WELSH DEVELOPMENT AGENCY: OTHER AMENDMENTS (Hansard, 25 February 1998)

§ Mr. Denzil Davies
We have already debated schedule 10 in relation to the definition of the word "business". My hon. Friend the Minister was asked why it was necessary to include the activities of any government department or any local or other public authority in the schedule. The Committee will recall that "business" is now defined not only as activities (whether or not with a view to profit) but as the activities of any government department or any local or other public authority". 444 I do not criticise my hon. Friend for not dealing with the matter, because time ran out. However, I, the hon. Member for Ribble Valley (Mr. Evans) and others asked why on earth a Government Department, perhaps Her Majesty's Treasury—who knows, the public sector borrowing requirement may flip over again; we do not know—should stand outside the WDA with a tin can looking for money. This is a drafting matter. Why is it necessary to include a Government Department? I can understand the need to include a local authority a little better than a Government Department, but why is it necessary to include a public authority?
According to the definition, everyone in the world will now be able to rattle a tin can to obtain money from the WDA. The difficulty is that it has only £200 million. We were told that if it is to satisfy all the requirements built into the legislation, the money will have to come from somewhere else.
I hope that my hon. Friend will be able to say why it is necessary for any government department or any local or other public authority to be included in the definition as recipients of money. It may well be that this is a back-door way of legitimatising the joint venture agreements that the WDA had with local authorities. They were clearly illegal right from the beginning. It was not necessary to pay the large sums that some councils did to silks in Wales to tell them that they were illegal.
The WDA then moved to some kind of partnership agreement, although I was never quite clear what the difference between a joint venture and a partnership was. Those agreements are probably illegal as well. I do not know whether this is an attempt to cure that illegality—probably not—but will my hon. Friend explain why it is necessary to have the activities of any government department or any local or other public authority included in the definition of "business"?

§ Mr. Rowlands
I have listened to my hon. Friend the Minister's replies to a succession of amendments and watched the extension of the WDA's role, and I want to enter a caveat. I understand that the economy and the world are changing, but one of the qualities of the WDA was its industrial focus. I can remember the old-fashioned standard industrial classifications. Do I now understand that all that has been swept aside?

§ Mr. Hain
My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) asks a relevant question. We have defined business in a broad way—as we saw in the previous debate, agriculture is included in a certain context—precisely to recognise that, with the development of modern economies, there is a great deal of overlapping between the different areas, which previously may have been segmented off into traditional categories. We wanted to ensure that the new powerhouse drove forward the Welsh economy and that it had sufficient functions and powers to deal coherently with all the different sectors of the Welsh economy.
I reassure my right hon. Friend the Member for Llanelli (Mr. Davies) that there is certainly no intention to introduce any back-door method of legitimising illegal agreements. He is right to suspect that that is not the case. I am sorry that I did not respond to the question earlier, 445 but I did run out of time. The specific reason why Government Departments or any local or other public authority are included is that it may be necessary, as happens in the case of local authorities, for them to enter into an agreement with a private operator or a joint consortium. I think, for example, of waste management companies. They may then receive WDA support or advice or business services. The same is true for a Government Department. We wanted to ensure that we allowed the new powerhouse to engage in such activity and not be prevented from doing so. That is the purpose of including the reference in the schedule.