§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
9.40 pm§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)I want to draw attention to the difficulties in the regional economy of south-east Scotland and north Northumberland. I am pleased to be joined by my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and my hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore), whose joint interests in the debate have been notified to the Minister, and who I hope will be able to contribute.
I was pleased to welcome the Minister to Hawick earlier this week. He confirmed important details relating to the implementation of the Hawick internal traffic relief scheme. With his assistance, we look forward to the work starting next autumn: that is a welcome development for Hawick.
Because the area is similar to his own constituency, the Minister will know that the people of the borders are not by nature a demonstrative folk. It is worth noting that, in the very recent past, a petition organised by Tweeddale Press Group attracted more than 11,000 signatures in an extremely short space of time, and that a public rally organised on a stormy Sunday afternoon last month in Galashiels was supported by more than 2,500 people—an event the like of which has not been seen locally for many years.
Tweeddale Press Group's petition, entitled "Keep the Borders Working", asked the Prime Minister to mobilise all the resources of central Government to mitigate the recent catastrophic job losses that have occurred or been announced in the region over recent months.
My right hon. Friend the Member for Berwick-upon-Tweed, my hon. Friend the Member for Tweeddale. Ettrick and Lauderdale and I have lodged an application with the Prime Minister to see him in the near future and make representations along the lines contained in the petition. The job losses affect not only the borders. Berwick-upon-Tweed shares a travel-to-work area with eastern Berwickshire, so this matter is not only a Scottish Office responsibility.
Earlier this year we were just beginning to come to terms with what were at that time unprecedented job losses in the traditional manufacturing sector in the borders and north Northumberland, in textiles and, equally importantly, in the primary producing agricultural sector, which has recently suffered larger numbers of smaller-scale losses, which are sometimes less dramatically notified, so it is harder to track their exact extent.
Pringle of Scotland, Lyle and Scott and many other small or medium knitwear businesses have reduced their work forces dramatically over a short period. My constituency and that of my right hon. Friend the Member for Berwick-upon-Tweed suffered about 350 job losses apiece just before the summer. We were just beginning to try to come to terms with that when out of the sky fell the dramatic announcement of 1,000 job losses by the Viasystems group in Selkirk and Galashiels. That company is in the constituency of my hon. Friend the 574 Member for Tweeddale, Ettrick and Lauderdale, although many of those who will lose their jobs come from communities in my constituency.
I am sure that the Minister will acknowledge that the scale of the difficulties is such that they cannot be adequately addressed using the area's own resources. We also need some external assistance.
The Minister will have seen for himself, during his short but productive visit to Hawick, that everything that can be done locally is being done. All the relevant bodies in the local economy in the public sector have been mobilised and they are working closely together. Their co-ordination is excellent and their motivation is obvious, but the budgets within which they are struggling to work were cast at a time when no one could foresee what would happen, although we warned Ministers in the previous Administration that the textile industry was in a fragile state. Notwithstanding that, no one could have predicted 12 months ago that things would be as bad as they are.
The Government should address four aspects of the problem. First, we need them to investigate every nook and cranny of any budget that is available through local authorities or the Scottish Enterprise mechanism to see whether any small underspends, additional resources, capital assets or capital consents can be deployed to help the area cope with the short-term problems that we face.
Secondly, and in particular, we need early confirmation that Scottish Office Ministers will honour their pledge to seek actively to determine whether any underspend has occurred in the present EU objective 5b structural funding programme and to divert any such underspend to areas such as the borders and north Northumberland.
Thirdly, we also need help in applying for eligibility for the new objective 2 category of EU structural funds in the next programme of funding. The safety net that the Government secured in the new programme will assist that process and that is welcome, but we need Scottish Office support for our case to have much chance of accessing any EU funds in future. We have taken fruitful advantage of the £20 million-odd that we have had during the current programme.
Fourthly, the petition from Tweeddale Press Group directly adverted to the need for assisted area status, but we also need help from central Government with our application for future access to regional development assistance. The map is being redrawn currently, in co-operation with the Department of Trade and Industry, but if we do not get help we will face depopulation in the next few years. That will damage the local economy and we will suffer the consequences for many years to come.
I have two concerns specific to my constituency. I am worried about the knitwear industry and the agricultural sector, which is spread widely across the region. Hawick, and towns like it, have several viable knitwear businesses. They operate in niche markets and they manufacture world-quality goods, but they need to be nurtured and helped to develop. They need help with training, equipment and new market opportunities and they need assistance to enable them to compete more effectively in future. The Government can help with such activities.
Border towns such as Hawick need much more public investment in the built environment. The traffic relief scheme that the Minister announced when he was in Hawick will help that and it could be used as a focal point around which other built environment improvements 575 could be structured. Good examples exist of what can be done. If the Minister cares to look at the example of Duns in my constituency, he will see a central town scheme that transformed the centre in a way that gave a boost to the whole local economy. We have been told that we will have a replacement cottage hospital in Hawick, and that is welcome. However, it is a private finance initiative project, so it will take longer than we would have liked. Other welcome initiatives have been taken in the Galalaw factory units to grow new small-scale businesses in the town, but we need more assistance in training and business development in the community.
We also need the Borders college to be expanded. I was disappointed to discover that the rules do not allow mature students over 50 access to student loans. An electrician in my constituency wants to study computer science and has been accepted on a course. Because he is 52, he cannot get a loan, but that is perverse and the Government should reconsider that obstacle to retraining. A change would not cost large sums of money, but it would make a difference to the constituent to whom I spoke on Friday.
The Borders college has been given help recently. My hon. Friend the Member for Tweeddale, Ettrick and Lauderdale has received some welcome news about expansion in bursary capacity there. He and I are keen that the problems of a split-site rural college of education should be recognised in the funding formula. I need not overstress that argument to the Minister, who knows well enough those difficulties from the problems in his own back yard.
Tourism can develop, there is potential for forestry processing, and the local enterprise company, Scottish Borders Enterprise, is working hard to expand indigenous businesses. The local authority is working hard to develop business, to improve transport links and to gain additional resources for schools. The Secretary of State has been to the Burnfoot primary school in Hawick and has given extra assistance to the community school development there, and that is very welcome.
The borders could also take advantage of social inclusion schemes that are currently in gestation. I plead with the Minister to consider urgently applications that will come from the region. In passing, I should just mention the Dalkeith bypass. When the Minister visited Hawick earlier this week, he heard from the convenor of Borders council that the bypass is important to the borders economy: it is not just an Edinburgh issue.
There is evidence of market failure in the private sector in south-east Scotland. The public sector must pump-prime provision of factories and other premises in areas in which the private sector simply is not prepared to invest. Towns such as Hawick need that. We must provide premises of the right size and quality, in the right places. That would be a sensible investment, which would pay dividends by unlocking private sector investment that would kick up and underpin the local economy.
We can take advantage of one new opportunity—the welcome new development at the Heriot-Watt university campus. That gives us access to higher education, and it could result in spin-offs such as development of a science park at the Riccarton site. I attended Heriot-Watt university myself, and I know what a magnet and what a generator of economic wealth a science park spun around 576 a campus can be. There are opportunities for conference facilities and for information technology spin-offs for the whole region if the park is properly developed. We still require Government help with that investment.
The local authority and the local enterprise company are compiling a medium-term economic strategy. I am confident that that will address the questions, and that it will come up with good recommendations. We need help to bridge gaps in the short term, however, to ensure that the system works.
I have two final points, on agriculture. There is concern that the Irish Government have put money into reducing Ireland's ewe flow. The Republic's national heritage Department is, if rumour is correct, putting funds into agriculture, paying £30 a head to take ewes out of the system. That may be good for the south of Ireland, but the ewes may be dumped on the United Kingdom market at £17 a kilo. That would have a catastrophic effect on an already difficult sheep market throughout Scotland, and particularly in the borders.
Secondly, we need a package of measures to tackle the problems of agriculture by reorganising local businesses. In particular, we need a more effective outgoers scheme to allow tenant farmers on the hills to retire with some dignity.
I hope that the Minister will acknowledge that we face serious problems. My right hon. Friend the Member for Berwick-upon-Tweed, my hon. Friend the Member for Tweeddale, Ettrick and Lauderdale and I are determined to keep on raising these matters robustly and positively to make sure that the Government are kept informed of local circumstances as the local crisis unfolds. We want the House to be able to monitor Ministers' responses. If we hear only empty rhetoric, local people will notice it. That would cause damaging depopulation, which would be held against the Government for many years to come.
§ Mr. A. J. Beith (Berwick-upon-Tweed)I am grateful to my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) for seeking this debate and giving us and our hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) an opportunity to represent concerns that go right across the borders.
As my hon. Friend made clear when he spoke about the redundancies at Pringle of Scotland which occurred in both his constituency and Berwick-upon-Tweed, redundancies know no boundaries. Although the firm is called Pringle of Scotland and it did not make much publicly of the fact that so much of its knitwear was assembled in England, it was a significant employer in the town. In years gone by it employed hundreds more even than those who lost their job at that final stage. Textile job losses hit us hard, along with the rest of the borders.
Since then there have been other losses as a couple of firms have gone under, one in computer cataloguing and the other a sandwich business. Both provided vital jobs in the area.
At the same time, we have a desperately difficult situation in agriculture. It is not always realised how many agriculture-related businesses there are in the communities of the borders or how much the small 577 towns depend on agriculture because they service it. They provide it with supplies, machinery and vehicles. They maintain those vehicles and carry out engineering and other services. Not only Berwick and Kelso, but smaller towns like Wooler, Belford, Chirnside and Coldstream are involved in those businesses and they are all feeling the pinch severely. Further job losses are starting to happen in agriculture-related businesses, all of which trade across the border. It is a cross-border problem which demands cross-border solutions.
In this my brief contribution I want to emphasise to a Scottish Office Minister how he might help us and what he could be doing. I remind him that if 100 jobs are created in Berwick, in all probability 20 or 25 of them will be taken by my hon. Friend's Scottish constituents. If 20 jobs are created in the Cornhill area, a number of people from Coldstream will take those jobs. Conversely, the success of businesses on the Scottish side of the border, such as Dexters papermill in Chirnside and others, is crucial to my constituents.
I should first like to see the Minister ensure full co-operation from Scottish agencies with the Berwick area task force. It was set up to co-ordinate all the work of all the Government-related and relevant private bodies that can contribute to economic regeneration in and around Berwick. It started life as Pringles task force in response to the redundancies there, but it has had to change its name because of so many other redundancies elsewhere and the widening problem. We have had some co-operation from the Scottish Borders Council and from the Scottish Development Agency, and we should like that to continue and to be strengthened.
In recognising that jobs in Berwick are relevant to the other side of the border, I hope that the door will not be shut on any suggestion of some financial help in putting together a joint bid for some industrial regeneration project or other. It would be sound investment for the Scottish agencies. The problem is often assembling a bid which puts together enough matching funds to draw out the European funds which are available for many of these projects, such as those for textile areas under the Retex scheme. The other day a Minister assured me that there are £2.5 million in funds directly accessible for various regeneration work in the Berwick area, but that depends on assembling matching funds.
In the context of European funds I echo my hon. Friend's plea in so far as it relates to north Northumberland, too. I hope that he recognises how important it is that north Northumberland continues to have some access to European and United Kingdom regional funds. We have patchy involvement now partly because in times past the Berwick area has not been one of high unemployment. We are suddenly faced with these problems. The southern end of my constituency, which is more related to the Tyneside economy, has had high unemployment for a long time. Unemployment has hit the borders severely in relatively recent times and since most of the old maps of assisted area status and so on were created.
I hope that the Minister recognises the importance of infrastructure spending on jobs in the area. All of this is of cross-border significance. Hon. Members have worked together on the A 1 campaign because it is crucial to the communities on both sides of the border that we have a safe and effective A 1 . We have all been bitterly disappointed—indeed, the hon. Member for East Lothian 578 (Mr. Home Robertson) has said so—that so many A1 dualling projects have been abandoned on the Scottish side and that progress on the English side is so limited.
There are other transport plans and proposals, for example for a rail freight centre in Berwick and for opening up rail links in the borders. I hope that they will be looked on with favour because they will bring jobs as they are created and will strengthen the infrastructure for the businesses that could prosper in the area.
My last point concerns joined-up Government, in the phrase that Ministers have popularised. When an area has a crisis such as this, every Department should be put on notice that it has special problems so that all decisions are checked for whether they will make the problems worse. It is happening even now. Several Ministers have said how concerned they are by the situation in the borders but harmful decisions are still being taken.
We have a classic coming up on Monday. If the Government announce that we are to lose the Territorial Army centre in Berwick, we will lose some full-time jobs, and the input into the training and development of the relatively young men and women who have the opportunity to serve in the TA. They would have to travel to continue serving. Closure would have an impact on the area.
§ It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Allen.]
§ Mr. BeithEducation expenditure, to give only one more example, is crucial. My hon. Friend the Member for Roxburgh and Berwickshire mentioned further education, of which there is little in the eastern borders. For most people, there is almost nothing within 30 or 40 miles or any sort of travelling distance. Berwick-upon-Tweed has only a tiny annex of Northumberland college with a useful but limited range of facilities. The only other readily accessible facility is the part of the Borders college at Duns. Again, that is only a small part of the college's activities. Without further education facilities in the area, we cannot re-equip our young people to follow different careers. I hope that as part of joined-up Government, Ministers realise that every Department must deliver its policies as they affect areas with special problems. I hope that the three of us will have made the case that the area has special problems.
§ 10.1 pm
§ Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale)I am grateful to my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) for encouraging me to participate in this debate, and to the Minister for his willingness to hear from the three Members who represent south-east Scotland and Northumberland, which have been badly affected by economic developments over the past 12 or 18 months.
It has been a dreadful year. We face the loss of about 2,000 or 2,500 jobs. There is not a community that has not been affected. My right hon. and hon. Friends have been most eloquent in explaining how the different communities north and south of the border have been affected, and how much they depend on one another. It is only as we approach Christmas that the personal tragedy of lost jobs and lack of income, and the desperation 579 of families, will come home to roost, not least in textiles, but also in electronics, with the first major redundancies from Viasystems expected in the next few weeks.
Our part of the country welcomes the fact that Ministers have visited and seen our problems at first hand. It is fair to say that, over the summer, we have had many meetings with Ministers in Glasgow or in the borders, and we are most grateful for that. If the Minister will accept a small reminder, many initiatives have come from the communities of the borders and local agencies. All the people of the borders recognise the need to come up with good, positive ideas. The various rescue plans put to the Scottish Office over the past few months pay tribute to the creativity and far-sightedness of many local people in understanding the nature of the problems that affect our area, and possible solutions to help get us out of the current difficulties.
There is no lack of community spirit. We hear so often about the borders rivalries. This shows the flip side: towns and villages coming together, recognising the common purpose of the borders and the north of England. We know that we need a variety of responses in the short, medium and long term.
For the short term, I have already mentioned that so many families are horribly affected by the sudden loss of jobs and thus of income. We have had some high-profile task forces from the Department of Social Security and the Employment Service in our area in recent weeks. We are anxious to have an assurance from the Minister that those task forces will remain in the borders, properly staffed and resourced, for many weeks and months to come, to ensure that the proper advice and support is available to those families in their hour of need.
In the medium term, to provide some solutions for our part of Scotland and the north of England, we must tackle our disadvantages. Reference has already been made to the need for assisted area status. I commend to the Minister the publication by Scottish Borders council entitled "The Scottish borders case for assisted area status" only recently produced, and now submitted to the Scottish Office.
We have suffered often in the borders from an apparent wealth and an apparent lack of the headline figures such as high unemployment that might make us eligible for support. The thoughtful proposal by the local council in partnership with the enterprise company and others highlights the fact that the problem with unemployment figures is that they do not take any account of the many people who leave the area. Indeed, too many people may be forced to leave our part of the country.
Just a short trip—the Minister may have made it this week—into the top end of Galashiels from Edinburgh reveals that almost every third house is for sale. People do not hang around to be unemployed in the borders. Other factors, such as our very low income per head and our very low numbers of young people, should be taken into account when the assessment for assisted area status is made.
The Minister will be familiar with our view from deputations that my hon. Friend the Member for Roxburgh and Berwickshire and I have brought to him about the future of European Union structural funds. When we met recently at Dover house, he encouraged us 580 to go away and pull together the different parties involved in the bid for objective 2 status. I can happily report to the Minister that, only this week, we had a meeting at the Scottish Borders tourist board headquarters in the borders of all the main parties. We shall meet on a monthly basis from now until the announcement is made about the future.
We are committed to ensuring that we produce a co-ordinated response which will demonstrate beyond reasonable doubt that the borders deserve to be considered properly within the objective 2 category, and at the very least are eligible for the safety net proposed by the European Commission.
When we get beyond medium-term initiatives, we have to look at the long-term problems. Too often in the past, people in the borders have identified many of our problems, be it poor roads or the lack of a railway, yet previous Administrations have chosen to ignore them, and have never prioritised them. We hope that the Government will not repeat their mistakes.
We welcome the fact that, over the summer and the past few months, a high-level working party sponsored by the Scottish Office and led by a senior Scottish Office civil servant has been looking at the various problems in the borders. We hope that the Minister will be able to tell us, if not this evening then soon, when we might expect an interim announcement from that working party as it draws together its first conclusions and reports to the Secretary of State.
We hope that it will not finish quickly, meaning that the problems of the borders are quietly shelved, and Government initiatives move on to other areas. We hope that the Minister will be able to tell us that there will be a continuing focus for that group, and that there will be evidence of the joined-up thinking to which my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) referred in Government Departments for some time to come.
I want to pay particular attention to the case of Viasystems, the electronics company that recently announced it would close with the loss of 1,000 jobs. As my hon. Friend the Member for Roxburgh and Berwickshire pointed out, although those jobs are primarily situated in my constituency, in Selkirk and Galashiels, the effect of their loss will be felt across the borders. There is a real sense of shock that something as horrific as that is to hit the local area. In many cases, people have put 30 hard years of their life into the company, which was highly profitable and had a committed and productive work force, yet their commitment, productivity and hard work have been betrayed by the management in St. Louis.
During the summer, my hon. Friend the Member for Roxburgh and Berwickshire and I visited St. Louis, and put the case to the management for continuing with the Viasystems plants in the borders, but our appeal fell on deaf ears. It was not that we made an emotional case; our case was based on hard financial realities. In the first six months of this year, Viasystems' plants in the borders made a profit, by the company's own definition, of £2 million. The company makes an estimate of earnings before interest, taxation, depreciation and amortisation; as an accountant, I could get very excited about all that, but suffice it to say that the company chooses in all its corporate releases to concentrate on that operational measure. 581 As I said, in the first six months of this year, the profit made by the company's own measure was £2 million, so it is a disgrace that the company has argued publicly that it was losing money in the borders. The only way in which the company could begin to portray the borders facilities as losing money is by allocating some interest charges from an Italian subsidiary, Zincocelere, that has absolutely nothing to do with the borders; by attributing to the operational performance of the facility –200,000 associated with early redundancies this year; and—something which sticks in the throats of many in the borders—by allocating nearly £100,000 of fees paid to the financiers Hicks, Muse, Tate and Furst, who put up the money that backs the Viasystems shareholders.
My hon. Friend the Member for Roxburgh and Berwickshire and I have often called for a public inquiry into the Government assistance given to the corporation. When we saw the Secretary of State a few days ago, he promised once again to look at the matter. We hope that the documents surrounding the Viasystems case will be put into the public domain, and that all the efforts of local trade unionists and the people working in the factory to transfer work from the borders to other plants will be exposed. Only then will we have a true picture of what Viasystems has been up to.
Collectively, we have painted a bleak picture of what is happening in the borders, and I believe that it is a fair portrayal. However, we would all agree that we must not talk down our part of Scotland and northern England. There is still a lot in the borders and in north Northumberland to encourage people to stay in the area, but we need some encouragement from the Government to show that they share our commitment and the commitment of the people of the borders and north Northumberland to get through these terrible difficulties and move on to a more optimistic future.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. Calum Macdonald)I start by congratulating the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on instigating this debate, and the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Moore) for joining him in raising the important issue of the economic crisis in the borders and the question of economic development in that area and in north Northumberland. They have described the difficulties faced by the area most eloquently and pungently. Thanks to their previous representations and those of the local communities, which has resulted in a large postbag, the Government are very much aware of the problems.
I assure the House of the Government's continuing commitment to the borders and their awareness of the economic difficulties that the area faces. My right hon. Friend the Secretary of State for Scotland visited the borders on 2 and 3 November to hear at first hand about the problems and about the plans to strengthen the local economy. I have just returned from a visit to the borders, where I spoke to local people about their concerns, and about ways to improve the economic situation in the area.
There can be no doubt that the jobs lost at Dawson International and Viasystems mean that the area is facing difficult times. I fully sympathise with those made 582 redundant by both firms, and I know that many small businesses are concerned that their own future is uncertain as a result.
I can assure the House that the Government did everything possible to save the jobs that have been lost. In particular, my noble Friend Lord Macdonald tried repeatedly to engage Viasystems in discussions about securing the future of the Galashiels and Selkirk plants, but, sadly, the company was not interested. I note that hon. Members are in discussion with the Secretary of State about the background to those events, and I am sure that those discussions will continue.
On 2 July, the Minister for Trade, my hon. Friend the Member for Cunninghame, North (Mr. Wilson), announced the Government's initial response to the job losses at Dawson International and the difficulties at Viasystems. The package included further funding of £1 million for Scottish Borders Enterprise, and the establishment of a rural inward investment team by Locate in Scotland to try to help areas such as the borders.
The Employment Service also moved quickly to establish rapid reaction teams when the closure of the Viasystems plants was announced. Those teams have been working hard to provide advice and assistance to those facing redundancy, and so far they have been successful in securing employment for 50 former Viasystems employees, and more than 900 have been put forward to prospective employers by the Employment Service. I also understand that 70 more former Viasystems employees have also found jobs without using the services of the rapid reaction teams.
Those initial actions show the seriousness of the Government's reaction to developments in the borders. The hon. Member for Roxburgh and Berwickshire asked that the Government stand ready to help Scottish Borders council in various projects that it is trying to develop. I can tell him that we stand ready to grant additional capital consent to the council for a specific project that is currently under discussion, if the company involved decides to go ahead with a proposed expansion.
The Government are very aware of the need to work in partnership with the local authority and the local enterprise company to deal with the economic problems in the area, not only immediately but in the longer term. At the end of August, my noble Friend the Minister who has responsibility for business and industry announced the establishment of the borders working party, which is chaired by a senior official in the Scottish Office, and is building on the useful work that the council and Scottish Borders Enterprise have done to try to deal with the problems in the area.
Although the core membership of the working party is made up of officials from the Scottish Office, Scottish Borders Enterprise and the council, the working party is also drawing on the experience and expertise of other local bodies as necessary.
The working party has met three times so far—most recently last week—and is developing initiatives to address short-term and longer-term economic problems. I can assure hon. Members that the working party is very aware of the need to press ahead with its work, and that it is doing so.
Hon. Members asked for details of an action plan for economic regeneration in the borders. I am sure that they will appreciate that some of the opportunities being 583 pursued by the working party will inevitably take time to develop, and of course many of them are also commercially confidential at this stage, so I cannot give any details to the House without endangering the projects.
I realise that, because of the need for commercial confidentiality, it may appear to people in the borders that not much is happening, and that that must be frustrating, but I can assure them that the members of the working party are pursuing any opportunity that has a realistic chance of bringing new investment to the borders.
There is, in particular, a clear need to broaden the company and sectoral base of the borders to promote longer-term sustainability. To that end, the working party will be drawing on work in progress on an economic strategy for the longer-term future of the borders and, separately, on training needs.
The hon. Member for Tweeddale, Ettrick and Lauderdale asked when that interim report would be available. It is hoped that the borders working party will produce an interim report on its work around the end of this month. I hope very much that it will include some positive news for the area, as well as outlining a strategy for tackling the long-term economic challenges facing the area. We are committed to our on-going support for the work of the working party.
Hon. Members also asked about assisted area status for the borders. As they will know, the existing pattern of assisted areas across Great Britain is currently under review. The Government have invited views from a wide range of bodies, including local authorities, local enterprise companies and business, on the factors that should be taken into account in selecting areas for a new assisted areas map that will come into effect from January 2000.
I am aware that the Scottish Borders council has responded to that consultation exercise, pointing out the problems facing the area, and putting forward its case for priority when the new map is drawn up. I am sure that the House will appreciate that I cannot comment on the merits of individual areas before the review is completed, but it is clear that the present economic difficulties in the borders will demand serious consideration when decisions are taken on the coverage of the new map.
Hon. Members also raised the concerns of people in the borders about continued access to European structural funds—which was also the subject of our recent meeting. Those concerns were also raised with me yesterday in the borders, and I have heard similar concerns expressed in many other areas across Scotland. The Government's priority is a wider European Union, offering new business opportunities to firms in the United Kingdom, and I hope that borders firms will be at the forefront of those taking advantage of these opportunities.
To achieve a wider European Union, it is important to recognise the needs of acceding states, and balance the benefits brought by a wider union with the needs of areas within the United Kingdom, such as the borders. The safety net proposal to limit to one third the reduction in the population eligible for the new objective 2 compared with the current United Kingdom objective 2 and 5b eligibility will help us to balance those needs.
I have been impressed and encouraged by the collective and corporate approach taken by Scottish agencies, including local authorities, in making Scotland's case to 584 the Commission. We will continue to press hard in Brussels to make sure that all the relevant parts of Scotland have the best chance of securing future European structural funds. I can also give the hon. Gentleman the assurance he seeks about investigating any potential underspend under objective 5b, although he will acknowledge that that potential will remain uncertain in the near future.
The Government recognise the particular difficulties that rural areas face in attracting inward investment, and that is why we decided to set up a rural inward investment team within Locate in Scotland. The team's role will be to seek out and pursue opportunities for inward investment projects that might be particularly suitable for location in rural areas.
Locate in Scotland will be able to do only a limited amount at its own hand, and will rely heavily on the trust, co-operation and creative approach of local agencies. It will also look to the local enterprise companies for much of its information on genuine local strengths. I know that members of the team have already had initial meetings with the chief executive of Scottish Borders Enterprise. Although I hope that the team will be successful in attracting more investment to rural areas, obviously its task will not be easy, and it would be wrong to expect over-dramatic results initially.
Hon. Members kindly mentioned last week's announcement of Government approval for the new A7 bypass in Hawick. The scheme will transfer traffic, which passes through the town when travelling along the A7, on to a new inner relief road. The scheme represents another example of strong partnership between the Scottish Office and Scottish Borders council, which will share the costs of the relief road. Obviously, the bypass will boost the economic potential of Hawick, but it will also benefit the borders as a whole by improving travelling times on the A7.
Mention was made of the potential for rail developments in the borders. When I was in the borders recently, I heard representations about the reopening of the Waverley line through the borders. I recognise that that project is widely supported by many throughout the area. I am aware of the plans promoted by Borders Future Transport for the line to be reinstated in three phases. The first phase is a freight-only line, and is being taken forward by means of private legislation procedure. Similar parliamentary powers will be need for the other phases.
The Scottish Office is in regular contact with Borders Future Transport about phase 1. Subject to parliamentary consideration, it is anticipated that Borders Future Transport will submit a formal application for freight facilities grant assistance to the Scottish Office. When that is done, it will be given every consideration.
The Scottish Office can also consider providing help for major transport improvements under section 56 of the Transport Act 1968, subject to the availability of funds.
The right hon. Member for Berwick-upon-Tweed expressed concern about the difficulties of the Scottish borders, and pointed out that those difficulties were shared by north Northumberland. I am aware that economic changes seldom respect administrative boundaries. I am also aware that the right hon. Gentleman is a member of the Berwick regeneration task force, which brings together local interests with the Government office for the north-east, and a 585 representative of Scottish borders council. It is important that that partnership stretches across the border to ensure an integrated approach, and I can give the right hon. Gentleman the assurance he sought on co-operation with Scottish agencies as appropriate.
The right hon. Member mentioned the Al. He knows that it is being considered as part of the strategic roads review, and he will therefore understand that I can say nothing that might anticipate the review's outcome.
I hope that I have been able to convey the Government's determination to tackle the issues raised tonight by working in partnership with Scottish Borders 586 council, with Scottish Borders Enterprise, with local businesses and—most important—with the local people. I hope that the steps outlined tonight and those in the pipeline from the working party will prove successful in promoting economic regeneration so that we have a long-term and thriving business sector in the borders; and that that can form the basis of long-term thriving communities in the borders and in north Northumberland.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-seven minutes past Ten o'clock.