments about best quality. If the investor is enticed to an area that can offer more attractive and all-important start-up grants and packages, that might suck existing employment from the disadvantaged area to the more advantaged area. In the long run, that cannot be to the benefit of our country as a whole, as it raises questions of fairness, equity, waste, economic planning, social exclusion and social cohesion and, indeed, democracy and governance.

On an unusual, but related, matter, I am alarmed that few members of the business community or of the public have recognised the importance of addressing what has become known as the millennium time bomb. In simple terms, that is the breakdown as we reach 2000 of current computer systems, because their processors cannot cope with dates falling after the turn of the century. That might lead to disasters throughout the world. I shall comment only on our Government's action in that respect and why it has potential implications for inward investment in the UK.

The Government are to be congratulated on taking prompt action to address the problem by setting up the Action 2000 initiative. I am sure that the Government understand that we have now passed the awareness-raising stage and that we must now move on to finding and delivering solutions. Although a Government's ability to bring about such solutions is limited, they could nevertheless give a lead in setting up geographically based groups of interested partners in which best practice and new thinking can be shared. The crux of my statement is that if the UK can become accepted throughout the world as "year 2000 safe", in addition to the obvious benefit to our society in general, it might be a tremendous incentive to inward investment.

In conclusion, I should say that this is not the first time I have attempted to make a speech in the House. I have made several such efforts—for example, I prepared a magnificent speech for last week's debate on hunting with hounds. If right hon. and hon. Members think that the right hon. Member for Maidstone and The Weald (Miss Widdecombe) made a fine speech in support of the Bill, I can tell them that mine would have been an exceptional and magnificent supporting effort. However, I was not lucky enough to be called and my speech ended up in the bin, as did all my previous attempts. As a result, the House has had to suffer my meagre contribution today. I thank you, Mr. Deputy Speaker, for your patience and I thank hon. Members for theirs.

Mr. Jenkin

On a point of order, Mr. Deputy Speaker. From his comments, it appears that the hon. Member for Banff and Buchan (Mr. Salmond) has been furnished with a crucial document relevant to the debate by the Scottish Office—an official document that is not available to other hon. Members. For the benefit of proper debate, will you consider a short adjournment so that we can be given that document? In view of the number of hon. Members who want to speak in the debate, will you seek an undertaking from the Government that they will give us the document, so that the debate can continue uninterrupted?

Mr. Salmond

Further to that point of order, Mr. Deputy Speaker. I regret that the hon. Member for North Essex (Mr. Jenkin) misleads the House. I most certainly was not furnished with the document to which he refers by any Department. I was asking the Government about its bona fides and if they would put it in the Library. I am not responsible for the Conservative party's lack of information sources.

Mr. Deputy Speaker (Sir Alan Haselhurst)

The Chair is not responsible for information provided for the House. That is the responsibility of Ministers. We shall no doubt hear from the Minister in due course.

11.49 am
Mr. David Chidgey (Eastleigh)

I congratulate the hon. Member for Eccles (Mr. Stewart) on his most informative maiden speech. What a shame it is that he threw his other speeches away. He could have placed them in the Library for hon. Members' enjoyment. Perhaps we can look forward to that in future.

There is a danger of the United Kingdom's success in attracting inward investment leading to a sense of complacency. We could spend all day discussing the squabbles between Scotland, Wales and the English regions about how investment grants are distributed, but that would be a distraction because the game is moving on. We have only to consider recent events in Korea to realise that.

We take great pride in the fact that we have attracted about two thirds of Korean global investment in the past three years, amounting to about £6.75 billion. But the bubble can burst as easily as it swells. Time does not allow me to go through the three disasters that we face; suffice it to say that some 6,000 jobs that we thought we had in Scotland, Wales and the north-west seem to be substantially at risk, with about £2 billion worth of investment now cancelled, delayed or in doubt. That affects the whole of the United Kingdom, not just one area.

The major threat to inward investment is not just the volatility of the Asian economies, but the growing competition for that investment from other parts of the world, particularly eastern Europe. For instance, the state incentives now on offer for inward investment in the Czech republic in some cases amount to funding 50 per cent. of a project. Compared with that, the sort of inducement that the United Kingdom can offer through Government grants is paltry.

Pursuing an international auction on ever greater financial inducements leads us up a blind alley. It is essential that we understand that financial inducements are only part of the equation. Potential long-term investors are more concerned about the quality and skills of the work force, the modern management techniques available, and the efficiency and productivity from which their investments will benefit. Turf wars between Scotland, Wales and the English regions are a bit of a smokescreen. The claims and counterclaims on financial packages that are available in Scotland or Wales compared with the English regions only undermine our overall inward investment performance.

I welcome the introduction of a concordat by the Department of Trade and Industry to resolve such differences and arguments, but it is essential to clarify the DTI's role in that. I hope that the Minister will do so today. What is the precise difference between the DTI vetting projects and the DTI vetoing projects? That is a question of semantics that I have yet to get to the bottom of.

The concordat should not become an excuse for smothering initiative in national and regional agencies. It must not introduce centralised, bureaucratic control from Whitehall. It must not be used as a way of delaying decisions through DTI interference in potential projects. It must not be allowed to breed indifference to the needs of Britain's potential and prospective clients.

Inward investment is a complex and varied process. For example, green-field development projects—new factories and manufacturing plants, the projects on which all the wrangling seems to concentrate—represent only some 5 per cent. of total inward investment in the UK. As Neil Hood from Strathclyde university has pointed out, the vast bulk of inward investment is through mergers, acquisitions and alliances—projects which are not necessarily mobile and certainly not necessarily contestable by different regions of the UK.

Inward investment decisions are made on a range of issues. They can be summed up as bringing value for money to the financial investor. Financial assistance is only part of that process. It will be highly damaging if the concordat results in a rigid formula based solely on financial assistance and ignores the importance of all the other factors which will vary from one region to another.

Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale)

It is sensible that we should have discussions around the UK and achieve a concordat between the different nations and regions, but does my hon. Friend agree that there should be no dumbing down of the process with the high quality work being done by agencies such as Locate in Scotland being reduced to some lowest common denominator to suit the DTI?

I take the point made by the hon. Member for Banff and Buchan (Mr. Salmond) that it is completely inappropriate to seek a concordat in advance of a Scottish Parliament, to which the issues will be devolved and which must form its own view. In due course, when that Parliament is up and running, it should enter as a full partner into any concordat that is reached.

Mr. Chidgey

My hon. Friend makes a telling point. It is vital that we do not dumb down the process but learn from best practice.

Dr. Liam Fox (Woodspring)

Does the hon. Gentleman accept that when the DTI talks about co-ordination it is Whitehall-speak for the dead hand of Treasury involvement?

Mr. Chidgey

I am surprised to find myself agreeing with the hon. Gentleman. It is vital—I hope that the Minister will respond to this—that we should use the DTI to boost best practice rather than to constrain and stifle it. The concordat's key role will be to promote best practice. As the hon. Member for Banff and Buchan (Mr. Salmond) said, Locate in Scotland has set high standards in diligent and patient company tracking. Again, Neil Hood's words are relevant. The Northern Development Company and the West Midlands development agency have all had major successes from which other regions can learn. The DTI has a crucial role to play in ensuring that best practice is promoted throughout the regions.

Today's announcement of the establishment of the regional development agencies is a good starting point. I welcome the Government's view that the RDAs should not be creatures of local and central government, but the Government must show that they mean what they say, because neither should the RDAs be glorified property managers.

The United Kingdom has lost out within the EU by not having strong, powerful and properly resourced regional organisations that can attract inward investment from the EU and provide the matching funds that such projects require. In that context, the RDAs' long-term success depends on adequate funds. I am disappointed that at present there seems to be no such provision. They need adequate funds and to be able to provide much more economic development stimulation than most regions have managed so far. It is far more important to direct Government assistance not to up-front grants but to inward investment projects which add further value to the economy in research, design and development.

A key role of the RDAs will be to foster value for money for investors. RDAs could and should play a major part in creating that added value in their areas. RDAs need an overarching role with the training and enterprise councils in tackling skill shortages. We do not want a return to that appalling and failed programme of training for work which was merely a device for massaging the unemployment statistics and added little to communities' skill base.

Most of all, we need to provide inward investors with a highly skilled work force on which they can rely and with high quality management. Only if the RDAs are given the resources and flexibility that they need to meet those challenges can we maintain the UK's inward investment performance.

11.58 am
Mr. Michael Fallon (Sevenoaks)

I congratulate the hon. Member for Eccles (Mr. Stewart) on finally making his maiden speech. As he explained, it was through no fault of his own that he was unable to do so until this morning. He paid a generous tribute to his predecessor who is well remembered and well respected on both sides of the House. He gave us an interesting tour d'horizon of Eccles and, perhaps, a glimpse of a streak of, independent-mindedness when he referred to the need to maintain the present level of benefits. I hope that that streak of independent-mindedness does not lead him too quickly on to the list prepared by the Minister without Portfolio, but we shall watch his progress with interest.

I should like not to congratulate but to thank the hon. Member for Banff and Buchan (Mr. Salmond) for initiating today's debate. He has exposed perfectly for the House the tensions that will arise directly from devolution, and indeed have already arisen from the devolution proposals in the White Paper. He sketched the anarchy that will result from establishing a separate Parliament and Assembly in Scotland and Wales respectively and separate regional agencies and assemblies in England.

Mr. Salmond

Will the hon. Gentleman give way on that point?

Mr. Fallon

Today's debate is a direct consequence of the devolution Bill.

Mr. Salmond

Will the hon. Gentleman give way?

Mr. Fallon

The hon. Gentleman did not give way to me, but, as I am more generous than he is, I will give way to him.

Mr. Salmond

From the intervention of the hon. Member for North Essex (Mr. Jenkin) in my speech, I gathered that he accepted that exactly those tensions existed within the Conservative party in their period of office and that Lord Young, Lord Tebbit and Lord Lang at one point supported proposals identical to those that the present Government are making?

Mr. Fallon

The hon. Gentleman is falling directly into the trap that we have set for him. Of course those tensions existed under previous Governments. They exist under any Government. The point is that those tensions were resolved within a collective, United Kingdom Government. A concordat would not have been necessary had the present Government not published their devolution proposals. They would not need a concordat to resolve the tensions that have been mentioned, were it not for the devolution proposals that the Government have published and the hon. Gentleman has championed for years.

By attacking serious English industrialists such as Sir George Russell, the hon. Member for Banff and Buchan is simply stirring up the anti-English sentiment which we have long suspected lies behind the agenda of the Scottish National party. The hon. Gentleman suggested that English regions should not have the freedom to fight their corner that Scotland had.

Today's debate would not have taken place were it not for the devolution proposals and the arrival of a Labour Government committed to them. The previous system worked. There was collective responsibility for all inward investment into the United Kingdom. There were rules that applied throughout the United Kingdom. The fact that Locate in Scotland, representing 10 per cent. of the population, managed to achieve 20 per cent. of inward investment shows how that success was managed in a United Kingdom system. We congratulate Locate in Scotland on that, but it was achieved under United Kingdom rules and collective Government responsibility.

The Invest in Britain Bureau was established precisely to take the lead in overseeing all inward investment promotion overseas for the whole of the United Kingdom and the handling of individual inward investment cases here in the United Kingdom. The result was an outstanding record in the quality and quantity of investment attracted.

The most recent Organisation for Economic Co- operation and Development report said that the United Kingdom attracted about 40 per cent. of inward investment into the European Union in 1996—about $32.7 billion of foreign direct investment. I will put that achievement in context by saying that France came second, with a mere 17 per cent.

The report of the Invest in Britain Bureau for 1996–97 showed a record 483 projects attracted to the United Kingdom during 1996–97, creating 46,000 new jobs and safeguarding about 47,000 existing ones. During 18 years of Conservative government, 4,700 inward investment projects were attracted to this country, creating or safeguarding about 800,000 jobs. That is a substantial record, and in July 1998 Conservative Members will look carefully to see whether the present Government have matched our achievement last year in attracting 483 projects.

It is no use telling us now that there have been difficulties in the far east. When I was in Korea in September, I heard directly from senior industrialists in Samsung and other companies that the strong pound encouraged by the present Government was already bringing into question the future development of their projects on Teesside and elsewhere.

That Conservative record has been deliberately placed at risk by the Government through their proposals to devolve power to Scotland and Wales, their plans for separate regional development agencies and their economic policies for higher taxation and more regulation.

Jacqui Smith (Redditch)

An Invest in Britain Bureau survey showed that 39 per cent. of companies suggested a location in Europe or the European single market as one of their main reasons for locating in the UK. Does the hon. Gentleman therefore agree that the positive approach that the Labour Government have taken to Europe, as opposed to the very negative attitude taken by the official Opposition, will play an increasingly important role in encouraging companies to come to this country?

Mr. Fallon

I take it from that intervention that the hon. Lady expects Britain's percentage of inward investment projects coming into Europe to rise above 40 per cent. if she says that the present Government's European policy is more positive than ours was. In July 1998, we shall discover whether that is true.

Last year, a record was achieved. The Labour Government must show that they can improve on the record that they inherited. Conservatives say that, as a result of policies for higher taxation and more regulation and by deliberately devolving power to Scotland and Wales and setting up regional development agencies, the Labour Government will jeopardise the type of investment that we attracted into the United Kingdom as a whole.

The Scottish Executive will have power to attract inward investment and I suspect that, eventually, it will find the ability to subsidise that inward investment in the ways that it chooses and in the direction that it prefers.

Mr. Alasdair Morgan (Galloway and Upper Nithsdale)

Will the hon. Gentleman give way?

Mr. Fallon

I have given way generously.

I believe that once that Parliament is established it will be difficult for the House to control the budget that the Scottish Executive takes over. Who knows? No doubt some of the additional funding provided under the Barnett formula for housing, for the Scottish health service or for policing in Scotland will soon find itself smuggled along by back channels into Locate in Scotland and other agencies that are established more locally. Why else would Ministers have been wrangling in the past three months about the concordat, of which the hon. Member for Banff and Buchan has received a copy?

Of course those tensions will arise and of course Scottish Executive will have money at its disposal. Unless checked and brought back properly within a United Kingdom framework, there will be little to stop Locate in Scotland breaking the existing United Kingdom rules with its own slush funds carefully garnered from housing and health budgets and outbidding the other regions for prestigious projects. That is exactly the kind of anarchy that will unfold as a result of those proposals.

As well as setting up a Parliament in Scotland and an Assembly in Wales, the Government will make matters worse still by setting up regional development agencies. We shall be getting fuller details on those this afternoon. The original objectives of the regional development agencies were published in the consultation paper in May. Their first objective is to co-ordinate regional economic development, but their second objective is to help attract inward investment.

We are told that it is not envisaged that each region will have to conform to a specific prescriptive framework. On the contrary, the legislation will allow each region to have an agency, the organisations and activities of which fit the region's circumstances. The northern development agency may regard the funding of inward investment as a higher priority than the East Anglian agency does and may choose to allocate more of its resources to it. That is precisely what the Government are encouraging. We shall thus see an end to a United Kingdom approach to inward investment. We shall have fragmentation—one region or territory set against another, duplicating effort, budgets and resources. Ultimately, the United Kingdom as a whole will lose out and I suspect that, from next July onwards, that marvellous percentage—40 per cent. of all European inward investment achieved by this country—will start to decline.

That is probably what the hon. Member for Banff and Buchan wants. He favours that kind of anarchy. Indeed, he suggested that Locate in Scotland should have complete autonomy and the ability to pursue the inward investment projects that he wants. I wrote down those words and I invite the hon. Gentleman to deny that he uttered them. I suspect that he wants no limits on Locate in Scotland's autonomy and ability to fight for inward investment projects.

Mr. Salmond

The hon. Gentleman misunderstands the present position. To show his expertise in and command of the subject, can he tell me the percentage of inward investment to Scotland where the first contacts were with Locate in Scotland and the percentage where the first contacts were with the Invest in Britain Bureau?

Mr. Fallon

The hon. Gentleman tries to tempt me, but it is not my job to answer questions about percentages; it is the Minister's job when she replies to the debate. I notice that the hon. Gentleman does not deny what I said: he wants no cap or restraint on Locate in Scotland's autonomy and ability to subsidise—

Mr. Deputy Speaker(Mr. Michael J.Martin)

Order. I am sorry to interrupt the hon. Gentleman's speech, but he was turning his back to the Chair. That is not the done thing in the Chamber, so perhaps he would address the Chair occasionally.

Mr. Fallon

I apologise, Mr. Deputy Speaker. I was wrongly tempted by the Scottish National party to turn to my left.

The hon. Member for Banff and Buchan has not denied the fact that he wants no restraint on Locate in Scotland. He wants the Scottish Executive to be fully free to compete for any subsidy for inward investment projects that head towards the United Kingdom.

It is for the Government to answer for the mess that they have created. I wish to put some key questions to the Minister. First, why has the concordat suddenly become such an issue? It cannot be because of the new regional development agencies, which will be quangos for the next five years. There will be no assemblies before the next Parliament, so that cannot be the pretext. Is not the reason simply the emergence of the Scottish Executive?

Secondly, can the Minister explain why a concordat has not been necessary in the past? Locate in Scotland, the Northern Ireland development organisation and the Welsh Development Agency have been powerful magnets with powerful budgets. They have good records, but they have always co-existed happily in the past. Why has such a concordat not been necessary before?

Finally, has the dispute between the Scottish Office and the Department of Trade and Industry—and, indeed the Department of the Environment, Transport and the Regions—been truly resolved? If not, and if it is to become a running sore between London and Edinburgh—between this Parliament and a new Scottish Parliament—we shall simply play into the hands of the Scottish National party, which supported the Government's devolution proposals precisely to foment the kind of dispute to which the hon. Member for Banff and Buchan has drawn the House's attention today.

12.15 pm
The Minister for Small Firms, Trade and Industry (Mrs. Barbara Roche)

We have had a good and interesting debate and I am delighted to have an opportunity to respond. First, however, I pay tribute to the excellent maiden speech of my hon. Friend the Member for Eccles (Mr. Stewart). He showed that he will be an articulate representative of his constituency. He dealt with health, transport and an issue dear to my heart—the century date change problem. I am grateful for the backing that he has given Action 2000 under the chairmanship of Don Cruickshank. It may interest my hon. Friend to know that I raised the problem at the Telecommunications Council on Monday and there was great support from other member states for what the United Kingdom was doing.

Hon. Members on both sides of the House appreciated my hon. Friend's warm tribute to Joan Lestor, who is now Baroness Lestor. On a personal basis, I look to her as a role model and friend. We would all want to emulate her fine record of work. I thank my hon. Friend and warmly congratulate him on his tremendous speech.

A number of important points have been raised, but I take this opportunity to emphasise that the Government strongly support inward investment and want to see it grow. Indeed, it was a Labour Government who had the imagination, vision and foresight to set up the Invest in Britain Bureau some 20 years ago and to set up the Scottish Development Agency, which had inward investment powers right from the beginning and which led to the creation of Locate in Scotland. I pay tribute to Locate in Scotland's professionalism, dedication and commitment.

The Government recognise the importance of inward investment to the UK economy. It needs a properly co-ordinated national effort to market the UK's attractions as an investment location. The IBB is now a jointly managed operation between the DTI and the Foreign and Commonwealth Office, reporting to Ministers in both Departments. That recognises the fact that successful promotion of inward investment requires an integrated worldwide team.

Our commitment to inward investors remains solid, and is long term. We remain committed to ensuring conditions for their success in the UK and Europe. Of particular concern to inward investors is our relationship with the European Union. The Government recognise the importance of the European Union and the need to promote the UK as a leading player in the single market. We have already shown that we will work with our European partners, not against them, as our predecessors were prone to do.

Mr. Chidgey

In that context, will the Minister explain the role that she sees for regional development agencies in securing more funds from the EU, especially matching funds, which will require some financial stream through the RDAs?

Mrs. Roche

We have always recognised that regional policy can play a great role. There should be a voice for the regions. That is why the Secretary of State for the Environment, Transport and the Regions will produce his proposals.

Mr. Godman

I welcomed my hon. Friend's comments on the origins of Locate in Scotland. It came from a Labour Government, by way of the SDA. I seek from my hon. Friend an assurance that there will be no reduction in the role or the autonomy of Locate in Scotland.

Mrs. Roche

The role of Locate in Scotland is extremely important. The scaremongering that we heard is entirely inappropriate. I regard the dedication and commitment, and the track record, of Locate in Scotland as being of a very high order.

Last year, the UK recorded some 492 inward investment successes, involving more than 94,000 associated jobs. The UK stock of inward investment is now more than £154 billion. Of those, Scotland had 76 successes—

Mr. Fallon

Who does she think did that?

Mrs. Roche

The hon. Gentleman asks from a sedentary position who did that. I can tell him who started the process: a Labour Government who had the imagination and the foresight to set up the programme. Not for the first time, the Labour party is showing that it is the best party for business, in contrast with the tired diatribes that we so often hear from the Opposition.

Of those inward investment successes, Scotland had 76, resulting in nearly 12,000 jobs. That is a tribute to all involved.

Recently, the IBB was named as Europe's best investment agency by the international consultants Coopers and Lybrand and Corporate Location, in recognition of the bureau's role in attracting foreign direct investment projects to the UK. That is warmly welcomed.

Inward investment has been a catalyst for change throughout the economy. It has meant introducing world-class management standards and has challenged established UK companies to improve their own performance. It also encourages supply chain developments, creating new regional supply opportunities for British firms, which we warmly welcome.

Mr. Salmond

The hon. Member for Greenock and Inverclyde (Mr. Godman) was not looking for praise of Locate in Scotland, I think, although that is welcome; he was looking for reassurance. May I give the Minister the opportunity to offer such reassurance? Will projects identified by Locate in Scotland continue to pursue negotiations as they do at present? I refer to projects that are interested only in Scotland. Can she also give us the assurance that reinvestment cases, which are 60 per cent. of total inward investment, will continue to be handled by Locate in Scotland as at present? After her praise of Locate in Scotland, she is surely not saying that such projects would have to be handed over to IBB or the industrial development unit.

Mrs. Roche

Yes, of course. I hope that, as I go on, I will be able to reassure the hon. Gentleman further. With the greatest respect, his contribution was a rather sad one, which led to scaremongering and undermines the very organisation that he seeks to promote. We are in favour of Locate in Scotland and what it wants to do. Contributions such as the hon. Gentleman's do not help Locate in Scotland to deliver to its customers.

The record on inward investment has been very good indeed.

Mr. Fallon

It is all ours.

Mrs. Roche

The hon. Gentleman claims the credit for his party, as though it were all due to the Conservative Government. Does he not realise that business wanted that inward investment because of the work force? One of the reasons why investors come to the UK is because of our language and tradition. For the Conservatives to try to take credit for that is beyond belief. One of the interesting lessons of the past few months is that the Opposition have learnt nothing from their defeat.

We want to encourage competitiveness, and we are doing all that we can to create a stable business environment in which we can go forward. We shall not rest on our laurels. We know that we must go further.

In encouraging inward investment projects, I am determined that we should ensure value for taxpayers' money across the UK. The President of the Board of Trade was asked by the Prime Minister to develop a system to address understandable concerns that public money might be used to finance wasteful upward bidding between different parts of the country. As my right hon. Friend told the Trade and Industry Committee in November, she is working on detailed proposals with her Cabinet colleagues.

It is essential that sensible arrangements are agreed, based on co-operation, partnership and transparency, in order that we can ensure that offers to inward investors represent value for money for the UK taxpayer and are fair to all parts of the UK.

Mr. Fallon


Mr. Alasdair Morgan


Mrs. Roche

No. I do not have much time and I am anxious to make progress. I apologise to the hon. Gentlemen. If I had time, I would take interventions.

We have heard speculation, founded on rumour. It was raised by the hon. Member for Banff and Buchan (Mr. Salmond) and compounded by the hon. Member for Sevenoaks (Mr. Fallon). Not for the first time, we see a linkage between the Conservative party and the Scottish national party. It was said that the DTI seeks centralisation or a veto, contrary to the proposals on devolution. That is absolutely not the case.

It has also been rumoured that the new arrangements are bound to be bureaucratic. That was suggested by the hon. Member for Eastleigh (Mr. Chidgey). Again, I can reassure the hon. Gentleman and the House that that is not the case.

There has been much interest in the press, all of it speculation, and we have heard some of that in the House today.

The Minister for Education and Industry, Scottish Office, put the case well. He is reported in The Herald of 29 November as having said that there has been tedious scaremongering by people whose politics depend on all news being bad news. On that occasion, the Government were reported properly. I could not agree more with my hon. Friend.

We are seeking simple, transparent arrangements, based on co-operation and partnership, which may simplify consideration of new projects.

The Government's devolution programme is a key part of our comprehensive programme of constitutional reform. Devolution will provide a strong, democratically elected Scottish Parliament and national Assembly for Wales, within a strong United Kingdom.

The new bodies will reflect the needs and circumstances of the people in Scotland and Wales, working within a UK framework, so that matters that are best handled on a United Kingdom basis will continue to be dealt with at that level.

Those are basic democratic reforms that will strengthen and modernise Britain for the benefit of everyone living in this country, but it is essential that devolution should not undermine the UK's position in the wider world. It is the positive factors shared by every part of Britain that we must thank for our success in attracting more foreign investment than any other developed country in the world, apart from the United States.

The world looks to Britain as a whole for profitable investment, and anything that undermines our united promotion of UK plc overseas can only harm our international image in the long run.

The Scotland and Wales White Papers on devolution indicated that there would be a concordat on financial assistance. We are now looking at how the concordat should be drawn up.

Inward investment is all about partnership: national, regional and local organisations and individuals from private, public and central Government organisations working together to provide a quality service for inward investors. We shall hear later today about the proposals and the important contribution of the regional development agencies in that regard. The White Paper will set that out in more detail. Inward investment takes place in a fiercely competitive world, and our performance must be judged on that basis. We shall build on our record so that we have a competitive economy with competitive companies in a competitive United Kingdom.

Dr. Fox

On a point of order, Mr. Deputy Speaker. You were not in the chair when this point was raised earlier. There are a number of written questions on the Order Paper regarding the timing of the publication of the concordat on inward investment. The hon. Member for Banff and Buchan (Mr. Salmond) claims to have a document showing that discussions about that matter are now well advanced. Either the Government have not yet drawn up the document or the hon. Gentleman has useless information—both scenarios cannot be correct.

Mr. Deputy Speaker

That is a matter of Government responsibility and not a matter for the Chair. The hon. Member may wish to raise the issue through the usual channels, but it is not a point of order.