HL Deb 30 October 1975 vol 365 cc672-6

[No. 3]

Clause 2, page 2, line 30, at end insert— (aa) carrying on, or establishing and carrying on, whether by themselves or jointly with any other person, industrial undertakings;

5.50 p.m.


My Lords, I beg to move that the House doth agree with the Commons in their Amendment No. 3. With permission, I should like also to speak to Amendments Nos. 6, 10, 11. 31, 37 and 47, which are associated with the present Amendment.

This was the fundamental point of disagreement when previously discussed in your Lordships' House, so a great deal has been said here and another place on this matter in the context of the present Bill, the Industry Bill and the Welsh Development Agency Bill. I cannot expect, therefore, as a relative "new boy", to say very much of novelty.

I would merely rest on two arguments. The first is that the ability to establish and carry on businesses is the function which above all makes the Agency a vital new element in Government policies for creating jobs in Scotland. It will allow the public sector to fill the gaps left, for whatever reason, by the private sector and thus attract jobs to the most needed areas of Scotland. Without this function the Agency would simply not measure up to Scot lands needs. It would not be able to ensure the pay off in terms of jobs of all the resources and imaginative effort that go into its environmental and industrial functions. It would be able to set the scene for new industrial development, to provide the sites and factories and the environmental conditions in which industry should flourish; and to provide advice and offer capital for investment. But it would have to stop short at that vital point—the point at which, in the past, we have always had to stop short. That is precisely why all the efforts of successive Governments in the past have not been able to solve the problems. The full realisation of all the Agency's plans and the return on its expenditure would be completely dependant upon private industry having the will, foresight and enterprise to set up and develop the industries that provide the jobs in the places where they are desperately needed.

The establishment of the Agency with its task of economic and environmental regeneration is an expression of the Government's faith in the economic future of Scotland and the West Central belt of Scotland in particular. But without the power to set up industrial undertakings its efforts could go for nothing if the private sector of industry did not share the same faith. The Government believe they cannot take that risk. The second argument I would briefly deploy is related to the fear expressed earlier that the Agency's undertakings will be in unfair and subsidised competition with private industry. This is a point which my right honourable friends in another place have dealt with at length and in which they have given complete assurances. I hope your Lordships have studied closely what was said. It is to make our intentions crystal clear on this matter, that my right honourable friend the Secretary of State tabled an Amendment in the other place to oblige the Agency, when exercising its function of establishing and carrying on industrial undertakings, to do so only through a company within the meaning of the Companies Act 1948 or through a partnership firm. This means that any businesses which the Agency set up will be subject to the same rules of conduct and the same liabilities as are private companies. They will be regulated by the City Code and by all the legislation which governs commercial trading activities. I hope that noble Lords, recognising this as a real attempt to meet the concern which they feel over this function of the Agency, will not disagree with these Amendments.

Here, may I draw particular attention to the remarks which my right honourable friend made at the Third Reading of the Bill in another place when he said: It is absolutely essential for Scotland's future prosperity that the public and private sectors should work closely together, neither suspicious of the other's motives, but both dedicated to the development of the economy and the strengthening and expansion of existing firms, the stimulation of new ideas and the creation of the new job opportunities which Scotland so badly needs. One of the prime purposes of the Agency will be the provision, maintenance or safeguarding of employment. This policy will commend itself to existing firms and the people of Scotland generally. My Lords, I believe that this Amendment will be welcome.

Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Kirkhill.)


My Lords, this brings us to a very clear difference of view between the two sides of your Lordships' House. I believe that on both sides of the House we sincerely desire to promote the good health, vigour and competitiveness of Scottish industry, but we on these Benches believe that the method proposed by the Government is not the best way of achieving that. The power of the Scottish Development Agency to establish separate companies in competition with private firms in Scotland we believe to be likely to undermine the confidence of Scottish industry and to undermine the confidence of that very large part of industry in Scotland which is to be responsible for a regeneration and upon whose success exports and industrial health in Scotland depend.

I agree with the words of the Secretary of State for Scotland which the noble Lord has just quoted, and which I took down, that private industry and public industry should work together, neither suspicious of the other. However, our complaint is that we believe that the kind of power which has been given to the Scottish Development Agency might cause them to work less easily together and might indeed cause the suspicions which the Secretary of State wishes to dispel. We accept, therefore, that there is a divergence in view between the two Front Benches on the best methods to achieve the general results which I believe we all wish to see. I shall not suggest to my noble friends that we should reject the Amendment, but I must draw attention to our very clear difference of views about the way in which we feel Scottish industry can be helped forward to success in the future.


My Lords, I should like just to follow the noble Lord, Lord Campbell of Croy, with a suggestion upon which the Minister may perhaps be able to reassure me. One way of overcoming the suspicions which apparently exist on the Conservative Benches would he to have a regional representative of the Scottish Development Agency who would be in a position to reassure the local businessman of the friendly intentions of any assistance that might be required from him. I feel that, if the point made by the noble Lord, Lord Campbell of Croy, is extended in effect, the effect of the Agency will be to create unemployment. We see clearly written here that the main objective of the Agency is to provide, maintain and safeguard employment, so we on these Benches are completely happy that these are the primary intentions of the Scottish Development Agency, and we assume that they would not undertake any commercial entity that would be competitive to the extent of creating unemployment because that would, after all, entirely undermine the objectives of the Bill.


To reply first to the noble Lord, Lord Tanlaw, I can assure him that, at this stage, the membership of the Scottish Development Agency has not been completed. The present position is that an initial inner membership of four distinguished Scots—each distinguished in his own field—have been invited to form the nucleus of the Agency. From the discussions and deliberations of those four will emerge the membership of the Agency which will certainly be broadly based and will have regard to regional balance. I give that assurance.

Secondly, I should like to refer to the points made by the noble Lord, Lord Campbell of Croy. I have to rest on the point that there is a divergence of political philosophy between this Front Bench and the noble Lord's Front Bench. That divergence can be expressed in the creation of the Scottish Development Agency, which although not a political body when in being is an expression of a belief on the part of this Bench that unquestionably in the past the private enterprise sector of the economy in Scotland has failed in its true initiative, has failed in expansionary terms, and we feel that this is a new initiative which, given goodwill from all sides, can prove to be a real breakthrough.

On Question, Motion agreed to.