Lords Sitting of 15 May 1975

Preamble
The House met at three of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.
The Lord Shaughnessy—Took the Oath.

TOURISM EARNINGS AND OUTGOINGS
Lord INGLEWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their estimate of the earnings from overseas tourists visiting this country in 1975 and how this figure compares with the earnings of overseas countries from British residents taking their holidays abroad.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, Her Majesty's Government do not publish forecasts of tourist earnings and expenditure. The latest available figures show that in 1974 overseas visitors to the United Kingdom spent £821 million during their visits here and that United Kingdom residents spent £692 million during visits abroad, giving a surplus on the travel account of the balance of payments of £129 million. Statistical information regarding these and other matters on tourism is published quarterly in the Business Monitor M6, Overseas Travel and Tourism.
Lord INGLEWOOD: My Lords, may I ask the noble Lord when he expects the 1975 figures to be available, because those he quoted have been available for some time? They are the best that we have seen for a number of years, as against those of the previous year which cancelled one another out. It is important to know these figures at these times and I wonder when the noble Lord can let us have them?
Lord BESWICK: My Lords, I certainly cannot let the noble Lord have
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them until the year 1975 is over. The figures are published quarterly and it will be in 1976, will it not?

CONSUMER COUNCIL INDEPENDENCE
3.7 p.m.
Baroness BURTON of COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they propose to take to ensure the independence of consumer consultative bodies from the industry with which they are concerned and whether such steps include the provision of funds to enable those bodies to employ experts or consultants.
Lord JACQUES: My Lords, certain responsibilities in relation to consumer councils in the fields of coal, gas, electricity, surface transport and Post Office services have already been transferred, on 1st February this year, to the Department of Prices and Consumer Protection from the Departments responsible for their respective industries. The Government also introduced legislation, on 1st May 1975, to enable the Gas Consumers' Council and the Electricity Consultative Councils to be financed from public funds and not, as at present, by their industries. The other consumer councils I have mentioned are already financed from public funds. The National Consumer Council will be free to recommend what further steps might be taken, including those suggested by my noble friend, when it reports on its review of the present arrangements for consumer representation in the nationalised industries.
Baroness BURTON of COVENTRY: My Lords, while I am delighted at anything that is transferred to the Department of Prices and Consumer Protection, may I, while thanking my noble friend for that satisfactory Answer, ask him whether I am to assume from it that it is the desire of the Minister and the Government that all consumer committees of nationalised industries shall be seen to be independent of the industries concerned and shall all have funds to conduct their own research?
Lord JACQUES: Yes, my Lords, but, so far as research is concerned, we should hope to avoid duplication of expenditure.
Baroness EMMET of AMBERLEY: My Lords, while I support the noble Baroness—I always have in questions of this kind—I wonder whether the Answer which the Minister gave will enable complaints to be answered more quickly. I have a complaint which dates from the middle of January, though I have had pleasant answers. Could the noble Lord assure me that, under this new arrangement, I shall now receive a quicker reply to my complaint?
Lord JACQUES: My Lords, I very much doubt whether the new arrangement has anything whatever to do with the complaint.
Lord WALLACE of COSLANY: My Lords, does my noble friend not agree that a higher proportion of working housewives would provide a larger number of experts free of charge?
Lord SLATER: My Lords, with regard to the Answer which my noble friend gave and which has received so much support from my noble friend Lady Burton of Coventry and the noble Baroness, Lady Emmet of Amberley, do the Government really feel that the action which they have taken is, so far as the Post Office is concerned, the right and proper one? Are they not overlooking the fact that not only will the Post Office have a national board but it will also have district councils in every region which will deal with postal matters on behalf of the consumer?
Lord JACQUES: My Lords, the first question dealt with housewives. Information from housewives in a matter of research is not free of charge. It has to be collected and somebody has to pay for that. So far as the Post Office is concerned, all that has happened is that the Post Office, like all the other industries, will have a council which is responsible to the Secretary of State for Prices and Consumer Protection, because it is a consumer matter. It will not in any way affect the operation of the Post Office.
Baroness EMMET of AMBERLEY: My Lords, can I further exploit my question to the Minister by asking whether, as
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he said that experts and consultants would be employed, he thinks that that will enable my questions to be answered more fully and more quickly?
Lord JACQUES: My Lords, I think the noble Baroness has taken the words "experts and consultants" from the Question and not from the Answer. Experts and consultants will be employed when it is necessary to employ them and provided it does not result in a duplication of expenditure.
Lord SLATER: My Lords, is my noble friend aware that I cannot agree with his reply to my supplementary question, because it is wrong to break up now the system that has been in operation ever since the consumer councils first started? Is my noble friend aware that they have been doing a good job within the respective regions of the United Kingdom, and it would be a shame to change the position?
Lord JACQUES: My Lords, I reinforce what I said; this will make no difference to the operation of the Post Office. The transfer of responsibility to the Department of Prices and Consumer Protection means that the appointments are made by the Secretary of State for Prices and Consumer Protection in consultation with the Minister responsible for the industry concerned. Secondly, any references to the Consumer Council—whether it be the Post Office or any other—can be made by the Secretary of State for Prices and Consumer Protection. Finally, any representations and reports from the consumer councils of any of the industries concerned, including the Post Office, can be made to the Secretary of State for Prices and Consumer Protection. Surely it is to her that consumer councils should report.
Lord WALLACE of COSLANY: My Lords, is my noble friend aware that in putting my supplementary question I was well aware of the fact that collecting information costs money? What I was hinting at was that a fairer proportion of working housewives should be members of these consultative bodies.
Lord JACQUES: My Lords, I think I would agree with that.

STUDENT GRANT LEVELS
3.14 p.m.
Lord ELTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government to state under what circumstances grants for married male students paid in respect of dependent children fall below the level regarded as necessary for their support by the Supplementary Benefits Commission and whether they regard this situation as satisfactory.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Lord Crowther-Hunt): My Lords, under the student grant arrangements which apply during the current academic year, the allowance paid for a dependent child is less than that now paid under supplementary benefit, the rates of which were increased last month. Rates of grant and allowances for students are now being reviewed, and au announcement will be made very shortly about the rates which will apply from the next academic year. I consider that the student grant arrangements, taken as a whole, are reasonably fair, and enable a student to complete his course without undue hardship to himself or his family.
Lord ELTON: My Lords, I thank the noble Lord for his reply. May I ask him in reviewing this situation to bear in mind the fact that when recourse is had to supplementary benefit to make good the gap which, as he agrees, at present exists, this is available only in the vacation? Will he also see whether arrangements can be made for students who are in difficulties in term time?
Lord CROWTHER-HUNT: My Lords, I have noted what the noble Lord has said. The position is that under the supplementary benefit system at the moment a husband and wife get a weekly basic sum of £15·65 plus rent. A married student and his wife, under the main awards regulations, get the equivalent of a weekly payment of £24·29 which is intended to cover rent. A student may also be entitled to rent allowances, or rent and rates rebate from the local authority. The noble Lord was kind
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enough to give me details—unfortunately, only a short time ago—of the particular case which he has in mind. It is true that under certain circumstances a married student with a very large number of children—particularly if they are nearer the age of 17 than 5—would be entitled to more under the supplementary benefit regulations than under the student grant regulations. But there are enormous complexities in this area. I undertake to write to the noble Lord about the case he has in mind, although I shall require slightly more information from him to be able to answer is precisely.
Lord ELTON: My Lords, may I ask the noble Lord whether he will make himself aware of the fact—which I gave him—that the family in question is not a large one, having only three children all under the age of 13 years. But I am obliged to the noble Lord for his help in this matter and I look forward to his letter.
Lord DAVIES of LEEK: My Lords, I thank my noble friend for that answer, but would he help to clarify the matter a little? Does this grant apply across the board to adult students, or to those who may marry when they are still taking their degree course, or does it apply to both?
Lord CROWTHER-HUNT: My Lords, it does not apply to students who marry during their course. In those circumstances there are some special hardship arrangements for students who marry during the course. So far as older students are concerned, there are additional allowances for them. But a condition of all these allowances is that the people concerned must be taking degree level courses, or courses at comparable level.

DEFENCE AND ALL-PARTY DISCUSSIONS
Lord SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether in the matter of measures relating to the defence of the United Kingdom any consultation has taken

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place between the Government and leaders of the Opposition.
Lord BESWICK: None, my Lords, apart from the usual exchanges which take place between the Government and the Opposition in the normal course of Parliamentary business.
Lord SHINWELL: My Lords, is there not some information, which it is not desirable to make public, which ought to be conveyed to leaders and members of the Opposition in the interests of military security? Is my noble friend aware that this was customary in the past? For example, when the late Mr. Churchill was Prime Minister after 1951 he called together, in special circumstances, certain leaders and members of the Opposition—Privy Councillors, in particular—who had taken the oath of allegiance to Her Majesty, in order to disclose information which could not be made public. Is it not desirable that this should continue?
Lord BESWICK: My Lords, I think that my noble friend's memory, which is a very long one, is slightly at fault. There was an occasion in 1949 when leaders of the then Opposition met with the then Prime Minister, Clement Attlee, and an occasion in 1954 when Sir Winston Churchill offered the same facilities to the Opposition leaders, but on that occasion the offer was not taken up. Certainly, if Opposition leaders today asked for a briefing or a presentation such a request would be sympathetically considered. I might add that the Defence Sub-Committee of the Public Expenditure Committee in another place has arrangements under which classified information is made available.
Lord SHINWELL: My Lords, is my noble friend aware that his memory is a little faulty? Certainly it is not as good as mine, because I recall being invited by the late Mr. Churchill to attend a meeting of Defence Ministers, ex-Defence Ministers and Secretaries of State for War. I attended the meeting myself--in fact, more than one meeting—when we discussed military measures which it was desirable should not be made public. Is he aware that this was not in 1949 with Lord Attlee—that was natural at the time—or in 1954, but immediately after Mr. Churchill had resumed Office after
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1951? May I also ask whether it would not be desirable in the international situation, and a great deal of confusion about our military strength, that we might appoint something in the nature of an all-Party defence committee to deal with defence matters or, at any rate, to ascertain exactly what is behind much of the military estimates?
Lord BESWICK: My Lords, so far as the record is concerned, I am afraid I do not rely on my memory; I am reading from the book. On 16th December 1948, Mr. Churchill asked Mr. Attlee whether he would be prepared to receive a deputation on defence matters. Mr. Attlee agreed in principle. Meetings were held on 13th July, 20th July and 20th October 1949. In 1950, Mr. Churchill asked Mr. Attlee for a secret session on defence. Mr. Attlee refused but suggested that the confidential defence discussions might be resumed. In the House of Commons on 1st December 1954, Mr. Churchill made an offer to have talks with the Opposition on defence matters. Mr. Attlee replied that he preferred to allow the matter to rest until after the Service Estimates had been discussed. According to the records—which may be wrong; and my noble friend's memory may be right—nothing further was done at that stage.
Lord MAYBRAY-KING: My Lords, is the noble Lord aware that behind the Question of the noble Lord, Lord Shin-well, and other questions he has asked recently, is the conception that while we have Party Government, and that is right, in times of crisis the essential unity of Britain is something extremely important?
Lord BESWICK: My Lords, I know my noble friend feels that, and of course I absolutely agree. Both he and I in another place pressed for an all-Party committee in which all matters could be discussed openly. I think it was possibly in response to the sort of pressure that has been made that the Defence and External Affairs Sub-Committee of the Expenditure Committte now have classified information available to them.
Lord CLITHEROE: My Lords, is the noble Lord aware that before the 1914 war regular consultations used to take place?
Lord BESWICK: My Lords, my book does not go back as far as that.
Lord CARRINGTON: My Lords, is the noble Lord aware—in fact, I know that he is—that in matters of defence Oppositions get out of date more quickly than on any other subject, because of the classified area of the subject? Generally speaking, would he not agree that when these meetings take place, if they do, there is advantage not just to the Opposition but also to the Government for it certainly helps informed debate.
Lord BESWICK: My Lords, I am sure the noble Lord is right. As I have said, I am equally sure that a request from the Opposition leaders would be very sympathetically considered.
Lord LEE of NEWTON: My Lords, is my noble friend aware that the late Sir Winston Churchill resolved the problem by asking for a secret session; and when it was refused he "spied strangers", cleared the whole of the Gallery and had his secret session anyway?
Lord BOURNE: My Lords, does the noble Lord realise that this subject has been raised earlier? During the first four years when I spoke on defence matters, I suggested an Armed Forces committee, as they have in America; and it was always turned down by the Government?
Lord BESWICK: My Lords, I am not quite certain what the noble Lord means by an "Armed Forces committee". I have given details of the Parliamentary Sub-Committee to which classified information is now being made available. I have also said that arrangements have been made in the past, as my noble friend Lord Shinwell reminded me, although there was a difference about the dates; and for the future I have said that if there were a request from the leaders of the Opposition for a presentation it would be sympathetically considered. In reply to my noble friend Lord Lee of Newton, I fear that on the occasions to which he referred I was not engaged in Parliamentary business but was otherwise occupied.
Lord SHINWELL: My Lords, is my noble friend aware that secret sessions occurred frequently during the period
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of the last war? That is quite a different matter and quite irrelevant to the Question that I asked. May I have an assurance—for this is a serious matter—in view of some doubts and disquiet about our military strength, that it is desirable that frequent consultations should occur between the Government and responsibly leaders of the Opposition, so that there is satisfaction that, in the circumstances, our security is regarded as effective as it is possible to be? Would that not be a desirable thing to do?
Lord BESWICK: My Lords, I do not necessarily accept the implications of the first part of my noble friend's supplementary question; and as to the second part I think I have answered it. But if he taxes his memory further, he will probably recall that there were reasons at the time (and my noble friend was then spokesman for the Opposition in the 1950s) which it was thought were valid, which precluded the Opposition then asking for information. I think that the idea then was that it might limit defence. I have said, and I emphasise that if any request is now made it will be sympathetically considered.
Lord BALFOUR of INCHRYE: My Lords, am I right in thinking that there is a traditional practice whereby the Prime Minister keeps the Leader of the Opposition, both of them being sworn to the Privy Council, cognisant of any major policy matters in foreign affairs or defence, particularly if any emergency arises?
Lord BESWICK: My Lords, I am sure the noble Lord is right.
Lord SLATER: My Lords, is my noble friend aware there is no barrier that has been erected which prevents the Leader of the Opposition, if he feels so disposed, from having consultations with the Prime Minister as such? I have seen this in action and I know it to be true.
Lord BESWICK: My Lords, my noble friend expresses it more clearly than I was able to do.

HOUSING FINANCE (SPECIAL PROVISIONS) BILL
Brought from the Commons; read 1a, and to be printed.
SCRABSTER HARBOUR ORDER CONFIRMATION BILL STORNOWAY TRUST ORDER CONFIRMATION BILL
Brought from the Commons; read 1a, then (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.

NURSING HOMES BILL [H.L.]
3.30 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that the House do now resolve itself into a Committee on this Bill, which is a Consolidation Bill. In moving this Motion, I would draw your Lordships' attention to the Fifth Report of the Joint Select Committee which is unusual in that it pointed out that certain minor anomalies remain in the Bill. In the view of the Committee, this was because the Bill is not being dealt with under the Consolidation of Enactments (Procedure) Act 1949, or the Law Commissions Act 1965, whereby limited amendments could have been made. The Committee did, however, invite the draftsman to consider whether any of these anomalies could be removed. This has been done, and the result is the technical Amendments which stand in my name on the Order Paper. They cover some of the points made in the Committee's Minutes of Evidence. I am glad to have the assurance of the Chairman of the Joint Committee, the noble and learned Lord, Lord Simon of Glaisdale, that the proposed Amendments can properly be made. I beg to move.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of LISTOWEL in the Chair]
Clauses 1 to 5 agreed to.
Clause 6 [Supplementary regulations]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 1:
Page 4, line 19, leave out from ("particular") to ("with") in line 21.
The noble and learned Lord said: The words proposed to be left out would appear to add nothing to the phrase "in particular" which precedes them in the clause. On the other hand, if they are left in, they might have unwanted implications for Clause 5(1). Then, in exactly similar conditions, no such words appear, and if the words were left in Clause 6 the difference in form between the two provisions which are drawn from different sources might suggest a difference of substance that is clearly not intended. It therefore seems desirable now that the two provisions have come together in this consolidation, to bring them into line with each other by making this Amendment. The Joint Committee drew attention to this point during the proceedings on the Bill before that Committee. They left the draftsman to consider whether the discrepancy could he cured on a pure consolidation. He is of the opinion that it could, on the footing that, as I have indicated, the words add nothing to what is already in Clause 6 and therefore their omission would not involve any change in the law. I beg to move.
On Question, Amendment agreed to.
Clause 6, as amended, agreed to.
Clauses 7 to 12 agreed to.
Clause 13 [Breach of condition as to registration]:
Clause 13 agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 2:
Transpose Clause 13 to after Clause 15.
The noble and learned Lord said: This is an Amendment to transpose Clause 13 to after Clause 15. The penalty clauses follow the sequence of the earlier clauses in the Bill for breach of which the penalties are imposed, except that Clause 13 was placed after Clause 12 because the two are closely concerned with registration. However, the Joint Committee took the view that the sequence ought not to be broken and it is now thought that this view is the more logical. The Amendment would give effect to the Joint Committee's view accordingly. I beg to move.
On Question. Amendment agreed to.
Clauses 14 to 24 agreed to.
Schedule 1 agreed to.
Schedule 2 [Transitional provisions and savings]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 3:
Page 13, line 36, leave out from beginning to end of line 38.
The noble and learned Lord said: This Amendment would remove paragraph 5(1) of Schedule 2. "Transitional provisions and savings". The Joint Committee in the proceedings on the Bill questioned whether certain provisions of the Schedule, including this one, were necessary and asked that the question of their inclusion in the Bill be considered further. This paragraph is unnecessary because it adds nothing, at any rate so far as the Bill is concerned, to what is provided in Section 38(2) of the Interpretation Act 1889, and it is clearly desirable to eliminate the superfluous from legislation. The purpose of the Amendment, therefore, is to meet the wishes of the Joint Committee by getting rid of a provision which covers ground already covered by the Interpretation Act.
On Question, Amendment agreed to.
The LORD CHANCELLOR: This Amendment would remove paragraph 6 of Schedule 2 on the grounds that it is entirely unnecessary for this particular Bill. I beg to move Amendment No. 4.
Amendment moved—
Page 13, line 45, leave out from beginning to end of line 8 on page 14,—(The Lord Chancellor.)
On Question, Amendment agreed to.
Schedule 2, as amended, agreed to.
Remaining Schedule agreed to.
House resumed: Bill reported with Amendments.

SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [H.L.]
3.38 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes): My Lords, I beg to move that this Bill be now read a second time. Your Lordships may be interested to recall that it is just six weeks short of a complete decade since I addressed your Lordships' House on the Second Reading of the Bill
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to establish the Highlands and Islands Development Board. I see from the record of that occasion that I described that Bill as in many ways the most important with which I had then been associated. Today, almost 10 years later, I have the privilege of commending to your Lordships for Second Reading a measure which is of at least as great significance to the whole of Scotland as that earlier measure was for the Highlands. The Bill seeks to bring to the breadth of Scotland the benefits of harnessing substantial financial resources and wide executive powers within a new body—the Scottish Development Agency—charged with furthering the development of Scotland's economy and improving its environment. Today's debate is, of course, the first Parliamentary discussion on the proposals in the SDA Bill. Although it is unusual for measures of this wide-ranging financial significance to come first to your Lordships' House, I have no reason to believe that your Lordships will object on that account.
My right honourable friend the Secretary of State has described this Bill as one of historic significance for it is the first that confers on him—as Minister to whom the SDA will be responsible—substantial powers in relation to industry throughout Scotland. Together with the executive responsibilities for industrial assistance which he is shortly to assume under existing legislation, this means that my right honourable friend, in addition to being Scotland's economic planning Minister, will, to a large extent, be its industry Minister as well. These are onerous and challenging responsibilities, but I know that my right honourable friend looks forward to the closer relationship between Government and both sides of industry in Scotland which will flow from his new role.
At this point I feel I must take up that extraordinary report which appears in today's Glasgow Herald, in which the CBI in Scotland are reported as alleging that, in some mysterious fashion, the Bill makes the Agency responsible not to my right honourable friend the Secretary of State for Scotland but to the National Enterprise Board—despite the fact that the NEB is nowhere mentioned in the Bill. The CBI apparently see something sinister in the fact that the Bill refers to

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"the Secretary of State" without specifying my right honourable friend the Secretary of State for Scotland. But this is standard practice. Of course, the SDA will be responsible to my right honourable friend, but as I am sure the noble Lord, Lord Campbell of Croy, as a former Secretary of State for Scotland will testify, virtually all the powers exercised by Secretaries of State for Scotland—for example, in housing, planning and education—are powers vested by Statute in "the Secretary of State" un-named. There is no reason to make an exception from that constitutional practice in this Bill.
According to the CBI, the Bill is not a Scottish Bill apart from the Title. This is also rather astonishing and I must assume that Mr. Grant got tired of reading the Bill before arriving at Clause 26, because that clause contains the statement that the Bill applies to Scotland only and, as I shall seek to explain this afternoon, the Bill establishes the Agency as a body specifically designed for Scotland's needs. I realise that we have published two Scottish Development Agency Bills—one for each House of Parliament—but I can assure your Lordships that both are in identical terms and neither fits the CBI's description. May I correct that? I have no reason to assume that the views expressed in today's Glasgow Herald are the views of anyone other than Mr. Grant, and I may be wrong in attributing those views to the CBI as a body. Having set the record straight, I would not wish to dwell unduly on this incident, since my right honourable friend the Minister of State in another place had a most useful meeting on our proposals for the Agency at a meeting with the CBI earlier this year at which, with reservations, their response was not unwelcoming. My right honourable friend undertook to have continued consultations with the CBI during the passage of the Bill, and this he certainly intends to do.
The SDA is not, however, to have a narrowly industrial remit. Its tasks are to further the development of Scotland's economy and the improvement of its environment. These are two purposes which some people might think as being quite separate, or even in conflict. Their combination in the remit of a single agency is certainly a novel one. But it is
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the Government's view that what we need above all in Scotland today is an accelerated and co-ordinated attack on the economic and environmental decay which blights the living environment of too many of Scotland's workers and discourages those whose new enterprise is essential for the creation of a modern industrial base. In our view, an executive agency with dual responsibilities to improve both the job prospects and the quality of life in Scotland is precisely the extra element which we need to add to the already formidable array of regional development measures, in order to tackle the special development problems which face us in Scotland in 1975.
The problems and the priorities of Scotland in 1975 are different from those of 10 years ago. We have come a long way in the "British league" in that period. For example, unemployment in Scotland is now 1·3 times the average for Great Britain—the lowest relative figure since we started recording over 20 years ago. There is, of course, no room whatsoever for complacency about actual levels of unemployment, but there has been genuine progress compared with 10 years ago when Scottish unemployment was 2¼ times that of Great Britain. The improvement on the migration front has been even more dramatic. In the mid-1960s Scotland was losing as many as 45,000 people each year by net emigration. The most recent figures show a net gain of population. Naturally, the most dramatic changes have occurred in the last two years and have been directly linked to the exploitation of oil off Scotland's shores. But the improvements in Scotland's relative economic position have not all come about overnight. Scotland's industrial structure would be in a weaker position today without the vigorous regional policies which were pursued by successive United Kingdom Governments on a broad front.
There have been creditable and hard-won achievements, but they have not been enough. And, in particular, we have yet to make real inroads into the economic problems of our older industrial areas, especially in West Central Scotland, whose difficulties have emerged with increasing clarity over recent years as the most acute which Scotland has to tackle. Despite the efforts of the recent past, too much of the economic, environmental

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and social conditions of that region fall short of the reasonable standards of a modern industrial nation. Recent economic improvements have failed to stem the loss of population through emigration from West Central Scotland. The progressive loss of a substantial and ambitious element of its potential working-force, which West Central Scotland has sustained over the whole post-war period, cannot continue indefinitely if that region, which contains half of Scotland's population and 60 per cent. of its industrial capacity, is to provide the basis of a balanced and prosperous industrial community. The Agency will be a means of channelling extra resources to West Central Scotland so that we can seek to achieve a more balanced prosperity in Scotland; and the Agency's twin economic and environmental remit is designed with the problems of that region very much in mind. It is the West Central region which bears the worst environmental scars of our industrial past, and I am confident that direct economic benefits will flow from the Agency's efforts to speed up the clearance of industrial and urban dereliction.
We have said from the outset that West Central Scotland will have a special call on the resources of the Agency and we have been gratified to find this view endorsed by bodies from all over Scotland. However, I should emphasise that this is a Scottish Development Agency with a remit for the whole of Scotland, and the expertise which the Agency develops will be available to tackle special development problems wherever they arise in Scotland. Indeed, the Agency will have a very important role in rural areas, where it will take over and develop the excellent work that has been done in the past by the Small Industries Council for Rural Areas of Scotland and the factory-building activities currently sponsored by the Development Commission—and I shall have more to say about that later on. In two of its major functions—industrial estates development and derelict land clearance—it will have a general executive remit throughout Scotland (with special arrangements in the Highlands) and this will give it the executive strength arid geographical spread of experience and contacts to enable it to identify and respond to development needs where and when they arise.
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The Agency also represents a new approach by Government to industrial development in Scotland. It will be the first body wih a Scottish remit which is able to initiate industrial development at its own hand. It will not simply have to wait for development proposals to arise in the private sector. It will be able to play an entrepreneurial role, identifying opportunities which are waiting to be seized by industry in Scotland. It can then support private industry in grasping these, or mount joint ventures, or even set up and run companies on its own account. This means that the Agency is directly in the business of creating jobs in a sense which has not previously been possible. For example, it will examine carefully the possibilities which exist in the field of offshore development and seek to exploit any opportunities which are currently being missed. The object of the Agency's industrial role will be to secure the creation and maintenance of employment and help in strengthening and restructuring Scottish industry. This will involve a larger public stake in industry in Scotland, but the Agency will also have a vital role to play in strengthening the indigenous private sector of Scottish industry through its investment funds and its management and financial advisory services which it will pursue with particular emphasis on the needs of small firms.
Having outlined the guiding principles which have led us to propose the creation of the Agency I should now like to take your Lordships through the main provisions in the Bill. Clauses 1 to 17 of the Bill deal with the establishment of the Agency with the tasks of furthering Scotland's economic development and improving its environment. Clause 2 specifies the objects, functions and general powers of the Agency in greater detail and specific powers and functions are covered in Clauses 5 to 11. The principal functions given to the Agency are based upon the policy outlined in the Consultative Document which we issued in January. The chief ones are: providing finance for industrial undertakings; engaging in industrial enterprise; providing and managing industrial estates and other industrial premises; developing, redeveloping and improving the environment; bringing derelict land into use or improving its appearance. The powers

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given to the Agency are wide and flexible, including powers to take shareholdings, form companies, make loans, acquire land by agreement or compulsorily, manage and dispose of land, carry out works on land, reclaim land from the sea, provide advisory services and promote publicity relating to its functions.
The Secretary of State may also direct the Agency to exercise in particular cases the functions of regional selective assistance under Section 7 of the Industry Act, which are being transferred to the Scottish Office from 1st July this year. The Agency will not be given the task of handling applications for selective assistance, but the Secretary of State will be able to use them with the applicant company's consent where their expertise will be of value in monitoring the Government's stake in a company which has received special help. In this important new role the Secretary of State will have the advice of the Scottish Industrial Development Advisory Board which is given statutory status under Clause 18 of the Bill.
For the exercise of its functions the Agency will be given an initial financial allocation of £200 million, and the Bill provides for this to be raised to £300 million subject to Parliamentary approval. These sums are of course additional to the existing spending in Scotland on selective assistance, regional development grants and regional employment premium. The assurance that sums of this magnitude will be available for the discharge of its functions will give the Agency the confidence to plan its programme on a co-ordinated long-term basis in the knowledge that funds will be made available.
Clause 1 establishes the Agency and provides for it to have a Chairman and between six and 12 other members who will be appointed by the Secretary of State from relevant backgrounds such as industry, then trade unions and local government. The Bill does not, of course, deal with the organisational arrangements for the SDA, which will be chiefly for the Agency itself to decide. However, I am happy to be in a position to announce now that it is my right honourable friend's intention that the Agency should have its main headquarters in Glasgow. I am sure that this announcement, if it does not
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exactly occasion much surprise, will certainly create much pleasure in the West of Scotland. I think it is fair to say that Glasgow is the natural location for the Agency. A large part of its work, both economic and environmental, lies in and around Glasgow and we have made the attraction of public sector office jobs a key part of our policies for the city's economic regeneration. And, of course, the Scottish Industrial Estates Corporation, which may account for over half the Agency's eventual staff complement, is already located in the city.
The actual siting of the Agency's headquarters will be for the SDA itself to decide but this will be looked at as part of a co-ordinated exercise for locating the many thousands of Government and related office jobs which have now been diverted to Glasgow. In saying that Glasgow will be the location for the Agency's main headquarters, this does not in any way detract from their all-Scotland remit and, to fulfil this, I think there is a very strong possibility that they will want to have a physical presence in other parts of Scotland. In particular, the Small Industries Council for the Rural Areas of Scotland, which, as the Bill provides, is to be absorbed into the Agency on a date which we will decide in full consultation with SICRAS, has its headquarters in Edinburgh and regional bases in other parts of Scotland. There are at present no plans to change that set-up and if any changes are planned in the future they will, of course, be the subject of full discussion with the staff concerned, whose interests we have seen in this Bill, and will be in the future at great pains to protect.
The Agency will be a Scottish body responsible to my right honourable friend the Secretary of State for Scotland who will in turn be accountable to Parliament for its work. The Bill gives him power to give general or specific direction to the Agency and also provides for particular functions like derelict land clearance and industrial estates provision to be performed in accordance with arrangements which will be settled in agreement with him. I want to make it quite clear from the outset that it is no part of our intention to tie up the Agency with unnecessary controls. It is my right honourable friend's intention to allow it the maximum degree of initiative and independence that is consistent with the nature

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of the functions which it will be performing. The Agency will have at its disposal very large sums of money; and the selection of its programme of work will involve difficult decisions about priorities. The initiative in selecting priorities will lie primarily with the Agency, but it is proper that the Secretary of State should be able to ensure that the priorities are in his view the right ones and in keeping with the Government's general strategy towards development.
It is also necessary to maintain a reasonable balance between the assistance on offer in Scotland and that in development areas in the rest of Britain. For example, the provision of industrial estates, and above all of advance factories, is a very powerful inducement—indeed, often an underrated element—in the "bunch of carrots" which are held out to industrialists. Thus, the Agency's policies in locating and letting factories need to be in general accordance with the Government's regional policies. The Bill deliberately does not attempt to spell out all the details of the things the Agency can do without approval and those which will require consent or guidelines. We shall be able to explain our intentions more fully in later stages of the Bill's passage. But these are matters in which there should be flexibility.
When we come to the Agency's so-called "industrial investment" functions—that is to say the functions of financing and undertaking industry which will closely parallel functions of the National Enterprise Board—we are involved in completely new initiatives. Apart from the specialised and inevitably smaller-scale activities of the Highlands and Islands Development Board, no independent body in Scotland has previously had these functions. It will be fundamental to their successful operation that the Agency is genuinely free to exercise and back its own judgment. Indeed, the Bill enables it to acquire a stake of up to £2 million worth in any one company without the Secretary of State's consent, provided that does not give it a larger than 30 per cent. holding in the voting rights of the company. But the Agency cannot be without some guidelines and the power to give both specific and general directions is an appropriate power for the Secretary of State in this context.
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The greater part of the Agency's efforts will be a new element in the Scottish development scene. However, there will be some streamlining of existing activities. As we proposed in the Consultation Document, the Scottish Industrial Estates Corporation is to be absorbed and its staff and resources imported into the Agency. They will form part of its executive effort from the outset and will enable it to make a quick start to its work. The recently announced decision to transfer responsibility for SIEC to the Secretary of State for Scotland from 1st July will pave the way for a smooth hand-over to the Agency, and forward planning is already in hand in close consultation with the staff concerned. Clause 15 of the Bill provides for the transfer and Schedule 3 provides important safeguards for the staff of the SIEC. The same provisions also deal with the proposed transfer to the Agency of the activities and staff of the Small Industries Council. This is a logical step since its loans and advisory service which has been of great value to Scotland's rural areas will merge naturally with the financial and advisory service to industry which will be an important part of the Agency's functions. Indeed, SICRAS' experience with small firms will be of great value in developing a broader service to Scottish industry.
Here it might be helpful to your Lordships for me to say a few words about the relationship between the Agency and the Development Commission who, together with SICRAS, play such a valuable part in the economic and social development of our rural communities. Above all, I should like to emphasise to your Lordships our determination that there should be no hiatus in this work—no loss of momentum in programmes already under way—during the time when the Agency is getting itself into top gear. We have had full consultations with Mr. Donald Chapman, the Chairman of the Development Commission, and we have agreed with him that the Commission's activities in relation to rural economic development in Scotland will gradually be merged into those of the Agency but that in order to assist the Agency in the early stages the Commission will continue to make their expertise available until 1st January 1977. During this run-in period arrangements will be made to ensure the ongoing activities of the

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Commission in both the economic and social spheres.
As an example of the kind of co-operation we intend, I am pleased to be able to announce today that the Development Commission have been given approval for the programme of advance factories in the South-West of Scotland which they have worked out in consultation with the South-West of Scotland Development Authority. This programme provides for factories to be built in the areas of Kirkconnel, Newton Stewart, Gretna and Dalbeattie. The Scottish Industrial Estates Corporation will be authorised to act immediately as the Commission's agents in implementing this programme and when the Agency comes into being it will become fully responsible for the continuation of the work. We look forward to further similar initiatives by the Commission between now and the beginning of 1977.
I should like to say something now about the respective roles of the Scottish Development Agency and the National Enterprise Board in Scotland and the relationship between them. I think it would be true to say that it is this aspect of the SDA which attracts most attention in the media, and there has been a rather fanciful notion of Scotland as a battleground over which the NEB and the SDA will fight for the spoils. Nothing could he further from the truth. My right honourable friend will work out with my right honourable friend the Secretary of State for Industry, and with the two bodies themselves, guidelines for a complementary and co-operative relationship, and I see no inherent difficulty in this. But there is no hard and fast division between wholly Scottish industry on the one hand and industry wholly integrated in a United Kingdom sense on the other; so we consider that the division of responsibility should be dealt with by administrative rules which can be adjusted from time to time in the light of experience and according to particular circumstances. We shall publish these in due course, as it is right that Parliament—and essential that industry—should know what the arrangements are.
It has been a frequent theme of our debates on the Scottish economy over the years in your Lordships' House, that we
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should do more to foster and sustain the element of decision-making in industry which goes on in Scotland, and to the extent that the Agency can do anything to foster or secure this objective, it will be empowered to do so. Thus, Clause 2 empowers the Agency to do anything which will assist the establishment, growth, reorganisation, modernisation or development of industry in Scotland. But where these activities have implications for industry South of the Border—as frequently they might have—it is right that the SDA should consult the NEB about these implications, in the same way as the NEB will consult the Agency about its activities in, or affecting, Scotland. There are some activities which more naturally fall to be exercised at the United Kingdom rather than the Scottish level. The reorganisation of industries into more rational production groupings generally has to be looked at on the wider national basis, because there are extremely few industrial sectors which are confined to a single part of the United Kingdom, and reorganisation on a narrowly Scottish basis without regard to the policies being pursued at national level would be impracticable as well as shortsighted. In these cases, as I have said, the NEB will act in consultation with the SDA in any of the activities affecting Scotland.
Clause 12 of the Bill enables the Secretary of State to set financial guidelines for the Agency's activities and—as is usual—these are to be drawn up in consultation with the Treasury. We do not intend to impose an overall financial objective—a rate of return or whatever—for the Agency's activities; these are very diverse and some of them, like derelict land clearance, cannot be subjected to a particular financial objective. At the same time the SDA obviously needs to have some financial yardstick when it is investing in industry or setting up new projects. It is no part of our intention that the Agency should become what my right honourable friend has referred to as "a collector of crippled poultry". Thus, we shall expect the SDA to perform its industrial investment role in a way which is likely to secure an adequate return on its capital.
We recognise that occasions will arise when the SDA comes across worth-while cases where an element of subsidised help

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is also required. This is where the important new selective assistance powers of my right honourable friend come into play, and we shall encourage the Scottish Office and the SDA to work closely together on such cases.
The Agency's powers will extend to the whole of Scotland, so that its expertise and resources may be put to use in any part of the country, should the need arise. However, we have no intention of disturbing the special role which the Highlands and Islands Development Board play in the Highlands and Islands, and we do not envisage any diminution or disturbance of their work. Indeed, we have recently extended the boundaries of their area. We shall be working out arrangements with the two bodies for co-ordinating their activities—just as we have done with the Highlands and Islands Development Board and the Scottish Tourist Board, for example. We are very grateful for the many helpful comments which we received on the consultation document which was issued in January. There was a heartening amount of support for the proposals from all quarters, and to a very large extent they are now reflected in the Bill.
In particular, I should like to thank the many individual local authorities—both old and new—who took the trouble to comment at a very difficult and busy time. Our debate today takes place on the eve of a historic day for Scottish local government. Tomorow, the new regional, districts and islands authorities come into being. I am grateful to them for their general welcome of the Agency's proposals and their willingness and keenness to co-operate with it in its work. This co-operation will be absolutely vital to the Agency's success. I can assure them that the Agency is not intended to detract in any way from their powers and independence. It will bring new resources and expertise to bear on special problems which the authorities have agreed with us command special attention—cleaning up the environment and creating jobs—and it will work in partnership with them.
One aspect which is of particular interest to local authorities is our proposal for the SDA to undertake the complete financing of the derelict land clearance programme and undertake its implementation. Local authorities have strongly
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endorsed the case for an accelerated programme, and we have been impressed by their willingness to work closely with the Agency in achieving it. Therefore we propose in the Bill—and this is a direct result of our consultations—that the Agency should assume its derelict land powers on the same date throughout Scotland. This means that all local authorities will be relieved of derelict land expenditure at the same time. This is recognition of the fact that this is a national problem and that it should not impose an additional burden on certain areas where, quite fortuitously, the scars of the last Industrial Revolution appear at their worst. Clearly, of course, the SDA cannot take on the implementation of the entire programme at once. Therefore, we expect that it will make extensive use of the plans which local authorities themselves will formulate in the early stages. We shall be discussing the detailed arrangements to be adopted in each region with the authorities concerned, and it will be our firm intention to ensure not only that there is no loss of momentum in existing programmes but that we progress speedily to an expanded rate of clearance.
Closely related in many ways to the derelict land clearance powers in Clause 8 are the provisions of Clause 7 under which the Agency will be able, in close co-operation with local authorities, to devise and implement major schemes of environmental recovery. The kind of scheme we have in mind here is, for example, the redevelopment of the area at Cambuslang which has already been identified for a major recovery project, combining new industrial development within high amenity surroundings and for which imaginative plans have already been prepared. The implementation of these plans will be a priority task for the Agency and my right honourable friend hopes soon to be in a position to make a detailed announcement about how these will be followed through. This is just one example—but a particularly exciting one—of the sort of comprehensive development scheme which we have in mind for the Agency to undertake. Another example which comes readily to mind is the redevelopment which is needed in the Queens Dock area of Glasgow where, working with the local authorities, and with the resources and expertise which the Agency will be able to

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bring to bear, we can envisage the recovery of a whole area of vital strategic importance to the city and of considerable potential commercially. The Agency will not be short of ideas and we are determined that they should have the resources to turn those ideas into realities.
While the primary purpose of the Bill is to establish the SDA, it also contains a couple of additional provisions connected with the development of Scotland's economy. Clause 18 provides for a statutory Scottish Industrial Development Advisory Board, to which I have already referred. This Board will advise the Secretary of State on his new responsibilities for regional selective assistance under the Industry Act 1972. The Board in fact already exists for the purpose of advising on selective assistance cases currently decided in Scotland. It is now to have a wider role and is therefore being put on the same statutory footing as the Industrial Development Advisory Board in London.
Secondly, Clause 19 gives to the Secretary of State the power to provide financial assistance for domestic air services serving the Highlands and Islands. The Highlands and Islands remain a unique part of Scotland and despite the great progress which they have made in the past 10 years their sparse population and difficult geography continue to require special measures of assistance. An example of this is the special need for air services in the region. It is beyond dispute that these make an important contribution to its social and economic well-being and this has been recognised by successive Governments. In reply to a question in another place on 14th April my right honourable friend said that the Government accepted the conclusion of the Civil Aviation Authority—in their most informative Report Air Transport in the Scottish Highlands and Islands which they published in March 1974—that some air services in the region which are essential to the life of remote communities show little or no prospect of becoming viable. Because of this, the Government have decided that some financial support should be given to such services and Clause 19 provides the necessary powers.
I should like to recall briefly how we propose to use these powers. As noble
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Lords know, the British Airways Board have recently rationalised their aircraft fleet and disposed of what is called their "third level" aircraft. Loganair, a Scottish company whose whole experience is in operating short and thinly trafficked routes, are now providing services to Tiree and Barra, formerly run by British Airways. Although this still leaves Scottish Airways with a loss on their remaining network, the buoyancy of traffic in the North-East of Scotland offers the prospect that within two or three years the network as a whole could be nearing the break-even point. There is no correspondingly hopeful prospect for the network which Loganair operates. Many of their routes will clearly remain unprofitable for some time and we have entered into discussions with the company about the assistance which might be given, under the aegis ultimately of the powers in this Bill. It is not intended that all Loganair's services should be supported from public funds; the Government have in mind assistance on a selective basis, for example, on routes between the mainland and the islands; and to do so for a period of five years when the position would be reviewed. It is also a matter for consideration whether certain services might be assisted by a local authority rather than directly by Government.
In conclusion, my Lords, I would see the keynote of this Bill as the important new initiatives it embodies for securing the higher level of investment which is much needed in Scottish industry; for creating new employment possibilities; and for helping in the restructuring and modernisation of Scottish industry. These aims are vital to the future prosperity of Scotland. I mentioned earlier the beneficial effects of the vigorous regional policies which have been pursued over the years by successive Governments. Beneficial they have certainly been; but I think none of your Lordships would wish to argue they have been curative. They have provided the medicine to keep the patient alive but they have not rooted out the causes of the illness. A new initiative is therefore urgently necessary; new steps are needed to realise the growth potential of indigenous industry in Scotland and to promote and attract new developments. This new initiative is contained in this Bill in the exciting concept of the Agency, being established against

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the background of the Secretary of State's new powers and responsibilities to industry in Scotland. To be successful it will need the support and good will of every organisation in Scotland which has the same objectives. I wish to assure your Lordships that it will certainly be the objective of the Scottish Office and of Scottish Office Ministers to secure that full degree of co-operation.
The Bill adds two vital new elements to the existing machinery for Scotland: first, a substantial commitment of funds for a planned programme of renewal in the economic development field and, secondly, new powers to engage directly in the creation of jobs and the development of new enterprise. These are urgently needed if we are to overcome the legacy of the past and thus lay the foundations for a balanced prosperity for Scotland in the future. I therefore commend the Bill to your Lordships and beg to move its Second Reading.
Moved, That the Bill be now read 2a.—(Lord Hughes.)
4.16 p.m.
Lord CAMPBELL of CROY: My Lords, I should like to thank the noble Lord, Lord Hughes, for introducing the Bill in his usual agreeable way and, again, for his stamina, because he had a lot to tell us. I should like to take up a point which he made at the beginning because, while this is listed as the No. 2 Bill, he gave the impression that it was not of the Government's making that it duplicates a Bill that has already been introduced in another place. But surely the Government must have miscalculated? It seems that they overlooked the right of Members in another place to have a Second Reading debate on the Floor of that place. They should have expected this to happen on a Bill of such significance, because this Bill seeks to create wide powers of the kind which the noble Lord himself said had never before existed in Scotland. There were the precedents of the Highland Development Bill 1965, and the Local Government Reorganisation Bill 1973, on neither of which there were to be Divisions, which were debated on the Floor in another place. That is how we come to find ourselves having a Second Reading debate on a Bill which is already in another place, yet switched to go through the processes here before it goes
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to another place. I would suggest with respect that to ease the legislative log jam which still exists, two or three Bills could be dropped altogether without anguish to anyone. Indeed it might have the immediate result among observers abroad of some accretion of confidence about the British economy if those Bills disappeared.
With much of the analysis which the noble Lord, Lord Hughes, gave us I agree, and especially with the needs of West Central Scotland, to which he drew attention. I do not agree, however, that the battery of powers to extend public ownership in this and the related Industry Bill is either necessary or wise; nor can I agree completely with the circumstances described by the noble Lord against which he is introducing this Bill. It is common ground that many people in Scotland in the last two or three years have been seeing a useful role for a new body to help finance industrial development operated within Scotland as a Scottish entity, the responsibility for it being with the Secretary of State for Scotland. Such a body, many people thought, would bring together some of the jobs which are now being done separately by other, smaller bodies.. For our part we have suggested a development fund for Scotland; others have suggested bodies with rather different functions. But all have been with the idea of supporting and complementing private industry—not replacing it or competing directly with private industry.
The bodies in Scotland representing trade and industry were well disposed towards that concept. The kind of events which have led to this are the rapid development of offshore oil installations and activity in Scotland, the arrival of grants and loans from the Common Market, and the fact that the Regional Development Fund of the EEC is expected to be making grants this autumn. Last year and the year before, when these ideas were being considered, such a body was not being contemplated in the context of an Industry Bill of the kind now worrying British industry, or of the National Enterprise Board to which a particular function is ascribed—here I am quoting from Clause 2(2)(c) of the Industry Bill—
"…extending public ownership into profitable areas of manufacturing industry; …"

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I must warn your Lordships that we see this Bill as part of the Industry Bill complex. A comparison of the texts of the Industry Bill and the Scottish Development Agency Bill shows how this is so, because this Bill would give powers to the Scottish Agency greatly in excess of any it could possibly need. Instead of producing a Scottish entity, with a special mission to stimulate and support industrial activity in Scotland, it would produce a new régime, and a régime to be imposed over the whole of Britain based on the system in the Industry Bill.
Although there are to be a Scottish Agency and a Welsh Agency, many of the functions of these Agencies are those of the National Enterprise Board. If one compares the texts, one sees the Scottish Development Agency is to have many of the identical functions, but not all. This is a most significant point. Some of the most powerful functions of the National Enterprise Board are retained by it to be operated over the whole of Britain. For example, the vesting order power of Clause 10 of the Industry Bill is not one which the Scottish Development Agency is to have, nor is the function I have just described written into the Scottish Bill; extending public ownership into profitable areas of manufacturing industry.
Therefore, if the Industry Bill is passed in its present form, the situation will be that both the National Enterprise Board and the Scottish Development Agency will be operating under the same uniform system over the country, and their operations will be centralised, not devolved. The Scottish Development Agency will be operating in the name of the Secretary of State for Scotland. Comparison of the two Bills will show that in practice, he will be carrying out the requirements of the Secretary of State for Industry, or other Ministers of the Government. If one compares Clause 2 of this Bill with the Industry Bill, one finds many common functions, so that the Scottish Development Agency would become an arm of the National Enterprise Board, but would not have all its powers.
The National Enterprise Board would wield the even heavier weapons involving extending public ownership. This is unnecessary, because the 1972 Industry Act already enables the Government to help firms in difficulties. Indeed, already the
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Government have been able to use the 1972 Act for rescue operations. But the 1972 Act provides safeguards for industry as a whole against arbitrary expropriation by the State, either by the Government or by some marauding public body such as the National Enterprise Board. The new Bills do not provide those safeguards. Those safeguards reassured British industry, but the new Bills do not contain them.
Under Clause 2 the Scottish Development Agency's functions include acquiring premises, plant, machinery and equipment, as well as,
"carrying on, or establishing and carrying on,…industrial undertakings".
So that the Agency will have power to acquire all that is necessary in the way of industrial plant, premises and land, and to establish or carry on industrial undertakings. This combination, together with several of the other powers proposed, makes it clear to industrialists and businessmen in Scotland that the Agency is not there mainly to support industrial activity, but is there to enter the industrial field, acquiring and competing with the advantages of all these powers to obtain information about the operations of rival firms.
As my noble friend Lord Watkinson said last week in the debate which he initiated, the efforts of businessmen who run private enterprise provide most of the financial sinews and most of our exports. Their efforts are needed now more than ever, but they will not be fully enlisted if those businessmen are antagonised by an open attempt to extend public ownership of profitable industry involving arbitrary take-overs, with the Scottish Development Agency acting for the National Enterprise Board in Scotland—if the National Enterprise Board is not directly involved. The initiative and ingenuity of Scottish firms have played a very effective part in winning business for industry, particularly in Scotland. It would be folly to discourage or stifle those attributes of the private sector; they could not be replaced.
In the running of many different kinds of industries, with all their intricacies, we rely on private firms; for example, in Scotland, in engineering of many kinds, in textiles and in whisky, and in other spheres private enterprise has been continually seeking out markets in the world and supplying them. More important, it

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has been foreseeing what the world will want next, and producing it in time at the right price. I mentioned whisky and in this context I should remind your Lordships that a union conference last October proposed that the distilling industry should be nationalised. It seems that nothing is any longer sacrosanct and, with the National Enterprise Board and the Scottish Development Agency prowling the land, no business could regard itself as safe.
My Lords, I should for a moment draw attention to Clause 14, and there is a similar clause in the Industry Bill. It limits the percentage of share capital and the amount of money that can be paid on the acquisition of an industrial undertaking. As the noble Lord, Lord Hughes, said, it is subject to the consent of the Secretary of State, but that is not of very much reassurance to businessmen and industrialists, nor is it much comfort to them when the purpose is stated quite plainly in the Industry Bill being to extend public ownership. The Secretary of State may well give his permission, but indicate that the limit is not enough. He may also wish to encourage the taking over of certain sectors. Scottish industrialists and businessmen are disquieted and worried about the Bill. Already they have made their objections very clear concerning the Industry Bill. Many of them in Scotland are disturbed to see a lot of the same functions being provided under the Bill for the Scottish Development Agency. The Scottish office of the Confederation of British Industry thoroughly dislikes these proposals and hopes that the role proposed for the Scottish Development Agency will be greatly altered.
The noble Lord, Lord Hughes, mentioned the report in the Glasgow Herald today. To me, it is not a question of the use of the words "Secretary of State". I think we Parliamentarians are familiar with the custom whereby that phrase is used in Bills and Acts to cover many Ministers. I confirm that it has not led to difficulties where Scottish legislation is concerned. But it is not the wording that matters; what matters is the close relationship between the wording of these two Bills, which indicates that in practice the Scottish Development Agency would be dominated by the Department of Industry and the National Enterprise Board.
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This Bill and the Industry Bill, if unaltered, would spawn and let loose two new creatures which would be seeking what they could devour and presenting an ugly appearance to those who can clearly see their claws, which are the powers written into this Bill. In their presentation of the Bill I believe the Government have been guilty of trying to pull the wool over the eyes of people in Scotland.
The Bill provides for borrowing powers up to £200 million, and for further approval from Parliament to be sought for an increase up to £300 million if the economic situation and the Chancellor of the Exchequer permit. These provisions have been curiously described by the Government, and so reported in the Press in Scotland, as the injection of an extra £300 million into Scotland. But surely the total of borrowing must be limited at present; and indeed normally a great deal more than this would be going into investment expenditure in Scotland through normal channels, were it not for the parlous situation, for which the Government must take considerable responsibility. In the present situation the Government are being compelled, rightly, I am sure, to reduce overall borrowing and expenditure because of the economic situation.
As the noble Lord, Lord Hughes said, this is additional expenditure to the regional assistance, but it is very doubtful whether overall extra investment and expenditure in Scotland will occur otherwise than would be happening in other ways. If the Government were frank they should be describing the Bill to the public as follows: "The Government are setting up yet another public body to borrow your money. At the same time the Agency will be increasing public ownership and widening the bureaucratic web." I would add that this is Bennery trying to buy itself into Scotland. Having embarked on giving the false impression that extra money is being offered to Scotland, why do the Government stop there? Why not double the amount supposedly offered, make it £600 million, and offer at the same time to nationalise everything in Scotland? That, at least, would make the proposition clearer.
Now I come to a particular subsection. Perhaps your Lordships will allow me to concentrate on this, because I think it is most revealing. There is a subsection in

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Clause 2 which would enable the Agency to
"…do anything, whether in Scotland or elsewhere, which is calculated to facilitate the discharge of their functions or is incidental or conducive to their discharge."
That subsection permits the Agency to "do anything"; those are the words, and then it continues as I have read. That appears to be the ultimate in granting blanket powers, and we shall certainly be seeking an explanation of what it means. We have seen it before; in the Industry Bill we find that the NEB is to enjoy the same liberties, whether to the detriment of other people or not. And they are not the only ones. In other Bills the Government are proposing similar extraordinary powers. In the very recent Petroleum and Submarine Pipelines Bill we find in Clause 2(1)(g) virtually the same words. Then in a more recent Bill concerning nationalisation of shipbuilding and aerospace industries, if one looks at Clause 3(7) one finds the same subsection.
This new form of wording giving blanket powers seems to be used by the Government in all the Bills I have mentioned, and, for all I know, in others which have all been published in the last few months. The point has already been raised in the discussion on the Industry Bill. This curious subsection has come under attack. The Government have indicated that they are unhappy about it. In due course I trust that the noble Lord will be ready to agree to Amendments on this and other points; and it looks as though Amendments should be made to the other Bills as well when they come to be considered.
In Scotland these new bodies are likely to be colliding with each other. There is the Oil Corporation, which will be active in Scotland, the shipbuilding body and the aerospace body. They will be colliding over businesses, property and land. When, in order to discharge their functions, two or three consider that the same facility needs to be expropriated under this subsection, if it continues in this form, who is to be the referee? Different Ministers are responsible for each body. Scotland would become a hunting ground for these maurauders. This example of identical wording confounds any contention that this is a Scottish project for Scot-
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tish conditions and dealing with distinctive Scottish problems.
Then there is another body, one already in existence to which the noble Lord referred, and that is the Highland Development Board. It has been in the field for about eight years with certain functions, mainly the awarding of grants and loans. There will be a difficult dividing line to work out, because they do not have the powers which this Bill gives to the SDA and which the NEB and ether bodies may have. Therefore, if these powers go through, those who live within their area may find themselves at a disadvantage, if they find not only the Highland Development Board but other bodies coming in and apparently all taking a hand.
The noble Lord mentioned the transfer of powers. I should mention this before I leave the Highland Development Board. In his opening remarks the noble Lord referred to June 1965 and the fact that in your Lordships' House he then Miloduced the Highland Development Bill, as it was called. I should remind him that it had already been through another place; in March 1965, when we had the Second Reading in the other place, it contained powers which were objected to. It was a greatly changed Bill when it reached this House, because the Government accepted Amendments which immediately made it impossible for the Highland Development Board to take over businesses against the wishes of the people concerned. The Government were very quick to make that Amendment, and others which followed, and I hope the noble Lord will follow that good example when it comes to the powers in this Bill.
The noble Lord referred to the transfer of functions under Section 7 of the Industry Act for selective assistance and, also, regional development grant functions which are being transferred from the Secretary of State for Industry to the Secretary of State for Scotland. I agree that this is a significant transfer of functions. I can acknowledge this, having myself been involved in the establishment of the Scottish Development Office in Glasgow, and the arrangement whereby all the work on applications for grants of various kinds started to be carried out in Scotland. But the impression is being given—the noble Lord did not do it today but he came near to doing it—that the

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responsibility for the sponsorship of the whole field of Scottish industry is being transferred from the Secretary of State for Industry to the Secretary of State for Scotland, and that all the continuous diologues on technical and other matters between the industries in the country and Department of Industry or to be transferred to the Scottish Office. That, of course, is a false picture, and it should be registered that it is simply the important functions concerning grants for regional development purposes which the Secretary of State for Scotland is assuming.
Any suggestion that the Secretary of State is now the Minister for Industry in Scotland is misleading. The principal industries, such as engineering, electronics and textiles, are still sponsored by the Department of Industry, as are most of the other industries in Scotland. Their health and prosperity will be in jeopardy if ragged holes are torn in them by the so-called teeth of these new agencies and boards. Before they try to alter the record, it should be noted that the SNP at present support the Government's proposals for this Agency. They can now be seen as the Scottish Nationalisation Party. They appear to welcome this nightmare world of appointed public bodies vaguely responsible to Parliament, but under the general direction of Central Government. That seems an unusual line for that Party to be adopting.
The Bill, also, as the noble Lord pointed out, deals with tidying up the environment and with derelict land. These powers are available already to local authorities, and I think it should be made clear that legislation is not necessary in order that this work should be done. But I see the point about expense. If the Government could relieve the local authorities of the expenditure by reimbursing them, that work could be carried out without this Agency taking a hand. Certainly it would have lightened the legislative programme not to have brought that side in. The noble Lord said he thought it was novel that the Agency should be dealing with these quite separate problems as well as development of industry, but it is simply the unnecessary side of it to which we should like to draw attention, because it is going to mean changes in the system and these may not be justified.
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In general, the charming description which the noble Lord gave of apparently innocent proposals is not supported by the wording of the Bill, nor is it supported by the wording of the closely related Industry Bill. Scottish businessmen and others have already observed this with dismay. They know that it is powers passed by Parliament that matter, not reassurances by the noble Lord, Lord Hughes, who is always very convincing and bland in assuring us that all is well. Businessmen and industrialists know that it is what is written in Bills and finally passed that matters. Therefore, changes and amendments will be necessary.
I have seen all this before. I mentioned the Highland Development Board just now and the changes which I am glad to say transformed that Bill at an early stage and which the Government of the day accepted. But I have also seen it with the Transport Bill. I was on that marathon Committee in another place which broke all records, and during the course of nights and days no fewer than 23 pages of the Bill were dropped during the Committee stage. They were very much the same kind of thing: powers, taxes, things which were going to damage industry. I hope that the noble Lord will approach this Bill in the same frame of mind as his predecessors on those occasions, who were prepared to cut out whole sections of the Bill or make amendments to provisions which would otherwise have been damaging to industry.
The Bill as drafted will not produce the kind of body which many people in Scotland were expecting nor will it produce the kind of body which the noble Lord was describing in most agreeable terms. When one looks at the Bill and compares it with other Bills, one finds it is in fact quite a different kind of creature. Rather would this Bill as now drafted, with its parent the Industry Bill, establish a new regime over the whole country, with unprecedented powers being given to new bodies centred on London and the Department of Industry. We believe that that regime is unnecessary and that it is a threat to Scottish industry, and we shall aim to get the Bill substantially changed during its passage through Parliament.
4.43 p.m.
Lord TANLAW: My Lords, we are, as usual, grateful to the noble Lord, Lord

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Hughes, for his gentle and detailed presentation of this important Bill. My only criticism of it is that he was a little too modest about his own considerable achievements in regional development on both sides of your Lordships' House. He made reference to the unfortunate difficulties in another place which produce this Bill here. This is the wrong time and place to have such a Bill. Certainly when I see the Benches empty of Scottish Peers I begin to wonder what we should do with a Bill that is concerned primarily with regional issues; issues that directly concern and can be spoken un for by representatives of the constituencies in another place. However, I hope that the noble Lord, Lord Hughes, will accept the fact that we on these Benches will look upon this as a No. 2 Bill and hope that it will go through in Committee without any alteration on our part, on the basis that when it gets to another place there will be a full and detailed discussion of every clause of the Bill before it comes back to your Lordships' House.
I was also glad that the noble Lord, Lord Hughes, managed to give a description of the Secretary of State. I did not feel that the Secretary of State, as named in the Bill, represented anybody else but whom he usually does. It might also be worth saying to the noble Lord, Lord Campbell of Croy, that we are not perhaps as concerned as he is about a but-and-ben being behind every clause of this Bill, nor are we concerned that our wee doch-an-dorris is going to be infected by the National Enterprise Board. We welcome the role of the Agency as outlined by the noble Lord, Lord Hughes. We welcome the multiplicity of the roles vested in the SDA. These were outlined in the Consultative Document and developed further in the noble Lord's address. We also welcome the emphasis on urban renewal, and hopefully in Central Glasgow, where to me the housing situation is a blot on the conscience of every feeling Scotsman. At the same time the lack of housing in growth areas on the East Coast should not be overlooked by the Agency if commercial prosperity is to be maintained at the current rate in those areas.
As to the function of the Agency, it is described as an investment bank to
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Scottish industry. That is a fair and commendable description of the functions of such a public organisation as this. But I should like to draw the Minister's attention to a small point which is perhaps a misprint in the Consultative Document. Paragraph 5(a) states that the SDA will provide loan finance and equity. I have not known any merchant bank, industrial bank, or any other bank that actually provides equity to help its customers. This could be a misprint, and is perhaps referring to equity-linked loans, which are quite a normal way of financing industry. If it is not, perhaps the noble Lord will enlighten me, because this would be a new and avant garde form of financing unknown before.
The encouragement of industrial investment is another area which is going to be fostered by the Agency in Scotland. We warmly welcome this. The SDA has a chance of really succeeding where other efforts in this direction have been singularly unsuccessful. If the Board is as representative as is described in the Bill and the Consultative Document, there is just a chance that when loans are granted to industry for modernisation there will be a breakthrough in understanding, so that if that modernisation creates possible areas of redundancy through the introduction of new and labour-saving plant these installations can be made without any form of industrial unrest. The Agency may well prove to be an excellent link in putting forward this line of thinking. I believe that industry and boards of management have been scared stiff of cutting down their over-manning percentages and installing new machines because of the possibility, or probability in some areas, of industrial unrest that would affect the whole enterprise.
I believe that the current demand for 30 per cent. wage increases or more must cause many industries in Scotland that are already over-manned and are operating semi-labour intensive processes either to shut down or to re-equip. We should hope in these cases that the SDA would not supply the necessary loan capital for investment without ensuring first that the new plant will not be overmanned after its installation. I am worried about this matter, because there is no reference in the Bill or in the Consultative Document about retraining.

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From what I have just said, it will be seen that retraining is an important element, indeed an essential element, in the installation of new machinery where redundancy is to occur. I hope that this is just an oversight and, if it is, that it will be rectified in Committee.
Alternatively, it is just possible—and this is perhaps an even more worrying aspect—that it is the Agency's policy to encourage investment on the condition that there are no redundancies, even if the result is over-manning of new machinery. This would be a tragic waste of public money, and ultimately do far more harm than good to Scottish industry in the short, medium, and long term. I am sure that this doubt at least can be dispelled during the passage of this Bill through Parliament or, indeed, even at the end of this debate.
There are, however, two other doubts which must be overcome before Scottish industrialists will be trampling on their toes with cap in hand to the new office of the SDA, wherever it is to be in Glasgow, for these new loan facilities. The first doubt concerns the relationship of the SDA with the National Enterprise Board. I do not intend to dwell for any length of time on this matter, but the noble Lord the Minister states that there will be no hard and fast division between the activities of these State agencies. Indeed, he goes on to say that they should have no difficulty in "a complementary and co-operative relationship".
My Lords, sooner or later an association of this kind usually has to be formalised with a marriage certificate. Certainly, when first cousins are involved, as in this case, such liaisons should be discouraged at the outset. I am sure that the Secretary of State will want his commercial offspring from this new Agency to grow up into normal healthy enterprises. The only way he can do this is to get his pedigree right, and the only way he can do that is to dispel the doubts about the autonomy of the SDA and restrain the National Enterprise Board's activities to companies which are registered South of the Border. I think that this would clear up all the worries that the noble Lord, Lord Campbell of Croy, seemed to have about the NEB.
The second doubt that industrialists might have concerns the whole question of the continuity—this, unfortunately, I
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do not think the noble Minister touched on in his address—of regional development incentives. Businessmen can be excused for being extremely confused about what they are entitled to and where they are entitled to it, because not only have the investment incentives been changed time and time again since 1963—which is the 10 years which spanned the noble Lord the Minister's speech—but so have the geographical areas to which they apply.
The Economist—I suppose most noble Lords have already seen it—recently published a table to illustrate this point, but I should like to remind the noble Lords just how many and how substantial the changes of, policy have been. In 1963 the Local Employment and Finance Acts provided buildings and plant and machinery grants at varying rates, plus accelerated depreciation which applied to what were then called development districts. In 1966 the Industrial Development Act gave 40 per cent. investment grants to replace all existing allowances and applied them to the new development areas instead of the old disstricts. In 1967 special development areas were added and increases were made to certain other industrial grants.
In early 1970 the Local Employment Act created intermediate areas and advance factories, and altered the building grant. Later the same year and in the following year the Conservative Government extended the special development areas and all investment grants were replaced by "free depreciation". Further alternatives to the grant system were also put forward. But in 1972 the Industry Act changed the system back again to investment grants: 20 per cent. in development areas and 22 per cent. in special development areas. Regional executives were created, with power to award additional grants and loans of £250 million.
In 1975 we have before us the Scottish Development Agency Bill, with further changes in the system of regional assistance and at the same time retaining all those that I have been reading out. It is small wonder that British businessmen may be confused, and are suspicious of the constant changes in the system of investment incentives, because they are changing far too fast and changing in shorter periods of time than allow for any capital equipment they may have to

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depreciate at all. Capital equipment of the kind that the Special Development Agency is intended to support should have a minimum life of 5 years and certainly one of 10 years.
This, of course, is more than substantiated by the Second Report from the Expenditure Committee, which states at page 8 under the heading "Continuity":
"One of the strongest single themes to emerge from the evidence given by industrial firms was the lack of continuity in incentives. At least 13 of the 20 firms that gave oral or written evidence specifically stressed this point, as did the CBI."
Paragraph 17 at page 9 says:
"The Government has stated that it intends to maintain the present system of incentives at least until the transitional period of entry to EEC is over, i.e., to 1st January 1978. The Department of Trade and Industry regarded this commitment as of a totally different order from anything of the kind that had occurred before, within of course the limitation that one Parliament cannot commit another."
These quotations from Government Papers express quite clearly the greatest single criticism of this Bill, which is that the Government are in no position to guarantee permanence for the Scottish Development Agency or its system of incentives, not only for the reasons given by the Department of Trade and Industry but because there is still to be resolved the question of our continued membership of the EEC and Scotland's eligibility for the regional grants. Furthermore, and perhaps most important of all, a Scottish Assembly which will take on most, if not all, of the powers presently vested in the Secretary of State must have the right to decide what future role the SDA will play in the Scottish economy, with or without the National Enterprise Board. Finally, the Government's observation on the Second Report of the Expenditure Committee (House of Commons Paper 85) seems to recognise the need for continuity, but it can offer no further assurances in this direction. I think this is a serious defect in this Bill.
I should like to conclude with the matter of advance factories mentioned by the noble Minister. Indeed, they always come up under any body or any recommendation for assistance to regional areas. In this case the Scottish Development Authority was mentioned. I have already gone on record in this House
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with my views on advance factories, but I am very pleased—and I hope that the noble Minister will not get me wrong—that the policy of advance factories is still being pursued vigorously by the SDA; but, when all is said and done, an advance factory is only an empty shed awaiting an occupier and, according to the Report of the Sub-Committee on Regional Incentives, some of them have to wait up to 52 months before they can find a willing renter. My point about advance factory policy in Scotland is the same as I made to the noble Lord, Lord Polwarth, in a similar debate on regional incentives. It is simply this: jobs are linked more closely to the availability of housing than to factory space. Nowhere is this point more relevant than in Aberdeen. Unless proper housing is arranged by the local authority, is it unlikely that industrialists will come to set up and use advance factories? So I sincerely hope that the SDA, which will have a great influence in this area, will recognise that vital point.
I should like to say a brief word about the environmental applications. I think the noble Lord the Minister mentioned that the problem of derelict land was a United Kingdom problem and I believe I may be right in saying (the noble Lord the Minister will correct me if I am wrong) that 80 per cent. of the derelict land in this country is owned by the public sector. I feel that it is the responsibility of those industries that created the mess to clear it up. I do not see why the Special Development Agency should run around with a large dustpan and clear up the mess made by other public industries. If local councils have derelict areas that need clearing up they should do it, and I do not see why the SDA should use its valuable funds and potential in this way. The provision of proper housing in the Govan and Glasgow Central divisions, as part of an urban renewal programme, is by far the most exciting and beneficial project set out in the prospectus of the SDA. Situated in Glasgow, the Agency will be extremely well placed to supervise such a programme, and I hope that it will be given the highest priority in the years to come.
A word about Loganair, to which the noble Lord referred as being the airline which will have the duty of fulfilling the Highlands and Islands air

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service. Will the Minister explain why the Highlands and Islands Development Board cannot finance Loganair? Why should the SDA have to finance a Highlands and Islands operation? After all, the Highlands and Islands Development Board is right there on the spot and its clients, so to speak, will benefit from this service. There may be technical reasons for this arangement, but I suggest that the Highlands and Islands Development Board should be asked to consider doing this, because I do not believe that running an airline is part of the main duties of the SDA. Operating an airline is a specialist business and it looks as though it will be an unprofitable one in any case.
Lord HUGHES: My Lords, there is no question of the SDA running an airline. It is a question of providing a subsidy—and I will deal with the point of the Highlands and Islands Development Board later. But I suggest that if there is to be a Government subsidy Loganair will not care very much whether it comes out of the right hand or left hand trouser pocket.
Lord TANLAW: My Lords, I accept what the Minister says, but presumably if money is advanced to Loganair there will have to be representation on the Loganair board to see that it is used properly. I now gather that there is to be no such representation. Would the Minister tell me why the unfortunate ratepayers in these very under-populated areas in the Highlands and Islands should be asked to chip in to pay this subsidy? This to me seems unfair and I hope that something can he done about it. If the ratepayers can be saved from having to assist a non-profitable airline run by the Highlands and Islands Development Board, I am sure that the Minister will earn the gratitude of these people.
Lord HOY: My Lords, would the noble Lord, Lord Tanlaw, explain, when he says that local ratepayers will be asked to pay, how they will be asked to pay for this service? He must have thought it out.
Lord TANLAW: My Lords, I can best answer the noble Lord's question by recalling a mention somewhere that the local authorities—and I imagine that they are subsidised by the ratepayers and,
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indeed, by the Government—will also be paying. That is the only reference I have seen, but I imagine that ratepayers do pay their money to a local authority; I do not know to whom else they pay it.
I come to the financial disciplines laid down for the Special Development Agency, which are outlined in Clause 12 of this Bill. We fully accept that projects like the urban renewal programme to relieve hardship and so on can produce only human rather than commercial benefit, but it would be helpful to know how the funds offered by the SDA compared with the ordinary facilities available through the orthodox banking system. Are the rates of interest more competitive than those presently available, and what, if any, security will an enterprise have to put up as borrower for the use of the SDA's funds? Are these loans which are made by the SDA intended to be in any way equity linked, as is indicated by the Consultative Document? I ask these questions because the security that is given to a company's bankers is rarely, if ever, called in, except in cases of liquidation or when all else fails. This is primarily due to the fact that bankers want their clients to succeed and prosper and they have no desire whatever to acquire the commercial assets that are given as security or collateral. The recent slump in property prices was an example of this. The banking system suffered very badly and is still bearing the asset burden of these loans.
However, when the lender is a State Agency which sets out to be an investment bank with powers to acquire assets and equity, and not simply to lend money, it is a very different story. Many industrialists have cause to worry if, when loans are accepted from such an Agency and further recourse has to be had for an extension or for more funds, the security offered for the original loan may be taken up by the Agency as a condition of that loan agreement or under the powers of this Bill. This is the declared policy of the National Enterprise Board and it is to be hoped that this same policy will not be pursued by the SDA, which is designed, as we have heard, to assist medium and small sized companies in their expansion programmes. The greatest assurance that can be given by the Minister to industrialists in Scotland who want to take advantage of the SDA's services is for

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the Agency to sever all connections with the National Enterprise Board. Unless this happens, or unless, as I have suggested, the National Enterprise Board makes itself concerned only with those companies which are registered in England rather than Scotland, many opportunities will be lost in the regeneration of Scottish industry, which is the primary function of this Bill.
The top management team as outlined by the Minister is both commendably small and representative of industry as a whole. But the skills involved in investment banking are highly specialised and I hope that the Board and its advisers will call on all existing bodies with experience in this field—bodies such as the ICFC—to guide them in their investment programme. Perhaps the Minister will give some clarification of this when he replies to the debate. As to the staffing of the Agency, we are pleased to note that the Bill takes care of the security of employment, and so on, of the rather large number of staff shown to be involved with the SDA; 470 persons will be employed by the Agency, which presumably represents about 80 per cent. of this very large overheads bill of £3½ million per year.
It would be only right for the Minister to give the designations and a breakdown between those who are salaried and those who are wage earners on this new Agency. It would also be interesting to know what percentage of the 470 personnel, rising to 750, will be resident in Scotland; and I have no doubt that the Minister will say "100 per cent." loud and clear at the end of the debate. I also hope that, on the same question, the Minister will be able to explain the anticipated 50 per cent. increase in staff which is shown in the explanatory notes to the Bill because, as I see it, as the resources of the SDA become depleted it is normal commercial practice to decrease one's overheads in the form of staff. It seems from the explanatory notes that as the resources are depleted the overheads in the form of staff are increased proportionately. This goes against all commercial practice, but it may be a special formula followed in the Civil Service. I believe that some clarification is needed, because we have already mentioned the problems of over-manning. I hope that the SDA will be
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vigilant in the way in which it gives its loans and at the same time I hope and presume that it will not itself be overmanned.
In conclusion, I do not want to leave an impression in the mind of the noble Lord, Lord Hughes, that we do not welcome the good intentions behind the Bill or the objectives outlined for the SDA. The doubts I have expressed will, I hope, be allayed during the passage of the Bill through Parliament and when it has been fully debated in another place. Until then, it is our intention to leave the Bill as it stands.
5.11 p.m.
Lord DRUMALBYN: My Lords, first of all I should like to express my gratitude to the noble Lord, Lord Hughes, for the very clear and full explanation which he gave of the Bill. That will relieve me from saying some of the things which I had intended to say. Also, my noble friend Lord Campbell of Croy has covered so many points that I should be able to keep my remarks down to a fairly short compass. I should like to deal with the principle here. There has for so long been a demand in Scotland for more control of industry in Scotland that it would be churlish to say that what is proposed is not good enough. We are glad to see this transfer of powers and we hope that they will work well. I do not altogether share the noble Lord's optimism on the very close co-ordination which is to exist between Mr. Benn and Mr. Ross in these matters, but we shall hope for the best. I hope that they will be able to work out a proper system of deciding which industry needs attention, in what parts of the country it needs it, and so on.
I should like to deal with a question which has not really been mentioned so far; that is, do we need an agency of this sort at all? We already have the Scottish Industrial Estates, and there could be an agency with expanded powers to cover the development of particular areas. But, for the industrial and even the commercial powers that are taken over in the Bill, could the noble Lord indicate in his reply why it is he thinks it necessary to have an agency? Would we have had one at all or would it have been proposed now had it not been for the Industry Bill? After all, there is a perfectly good development Department

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in Scotland and surely it could have done the type of jobs which have been done by the Board of Trade, the Departments of Trade and Industry, and all the successor bodies for many years past. I am sure that the Minister will not say that a development agency can do this job more efficiently than St. Andrew's House, because I do not believe that. People like to feel that they are dealing with Government and not just an agency. There is a strong psychological element here.
The issues the Bill has to deal with on the industrial side, as I see them, are, broadly: how to finance modernisation, diversification and expansion of industry in Scotland; how to maintain and expand employment in viable undertakings which run into temporary difficulties; how to do all this under proper Parliamentary control and without impairing the initiative of the private sector and fair competition, as well as how to encourage Scottish-based undertakings and, at the same time, encourage overseas investment in Scotland? Last but not least, there is the issue of how not to stop the investment which is coming up from England and which has in many cases been guided up from London to the North. How will that be done in the future?
On these issues, there is of course a fundamental difference between the Parties on the function of Government in providing finance. It is inescapable. We see the Government's role as one of pump-priming and rescue for viable industries until they can get back on their feet again. Let no one underestimate the target set for an industry by a desire to get rid of any obligation to the State and any holding of the State in the industry. It is a great target. I am not so certain that it will be so easy to set a target with permanent participation of the State, which is what the Party opposite want the Government to do. They want the Government to participate permanently in undertakings and even to establish State undertakings in competition with a private sector. We are faced with a situation in which there is a shortage of capital, due mainly to excessive taxation and price restriction, which leaves industry with too little surplus for investment, to the lack of confidence of the private investor and of business due to Government policy, and to the failure of the
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Government to control inflation. In these circumstances, there is plainly a need for Government finance in one form or another. The question is how the Government are to find the very large sums of money foreshadowed in this and other Bills without stimulating inflation and without further damaging existing industry. The Bill looks clear enough on the surface, but it gives rise to many questions. I do not propose to put those questions now. We shall be raising them in Committee but, following on what was said by the noble Lord, Lord Tanlaw, perhaps the noble Lord, Lord Hughes, will be able to tell us, now that the distribution of industry provisions in the Industry Act are being taken over for Scotland—I think I understood him to say that—who will decide whether Scotland is to remain a development area and what parts of Scotland are to be special development areas in future. Who will decide whether the grants towards capital expenditure or the descriptions of qualifying activities are to he varied in Scotland and for Scotland alone? Must the decision be the same for the United Kingdom as a whole or will the Secretary of State for Scotland, with the consent of the Treasury—a phrase which is scattered throughout the Bill—be able to vary the percentages of grant to suit Scotland?
My Lords, I believe that these are relevant questions and, on the wider issues, the noble Lord, Lord Hughes, has said that, where it is a question of considering an industry on a United Kingdom basis, this can be done by the two Secretaries of State in conjunction. But is the Secretary of State for Scotland to develop sponsoring Departments for industries in Scotland? The Minister did not mention this point, but I believe that it is very important.
The noble Lord, Lord Hughes, referred to the Highlands and Islands Development (Scotland) Act 1965. He will remember that I gave that Act my blessing from this side of the House, but that I made it clear that I did so because the Highlands and Islands needed special treatment that St. Andrew's House was plainly unable to accord to them under the arrangements which existed. They were too remote and too scattered.
My Lords, I am not certain that the establishment of the Development Agency for the purposes of industry is wholly

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justified and I fear a very considerable diminution of Parliamentary control. It is difficult enough for Parliament to keep control of the Secretary of State's activities, but, when it is put at one remove and the Secretary of State is given powers to consent, to give directions, and so on, which at the best will probably only be revealed in the Annual Report which comes out in October the following year, I very much doubt whether the powers of Parliamentary control in the Bill are sufficient. I hope we shall do our utmost to see that Parliament is able to control what is going on. I think it is for consideration whether the powers of the Parliamentary Commissioner should be brought to apply to the Development Agency as well.
There is a detailed point I wish to mention. There seems to be some conflict or overlap between the powers under the Industry Act and Clauses 2 and 5 in this present Bill. Clause 2 gives as one of the purposes for which the Agency may exercise its functions the:
"…provision, maintenance or safeguarding of employment…"
while Section 7 of the Industry Act contains an identical provision for the purpose of financial assistance under that Act. It appears that in some cases it may be difficult for the Agency to know when it can act on its own and when it must seek a direction from the Secretary of State.
I do not think one should underestimate the extent to which "flexibility" is being given to the Agency—this is the word which the noble Lord. Lord Hughes, used—under this Bill. It is a very considerable flexibility indeed—to enable it to acquire securities without the consent of the Secretary of State, provided that the consideration for the acquisition does not exceed £2 million, and does not entitle it to more than 30 per cent. of the votes in the company.
As I understand it, the Agency will be able to form bodies corporate and set up and run an industry or an industrial undertaking without the consent of the Secretary of State. "Industrial" includes any commercial undertaking. If it gets the consent of the Secretary of State, it can acquire a majority holding, or entire ownership, of any undertaking. It can
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acquire land compulsorily; it can make and carry out plans for the development, redevelopment or improvement of any area. As I understand it, it can acquire an interest in the seabed. Perhaps the noble Lord will be able to explain the extent of the interest in the seabed. Does this apply only to Scotland, or to the territorial waters around Scotland?
Lord HUGHES: My Lords, I hope the noble Lord will permit me to interrupt-him for a moment, in case I forget about this later. He was referring to the acquisition of shares, and so on, in companies, and the power to acquire land compulsorily. It would be appropriate to point out that there is no power to acquire shareholdings by compulsion: it can be only by agreement with the company concerned. I think the impression was given earlier that there could be a take-over of companies against their will. There is nothing in the Bill which would permit that to be done. I shall have something to say later about the matter of acquisition of land by compulsion, and the circumstances in which that could be done. But it is important at this stage to distinguish between these two aspects.
Lord DRUMALBYN: My Lords, I am grateful to the noble Lord. I hope I did not give the impression that I thought there was such power to acquire shares by compulsion. I am really dealing with where the Secretary of State's consent is required and where it is not.
My Lords, at the Committee stage we shall expect the noble Lord to justify in considerable detail the provision of both these powers and of so much money. We shall expect him to demonstrate that the powers will be used to stimulate competition, not to stifle it. I for my part am not satisfied—at least not yet—that it is right for the same body both to take over the functions of the Scottish Industrial Estates Corporation and to undertake the development of land and areas as a whole—because in that way it becomes an industrial property developer—and to enter into the production field, very possibly in competition with its own tenants. I believe that the job of the State is to create the conditions in which industry can flourish. The Government, having brought industry almost to its knees by excessive taxation and failure

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to control inflation, ought at least to help it hack on to its feet again. I hope that there will be no question of bullying industry into losing its independence.
5.24 p.m.
Lord LYELL: My Lords, first I wish to thank the noble Lord, Lord Hughes, for the clarity with which he set out this very complicated Bill. I should say immediately that all of us in Scotland want to see Scottish industry and commerce flourish. But at the same time the powers given in this Bill both to the Agency and to the Secretary of State seem to be almost limitless—at least according to certain clauses of the Bill. I think immediately that the analogy of Walter Bagehot's definition of the British monarchy springs far too easily to my mind, in that the Secretary of State has the power to do a great deal that is good, yet according to the Bill he does not seem to find his powers limited when he may wish to carry out a dangerously partisan act, which could be harmful to the long-term interests of Scotland's economy.
I am sure that the noble Lord, Lord Hughes, while riot empowered to do a great deal himself under the Bill, would not do anything—and I hope his colleagues would not do anything—which would remotely qualify as harmful. But the noble Lord must know that Scotland is a diverse nation, and some of us in Scotland have doubts in that the powers in the Bill might not necessarily be used to benefit the most deserving areas. Specifically, I am rather concerned by the powers given to the Agency under Clause 2, particularly where it says that it will have powers to promote industrial democracy in undertakings which the Agency controls. While this may appear to be totally beneficial in spirit, it could mean that labour relations in these various enterprises become somewhat strained. I am sure that the noble Lord, Lord Hughes, will know that some concerns which have come to Scotland—not just to our own areas but to all over Scotland—as a result of Government encouragements have had major problems concerning labour relations. This is not general. There are only one or two well-known examples, but unfortunately they are quite large employers. They have had somewhat strained labour relations. I am
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happy to say that most of the enterprises that have come to Scotland in the past 10 to 15 years—particularly to Dundee—have had very good labour relations; in fact better than those in other parts of the United Kingdom.
I consider that another clause contains a little too much power for the Agency, and this is additional to local authorities having the power to acquire land for development. The Agency seems to have the ability to acquire such land as may be necessary to secure an adequate supply for industrial undertakings. This is praiseworthy in theory, but I ask the noble Lord to consider whether, in addition to the future legislation which we are to see concerning land tenure and the National Enterprise Board, this part of the Bill seems to use an elephant to crush a flea. I believe that adequate powers are available to industry and to the Agency under existing legislation without taking these further wider powers.
With regard to finance, I wonder whether the noble Lord in his reply could give us a fairly general idea of what we in Scotland are to enjoy for the £300 million worth of public investment, on top of all the forms of assistance and inducements already available to us. One should be fairly brief at this stage. Most of the points have been covered by previous speakers. I would not seek to argue in principle with any of the proposals in the Bill. But it it is to be administered in a spirit of good will, whereby the noble Lord, Lord Hughes, has helped, particularly in Dundee and Tayside (our own area), I give it my qualified approval. But I am afraid that I must reserve my position over the apparently very wide powers in the Bill given to the Secretary of State and to the Agency.
5.29 p.m.
Lord HOY: My Lords, I have listened to every word of this debate and I am happy to take part in it. Unlike the noble Lord, Lord Tanlaw, I shall not complain about the attendance this afternoon, because as I look round I see present 40 Members of your Lordships' House. There are 14 Scottish Peers present. This is not a bad attendance. Perhaps the noble Lord, Lord Tanlaw, does not come here too often and is unable to make an assessment of attendances. I

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want to do it this afternoon because only last week I was complaining about the lack of attendance and saying that there was not a single Peer present on the Back Benches opposite. If I wanted to be more particular, I could say that there was not a single Peer on the Front Benches or the Back Benches of the Liberal Party. That was an occasion when the Minister of State, my noble friend Lord Hughes, was making a very important announcement regarding Scotland and the extension of the area of the Highlands and Islands Development Board. All I shall say this afternoon is that, so far as I am concerned, there is a remarkable improvement on last week, at which I should like to express my pleasure.
My Lords, I was a little surprised at the way in which the noble Lord, Lord Campbell of Croy, opened the debate from the other side. It never does any good to take a little snivelling, procedural point and try to create it into an issue. This matter is far too big for us to be bothered with that kind of thing. What we are discussing this afternoon, whether we like it or not, has to do with what is going to happen to the economy of Scotland in the future, and in fact how it can be helped forward. Whether we like it or not, we have to take a view about whether we like or dislike the Government proposals. In all the speeches heard this afternoon—and I have heard every one of them—we have not had a single alternative to the scheme submitted by my noble friend—not one!
Lord CAMPBELL of CROY: My Lords, the noble Lord could not have listened very carefully. I referred to our scheme for a Development Fund. I was not going to take up time on this Bill in giving a 20-minute description of that.
Lord HOY: My Lords, I know the Development Fund very well indeed—and the 1972 one. I remember its results The noble Lord was then Secretary of State for Scotland, and we had the highest record of unemployment in Scotland since the 1930s. Obviously, that was not a solution to the problem.
Lord CAMPBELL of CROY: My Lords, it had not started.
Lord HOY: We had to find something else to meet the situation; because what
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he suggested had been a failure. The noble Lord said that it had not happened.
Lord CAMPBELL of CROY: My Lords—
Lord HOY: With respect, I have already given way. I did not interrupt the noble Lord. Perhaps he will let me finish my sentence. He was saving that what we were suggesting was not necessary; then he instanced one or two cases, including the 1972 Industry Act, as a rescue operation which he thought was necessary. All I am saying is that, whether it happened or not, what we were faced with in Scotland was an unemployment population higher than any since the 1930s. Now I will give way.
Lord CAMPBELL of CROY: My Lords, I am most grateful to the noble Lord who, over the years in another place and here, has been most courteous to me. He inadvertently misunderstood what I said. The Development Fund was a proposal of our last year in Opposition. It has never come about When the noble Lord said that not a single alternative had been put, I wanted to indicate that I had mentioned that alternative: but I had no intention of using the time on this Bili to expand on this alternative plan.
Lord HOYMy Lords, I understood that point. The noble Lord will give me credit for having been long enough in this House and in another place to understand what is being said. All I say is that whatever was suggested, when he had the power, if I exclude everything else, Scottish unemployment was at its highest level. I do not say that he personally was responsible for it. I pointed out what the result was, and that whoever succeeded him had to take other action to find a solution.
A solution is not always possible. I do not say that this is a panacea for all ills; I am not altogether convinced that this is the way it should be done; I am not certain about that. I express doubts about it to that extent. When the noble Lord said that all that this Bill does is to provide £200 million per annum, by permission of the Chancellor of the Exchequer, which might go to £300 million by permission of the Chancellor of the Exchequer, if that were a criticism, the noble Lord himself knows that no Government, of whichever Party, can

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make these financial provisions in any Bill without the approval of the Exchequer—whether it be this Government or a Tory Government. So in this point there is no change at all. All the expenditure comes through the Exchequer and must he approved by the Treasury. Many Members sitting on these Benches who have occupied Ministerial positions in the past, know that this procedure has not differed one whit; and not one of them will deny it. This Bill makes no change in that respect. I only hope that we will have sufficient projects to use up the money that is available to build up the internal economy in Scotland.
The noble Lord, Lord Drumalbyn, concluded by saying how this Government had brought industry to its knees, or something like that. He hoped we would give a little assistance to put them on their feet again. Again, he was for a long time a Minister at the Board of Trade. I do not remember that he was particularly successful. I do not remember; he may have been so, but certainly he did not bring it to my attention. I heard him yesterday indulging in an exercise on investment and industry in Britain. Even this Government were taking steps yesterday to rescue Ferranti. Let there be no mistake about it, Ferranti is an industry which is important in Britain as a whole, and certainly in Scotland. It has a very important part inside the Scottish economy. What the Government were saying to Ferranti was, "We offer you £15 million." It was an investment to save this firm which has made a remarkable addition to the British economy. The noble Lord suggested there might have been an alternative. But, it was pointed out, the alternative was, what?—the Official Receiver. Indeed, this is verified by the people who own Ferranti and by the Press today.
Noble Lords, on whichever side of the House they may sit, must make up their minds whether in the interests of their own political opinions they want to allow these firms to die rather than that they should be rescued by public enterprise. All I can say is that, so far as I am concerned, certainly the workers engaged in the industry will wish to have their employment continued. I want to add one other point about Ferranti. It was said in this House yesterday that they hoped that they would not take advantage of their
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position as a new publicly-owned company to have privileges over others. I would not want that to happen, but I want to say in the context of this debate that I do not want the new Ferranti to be treated less favourably than was the previous company.
I remember on many occasions the great trust that Governments of both sides of the House placed in this firm. Indeed, the noble Lord, Lord Drumalbyn, will remember that it was not always rewarded in the very best way. I will not put it higher than that, although I could do so if I wished. All I can say to my noble friend is that he ought to take great encouragement from what has happened this afternoon. No single noble Lord has opposed the Bill. It may be that they have their doubts about it; it may be there are some doubts about the powers of the Government contained in it; but at the end of the day noble Lords on the Benches opposite, like those on these Benches, know that without this Government aid the position would be very much worse. I can only hope that any slight doubts I may have about the method being employed will not be fruitful. I hope I shall be wrong. But I do know, without fear of contradiction, that there has been no alternative put to this proposal of my noble friend Lord Hughes, and as a consequence, speaking on behalf of all my colleagues on this side of the House, I am certain we give it our support.
5.40 p.m.
The Earl of KINTORE: My Lords, first I must make two apologies: I did not hear the end of the speech of the noble Lord, Lord Hughes, as I had to leave your Lordships' House. Had I heard all his speech, I probably would have had the answers to three queries which I have. I hope that the noble Lord will say, "You will see it in Hansard tomorrow" if, in fact, he has already covered the matters that I wish to put to him. Secondly, I had no intention of taking part in this debate, but I now have one or two questions to raise and this is the only time and place that I can get an answer to them. In the production of industrial sites from midnight tonight this is a concurrent function between the new regions and districts, and there is a certain amount of argument going on now, as you can

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imagine. What concerns me is the servicing of these sites, which is an expensive operation falling at the moment on the ratepayers. If the Government, through this measure, produce these sites, will they land the cost of servicing them on the ratepayers, or will it come under general supply of cash from the Government?
Drainage and water supply frequently take a considerable time to establish. There is a good deal of long-term planning involved. If you have masses of water and adequate pipe sizes, and so on, it is money for old rope, but in many cases in Scotland this is not the case, and in my region it certainly is not the case. If possible, I should like an assurance that adequate time on a long term basis will be given to those responsible for producing these services. Regarding employment, I was astonished last night—when travelling to board my train to come to your Lordships' House—to see direction and warning notices on the gas pipeline coming from the Frigg field written in French. The Scots are an educated race—I am not, but most of them arc—hut I think a French notice means that employment is going not to Scotsmen whom we know are out of work, but to Frenchmen. This suggests to me that either the Frenchmen are more adept at the job or more willing to do the job. I do not know, but seeing across the top of the hills in Scotland a notice, "Defense de Puller" was quite a shock.
I realise I should have informed the noble Lord I was going to raise these points, but originally I had no intention of mentioning them. Therefore I apologise once again. These points regarding the long-term aspects of services—and the necessity of services is obvious—should he considered favourably, and if we can get something a little more concrete than the usual refusal out of the Scottish Office to "cough up" any cash at all, we might manage to make this work. That is all I wish to say, my Lords.
6.45 p.m.
Lord MOWBRAY and STOURTON: My Lords, I shall not be very long; most of the remarks I wanted to make have been made and the noble Lord. Lord Hughes, will have more than enough to answer, I am sure. I would say to the ghost of the noble Lord, Lord Tanlaw,
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that considering today is the opening day of the Scottish Conservative Party Conference at Dundee I am impressed by the numbers of Scottish Peers in your Lordships' House. My noble friend is anxiously watching the clock as he has to go back to take part in the Conference tomorrow.
We have before us a Bill which at first sight has many advantages over its close relation, the Industry Bill. Despite the very kind, smooth and honeyed words putting across the good points this Bill has which we heard from the noble Lord. Lord Hughes, we still must realise its relationship to the Industry Bill which not everybody in the country welcomes as much as some Scots do this Bill. What right-minded person would not prefer, if given the choice, travelling with the Minister and the Secretary of State rather than with the Secretary of State for Industry and his Industry Bill? We at least know that the heart and feet of the noble Lord and his Secretary of State are firmly in the cities, towns and fields of Scotland, and they are not thinking about how the Old Testament prophesies will lead to the New Jerusalem! But it is right one should sound a note of caution. Public opinion needs to be warned that, despite its tartan appearance, this Bill is at heart simply a Northern edition to its big brother the Industry Bill.
As my noble friend Lord Campbell of Croy said earlier, this Bill is not necessary; there could have been other ways in which shots in the arm could have been given to industry. We are not against that; I do not know why the noble Lord, Lord Hoy, asked rhetorical questions. We have never said that we are against shots in the arm for industry, provided they are sensibly directed and provided they are given in the right way. The Bill sets up the SDA and we are not against that as such; it may well be a useful body if it can improve the prospects and quality of life for all in Scotland. We would be in behind him on that 100 per cent. But there are one or two matters which worry me: its agreement to any line of action suggested to it is not absolutely necessary. The Secretary of State can suggest general or specific purposes under Clause 4. There has to be consultation, but not agreement. I am sure the noble Lord, Lord Hughes, and his noble friend would be horrified at

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the idea, but there may be directions from the Government which in this period of economic gloom we might question. Under such directions, a body such as the SDA might possibly have to carry out provisions which are in the Bill of compulsorily extending the State control in industry. That is what we are frightened about on this side, that this Bill could be used for dangerous purposes.
Lord HUGHES: May I interrupt the noble Lord? I did not think that it would be necessary to say this again; I intervened when the noble Lord, Lord Drumalbyn, was speaking to point out that that is not so. There can be no compulsion in this direction. If a company wants help from the Government, it will come and ask for it. In these circumstances, there may be an acquisition of shares, but there can be no compulsion; there can be no direction by the Secretary of State because the Secretary of State cannot direct anybody to do anything which is not in the Bill.
Lord MOWBRAY and STOURTON: I accept that, my Lords, but I am still not sure whether, if you take that in conjunction with its big brother, the Industry Bill, down South, it still applies up North.
Lord HUGHES: My Lords, what the noble Lord is referring to as the "big brother" has no powers of giving direction to the Scottish Development Agency.
Lord MOWBRAY and STOURTON: I did not say that it would. I will come back to that in a moment. This Bill has vastly increased powers to extend such control in this matter. It has been dressed up to look very attractive. Both the clauses which the noble Lord mentioned, dealing with the environment and derelict land are welcome, but these matters could already have been dealt with by the Scottish Office and the local authorities under existing legislation.
Here, at any rate, we have some good and unexceptional functions for the SDA to perform. We obviously welcome the information given by the noble Lord that priority will be given to these two clauses. Similarly, everyone will recognise that the clause enabling the Secretary of State to deal financially with the air services in order to help the Highlands and Islands
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air communications is very welcome. But having said that, let us remember that although this Bill gives the Secretary of State vast powers, it still leaves industrial matters over a wide field in the hands of the NEB. When one compares the clauses embodying the general purposes and functions of these Bills—both happen to be Clause 2—one finds that the NEB, under the Secretary of State for Trade and Industry, have firmly kept quite an armoury of weapons in their locker for use North of the Border.
During the Committee stage in another place on 13th March, the then Minister of State, Mr. Heffer, said of the powers under the 1972 Industry Act dealing with financial assistance for industry that the Government were transferring to the Secretary of State for Scotland and, through him, to the SDA, the Section 7 powers. But they were deliberately holding back from the Secretary of State for Scotland, to keep for the Secretary of State for Trade and Industry, the Clause 8 powers which are all the general purpose powers. Against the advice of my honourable friends, the Government refused to exempt Clause 2 of the Industry Bill, and with superior numbers carried the day—a victory for Mr. Benn over Mr. Ross.
I think that is an indication that the Government are not going to let the Secretary of State for Scotland fully control the industrial field in his domain, which I think a lot of people, by the appearance of this Bill, have been misled into thinking would happen. It runs counter to the Government's own Consultative Document on the SDA, which said it would in no way be simply a Scottish arm of the NEB.
Although we possibly have too many statutory bodies in Scotland already, we agree that there is a good role for the SDA to play and the noble Lord has shown that it will be tidying up one or two smaller bodies. Another possible role for it would be to administer EEC regional funds, provided that we stay in the Community.
I wonder whether the noble Lord, Lord Hughes, can tell me—and I apologise to him for not having given advance warning of my question—whether it is expected that some members of the Agency shall also be members of the NEB; and, if so, how many, and will there be a

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minimum number or none? It is important that there should be the closest liaison between the NEB and the SDA. To our minds, the SDA has powers which seem very much on the wide side; for instance, there are the powers of compulsory purchase, the powers to obtain information. These powers and functions are rather vague. On page V of the Explanatory and Financial Memorandum, we see a frank admission in the first paragraph of inability to forecast the need to draw on financial resources. This shows that there is a lot of work yet to be done on this Bill before we can see how things are going to work out. Bearing in mind the wide powers of the Agency and, in particular, the power to do anything to discharge its functions, I, for one, feel that the Secretary of State's power to direct should be given only after getting "agreement with" rather than "consulting" the Agency concerned. The noble Lord, Lord Tanlaw, if I may say so, was perhaps a little naive in thinking that later this Session the House of Commons would be able to give detailed attention to the Bill, and we should therefore disregard it in Committee.
Lord TANLAW: My Lords, I thank the noble Lord for giving way. I should like to explain that I do not believe we in this House have the right to go into a detailed Committee stage on a Bill covering parts of Scotland which have proper representation in another place.
Lord MOWBRAY and STOURTON: My Lords, I do not think that is the constitutional position, but I will leave it to the Minister to answer. I think it is arguable that in this House, where we now have the time to give detailed consideration to Bills we must do so. It is highly likely, considering the state of affairs in another place, that they are having more meals to digest than they almost have time for, so they may not be able to give enough time to many things. In conclusion, the main point is that our Industry Act 1972 was essentially a rescue operation for Scotland and there were other means of injecting help where needed. This Bill carries with it the danger, despite the very many good functions which the SDA will perform, of putting the Agency in a take-over operator's position.
5.56 p.m.
Lord HUGHES: My Lords, the fact that the first Parliamentary airing of this Bill took place in your Lordships' House, and the very wide-ranging nature of the duties and powers which are being given to the Scottish Development Agency, required me to make a speech in opening which was much longer than I should have chosen to make—and probably much longer than our Welsh colleagues could have wished for, considering the patience with which they are awaiting their turn. However, I would suggest that it has probably not been a total waste of time, from their point of view, to hear about the setting up of a body which is rather like the one that they will be having in Wales.
I have been receiving a mass of notes from some of my expert colleagues, and if I were to use them all I might achieve a record that I should not wish to attain; namely, that my closing speech would be even longer than my opening speech. So I shall leave a lot of the answers to which noble Lords are entitled to be followed up by correspondence. Also, as we shall have a little time before going on to the Committee stage of the Bill, I will try to ensure that these replies reach noble Lords in ample time for them to take any necessary action by way of submitting Amendments to the Bill. However, it is essential that I take some time, though not a long time, to make general points.
First of all, I am surprised at the extent to which I have received support on considerable parts of the Bill from noble Lords opposite. I was pleased that not everyone followed the line of the noble Lord, Lord Campbell of Croy. I cannot say that I was totally surprised at his reaction—certainly not to parts of the Bill—because we must accept that in some of these matters there is a fundamental difference between the policies of the Conservative Party and those of the Labour Party. If there were not these differences we should obviously be sitting on the same side of the House and life would be very dull indeed. We should have only family quarrels, and those are best conducted in private rather than in public. But we do have these fundamental differences, and I must accept that in certain directions the noble Lord was

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perfectly entitled to say what he did, and indeed would have been wrong not to have said what he did. However, I think he may have gone perhaps a little further than was reasonable, because he produced an extraordinary amalgamation of inaccuracies and false assumptions in putting forward those points. So I must at least do something to dispel the general atmosphere of gloom.
I began my opening speech by referring to what happened on the Highlands and Islands Development Board Bill, and if we look up the debates on that measure I think we shall find that the noble Lord, Lord Drumalbyn, was a rather interesting exception to the general argument, because there were all the fears, all the doubts, all the arguments; when that Bill was put forward it was even suggested—not in your Lordships' House but in another place—that it was a Marxist charter for the Highlands. The interesting point is that the Act survived four years of Heath Government.
Lord CAMPBELL of CROY: My Lords, I said earlier that the whole point was that when it arrived in the other House the Government agreed to make the essential changes to Clause 6 here. That is the point. We hope that the noble Lord will do the same with this Bill.
Lord HUGHES: My Lords, I was hoping that the noble Lord would fall into that trap, because there was an Amendment to the Bill in 1968 in which Parliament put the powers back in again; and there they remain.
Lord CAMPBELL of CROY: Section 6.
Lord HUGHES: If the noble Lord wishes, I will deal with the matter at this point. The Highlands and Islands Development Act 1968 had these powers added to Section 6:
"to form or promote, or join with any other person in forming or promoting a company;
to subscribe for or (with the consent of the company concerned) otherwise to acquire by agreement the shares or stock or any part of the shares or stock of a company;
to hold any shares or stock so acquired;
to dispose of the whole or any part of any holding of shares or stock so acquired"
I could go on reading for a while, but these—
Lord CAMPBELL of CROY: My Lords—
Lord HUGHES: My Lords, the noble Lord must not pop up every moment. These are provisions which were taken out, and which are now in and are almost identical with the powers which are being sought by the Scottish Development Agency. Another point to which the noble Lord took exception—no, I will not give way—is the wide powers given to the Scottish Development Agency. But the Highlands and Islands Development Board has such power. When the noble Lord was Secretary of State he did not attempt to do anything about it. The wording is:
"…to do all such things as are incidental to or conducive to the attainment of the purposes of any of their functions".
The wording in this Bill gives exactly the same power. The reason for this is quite simple. These are creatures of Parliament, and unless the Board have to return to Parliament periodically for detailed powers to do this, that and the next thing, Parliament gives a wide definition of their function.
As to the Highlands and Islands Development Board Bill, if we had listened to noble Lords in Opposition when that Bill was before Parliament that body would never have come into existence. But it remains a useful tool in Scotland. One of the arguments which brought it into existence, and which have proved to be acceptable, is that it created in the Highlands a single body which could do things which hitherto had been spread over a number of Acts of Parliament and a number of different bodies. This is the justification for setting up the Scottish Development Agency.
The noble Lord, Lord Drumalbyn, asked: Could not all these things be done? I think that if I were to be as naive as noble Lords might want me to be I could say: "Yes, it is possible that they might be done." But the point is that they cannot be done in the satisfactory way that people want. And, after all, it is not for me to belittle the Government's own legislation in this matter. The Scottish Development Agency is no new idea. The advantages of having a body with executive responsibilities for developing Scotland's economy have long been argued by a large number of bodies

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and organisations in Scotland. I would, for instance, name the Scottish Labour Party, the Scottish Trades Union Congress, the Scottish Liberal Party, the Scottish Council for Development and Industry, the Scottish Council's Research Institute, the West Central Scotland Planning Team and the Scottish National Party, all of which have made proposals for a body of this kind. The only people who have not called for it are the Scottish Conservative Party. It may well be that their somewhat attenuated numbers in Scotland at the present time are not unrelated to the fact that they had no suggestions of this kind to put forward. The noble Lord interjects, "The Development Fund", but the Development Fund, as he explained to my noble friend Lord Hoy, arose only after they had lost seats in Scotland. So on the question of setting up the Agency, there is a very large demand in Scotland for a body of this kind.
Periodically Ministers at the Scottish Office in both Governments have had the request from people in other parts of Scotland: "It is not only in the Highlands that there are problems to be dealt with. Here is the Highlands and Islands Development Board which has done a good job for the Highlands. Give us a similar body to deal with the special problems which exist in other parts of Scotland." The Borders asked for a body of this kind. Now we are doing it, and I think we are doing something which the general body of people in Scotland will want. I hope that the noble Viscount's interjection is not a long one.
Viscount MASSEREENE and FERRARD: My Lords, the noble Lord who has just sat down has been quoting as a precedent the Highlands and Islands Development Board. Would he say that the Highlands and Islands Development Board had been a financial success? The Highlands and Islands Development Board has, in fact, wasted a great deal of the taxpayers' money. If the noble Lord would like to meet me afterwards, I can tell him of certain examples. One recent case is the Tobermory Distillery, which received a big grant from the Highlands and Islands Development Board just over two years ago and is now
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closing down. I could quote many other instances where taxpayers' money has been wasted by the Highlands and Islands Development Board.
Lord HUGHES: My Lords, I will not meet the noble Viscount after this debate, but I will make an offer to him. Let him send to me a list of every one of the failures of the Highlands and Islands Development Board and I will guarantee to send him back at least two successes for every failure he puts forward. I shall not convince the noble Viscount, because he does not desire to be convinced. He is probably the one person in Scotland whose views of the Highlands and Islands Development Board are exactly the same as they were in 1965. Some people never learn.
A considerable part of the speech of the noble Lord, Lord Campbell of Croy, sought to establish comparisons between the SDA and the NEB, between this Bill and the Industry Bill. There is nothing in the Bill which talks of the SDA buying itself into profitable manufacturing industry. There is nothing which mentions the National Enterprise Board, let alone makes the SDA one of its subsidiaries. The purposes for which the Agency may exercise its functions are clearly declared in Clause 2(1)(a) and (b). These are the purposes for the Agency these are the only purposes. I do not think the noble Lord does a service by making vague suggestions to the contrary. He has suggested that in practice the Agency will be dominated by the Department of Industry and by the National Enterprise Board. There is nothing in the Bill which enables the Agency to acquire holdings in companies compulsorily. I must emphasise that again. There is nothing which empowers it to have access to confidential information about private industry. The powers to acquire land compulsorily will not be exercisable simply to facilitate the development of an enterprise; Clause 9(4) of the Bill provides the necessary safeguards in this direction. The Agency's powers in relation to land requisition and information are necessary for its activities in relation to the development of land for industrial estates and are well precedented in that context. These powers will not be exercisable in connection with the Agency's running of industrial enterprise. The Bill makes that intention clear.

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I might expand on what I have said about Clause 9(4). This makes it clear that the Agency can buy industrial land compulsorily only when it is needed to secure an adequate supply of industrial land in an area—I repeat, not for the purpose of helping a SDA-run business.
The noble Lord, Lord Campbell of Croy, said that local authorities have powers in respect of derelict land, and asked: Why, therefore, give them to the Agency? The answer is that although there are a number of local authorities in Scotland who have done excellent work—I am not in a position to list all of them, but Fife and the Lothians, for instance, have done an excellent job—there are many areas in Scotland where little or nothing has been done, not because the work is not there but because local authorities are either unable or unwilling to tackle the problem.
We believe that more progress must be made in this direction. Some of the authorities took the line of the noble Lord, Lord Tanlaw namely "We didn't create the mess; industry created it, and they should be compelled to clear up the mess. Why should we put the responsibility on to our ratepayers?" The Government accept that this is a national responsibility. That is why we are taking these powers to try to ensure that over Scotland as a whole derelict land is dealt with on a much better basis. I do not know whether much can be done about obtaining contributions from those who are responsible, but I can make certain that at least there are consultations with British Rail and the National Coal Board to ensure that they do not put obstacles in the way.
May I suggest that the best contribution that we can make to a fair consideration of this Bill is that at the next stage we consider it on its merits, without continually looking over our shoulder at the Industry Bill to find out whether this is a backdoor method of getting something into that Bill. There will be ample opportunity in due course to debate the Bill. Although life would be very much easier for me if your Lordships were to accept the advice of the noble Lord, Lord Tanlaw, and in due course were to move that the Bill be not committed, I doubt very much whether he will have persuaded the Front Bench
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opposite that this is the way they want to handle the proceedings!
On the question of Loganair, when I said that it did not matter to an operator whether the money came out of the right-hand trouser pocket or out of the left-hand trouser pocket, I may have created the impression that the money would come either from the Agency or from the Highlands and Islands Development Board. That is not the case. This Bill has been used as a vehicle for making quite certain that powers are available for giving a continuing subsidy as against the occasional one which the Highlands and Islands Development Board might give to an enterprise. I mentioned a period of five years, but it may he longer than that. We wanted to make certain that powers are available to the Secretary of State to do this. The money will come neither from the Scottish Development Agency nor from the Highlands and Islands Development Board; it will come from the Secretary of State as a Government subsidy. It may perhaps be considered a complication that it should be included in a Bill the primary purpose of which is to set up the Scottish Development Agency.
There are far too many other points to deal with tonight. I was determined not to speak for more than 20 minutes and I have already spoken for 17. Since, however, there are a number of points which deserve an answer, I shall certainly take the opportunity to write to noble Lords on all of them and will try to ensure that the answers are in their hands within the next seven days, so that they may have the maximum opportunity to interfere with the Whitsun Recess by thinking up Amendments to the Bill—or, alternatively, to consider the useful suggestion which has been put forward by the noble Lord, Lord Tanlaw!
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble Lord for his reply. During his reply he made reference to this Front Bench, and I should like to say that we do not share the view of the noble Lord, Lord Tanlaw. We expect to have a full Committee stage on matters affecting the Bill. We are grateful to the noble Lord for his offer to write to us about the points. We could not, of course, expect him to deal with all of them this evening. I shall certainly

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take up with him the question of the Highlands and Islands Development Board, because the point which he mentioned was not the major Amendment to the Bill which we made in the other place.
Lord HUGHES: My Lords, perhaps we can have some further useful exchanges on that point. We shall have a full opportunity to discuss this Bill when we return after the Whitsun Recess, and I hope it will go to the other place in at least a form which they will recognise.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

WELSH DEVELOPMENT AGENCY (NO. 2) BILL [H.L.]
6.16 p.m.
The LORD CHANCELLOR: My Lords, I beg to move that this Bill be now read a second time. The House has now had an opportunity to consider the Scottish Development Agency (No. 2) Bill. On this occasion, Wales has allowed Scotland to come first, but as both will benefit from the proposed Agencies it matters not. The purpose of the Agencies is to support and develop the economy and way of life of both countries. But just as the Scottish Bill has its own particular Scottish aspects, as my noble friend Lord Hughes indicated, so the present Bill is tailored to meet the special needs and circumstances of Wales. The Bill is the first wholly Welsh Bill on major economic and environmental questions in Wales. Accordingly, it gives me great pleasure as a Welshman to introduce it. It is the outcome of much discusion and consultation.
Earlier this year there was wide response to the Consultative Document setting out the proposals in the Bill from all who were consulted. A series of constructive meetings were held between Welsh Office Ministers and the local authorities' associations in Wales—the Welsh Counties Committee and the Council for the Principality—the Wales TUC, the Wales CBI, the Welsh Council, the Welsh Industrial Estates Corporation and the Development Corporation for Wales. Others—for example, organisations con-
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nected with mid-Wales—made, valuable comments in writing. The points made to the Government have been taken fully into account in drawing up this Bill and, if need be, can be re-emphasised in drawing up the necessary administrative guidelines for the Agency's operating arrangements on the ground.
The response in Wales was overwhelmingly in favour. It is true that the Wales CBI expressed opposition to those functions proposed for the Agency which will parallel in Wales responsibilities of the National Enterprise Board elsewhere. However, I understand that the Wales CBI welcomed the other provisions in the Bill and, not surprisingly, the additional finance to be made available. But overall there is no doubt that the Government's decision to give the highest priority to establishing a Welsh Development Agency on the lines set out in the Bill before us today has been very much welcomed.
The main objective of the Agency is to accelerate the economic and industrial development of Wales and to improve the environment in a way consistent with that objective. Part of the Bill has the aim of bringing together in one organisation a group of functions concerned with industrial and environmental development. A second and equally important part of the Bill is to bring to the Agency responsibilities and functions new to Wales. In particular the Agency will carry out in Wales the regional development functions which the proposed National Enterprise Board will have in England. I shall have more to say on this later on, but I should like to make it clear from the start that the Agency will not be simply, as some have suggested, a Welsh "arm" of the National Enterprise Board. It will be an independent body responsible to the Secretary of State for Wales.
When the Welsh Development Agency is established Wales will have a new and powerful piece of machinery to promote the industrial and environmental health of the Principality. For a long time it has been recognised that improvements to the environment and the development of a strong industrial base can and must be complementary. By making a place pleasanter to live and work in, the task of attracting new industries becomes

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easier. Wales has the men and women ready to work for these new industries—and to work well. Former miners, foundry workers, tinplaters, steelmen, copper workers, quarry men, slate workers have quickly learned new skills when a lot of those old industries ran down. It is not only at Cardiff Arms Park and Stradey Park, Llanelli that Welshmen have excelled, if I may say so.
I have mentioned parks. Too much of the natural beauty of Wales was despoiled in the past. Too often green valleys have been left a blight of slag heaps. Industrial changes have indeed left their scars in Wales, and at times it needed all the resilience of its people to survive them. In simple terms, we want to make Wales an attractive place to those we wish to encourage to move there and a pleasant place for those who live and work there. A good environment is a precious resource and we need to husband it well. In this, as Clauses 13 and 14 of the Bill make clear, the Agency will have its role to play.
The proposals for an Agency must be set in the context of other developments within Wales. The Secretary of State will from 1st July of this year be responsible for activities in Wales in the economic and industrial fields which have hitherto been the responsibility of the Secretary of State for Industry. These transferred responsibilities include a responsibility for regional selective assistance under Section 7 of the Industry Act 1972 and for Government factory building in Wales under the Local Employment Act 1972. This allows a consolidation of responsibility for economic and industrial strategy within Wales and it does so without breaking or weakening the link between Wales and Whitehall. Rather it means that the contribution from Wales to the effectiveness of a continuing link is becoming stronger.
The proposals for the Agency are being made at a time when the economy of Wales is under stress and there are major problems to be resolved in some of the basic industries, particularly steel. Unemployment throughout the Principality has unfortunately been rising in the past few months, and as an integral part of the economy of the United Kingdom the economy of Wales is in turn having to face up to the very serious challenge to
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our economic future as a result of international stresses and trade problems, like the increased cost of energy. In common with the rest of the United Kingdom, Wales is having to react and readjust to the many problems which inflation can bring. They are not problems capable of solution by Government alone. They call for effort and indeed some sacrifices by the whole community. In this task we believe that the Agency—with its powers to contribute to the whole range of the process of developing land for industry and then developing and supporting industry—will be an additional strength to the Government's arm in Wales. This is why it is being so broadly welcomed there.
The Agency's duties, which are set out in Clause 1 (2) of the Bill, are clear: to further economic development in Wales: to promote its industrial efficiency and international competitiveness; to provide, maintain, or safeguard employment in Wales, and to improve the environment. I emphasise the responsibility to improve both the job prospects and the quality of life in Wales. I stress the responsibility to maintain and provide employment. The Agency need not wait for the private sector to come along with development proposals. The Agency can support private industry, either jointly or on its own account. In short, it will be directly in the business of creating jobs. Of course, this can and will make for an increase in the public stake in industry in Wales. But the Agency's involvement will not be confined to increasing this stake; it will be able to make an additional contribution to the growth of the private sector of Welsh industry. It will by agreement be able to use its investment funds and to provide management advice and financial advice. There will, it is hoped, be a strong emphasis on the needs of small firms—which still form such a large large and important part of the Welsh industrial and economic scene.
The Bill is distinguished by the breadth and flexibility of the powers which it gives to the Agency under the direction of the Secretary of State for Wales. But these are powers which will best succeed when they are exercised, as is intended, in partnership with existing organisations and the local authorities. Save for the Welsh Industrial Estates Corporation, which will be absorbed by the Agency, it

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will in no way supplant any existing organisation, whether in urban or in rural Wales. Any fears that their powers will be supplanted are unfounded. The keynote of the Bill is the exercise of the Agency's powers in partnership with them.
I turn now to a brief description of the clauses in the Bill which will no doubt receive careful scrutiny during its progress through the House. My noble friend Lord Lovell-Davis, who will be winding up the debate, will no doubt deal with the points that will arise during the course of the debate. Clause 1 sets out in detail the duties, functions and powers of a Welsh Development Agency. These are powers which cover the whole of Wales and they are just as applicable to urban as to rural areas. Clause 2 provides for the appointment of a Chairman, Deputy Chairman, members and a chief executive. Clause 3 gives the Agency power to make charges for their services, accept gifts and carry out or commission inquiries, investigations and researches.
Clause 4 enables the Agency to appoint a local authority, a development corporation of a new town or other body or person to act as their agent, and it enables those bodies to place the services of any of their staff at the Agency's disposal. This clause emphasises the partnership which it is intended to develop between the Agency and existing authorities. Each body has and will have its own special responsibilities and powers. There will be an interlocking with the Agency, not an overlapping. And throughout the Agency will be working within the framework of the planning responsibilties of the local authorities, which will continue. Clause 5 gives the Agency the power to form committees so that from time to time the Agency can have access to advice and to informed opinion from a broad spectrum of people and organisations. But the aim is to keep the Agency itself small, compact and thus effective.
Clause 6 deals with the dissolution of the Welsh Industrial Estates Corporation and the transfer of its property, rights and liabilities to the Agency. I take this opportunity to pay tribute to the work which has been carried on in Wales over the years by the Corporation. That work will continue and expand, and the staff
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transferred to the Agency will find great advantage in working within a larger organisation with greater resources available to it and with a much broader range of functions and responsibilities. The Bill in Schedule II sets out safeguards in the interests of the staff involved. There will continue to be full discussion with those involved about the transfer. Clauses 7 to 9 set out the Agency's power to provide and manage industrial sites and premises and to provide additional services for the support of industrial development. It is intended that the Agency will have a special role to play in connection with any major development related to oil or gas in the Celtic Sea—and I hope that a great deal will be discovered in the not too distant future. Which country does not wish the same?
Clause 10 enables the Agency to be used as a channel for selective financial assistance to industry, if the Secretary of State so directs. This will ensure that in this important area of industrial support the Agency can have a role complementing that which from 1st July of this year will fall to the Welsh Office. A further consequence of this transfer to Wales of responsibility for regional financial assistance is that it is proposed to establish a statutory Welsh Industrial Development Advisory Board to advise the Secretary of State. That power is to be found in Clause 11 of the Bill. Clause 12 enables publicly-owned property to be transferred to the Agency.
Clauses 13 and 14 deal with the Agency's twin role of developing, redeveloping and improving the environment and grant-aiding local authorities in carrying out derelict land clearance works and carrying out such work itself. Anyone who knows Wales will know of the tremendous work carried out by local authorities, particularly in South Wales, in clearing up industrial dereliction, which has existed for so long, and making the country green again. The intention is that this work will continue and expand and that the local authorities will continue to play the most powerful role. In order to remove any doubt, I am happy to reaffirm our commitment that local authorities will in no way be affected and that Agency schemes will be undertaken after full consultation and agreement with local authorities. Beyond this the Agency will have power to inaugurate

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major environmental schemes, but once again only in the fullest partnership and co-operation with the local authorities. It will also be desirable that statutory bodies like the Countryside Commission and non-statutory bodies like the Civic Trust should have an opportunity to contribute their expert views.
Clauses 15 and 16 set out the financial duties of the Agency and in particular state that the Agency will have an initial financial allocation of £100 million which can be raised to £150 million. Clause 19 covers the important question of acquisition, disposal and appropriation of land. The Government think it is reasonable and right that the Agency, in carrying out its land development role—developing and improving the environment, clearing derelict land, providing industrial estates—should have powers to acquire and dispose of land. The powers given to the Agency do not in any way conflict with the local planning responsibilities. Nor will they conflict with the responsibilities of the proposed Land Authority for Wales (which forms part of a Bill at present being debated in another place). The Land Authority for Wales will be a body charged with the responsibility of acquiring and disposing of land, but it will not itself develop land. Its role will be different and distinct from that of the Agency. A number of public bodies will be able to acquire and develop land without intervention by the Land Authority, and it is the Government's wish that the Welsh Development Agency should be able to acquire and develop their own land. At the same time there will be a need for special liaison between the Agency, the Land Authority and the local authorities. Close and continuous consultation will be required, and this is yet one more instance of the way in which the Agency's role in contributing to the economic and environmental health of Wales will be a partnership role. So far as the limited occasions for compulsory acquisition are concerned, the normal procedures for public inquiries will apply.
I will not weary the House with specific mention of all the remaining clauses, but would simply draw attention to Clauses 21 and 22, which give the Agency appropriate powers of entry and powers to obtain information, and to the Schedules which set out in detail the way
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in which the Agency will conduct itself, appoint its staff and carry out its important and complex financial responsibilities.
I should like now to draw attention to the Agency's finances, its relationship with the Secretary of State and its responsibilities for industrial development, as these have occasioned so far the greatest measure of comment. It has been said that the financial allocation is not large enough, and, indeed, that may be said in the course of this debate. But equally it has to be said that at this time of great economic difficulty, a provision of up to £150 million is a substantial commitment to and investment in Wales. I want to emphasise that these sums are additional to expenditure in Wales on selective assistance, regional development grants and the regional development premium. It is the case that part of the £150 million provision represents a commitment which would no doubt have continued even without an Agency. But the Agency will be able, with the additional resources made available to it, to do more in existing fields; for example, derelict land clearance, to make a real impact in new activities designed to further and strengthen industrial development in Wales, and to get the priorities right. The Bill does not specify any time period for which the funds should last. This the Government think is right. It is hard to predict how rapidly the Agency will need to draw on its financial resources. This will depend to a large extent on factors which are difficult to predict, such as the demands of industry for investment finance and the speed with which it can make a start on major environmental schemes.
My Lords, it is also right that financial guidelines should be set up for the Agency's activities. It would not make sense to seek to impose an overall financial objective on all the Agency's work. Many of its varied activities—for example, derelict land clearance and environmental regeneration—just cannot be placed within a machinery with specific financial objectives. At the same time, parts of the Agency's work, particularly its industrial investment role, should be within a specified financial objective, and this will be part of the Agency's responsibilities to achieve.

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The guidelines for the Agency will be determined by the Secretary of State, who will have the power of both general and specific direction. It is explicit in the Bill that the Agency will be consulted before any direction is made, and the Agency's annual reports will set out details of any such direction. The powers of general and specific direction reflect both the central position of the Secretary of State responsible to Parliament for the economic health of the Principality and the very wide range of responsibilities laid upon the Agency, together with the substantial finance at its disposal. I emphasise the very wide range of responsibilities laid upon the Agency. These are responsibilities—with the power to act—which meet a proven need. I would reject any suggestion, in the same way as would those employed in industry in Wales, that these powers are in any way excessive. Indeed, in some quarters the view is that they do not go far enough.
My Lords, it is important, too, to recognise that the Agency will have considerable flexibility. It will be able to choose and advise on priorities. As time goes on, the relationships between the Agency and the Secretary of State and others involved in the economic and environmental development of Wales will naturally evolve and mature. In the last resort, however, the Secretary of State must be in a position to assess the choice of priorities and to point in a direction consistent with the Government's general strategy, particularly that on regional development. A developing relationship between the Secretary of State and the Agency will be most apparent, perhaps, in respect of the Agency's industrial investment responsibilities. If the Agency is to succeed in this new and challenging area of responsibility, it must be free to make its own assessment and back its own judgment. That is why the Bill would allow the Agency to invest up to £2 million in any one company without the Secretary of State's consent—the only reservation being that this should not give it a holding of more than 30 per cent. in the voting rights of the company.
It has been said, though I hope not by way of criticism, that the Agency is to be simply an amalgam of existing powers. But I do not believe this to be true. The Agency will have substantial and novel
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powers. It will provide investment capital in the form of loans and equity. It will be able to couple management and advisory services with its financial support. It will promote industrial democracy in its subsidiaries, in accord with the Government's policy of encouraging greater participation by workers in industry generally. The Agency will be expected to play its part in ensuring that companies which it controls provide for the fullest involvement of employees in decision-making at all levels. The Agency will be able to initiate developments, to create employment and strengthen the economy, both by joint ventures with private industry and by setting up new ventures. These are additional to existing powers to help industry in the Principality and I believe them to be essential additions.
These are powers which have a parallel in a Bill which so far has not come before this House; namely, the Industry Bill, which I noted was much discussed on the previous Bill. But the powers conferred by this Bill will be exercised for Wales within Wales, and separately from any activities by the proposed National Enterprise Board.
As I have said, the Agency will be a separate body from the proposed National Enterprise Board and will be able to use its industrial powers in a distinctive way to meet the needs and circumstances in Wales. The National Enterprise Board will of course be able to operate in Wales to the extent that its involvement with companies operating on an integrated basis on both sides of the border requires this, but this in no way restricts the Agency's role within Wales. There will be a partnership between the Agency and the National Enterprise Board- a partnership worked out on a commonsense basis. The Agency will have the power within Wales to acquire holdings in industry in pursuit of its functions and I am sure it will sponsor sound development. I should like at this point to emphasise this. All such acquisitions will be by agreement. None of the acquisitions will be compulsory. The Bill provides no powers to take over private concerns or to take equity shareholdings in them without their consent.
There should be no conflict between the Welsh Development Agency and the National Enterprise Board. There are no hard and fast divisions between Welsh

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industry and what might be called United Kingdom industry; equally, there should be no hard and fast divisions between the National Enterprise Board and the Welsh Development Agency. Where need be the Agency will welcome the National Enterprise Board over Offa's Dyke, the Agency will not be putting up border defence stations, in spite of the alarms expressed in the earlier debate.
My Lords, I am satisfied that what is proposed in this Bill will work to the benefit of the people of Wales and that the people of Wales wish it to be so. The Agency is, and is seen to be, the most constructive proposal for many years for organising and sponsoring industrial and environmental development in Wales. My Lords, I beg to move.
Moved, That the Bill be now read 22.— (The Lord Chancellor.)
6.44 p.m.
Lord ABERDARE: My Lords, we are grateful to the noble and learned Lord on the Woolsack, who made a noble and learned speech explaining the implications of this Bill. I cannot say that I was altogether reassured, although he did his best to reassure us, and I am still particularly unconvinced that the Welsh Development Agency will be all that free to go its own way, considering the powers of the Secretary of State, considering the fact that this Bill is a close reflection of the Industry Bill, and other matters which we can go into, some of them later tonight and some at Committee stage. But I hope that we can take some account of the debate that we have had on the Scottish Development Agency Bill, because the two Bills are very similar in their proposals. I am very flattered that the noble Lord, Lord Hughes, should have remained to listen to our debate. The Minister who is to reply, Lord Lovell-Davis, will not in our case be able to rely on the precedent of any Highlands and Islands Development Board, on which the noble Lord, Lord Hughes, seemed to base his defence of his Bill.
There is certainly a close resemblance between the two Bills, and much of the vigorous comment made by my noble friend Lord Campbell of Croy on the Scottish Bill equally reflects my views on this Bill. We look on it as something of a mini-Industry Bill for wales, and in fact many a the clauses in this Bill
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are drawn straight from the Industry Bill. The Scottish one differs, no doubt because they have a Scottish draftsman, but the Bill we are now considering has many clauses which come straight from the Industry Bill. The result is that this Bill suffers from many of the defects of the Industry Bill. It also raises what must be a difficult relationship between the Agency and the NEB. I was grateful to the noble and learned Lord for the words he said at the end of his speech on how this relationship might operate, but it will be a difficult one. Obviously, where companies operating in Wales are wholly owned by companies with their headquarters in England there will be overlaps. We shall want to explore further at Committee stage the question of how these two bodies will work together in Wales.
I must at the same time admit that the Bill has some incidental advantages. First, we think it an advantage to set up a single central body to co-ordinate the efforts of a number of existing bodies. All of there have the same object of bringing industry to Wales and providing increased development for the Welsh economy. As the noble and learned Lord said, much excellent work has been done, some by voluntary bodies, some by local authorities, in this field, but so far there has perhaps been a lack of co-ordination. I hope the Agency will supply that coordination, and that at the same time it will make full use of the willing spirit that exists in various voluntary bodies, and of the co-operation of local authorities.
The second point about the Bill with which we have no quarrel is that it lays a duty on the Agency to improve the environment in Wales. There is still plenty to be done in this field, as I know very well in my part of the world. In fact, I think I can claim that the Aberdare Urban District Council, and now the Cynon Valley District Council, have been in the forefront of reclaiming derelict land. I should like to ask the noble Lord whether he can say anything about the future of the derelict land unit, and whether he can tell us the present level of expenditure on derelict land reclamation in Wales; in other words, how much of the money that the Agency is going to get will be taken up with the present derelict land reclamation programme?

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There can be no doubt at all of the need to stimulate new industrial investment in Wales, and the noble and learned Lord repeated that. The Secretary of State for Wales told the Welsh Grand Committee on 7th May that last month nearly 60,000 people in Wales were registered as unemployed, the highest April figure since the war, and that the seasonally adjusted figure is now 4·7 per cent. The fact is that Wales has suffered industrially, as British industry as a whole has suffered, from the Government's failure to control inflation. The Chancellor of the Exchequer's first Budget heavily penalised industry and, coupled with rampant inflation, has led to an extreme crisis of liquidity in many firms. Profitability, on which investment depends, has fallen drastically and bankruptcies have shown a marked rise.
But while we admit the need for assistance to Welsh industries, what we dislike are many aspects of the proposals of the Government to meet them. Our 1972 Industry Act provides all that is needed to inject new financial investment into Wales. Moreover, it does so with what we consider to be highly desirable safeguards to prevent such assistance being used to nationalise more firms, and unnecessarily to increase the size of the public sector. These were sensible safeguards.
Lord DAVIES of LEEK: My Lords, will the noble Lord give way for a moment? It is absolutely right that tribute should be paid to that 1972 Act, and I myself and others have done so. But although the Act gave encouragement to investment, the entrepreneurs who had the necessary cash to do the investing did not do it. I do not want to make a Party political point, but our problem is: how can this be done in the future?
Lord ABERDARE: My Lords, that is a much wider and deeper question. All I would say is that in 1973 the investment plans of British industry generally were higher and larger than they had been for many years. The reasons why those plans are not being fulfilled, I suggest, might be laid more at the door of inflation and, as I said, the Government's failure to control inflation, rather than anything else. We can debate that on another occasion. The point I make is that the 1972 Act, as well
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as making it possible for the Government to provide more money for investment in Wales, also had sensible safeguards so that this money would not be used to extend the public sector, in my view unnecessarily.
The safeguards were that the Secretary of State had to be satisfied that assistance could not be given in any other way than by the acquisition of loan or share capital in the firm; he could not acquire more than 50 per cent. of the equity share capital; he was required to dispose of any stock or shares as soon as practicable, and his powers ran only to 31st December 1977. These safeguards are being swept away in the Industry Bill, and there will be no such limitations on the Agency when it wishes to acquire stock or shares in a privately owned company. Therefore, the Agency will be able to take over control of companies without any restriction, and without even the agreement of the board of directors. This is what my noble friend Lord Campbell of Croy described as "a battery of powers to extend public ownership".
The Bill puts £100 million initially, or possibly £150 million by order of the Secretary of State, at the Agency's disposal. Certainly I am not quarrelling with the amount of money at the moment; our quarrel with the Government is that there is no Parliamentary control at all over the expenditure of this money by the Agency. It can buy its way into profitable private industry, or it can set up its own individual enterprises in direct competition with existing companies in the private sector. It is said that competition between the Agency's companies and privately-owned companies will be fair. I must say I rather doubt it. The Agency will be able to set up and equip a new company with modern plant and machinery, which will compete with an established company in a private sector for which the possibility of new investment is desperately difficult at this moment, and which, if it needs new investment, may well also have to go to the Agency for help.
The Agency, as envisaged in the Bill, will inevitably lead to a steady increase in the size of the public sector of industry in Wales, and so far the record of that sector has not been notably successful, to put it mildly. We also deplore the fact

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that the Bill gives such sweeping powers of control over the Agency to the Secretary of State, without Parliamentary control. Clause 1(7) gives him the power to give directions to the Agency of a general or specific character. Clause 2(2) gives him powers to appoint the chairman, deputy chairman, and all the members of the Board. Clause 2(4) gives him powers to appoint the chief executive of the Board. Clause 15(1) gives him powers to determine the financial duties of the Agency. Clause 10(2) gives him powers to direct the Agency to exercise his powers under the Industry Act 1972. None of these powers is subject to Parliamentary control, other than the fact that they have to be published in the annual report, which could come at least 12 months after they have been exercised. It appears from that that the Agency may well become a puppet of the Secretary of State.
Our worry is that such powers given to the Secretary of State and to the Board, coupled with this inadequate Parliamentary control, could affect the willingness of foreign firms to establish their factories in Wales. At the present moment, Wales is well served with better communications (especially road communications) and is well placed to take full advantage of future opportunities in the European Economic Communities. Moreover, it was of great interest to read in the Ryder Report on British Leyland that the British Leyland plants in South Wales have had an excellent industrial relations record. It would be a tragedy for Wales if this Bill were to deter overseas companies from establishing themselves in Wales, simply from fear of Government interference.
To sum up, the Bill has many faults derived from its parent Industry Bill, but at least it also has some good points. We are quite willing to give it a Second Reading, and indeed we would willingly co-operate with the Government in giving it a speedy passage on to the Statute Book if they would drop some of the more controversial proposals that seem to us to be based more on politics than economics. If not, we shall certainly seek to improve the Bill in Committee.
6.59 p.m.
Baroness WHITE: My Lords, I suppose that one had to expect the kind of
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speech we have just heard from the noble Lord, Lord Aberdare. He gave a very little and very carping meed of approbation to this Bill. He mentioned some "incidental advantages", and that was as far as he felt able to go. He then went through a number of criticisms, some of which have been deployed at somewhat greater length by the noble Lord, Lord Campbell of Croy, on the previous Bill. Really the whole speech, if I may say so, was based on ideological dogmatism rather than on the facts of the Welsh economy as it is at present. At this time of night I do not want to spend too long in arguing against the ecnomic philosophy of the Party opposite. Having represented a Welsh constituency in another place for many years, having been a Minister with some responsibilities in the economic field in Wales, I must say that, although I frankly admit that there are some incidental advantages in the 1972 Act promoted by the Party opposite, they are not in themselves adequate to meet the industrial and economic needs of the Principality at the present time. Of course, we expected criticism of this Bill from the Front Bench opposite, more particularly after the refusal of their Party in another place to allow the Bill to be debated in the Welsh Grand Committee. This, I must say, astonished me. The Party opposite, after all, as I understand it, is not in favour of political devolution to the Principality. Surely the least they should wish to do is to strengthen and sustain the opportunities that we have in Westminster for the discussion of Welsh affairs. Surely the logical line they should have taken was to welcome the opportunity for the Bill to be discussed in another place in the Welsh Grand Committee. But that was not to be, and that is why we, at least, have the chance, which I personally welcome, of discussing it in your Lordships' House.
Lord ABERDARE: My Lords, the noble Baroness is being a little unfair. She knows very well that the attitude taken by my friends in another place was that this Bill was of great importance and should not be discussed solely in the Welsh Grand Committee, but on the Floor of the House.
Baroness WHITE: My Lords, the noble Lord himself has admitted that

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the parts of the Bill to which ha and his friends most strongly object are included in another measure which is being discussed in that way. It would mean that these points would have been discussed three times—in the main Bill, on the Scottish Development Agency Bill and on the Welsh Development Agency Bill. Surely the sensible and intelligent thing, from the Parliamentary point of view, would have been to allow the Welsh Bill—I do not presume to speak for Scotland—to go to the Welsh Grand Committee. Apparently, because of the reaction in Wales to this obstruction on the part of Welsh Conservatives in another place, their spokesman last evening made a statement—not in the House and therefore I would be at liberty to quote it—in which he made an offer to the Secretary of State for Wales not unduly to obstruct the Bill, provided that it was emasculated, watered down, bowdlerised, whatever phrase one cares to use, in ways which he suggested. Not surprisingly, the Secretary of State for Wales did not feel able to accept this offer.
I will not weary the House by going into the various conditions which Mr. Edwards, the Member for Pembroke, tried to impose, but I will quote from the leading article which appeared this morning in the Western Mail issued from Thomson House, Cardiff, which is not particularly friendly, as a rule, to the present Administration. It said:
"Mr. Edwards has previously condemned the present Bill"—
that is, the Bill which we are at the moment discussing—
"as a 'vast extension of Bennery' in Wales. But what he is proposing is exactly that. To take away powers from a Welsh agency is simply to hand hard-won autonomy straight back to Mr. Benn or his successors, and ensure that the agency is just the 'Welsh arm' of the National Enteprise Board. In fact, the agency could boost the Welsh economy without upsetting the private sector as it stands and could give advice, assistance and grant aid without nationalisation. To deny the Welsh people the opportunity to influence at first hand decisions that affect them, and maintain that this is a function which could be carried out from Whitehall, is wholly against our interests."
It is in that context that we who have really close connections with the Principality, and who have the interests of the Principality closely at heart would wish to discuss this Bill.
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I, for one, should like to make it plain that I very warmly welcome it, both as an earnest of the Government's substantial interest in the Principality and as a vehicle for co-ordinated investment in Welsh industry and development. As I said, I had experience when I was at the Welsh Office, and I know how time-consuming it can be to have to negotiate every development, every initiative, every nursery factory, every advance factory, with other Departments of Government, however helpful they try to be. I would willingly admit that in my experiences they were genuinely willing to be helpful, but naturally those of us who have a synoptic view of the developments in Wales were sometimes apt to have a different opinion and our lines of emphasis were also likely to be somewhat different. Therefore, to my mind, the kind of unified responsibility for which this Bill makes provision, firmly based on the Welsh Office, should prove very much more satisfactory.
I do not wish at this hour to go into the details, not least because they were so very clearly put by my noble and learned friend on the Woolsack. I should, however, like to enter one or two caveats, because in the context of what I have said I am sure they will not be misunderstood. I support the Bill, but I think there are certain aspects of it which could be improved. To my mind, it is a very good Bill for the traditional industrial areas of South Wales and North-East Wales. It provides for new industries and the modernisation of older establishments. It makes further provision for the promotion of Wales as an industrial area, which is very important. It still further strengthens the power to clear derelict land. This, I am sure, is the one aspect of the Bill which must be welcomed on all sides. And it makes provision for improving the environment in these industrial areas. But in the more rural parts of Wales it seems to me to sound a much less certain note.
I am particularly concerned with Clause 13 dealing with the environment, because as drafted it really is quite astonishingly open-ended. There seems also, incidentally, to be a misprint in the first line of this clause. I cannot see anything in Clause 1(10) that is relevant to Clause 13. And while we are talking of drafting, I think someone might have had a better

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sense of style than to begin the Explanatory Memorandum with a sentence which reads:
"This Bill establishes a Welsh Development Agency which is to be a non-Crown body."
There are more elegant ways of expressing that thought.
To revert to my main argument, under Clause 13 the Agency is to have an unconditional duty, after certain consultations, to submit schemes to improve, develop or redevelop the environment in Wales. Earlier, in Clause 1(2)(d), it is stated bluntly that,
"It shall be the Agency's duty—….
(d) to improve the environment in Wales.
Clause 1(3)(j) says that it shall be a function of the Agency,
"to undertake the development and redevelopment of the environment."
In the part of Wales where I live, between the exquisite Dovey Valley and the grandeur of Cader Idris, the last thing we want is for anyone to presume to improve, develop or, still less, redevelop the environment. There is some slate waste which could be treated, but otherwise I believe our universal cry would be, "Kindly leave us alone". This does not mean that I am indifferent to industrial development in the right place in rural areas or to the needs of tourism, the small industries fostered by COSIRA, and so on; but I am extremely dubious about leaving Clause 13 unamended. Clause 7 in the Scottish Bill, which is a parallel clause, seems to me to have been very much more carefully drafted. I hope this is something which we can look at in Committee.
When one considers the economic needs of rural Wales and particularly of mid-Wales, again I am not convinced that the line taken in this Bill is necessarily the wisest one. I have read what the Secretary of State for Wales said in the Welsh Grand Committee on 7th May, when he confirmed his personal commitment to plans to revitalise rural Wales, but we may have to wait quite a long time before these thoughts and plans of the Secretary of State come to fruition. In the present Parliamentary situation he may find it not so easy to obtain further legislation following this Bill and various other measures which will be needed in the interest of the Principality
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in the next year or two. I do not believe that the advance factories which the Secretary of State announced last week, welcome as they are in mid-Wales, are in themselves the answer to the problem. I am unrepentant in my view that the sensible course at present in mid-Wales is to make use of the Mid-Wales New Town Development Corporation as the most sensible instrument that we have to hand.
We have as well of course the Development Commission, and I join most warmly in the tribute the Secretary of State paid to that body and its present chairman, Mr. Donald Chapman. But it does not have the same overall responsibility for concerted economic and social development which falls to a New Town Corporation. When the Secretary of State finalises his plans we may want to do things differently, but meanwhile I wish very much that the opportunity could be taken in this Bill to extend beyond the confines of Newtown itself the responsibilities of the Mid-Wales New Town Development Corporation. This was always intended but it has never been brought about.
As I read the Bill—and again this is a matter that we wish to discuss in Committee—the new agency would be able to use the New Town Corporation as its agent, but of course an agent acting as an agent cannot perform functions which have not been bestowed on the principal, and the Welsh Development Agency, although it seems to have very considerable scope in some directions, as I read the Bill does not have power to carry out housing or social provision and therefore could not depute these functions, even if it wished to do so, to the New Town Corporation. I therefore wish to give notice that if I can find any way of proposing Amendments to the Bill in the direction I have indicated, I shall certainly attempt to do so.
One of the main aims of the Bill, as I understand it, will be to foster the smaller enterprises which are actually based in Wales, so that we do not have to depend as much as in the past on the subsidiary establishments of the large United Kingdom or multinational firms. If it is carried out successfully, this could be an extremely important outcome of the work of this new Agency. A recent report

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stated that of the 143 private firms at present in Wales employing more than 500 persons, no fewer than 94 have their headquarters in England. Those of us who know Welsh industry know the disadvantages that this can bring. I am therefore very strongly in favour of a Bill which could help to redress the balance. This, however, I suggest carries with it an obligation on the Government to do something positive and specific to foster industrial research in Wales. It is just mentioned in the Bill, but in very much a throw-away phrase in one of the clauses. But the large United Kingdom firms have their research centres elsewhere. We have not forgotten how ICI shifted its scientists from Pontypool to Harrogate. I am sure that my noble friend Lord Raglan will remember that. If we hope that Welsh-based industry will flourish, then we need far better opportunities in Wales for our Welsh scientists who want to work in the industrial sphere or in ancillary activity.
Finally—I do not want to delay the House because other noble Lords wish to take part in the debate—a word about relationships with other bodies. I was very glad that, in introducing the Bill, my noble and learned friend emphasised the position of the local authorities. That caused a good deal of apprehension when the Bill was first proposed and there were, as the Lord Chancellor said, discussions with the local authority associations. I am glad that he emphasised that anything which the Agency does must be done within the framework of planning. As the Welsh counties are now engaged on formulating their structure plans, one hopes that this Agency will soon be established and will recognise that one of its first co-operative actions should be to study the structure plans which are now being put forward by the Welsh counties. There are, however, several places where I am concerned about the interaction between the local authorities and the new Agency. The most enterprising of the Welsh counties have their own industrial development units for the promotion of their areas as places to which industry might come, and they also offer certain inducements. One hopes, therefore, that there will be the closest co-operation between the new Agency and the local authorities in this sphere.
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In Clause 13 concerning the environment, in the Bill as it stands there is an obligation to consult with the local authorities; but, as I understood it, when the Parliamentary Under-Secretary at the Welsh Office met the Welsh Counties Association he gave them an undertaking that their agreement would be sought That is not the same thing, and I hope that in Committee we will be given some clarification of that. After all, it is the locally elected body which is primarily concerned with the environment in its area and I think that we could have some unfortunate situations if the Agency, with the best will in the world, came in with a scheme and went through the motions of consultation, but did not have to secure the agreement of the local authority.
I am concerned about the position of statutory bodies like the Countryside Commission, National Park Committees, Nature Conservancy Council, and so on. I am not clear whether or not the new Agency will have overriding powers where they are concerned, and I would be glad to be enlightened on that matter at a later stage. I welcome the reference to meeting potential requirements for Celtic Sea oil, or gas exploitation if we find some, but my view is that this is less urgent than we thought it would be a couple of years ago, because I think all the major exploiters are so much committed elsewhere. But the time will no doubt come when we also will have to consider this problem. I am not so happy about an apparently unconditional right of mineral prospecting, including on residential property. We warned off Rio Tinto Zinc, and, personally, I would not find the Welsh Development Agency any more welcome in Coed-y-Brenin than they would have been. But these are relatively minor matters, although they have their importance. Overall, I believe that this is a Bill which has been welcomed in Wales and which should certainly be welcomed and sustained in your Lordships' House.
7.20 p.m.
Lord MAELOR: My Lords, I have never failed to take part in a debate in your Lordships' House when the subject concerned my native land. I am reminded of the occasion when David

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Lloyd George was present at a public meeting on Home Rule. He said, "I believe in Home Rule for Wales, Home Rule for England, Home Rule for Scotland, Home Rule for Ireland." "And Home Rule for Hell", shouted some man from the audience. Very good," said Lloyd George, "I like to see a man standing up for his own country!" That is what I am doing this afternoon, my Lords. I am proud to be a Welshman. Wales is the most beautiful and the most cultured country in the whole world. Our great tourist trade testifies to the country's beauty and, as to its culture, where but in Wales could one hold a National Eisteddfod for a whole week every August to compete in poetry, literature and music? Then, in July, we have the Llangollen International Eisteddfod with representatives of over 30 countries assembled to compete in music and dancing.
However, much of the natural beauty of Wales was lost in the course of the Industrial Revolution. Innumerable coal mines were sunk and slag heaps were erected in their vicinity. This was particularly so in the two Rhondda Valleys in South Wales. The beautiful mountainsides were covered with slagheaps. The destruction of this beautiful scenery prompted the author Richard Llewellyn to write his famous book, How Green was my Valley. Then came the tragedy of Aberfan, as a result of which the National Coal Board was compelled, thanks to my noble and learned friend Lord Edmund-Davies, to remove its slagheaps from very many places and to re-cover the land with green grass. My noble and learned friend should be proud of himself because of what has been accomplished. The transformation has been such as to permit the same author to write another book, called this time, Green, Green is my Valley.
However, my Lords, there is much more to be done. I should therefore like the Bill to become an Act of Parliament if only because of one of its clauses. It establishes a Welsh Development Agency, one of whose functions will be "to improve the environment"—that is, to remove the slagheaps and such monstrosities. What a blessing that will be! At the same time, Wales is suffering from another terrible plague—that of unemployment. I read the other day that no
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less than 11 per cent. of the workers in Anglesey are unemployed. Anglesey is mainly an agricultural county and there is no help for those people unless some suitable industries are established there. The provisions of the Bill will do just that. The Agency's functions will be to promote Wales as a location for industrial development, to provide finance for industrial undertakings and to establish and carry on industrial undertakings.
Again, unemployment is rampant in South Wales, due to the closing of the coal mines. As I have stated before in this House, I do not mind mines being closed. Speaking as an ex-miner, I regard coal mining as the most uncivilised of occupations, and the coal miners are a brave set of workers. They deserve every penny they receive. However, I am not prepared to see a coal mine shut unless provision is made for alternative employment. The Bill provides the means to do that.
In North Wales, from whence I hail, we are frightened today by the prospect of the closing of Shotton Steelworks, so throwing 10,000 workers on the dole. It is apparent that the chairman of the Board is hell bent on closing the works, despite protest from every direction. If those works close, alternative employment will have to be provided. The danger then will be that most of the new industries allotted to Wales will be concentrated on that one area. The Bill empowers the Secretary of State for Wales to keep the steelworks operational despite the chairman.
Lastly, I should like to point out that today we have empty factory buildings in towns like Blaenau Ffestiniog where the rate of unemployment is very high. That does not make sense. Let us pass the Bill in order to bring new hope to such towns. We have heard a great deal about North Sea Oil, but not so much about Celtic Sea Oil. According to the Bill, the Secretary of State will be able to intervene to meet requirements which can he related directly to exploration in the Celtic Sea and the subsequent exploitation of any resources discovered there.
When the Bill has passed to another place—and I hope, despite what my compatriot, the noble Lord, Lord Aberdare, I has said, that it will go to the other place

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unaltered—I am sure the Welsh Members there will give it their most enthusiastic support. It gives me very great pleasure, therefore, to support my noble and learned friend the Lord Chancellor, who is probably the first Welsh-speaking Lord Chancellor to occupy the Woolsack, in his effort this afternoon to get this Bill passed in the interests of Cymru—Wales.
7.29 p.m.
Lord SWANSEA: My Lords, time is moving on and I shall endeavour not to detain your Lordships for more than a few minutes. I also wish to apologise in advance for the fact that I shall be unable to stay until the end of the debate, and I hope that your Lordships will forgive me if I leave as soon as I finish speaking. It is always a pleasure to listen to the noble Lord, Lord Maelor, talking about Welsh subjects, because he waxes lyrical about the land from which both he and I come, and which we both love. He speaks of the countryside, the scenery and the language—he has the advantage of me there because I do not speak it myself. But as he and I know, it was the language spoken in the Garden of Eden.
My Lords, at various times in the past Labour Governments have shown a proclivity for what we might call "omnibus" legislation, and I am afraid that this Bill is no exception. It sets up the Welsh Development Authority with very sweeping powers, not only over industry in Wales, but over matters concerning the environment, to an extent which might well excite comment on the other side of the Iron Curtain. It is based on one of those articles of the Socialist faith which says that a business can be run more efficiently at a distance by an army of civil servants who know little or nothing of the local conditions. It is probably true that industrial development in Wales could be a great deal better co-ordinated than it is now. There are several bodies in existence—such as the Development Corporation for Wales and the Mid-Wales Industrial Development Association; and the new county councils have certain economic development powers.
These bodies all do very good work. But in many instances it is simply a case of the right hand not knowing what the
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left hand is doing. However, there is no guarantee that this state of affairs will be ameliorated after the passing of the Bill, because it is hard to see where one is to draw the line between the functions of the National Enterprise Board and the Welsh Development Agency. There seems to be a considerable area—a rather nebulous area—where the functions of these two bodies will overlap. Many businesses in Wales—in fact, I believe two-thirds of industry in Wales—are either branches or subsidiaries of national companies or companies with their headquarters in England or Scotland. Other industries with their parent companies in Wales have branches or subsidiaries in England or in Scotland. It will therefore be very difficult to sort out just what is the responsibility of the National Enterprise Board and what is the responsibility of the Welsh Development Agency. I cannot help feeling that this overlapping of functions and activities will lead to bad organisation which will not achieve its objectives.
One can question the need at all for a separate Welsh Development Agency. Perhaps it is really only a sop to Welsh nationalistic feelings. No matter how much I may sympathise with some of the aspirations of the Welsh Nationalists, I can hardly believe that the efficiency of Welsh industry, and, hence, the prosperity of Wales, will best be served by the setting up of this Development Agency. The noble and learned Lord on the Woolsack mentioned the beautiful countryside of Wales and, of course, it is beyond compare, with due respect to those noble Lords who come from North of another Border. Like the noble Lord, Lord Maelor, I often think, as I drive down through the South Wales valleys, how beautiful they must once have been, before the hand of man bespoiled them in the name of industrial progress.
A lot of work is now being done to reclaim some of these areas which have been worked out, some of the old pit workings which are now derelict and in ruins, as well as the neglected tips. Much work has been done by local authorities to clear these derelict areas and to make them once more of use to the community. I am sure that the local authorities are now much more aware of the need for this kind of work than they once were. Therefore, I venture to hope that they could be left to carry on with this very good

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work they are doing without too much direction from above and without someone from Whitehall, or the Welsh Office, breathing down their necks all the time.
My Lords, there is one aspect of the Bill which fills me with concern. This relates to Clause 21, which deals with the powers of entry on to land for the purposes of conducting a survey to see whether there are minerals—or, perhaps, even oil or natural gas—beneath the surface. This clause provides very wide powers, stating that:
"Any person … may, at any reasonable time, enter upon land…".
Subsection (3) states:
"A person authorised under this section to enter upon any land … shall not demand admission as of right to any land which is occupied unless at least forty-eight hours notice, or in the case of land occupied for residential purposes at least seven days notice, of the intended entry has been given to the occupier."
Is 48 hours' notice really sufficient? I should like your Lordships to consider for a minute the circumstances of the average Welsh farmer. His circumstances differ considerably from his counterpart in other parts of the United Kingdom. He is far from being feather-bedded. Most of these farms are small, owner-occupied, and are handed down from father to son. Most of them are under 100 acres. They are run by the farmer almost single-handed, with his wife and, perhaps, if he is lucky, with his son. These Welsh farmers are a very independent breed and they like to carry on as they have done from generation to generation. Among other things, they are very suspicious of authority, sometimes with good reason. One of these small farmers could be suddenly served with a notice stating that a survey is to be carried out on his land the day after tomorrow. Imagine, my Lords, the confusion of mind and the effect of that notice on one of these small farmers. He may be in the middle of lambing or in the middle of harvest. He may be ill or he may be away from the farm. It is not enough warning, nor is it enough time for this unfortunate man to collect his wits and, if necessary, take professional advice.
I do not think that it is in accordance with the principles of natural justice. If the occupier of a residential property can have seven days' notice, why cannot the occupier of land? I hope that this is
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one of the points in the Bill which will be amended at a later stage. Those, my Lords, are all the comments I wish to make, bearing in mind the previous speeches.
7.39 p.m.
Lord RAGLAN: My Lords, at the time the Bill was in draft I learned something of what was going into it, like the proposal for linking the various agencies mentioned by my noble and learned friend the Lord Chancellor, which seemed to me to be very sensible. Also I understood that the status vis-à-vis the Welsh Office of Cwmbran New Town, of which I have the honour to be the chairman, was likely to be substantially unaffected, for which I was glad. I thought to leave things there; but then, on reading the Explanatory Memorandum, I discovered that the Bill is much more far-reaching than I had supposed. So I began to read the Bill, and I have to say that after reading the first clause one evening what I read in it—and you may think me a political innocent—kept me awake that night until past the small hours. Before I say why, I should like to make a comment or two on the practical difficulties, as I see them, in the operation of this Agency.
In the debate on the economy last week I remarked upon the wide powers which Ministers and Departments have to intervene in our commercial and industrial life, more or less unchecked. Such powers invite use; and because the political time scale and the industrial time scale are so different, because they come from different worlds, the frequent changes of policy in the shape of political direction which have been imposed on us over the years by all Governments have, I suggest, made a substantial contribution to the ineffectiveness of our industry. I was interested to note from Monday's newspapers that many of the chairmen of nationalised industries have come to much the same conclusion. I am not thinking about weak government, such as Lord Shawcross is reported to have spoken about today; I am talking about very detailed control, uncertain direction and continual changes of policy. This reflects the nature of politics.
I am therefore expressing some scepticism whether this proposed Agency, under Government control as it must be,

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would make as effective use of public money as it ought; and if ever power of control were given over to the mooted Welsh Assembly, I can see confusion becoming worse confounded, because power to intervene would only too easily conflict with the wider, long-term public accountability of the Agency. This Agency will run into the political problem of a conflict between the short-term and the long-term public accountability in the running of our public agencies, a problem to which, as yet, we as a country have not devised a suitable solution. I am sure that in time one must be found; and if it must be found, it can be found, but only if the problem is studied and, above all, is fully understood by all concerned.
The staff of the Agency will have a further problem, that of remoteness from the areas of which they will have charge. New towns work well, although not all that easily, and mainly I think they work because their efforts are concentrated at one point and their staff is intimately connected and acquainted with the locality. The staff of this Agency will have no such advantage. They may end with the worst of both worlds, being too far away for some purposes and too near for others. Of course, we shall have to see. Those are a couple of practical difficulties.
Nevertheless, it is not that which worries me so much; it is Clause 1(4). If your Lordships read this, as you should, with subsection (13), it briskly and baldly states that the proposed Agency can do anything it likes as long as it is legal. I find that unacceptable. It seems to me also that the philosophy behind subsection (4) of that clause in some way permeates the whole Bill. It jars my senses and all my political sensibilities. And that a Government can ask for and obtain these powers has converted me to something I had not anticipated I should be converted to, which is the belief that we should have a Bill of Rights which would prevent, or at any rate strongly dissuade, Governments from demanding such powers except in the most dire circumstances. If the Bill has a Second Reading I propose to move an Amendment to leave out subsection (4) of Clause 1, which will take the stinging feeling out of subsection (13).
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The proposed Agency is not going to be a democratic body and, as I have intimated, I do not think it would be effective in its task if it were. But at least we can help by starting it off with a democratic feel and encouraging its executives to be much more sensitive to the rights of citizens than might otherwise be the case. I find it extraordinary also that these very wide powers are being asked for, apparently without provision being made for a public inquiry into any of the Agency's proposals. I do not know what reason is forthcoming for that. I may be wrong, and perhaps my noble friend will tell me when he comes to wind up. Altogether, it seems to me to be in tone a very dictatorial Bill. Its sharpness of tone may reflect the agonising difficulties and pressures to which the Secretary of State is inevitably subjected, and very likely he is glad to off-load some of his responsibilities on to an Agency.
I may add that the unfortunate Secretary of State comes into the category once described to me as being "everything almost and nothing quite". He and his Scottish equivalent are the result of the creation of the post of Secretary for Scotland, who is really a constitutional anomaly belonging to another era, when people's ideas about nation and history, race and separate development were very different from what they are today. Putting that aside, I want strongly to question for several important reasons the wisdom of separately legislating for different areas of what, by any criteria except convention, is a very homogeneous country.
Since the creation of a Secretary for Scotland 90 years ago, Scotland has been separately legislated for to an increasing extent as the Scottish Office has built up. It now employs more people than the Brussels bureaucracy; and they have to be employed to do something. Such a body as that acquires a momentum of its own. It inspires some Bills itself; others are "English" Bills which are given what is judged to be a specifically Scottish gloss, with multiple cross-referencing against the English Bill to prove it. All Parliamentarians know that Scottish business is the signal for the Chamber—and especially the Chamber of the other place—to empty of people who do not come from Scotland. It

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should surprise nobody, therefore, that there has been a steady alienation of Scotland from the rest of the United Kingdom, that there is a legitimate grievance among people in Scotland that they feel neglected by Westminster, and an increasing impression that this is the English Parliament—which is what the Nationalists call it. In other words, for many years Governments have been encouraging the very outlook and attitude which they would now like to diminish.
Since the advent of the Welsh Office in 1964, the same situation has arisen in Wales. The Welsh Office has built up numbers, interposing itself increasingly between Westminster and the people living in Wales, and it has started to issue its own legislation, of which of course this Bill is one example. I strongly urge that we should be clear that every piece of separate legislation loosens the integrity of the United Kingdom. As was put so well, but not greatly heeded then, at the conference of the Labour Party in Wales, "It feeds the pangs of nationalism". Every piece of separate legislation encourages separatist thinking. Again and again, I come across examples of this which have been a matter of great concern to me.
As an example, not only after I was appointed chairman of Cwmbran New Town, the New Towns Association stopped sending me details of their conference because I am Welsh. I wrote to the then Secretary of State, Mr. Peter Thomas, and protested that I was going to be cut off from comrades, from ideas and discussions and from the formation of policy decisions which were going to affect the staff, the town and me. The Secretary of State took the point and I am glad to say I remain a full member of the conference. The other day, when the New Towns Association chairman met the Minister of Planning and Local Government for discussions on a number of important subjects, our Scottish colleagues were not asked. They protested to us in the Association, because many of the discussions were, in the end, going to affect them and they wanted to be in on them. But the Scots had their own New Towns section, so their chairman was not allowed to attend.
The New Towns movement is a British one, not specifically Scots, Welsh or
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English. We need our Scottish colleagues; we need their help and they need ours. We want their ideas and we enjoy their companionship. But not a bit of it: because of the ridiculous built-in chauvinism of the system we did not get them, nor did they get us. The moral of this tale for me is that if, like the people who have now gained a great measure of control in Wales and Scotland, you wish to be inward-looking and exclusive, you end up by being yourself excluded to the detriment of everyone, especially yourself. The Scottish Conservatives have just woken up to this fact and are urging their Members to make a special effort to see that Scottish interests are continually represented at Westminster. But they have a task of immense and perhaps insuperable difficulty going, as they are against the grain of the system which, over the years, they themselves have encouraged or acquiesced in building up.
In reality exactly the same point applies to Wales and Scotland as to our membership of the EEC—stay in, and come in further if you want to or, in the end, find yourself excluded. As I sit upstairs in one of our EEC harmonisation committees, while we are trying to find common ground in legislation between historic enemies, I often reflect upon what an unhappy situation it is that the very opposite sentiments, quite opposed to what we are trying to achieve in Europe, are still being encouraged in Scotland and Wales by Governments in Westminster, as has been shown here this afternoon. The newly named Labour Party of Wales, which is traditionally more nationalistic than the Conservatives (it is the other way round in Scotland, and this is a very interesting point) has just voted to back this Bill and come out of the EEC. They have voted, in effect, for more nationalism, to be more backward-looking and more inward-looking. I hope that very soon they will change their minds.
I profoundly hope that the referendum vote on 5th June will give a clear decision that we should stay in the EEC, and I pray that somehow it may turn out to be a cathartic turning point, when people in this country will once again look outwards towards the wider world to which by long history and tradition we all belong. Being inevitably a little locally chauvinistic myself, I particularly hope

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for that result for the sake of the part of the world in which I was born and live. But approving of this Bill runs counter to those sentiments; approving of this Bill is approving a more separate and more exclusive Wales. A number of defects in the Bill can of course be sifted out in the legislative process; yet that it should be brought at all runs against my convictions about the best and wisest policy we as a country should pursue, and I cannot support it.
7.58 p.m.
Lord TAYLOR of MANSFIELD: My Lords, I have listened to the whole of this debate and every speaker has been either a son or daughter, as in the case of the noble Baroness, Lady White, of the Principality. I cannot claim that right. But, after listening to the Lord Chancellor's exposition of this Bill, I think it is only right that a poor Sassenach like me should give the Bill its support. I do so because I have a certain love for the Principality. If you ask me why, I could not explain it. I love its country, its people, its culture and its arts. There is only one thing about the Principality which makes me sad; that is, the scars which have been imposed upon it as a consequence of the coal and steel industries.
I sometimes wonder why I have a great affection for the Principality. I think I can put it down, in the main, to two reasons. Some time ago now—more years than I care to remember—I read a book about wild Wales by a man who wrote many books, such as Bible in Spain and Lavengro. This man was George Borrow and he wrote the book more than 200 years ago. There were no buses then, let alone aeroplanes. He traversed the whole of the country on foot. Something which effected me emotionally was that he had enough wind and courage to climb Plynlimon Fawr. As my Welsh friends will know, Plynlimon Fawr is noted for the source of three rivers, the Severn, the Wye and the Rheidol. What fascinated me about George Borrow was his description of the Principality on reaching the summit of Plynlimon and the source of the Severn. He described how he cupped the water in his hand and drank it. I thought, "This book is worth reading and this country is worth seeing."
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As a consequence of the whetting of my appetite by this famous writer, I have travelled from Rhayader in the North to the Rhondda in the South. I remember on one occasion calling at the post office in a small place which is more commonly known as Devil's Bridge. Who should be emerging from that post office but the noble and learned Lord the Lord Chancellor himself. I thought, "This is really a coincidence."
However, the speech of the noble and learned Lord in regard to this Bill so impressed me that I thought your Lordships would neither mind my trespassing on your time nor sparing a few moments to listen to the voice of one who is not a Welshman but who wishes to support this Bill. I thought of the scars that have been inflicted not only can you read about them in The Rape of My Fair Country but you can see them in the industrial parts of Wales. This Bill is an attempt—perhaps the biggest one yet—to do something to improve the environment of those parts of Wales.
I have many friends in the South: they were once part of a large mining community. Perhaps one of my closest friends was the first Secretary for Wales, Mr. James Griffiths. I have seen what has been done over many years so far as the pollution of the environment is concerned. I think that this Bill, and the expenditure of the money to be put at the diposal of the proposed Agency, will he an extremely good measure. It may be that in the not-too-distant future the Rhondda may look as beautiful as Rhayader—who know! I do not altogether share the criticisms levelled at the Bill by my noble friend Lord Raglan. He has certainly given more detailed study to the matter than I have and one would need to look closely at his speech to see whether his criticisms are really justified. We can look at them more closely during further stages of the Bill.
My Lords, I hope I may be pardoned for making these few remarks. I have listened to many Welsh debates, both in the other place and here, over the last 30 years or more, and this is the first time I have put my hesitation on one side and plucked up sufficient courage to participate in a debate concerning the Principality. I wish this Bill every success in its progress through your Lordships' House and the other place. And

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when it is eventually implemented I hope the results will be, as the noble and learned Lord on the Woolsack, said: that it will mean so much not only to the rural parts of Wales but to the industrial parts as well. For my part, I wish this Bill well and hope that it will bring greater prosperity to the Principality which, over the years, has suffered so much because of its mines, its tinplate works and its slate quarries. Indeed, perhaps the slate quarries in Blaenau Ffestiniog have left the biggest scars of all. If something can be done to remove those ugly spots and scars which are there for everybody to see, this Bill will be fully justified. I wish it well.
8.6 p.m.
Lord LOVELL-DAVIS: My Lords, despite the respective national reputations involved when it comes to talking, I am delighted to know that we have been less loquacious than the Scots and, perhaps I might also say, somewhat more in accord.
This debate has concentrated on certain aspects of the proposals in the Bill, for example the Agency's environmental role, its relationships with the Secretary of State and with local authorities, and particularly the extent to which the Agency will have powers in Wales analagous to those of the National Enterprise Board in England. I will try to deal in detail with the questions raised by noble Lords, but before doing so I should like to make some general remarks on the major issues we have been debating. I make no apology, first, for emphasising that this is a Welsh Bill—a Bill for Wales which will lead to the establishment there of a new Agency with power and finance to give a major impetus to Welsh development. I admit to the same feelings about the Principality as the last speaker, my noble friend Lord Taylor.
There has been reference to the Agency's environmental role and, together with my noble friend Lord Maelor, I feel sure that it is right to give as much emphasis to this as to the economic and industrial development tasks which the Agency will also have. It was a particular pleasure to hear what my noble friend Lady White had to say. Both she and the Prince of Wales Environmental Committee, of which she is chairman, are held in very high regard in Wales. She
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therefore brings to the House a background of experience in these matters which must command attention. I agree with the views she expressed about the Opposition's attitude to debating this Bill in the Welsh Grand Committee in another place. As she said, however, this has given us an opportunity to give a lead to discussion of the Welsh Development Agency proposal: and the noble Baroness herself has contributed positive and helpful comments. She also referred to the development and improvement of the environment in rural Wales, and in particular in the area I know very well, the area of Cader Idris. There will be no question of the Agency developing or improving the environment in many parts of Wales which do not need such development or improvement. They will be left well alone, and the Agency will concentrate on those parts of urban Wales where improvement is required.
I think it would be helpful, in view of the concern which has been expressed about the impact of the Agency's work on local authorities, if I were to explain in more detail how the Agency will operate. Its main role in environmental matters will lie in improving and financing schemes for derelict land clearance. This will in no way affect existing activities of local authorities. In the past the main restraint on local authorities has been finance. Not only will the Agency have the power to make additional finance available for land reclamation schemes, but it will also be able to make grants of up to 100 per cent. of the net cost incurred by local authorities instead of the present 85 per cent.
The noble Lord, Lord Aberdare, asked about the position of the Welsh Office Derelict Land Unit in relation to the Agency. The work of the Unit will be transferred to the Agency, and therefore the real contribution which the Derelict Land Unit makes will continue. The noble Lord also asked about the present level of derelict land clearance expenditure. I understand this is about £2,500,000 a year in Wales. My right honourable friend hopes that these arrangements, including the Agency's power itself to carry out land reclamation schemes, will eventually make it possible to double the present rate of derelict land clearance in Wales. This is a measure of the emphasis we are laying on

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the need to renew the attack on dereliction in Wales. At the same time, the Agency will have the role of preparing and implementing major environmental and redevelopment schemes.
We do not intend to lay down too many hard and fast rules as to what the Agency can do, but one initiative which we believe the Agency will certainly wish to take is that of drawing up proposals for areas into which a comprehensive approach can help to breathe new industrial or commercial life by creating space for new employment. My noble friend Lord Maelor referred specifically to areas of unemployment. I share his very real concern about areas of high unemployment, particularly in the area he knows best, North Wales: and I much welcome his support for the Bill.
Beyond this, the Agency will wish to have an eye to the preservation of the environment. It will be no use clearing land and improving amenities for new industries and the people who work in them if at the same time some new industrial dereliction is being established. There is here a major role for the planners, particularly local authority planners. We had emphasised that there will throughout he full consultation with local authorities. Indeed, the kind of schemes we have in mind will be set up, as my noble and learned friend the Lord Chancellor emphasised, in partnership. The Agency is not being placed in any special or privileged position as regards planning. In every instance where planning permission is required this will have to be sought in the normal way from the local planning authority. This will be true for the Agency's operation in rural as well as in urban Wales.
In this respect I would make it clear that the Agency will have a positive role to play in rural Wales, where the problems of depopulation and of lack of the right kind of jobs are to an extent different from those which we know in the Valleys or in the industrial lands of North-East Wales. My noble friend Lady White referred to this matter, and I agree with the views she expressed. They very much reflect the views expressed by my right honourable friend in another place; and that is why we continue to rely on existing organisations there. In rural Wales, for
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instance, the Agency will work very closely with the Mid-Wales Development Association, the Development Commission and the Council for Small Industries in Rural Areas. Each will have its part to play, and a partnership there will be a means of bringing new resources to bear on the problems of rural Wales. At the same time, I should make it clear that this does not prevent there being further and new proposals for rural Wales. The Government remain committed to establishing arrangements appropriate to the needs of the rural areas. But there are constraints on the legislative timetable, and it was thought right to give priority in the present Session of Parliament to an Agency whose work will cover the whole of Wales—although, as I have said, the Agency will have a role to play in rural Wales. If it proves necessary at a later date to introduce further legislation to enhance the development of rural Wales, this will be done.
My noble friend Lord Raglan suggested that the Agency would be remote. This is not so. The Agency will work very closely with local authorities which know intimately the problems of their areas. Although no decision on location has yet been taken, it is clear that the Agency will require a presence in more than one area of Wales. Incidentally, my noble friend Lord Raglan also referred to lack of provision for public inquiries. But provision is made. The Agency, by virtue of Clause 1(13), is subject to any enactment or rule of law. The Agency is not being placed in a privileged position.
I should like to say a word or two about the Agency's promotional role about which I know there has been some discussion and, indeed, uncertainty. The Agency has a responsibility to promote Wales as a location for new industrial and commercial investment. It will have both an executive and a co-ordinating role. Here, again, it will be able to share in the task of promoting Wales with existing organisations, including local authorities which have in recent years quite markedly increased their role in promoting their areas as industrial development locations. The Agency in its work abroad will be able to expand on the excellent work so far done by the Development Corporation for Wales. In particular, I understand it is agreed that the Agency

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will pay the Exchequer grant to the Corporation to ensure the continuance of its promotional work.
My Lords, I come now to the matter of the relationship between the Agency and the National Enterprise Board, which was raised initially by the noble Lord, Lord Aberdare. The fact that the Bill does not spell out in any way the relationship is quite deliberate. We have taken the view that it would be wrong to tie down legislation what will essentially have to evolve by way of flexible arrangements and agreement. Working guidelines will be drawn up—albeit they may well be changed in the light of experience—and these will be published in due course so that Parliament, industry and the public can see what the arrangements are. One of the essential raisons d'etre for this Bill is to enable more decisions affecting the Welsh economy and environment to be taken by Welsh people in Wales. This will be done, but clearly one cannot pretend that the Welsh economy and Welsh industry are fully autonomous.
There will inevitably be cases involving straddling of the Border: for example, where an industry has its headquarters in Wales and subsidiaries in England or vice versa. These are situations of the kind where close consultation between the Agency and the National Enterprise Board will be required. Similarly, decisions involving, for example, reorganisation of industries with United Kingdom implications more properly fall to the National Enterprise Board, although the Agency will be consulted about any Welsh industries affected.
The noble Lord, Lord Aberdare, criticised the Welsh Development Agency Bill's reflecting the Industry Bill. However, one of the strengths of the Bill is surely that it reflects the Industry Bill but places it in a Welsh context. He also referred to the Agency's power to acquire shares. The Agency will be in precisely the same situation as any privately owned company, with neither more nor less rights. It will comply fully with the spirit and the letter of the Takeover Code. He referred to the Agency's subsidiaries being in a privileged position in relation to private industry. My Lords, this is not so. The emphasis here is on
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fair competition, which the noble Lord surely welcomes. Incidentally, the noble Lord, Lord Aberdare, suggested that there would be insufficient Parliamentary control of the Agency. My Lords, this is not so. My right honourable friend will be directly accountable to Parliament for all the Agency's activities by way of Parliamentary Questions, et cetera.
My noble friend Lord Raglan questioned the powers set out in Clause 1(4). Here again, these require approval of the Secretary of State who is responsible to Parliament. In any case, however, I welcome discussion of this matter at the Committee stage, although I do not share my noble friend's apprehension.
Lord ABERDARE: My Lords, if the noble Lord will allow me to intervene, I should like to take up this point about Clause 1(4). Surely the Secretary of State's approval is required only in the case of "other parts of the United Kingdom". As I read it:
"The Agency shall have power to do anything in Wales, and, with the approval of the Secretary of State, anything in other parts of the United Kingdom…".
Lord LOVELL-DAVIS: My Lords, that is not how I understand it. As I understand it, the Agency requires the approval of the Secretary of State for its activities in Wales, but the best I can say is that I will write to the noble Lord.
The proposals before us in this Bill offer a unique opportunity to create in Wales a major new institution with real powers. We are speaking of a Development Agency working in Wales, for Wales, and responsible directly to the Secretary of State for Wales. It is a priority to get the Bill enacted and the Agency under way. The aim is to have the Agency established towards the end of the year, and this places the highest premium on ensuring that the Bill is on the Statute Book by the Summer Recess. That is the objective of my right honourable friend. I believe that we in this House should do everything that we can to help to meet that objective.
On Question, Bill read 2a, and committed to a committee of the Whole House.

INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) BILL [H.L.]
The LORD CHANCELLOR: My Lords, a possible question as to consent in respect of the Duchy estates has arisen in connection with this Bill. With the leave of the House—and I apprehend that at this hour the House will not be unduly disappointed—I shall not move the Third Reading of this Bill while the question is being looked at.

LIMITATION BILL [H.L.]
8.21 p.m.
The LORD CHANCELLOR: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord AMHERST OF HACKNEY in the Chair.]
Clause 1 [New time limits]:
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 1:
Page 3, line 39, after ("by") insert ("or under").
The noble and learned Lord said: This is a drafting Amendment. New Section 2B.(4) provides that the period of limitation for the purposes of actions under the Fatal Accidents Act 1846 is not to apply to actions for which special limitation periods are prescribed, such as cases of death in a maritime or aircraft accident or as a result of a nuclear accident. Following the precedent of Section 32 of the 1939 Act, the saving for special limitation periods is drafted in terms of periods prescribed by other Acts. There are, however, some limitation periods prescribed by Statutory Instruments as opposed to Acts. The Carriage by Air Act 1961, for instance, which prescribed a period of two years, was extended in 1967 by sub-
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ordinate legislation to certain classes of carriage not covered by the Act itself—for example, a flight from London to Edinburgh. This Amendment removes any doubt about the limitation period in such a case. It is to be the period provided for in the Statutory Instrument. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 2:
Page 4, line 24, leave out ("section") and insert ("subsection").
The noble and learned Lord said: This Amendment is designed to clarify new Section 2D.(1) which enables the court to allow an extension of time after it has assessed the relative position of the parties. The court is directed to consider the prejudice which an extension would cause to the defendant. The Amendment is designed to enable this provision to be more readily understood by the reader, without requiring him to search through the rest of the section to be sure that he has followed correctly what is intended. The Law Society suggested to me that an Amendment on these lines would improve the Bill, and I am most grateful to them. I beg to move.
On Question, Amendment agreed to.
The LORD CHANCELLOR: Amendment No. 3 is a drafting Amendment, and I do not think it calls for any lengthy explanation. I beg to move.
Amendment moved—
Page 5, line 45, after ("Part") insert ("II and").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Persons under disability]:
The LORD CHANCELLOR: Amendment No. 4 is a drafting Amendment to correct a minor inelegancy in Clause 2 of the Bill. An action cannot properly be said to be brought by virtue of a subsection which merely applies certain provisions about extension of a limitation period. The wording proposed shows more clearly that the new subsection (3) of Section 22 is meant to modify Section

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22(1) for cases relating to contributions between joint tortfeasors. I beg to move.
Amendment moved—
Page 6, line 8, leave out ("If the action is brought") and insert ("Where this section applies").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clauses 3 and 4 agreed to.
Schedule 1 [Consequential and minor Amendments]:
The LORD CHANCELLOR: Again, Amendment No. 5 is a pure drafting Amendment and I do not think I need to trouble your Lordships with any explanation of it.
Amendment moved—
Page 8, line 19, at beginning insert ("In the Limitation Act 1938 the proviso to section 2(1) and").—(The Lord Chancellor.)
On Question, Amendment agreed to.
The LORD CHANCELLOR The LORD CHANCELLOR moved Amendment No. 6:
Page 8, line 21, at end insert—
("4. In section 32 of the Limitation Act 1939 (saving for other limitation enactments) after the words "prescribed by" (in both places) there shall be inserted the words "or under".").
The noble and learned Lord said: This Amendment is analogous to the first Amendment I had the honour of moving and ensures that the saving of special limitation periods in Section 32 of the Limitation Act 1939 will save limitation periods prescribed under other Acts. This Amendment will have the same effect in personal injury cases as Amendment No. 1 has in fatal accident cases and is needed for the same reason; namely, to remove any doubt about the appropriate limitation period. I beg to move.
Lord ABERDARE: I hope that the noble and learned Lord will have noted the co-operation which has been offered to him by the Opposition over these Amendments to his Bill. I hope that when we come to the Committee stage of the Welsh Development Agency Bill he will show to us the same co-operation.
The LORD CHANCELLOR: I am most grateful for the forbearance of noble Lords and for their forgiveness in allowing me not to embark upon an explanation of mere drafting Amendments. My
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noble friend on my right has an urgent appointment with a train, which explains the brevity of my submissions.
On Question, Amendment agreed to.
Schedule 1, as amended, agreed to.
Remaining Schedule agreed to.
House resumed: Bill reported with the Amendments.

FARRIERS (REGISTRATION) BILL
8.30 p.m.
Lord NEWALL: My Lords, I understand that no Amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Unless therefore any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Newall.)
On Question, Motion agreed to.

FAMILY INCOME SUPPLEMENTS (COMPUTATION) REGULATIONS 1975
8.31 p.m.
Lord WELLS-PESTELL: My Lords, I beg to move that the draft Family Income Supplements (Computation) Regulations 1975, laid before the House on 1st May, be approved. The Family Income Supplements Act 1970 provides for the payment of a benefit for certain families with small incomes. The purpose of the Regulations is to increase the prescribed amounts for family incomes supplement and the maximum amounts payable, and for the changes to take effect from 22nd July of this year, a year after the previous uprating. The family income supplement scheme gives help to low income families where the head of the family is in full-time work and where there is at least one dependent child. The supplement is payable when weekly resources fall below a prescribed amount which varies according to the size of the family. The weekly rate of the benefit is one half of the amount by which the

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family's total income falls below the prescribed amount subject to a maximum and minimum weekly payment.
We are now developing our own long-term plans, and the Child Benefit Bill which received its Second Reading in another place on 13th May contains our proposal for a new system of family support. The new scheme will help to reduce dependence on means tested benefits, such as family income supplement, but for the time being the family income supplement still has a worthwhile function.
For the one-child family the prescribed amount goes up from £25 per week to £31·50; for each additional child the prescribed amount will be £3·50 higher instead of £3 as at present for families entitled to the maximum weekly payment—at present £5·50 for families with one or two children and for other families £7. We propose to move to a more equitable system under which the maximum increases progressively with each child. The maximum weekly payment for the one-child family will go up to £7 and for larger families that amount is increased by 50p for each additional child after the first.
The effect of the increases in the prescribed amounts will be that families with one child will generally receive, subject to the operation of the new maxima, an extra £3·20 or £3·30 a week according to the rounding up, on top of their existing family income supplement award. And for each additional child the increases will be either 20p or 30p greater.
Your Lordships will recall that family allowances were increased on 8th April last. To prevent duplication of support, awards of family income supplements for claims made after 8th April 1975 will, where appropriate, take account of the increased family allowance payments. For claimants receiving family income supplement before the increase in family allowances we are arranging to adjust the family income supplement award when the new rate of supplement is paid.
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The increases in prescribed amounts and maximum payments will provide much needed help during the year immediately following the uprating for some 70,000 families who are bringing up children on very low incomes. The total cost of a family income supplement during that year will be £11 million. This is within the existing departmental programme of expenditure. I have taken this rather briefly, my Lords, because I thought perhaps the House would prefer me to do so, and I hope that these Regulations will be welcomed by your Lordships. I beg to move.
Moved, That the Draft Family Income Supplements (Computation) Regulations 1975, laid before the House on 1st May, be approved.—(Lord Wells-Pestell.)
8.35 p.m.
Lord ABERDARE: My Lords, I am grateful to the noble Lord for having explained what this Order is about. Certainly he explained it clearly, even though briefly, and we welcome it. As he rightly said, it is an upgrading of the benefits under the Family Income Supplements Scheme and also some improvements in the Scheme itself, and these we welcome.
The Family Income Supplement has been of benefit, as the noble Lord acknowledged. I think he will probably remember, when we first introduced it, that it was never intended to last for ever. We had our own plans for a tax credit scheme which we still think would have been a valuable help in our social security provisions and would have obviated much means testing. Certainly in the meantime a family income supplement has brought considerable benefit to low-income families, and especially to one-parent families. For these reasons, we are very happy with this Order and have no objection to it.
Lord WELLS-PESTELL: My Lords, I am much obliged to the noble Lord.
On Question, Motion agreed to.