HL Deb 09 May 1983 vol 442 cc335-42

2.59 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Trefgarne)

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.—(Lord Trefgarne.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 1 [The Development Commission.]

Lord Northfield moved Amendment No. 1: Page 2, line 30, leave out subsection (8).

The noble Lord said: I move this amendment, which would delete the power of the Government to give directions to the development commission in its new statutory form. I am of course aware that this is a normal power which the Government have in relation to bodies of this kind, and I move the amendment to seek certain assurances about the use of the Government's power that they will have to give directions, and about the degree of independence which the commission will have under the new régime.

It does not need a Sherlock Holmes to realise that there has been a struggle about this particular provision. If one looks at Schedule 1 to the Bill, paragraph 11 indicates that the annual report of the commission will set out any direction given by the Secretary of State during the year. That is rather unusual if it really amounts to the commission being able to tell everybody what it was doing independently and what it was doing during the year under direct instructions of the Government.

The historic independence of the commission and the pioneering in support of the most disadvantaged rural areas that it has done for some 70 years or more are well known, but the catalogue—and I could not give it today—bears some examination to see how independent and pioneering it has been. It started just after the first world war in helping village industries and craftsmen from the early 1920s, first of all with an intelligence bureau with advice and information, and then on to a full rural industries bureau. We knew that later in the century as CoSIRA.

Again in the early 1920s the commission was the body which effectively fostered the growth of the rural communilty councils, starting with Kent in 1925, originally working to help craftsmen and having rural industry organisers to help the organising of craftsmen in the rural areas. In 1940 it was the commissioners, under the existing Act, who started a loan fund for rural industry. They started grants for village halls in 1925. They have funded the National Federation of Women's Institutes since 1921.

In my own time as chairman of the commission, we set up the special investment areas which are now effectively the rural development areas. We broadened the whole of our activity to include action plans for the total revival of the more disadvantaged areas. Again, the commissioners spent a lot of money after the first world war on agricultural research. This was then floated off from the commissioners as the Agricultural Research Council, a very eminent body today. The commissioners at that period looked after fishery harbours, taken over by the Government in 1955. I give these just as examples of pioneering which the commission has always undertaken to help the rural areas.

Now why is it important to seek assurances about the future? I repeat the point that this was pioneering Nearly all of it was a very substantial departure from the policy of the Government of the day. It would be disastrous if the commission were in future to be a creature of Government and he denied that continuous pioneering role which it has filled so effectively. In all of that work it nearly always has acted, and still acts today, as a catalyst. It does not put in a large amount of Government money. It offers a little Government money in return for people looking after themselves, or finding extra money from other sources.

The power of the commission under the present Act depends on the fact that it is a standing Royal Commission for a start. It is appointed by Her Majesty. It is not just an ordinary quango. It has this rather extra status of being a Royal Commission. It advises Her Majesty's Government on the spending of the development fund. The development fund is money voted by Parliament every year to help the rural areas on matters for which no other statutory provision exists. It is, if you like, the supporter, until other forms of statutory provision take over, of new ideas which are being pioneered.

The point about the commission is the extraordinary, unique power of the commissioners. It has what is known as a double veto. As the annual report of the commission makes clear, the commissioners cannot spend out of the development fund without the approval of Her Majesty's Government. But equally—and this is the important point—the Government cannot spend out of the development fund without the approval of the commissioners. I have never known an Act of Parliament which brought an outside body so near to control and strong influence over Government policy.

What that in practice meant was that the two bodies, the Government and the commissioners, had all the time to reach agreement in the middle, otherwise they could veto each other. Most important of all, if the Government too often tried to stop the new ideas, the new departures, the pioneering of the commission the commission could wave the big stick and say, "If you go on like this we shall veto other spending out of the development fund". This is an important influence on public policy. It has been an important power. It has worked extremely well by continuously reaching agreement rather than falling out and using the veto between the two sides.

Therefore, I say bluntly to the noble Lord, we are now going into a one-way street instead of a two-way street. The commission will not be able to prevent Government doing a lot of things any more if they fall out. It is a one-way street in which only the Government can give orders to the commission. Therefore, I ask will it still have this same freedom to pioneer that it has always had, or will it just be carrying out Government policy in the rural areas from now on? That pioneering role has been crucial to all the new departures I have listed.

Secondly, will it be the case, as before, that the Government will look to the commission to pioneer in this way and then will take over the commission's ideas when they prove fruitful and practicable and enshrine them in public policy so that the commission can use its resources, its expertise and its energies to find new ideas, to pioneer them again and bring extra new ideas to the help of the rural areas?

Finally, how much money is involved? Is the commission going to be allowed to have a reasonable budget to carry all this out so that it matches at least the sort of money that it has now and preferably goes on to, say, about £30 million a year as opposed to approaching £20 million, which would give it real independence and real power to carry on its most constructive work for the benefit of the disadvantaged rural areas? This is an important amendment on which I hope the noble Lord will tell us exactly what the Government's policy is for the future of this successful, unusual quango which has had such a great history up to now. I beg to move.

3.7 p.m.

Lord Cledwyn of Penrhos

We are indebted to my noble friend for putting down this amendment and for explaining his reasons for doing so. On Second Reading, as the Committee will recall, there were several tributes to the work of the commission and to the value of the 1909 Act. The noble Lord, Lord Montagu of Beaulieu, in particular, gave us the benefit of his own experience as a member of the commission; and my noble friend Lord Northfield, as a former chairman of the commission, obviously speaks with great authority.

The position as of now, as my noble friend has explained it, is that a delicate balance exists between the Ministry and the commission. The 1909 Act serves two primary purposes. First, it ensures that the commissioners are informed of Government policy in the field of activity submitted as a scheme to the Ministry. Secondly, it enables the commission to make certain that no other source of funds is available. The Department of the Environment must approve advances from the development fund, and the Minister can veto the commissioners' recommendations. On the other hand, the Ministry cannot make any advances from the fund without the commissioners' recommendations.

There are other related provisions, as the Committee knows, but that is the key one for the purposes of my noble friend's amendment. That is the sensitive balance to which he has referred. As he said, if the Government resisted too many of the initiatives for the revival of the countryside the commissioners could move to veto other expenditure. Of course, in practice over the years this power was sufficient to cause both sides to co-operate and co-ordinate amicably; and as the noble Lord knows, and as I know from my experience when I was Secretary of State for Wales, it has worked extremely well. Clause 1(8) removes this balance and appears to deprive the new commission of a very important power. It strengthens the department at the expense of the new body, and may do so unnecessarily. It would also be helpful if the noble Lord could give us the information about the budget to which my noble friend referred.

I hope, therefore, that the noble Lord, Lord Trefgarne, will tell us that he will accept my noble friend's amendment, or, if it is in any way technically deficient, that he will introduce another which will leave the commission with the discretion which it now enjoys. Our united wish is that the new commission should work well. It is in that spirit that I believe my noble friend makes his proposal.

Lord Trefgarne

It might be helpful if I make some brief general remarks before dealing with the specific points that have been put to me. Clause 1 and Schedule 1 together, including subsection (8), to which the amendment refers, replace the development commissioners and the development fund, established under the Development and Road Improvement Acts of 1909 and 1910, with the Development Commission, a statutory grant-aided corporation. Transitional provisions ensure that the present commissioners and staff continue in office without loss of status or rights, and that all the liabilities and assets of the development fund are transferred to the Development Commission to be established under this Bill.

There have been many changes since 1909, and this measure is designed to give the commission a legal and financial status in line with present-day thinking on grant-aided non-governmental bodies. It will also resolve a legal doubt over the propriety of the Council for Small Industries in Rural Areas (CoSIRA) being given Government funds to provide financial help to small firms. This change has no direct financial implications—the size of the grant is recommended by Ministers to Parliament, after consultation with the commissioners, in estimates—but it will allow certain simplifications of procedure and give the Development Commission a greater degree of autonomy in line with the Government's policy for it.

Our object in drafting these provisions has been to preserve all that is best in the original enactments while giving the commission up-to-date powers and protection. The personnel of the commission and, for that matter, CoSIRA, will have continuity of employment, pay and pensions. The commission will take over the assets and liabilities of the development fund, and the present commissioners will remain in office. We envisage this part of the Bill being brought into force on 1st April 1984.

To deal specifically with the amendment tabled by the noble Lord, he is, as he told your Lordships, a former and distinguished chairman of the development commissioners, and has obviously spoken with a great deal of authority and experience. It might be helpful if I first seek to explain briefly the effect of the amendment. This will show why we would not welcome such a change. Removing subsection (8) from Clause 1 would take away the power of the Secretary of State to give general directions, and the duty of the commission to comply. Ministers are answerable to Parliament for the work of the commission, and other analogous bodies receiving public funds. Ministers cannot be held responsible unless they have power to control and direct within the framework laid down by Parliament. The form of words used in subsection (8), or something like them, can be found in a number of recent statutes.

That said, I turn now to the main burden of what the noble Lord said, which was to the effect that we should give the Development Commission the maximum autonomy. These are sentiments very dear to the Government's heart. My right honourable friend the Secretary of State for the Environment in another place reported in March last year the results of an interdepartmental review of the Development Commission and the Council for Small Industries in Rural Areas. The review confirmed the Government's belief in the effectiveness and relevance of the commission's work.

My right honourable friend announced a number of steps to give it greater independence of action. In particular, the commission, instead of the Government, is to choose the areas of greatest need in which it will concentrate its work. They are to be called rural development areas. However, no line on a map can contain all areas of need, and the Government have allocated funds for use outside these areas at the discretion of the commission. CoSIRA will continue to provide its services in all rural areas. Another way in which we want to emphasise the independence of the commission takes expression in this Bill. At present, the commission only advises expenditure. In future, if this Bill becomes law, it will then spend its own grant in aid.

Now manpower and money. The Government were elected on a programme of reducing direct Government involvement and giving value for money. A general policy of holding manpower numbers throughout the public sector at the prevailing levels, wherever possible, was applied to the commission and to CoSIRA. Increases are not automatically refused. In fact, there has been one approved increase and one approved decrease, following a restructuring and up-grading, since we came to power. The commission understands our view that its principal task is to persuade others to take action in their own communities, keeping to a minimum the functions which it undertakes for itself. As for funds, the commission has had all it can spend, and it is the Government's intention to give all the support they can to the employment-creating work in hand.

Increasingly, public funds are used in a pump-priming or "lender of last resort" role, and the Government are grateful for the imaginative way in which the commissioners have found ways to attract private finance. We believe this to be the right way forward. In general terms I can give the noble Lord, Lord Northfield, the assurances he is seeking: that we shall be directing the commission's affairs much less under future arrangements than has been the case hitherto, and that the splendid work the commission has been doing up to now will continue and will be increased. I hope that with those assurances the noble Lord will see fit to withdraw his amendment.

Lord Northfield

The noble Lord has been quite helpful. However, I should not have traded the old Act for the new one. The commission was making good use of the old Act under a sharing of power with Government. It was unique in the history of bodies of this kind. We shall have to watch very carefully whether the one-way street that we are now in—in which only the Government can give the orders, and the commission has no effective right of fight-back with a veto—works to the disadvantage of the commission. Nevertheless, I take the general assurances that the noble Lord has given. We will watch and I shall consider what he has said, but for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 1 shall stand part of the Bill?

Lord Cledwyn of Penrhos

I follow my noble friend in thanking the noble Lord for his reply to my noble friend's speech. I confirm what my noble friend said: namely, that we shall be scrutinising carefully the activities of the commission in relation to the Department of the Environment in future. There is no doubt that the commission has been deprived of a substantial power that it enjoyed under the old dispensation.

The noble Lord made one important point: that the commission will have power to designate rural development areas. This leads me to ask the noble Lord a question which I put to him in another way in my speech on Second Reading. I refer specifically to the position in Wales and Scotland. In Wales the Welsh Rural Development Board designates an area within which it operates. The same is true of Scotland and the Highlands and Islands Development Board. But there are rural areas outside the designated areas of the WRDB and outside the boundaries of the Highlands and Islands Development Board. It seems therefore that rural areas in England—all of which are covered by the activities of the Development Commission—will enjoy substantial benefits not enjoyed by areas in Wales and Scotland, which are outside the designated areas of two boards I mentioned but which are, nevertheless, in need of assistance.

I come back to an area in which I have a great interest; that is, north-west Wales, an area covered more or less by the boundaries of Gwynedd. In that area, there are great rural problems. If I may remind the noble Lord and the House that unemployment there now runs at nearly 25 per cent. of the insured population, the House will appreciate that there is a grave problem, that rural industries need assistance and that there is also a need for new rural industries to assist young school-leavers in particular to find the training opportunities, apprenticeships and work in general. Is it the case that the Development Commission and CoSIRA will be able to designate any part of rural England as a rural development area but that there is no authority in Wales and Scotland outside the two rural boards which will be able to carry out this provision?

In reply to my question on Second Reading, the noble Lord said that CoSIRA will continue to operate in Wales and Scotland, presumably as agents of the Welsh Development Agency and the Scottish Development Agency. My short question to the noble Lord is whether the Welsh Development Agency and its counterpart in Scotland will be able, through CoSIRA, to designate rural development areas in the same way as they will be designated in England by the commission.

Lord Trefgarne

I have to say that I am not quite certain about the answer to that question. I wonder whether the noble Lord will allow me to inquire into it and write to him. My understanding is that that is not the case, that they will not be able to do that. I will clarify the position and write to the noble Lord.

Lord Cledwyn of Penrhos

I am grateful to the noble Lord. I understand his inability at the moment, without notice, to answer a rather complicated question. I would appreciate an answer because this is a matter of the utmost significance so far as the less prosperous rural areas of Wales and Scotland are concerned. I am obliged to the noble Lord.

Clause 1 agreed to.

Clauses 2 to 4 agreed to.

Clause 5 [Power of Crown Estate Commissioners to grant leases]:

[Amendment 2 not moved.]

On Question, Whether Clause 5 shall stand part of the Bill?

Lord Cledwyn of Penrhos

I wonder whether I may trouble the noble Lord, Lord Trefgarne, to deal with a point raised on Report, in another place on this clause. He will be aware that in the final debate on the Crown Estate Commissioners, his honourable friend the Minister announced an internal review of the position in relation to the leases for fish farms in coastal waters. I wonder whether the noble Lord is in a position to tell us how this is proceeding and precisely what it may involve.

Lord Trefgarne

I am aware that the inquiry is proceeding. I am afraid that there are not yet any conclusions to be reported to your Lordships. Perhaps I could make further inquiries and, at the risk of sounding somewhat unbriefed, will again undertake to write to the noble Lord.

Lord Cledwyn of Penrhos

I am obliged to the noble Lord.

Clause 5 agreed to.

Remaining clauses agreed to.

Schedule 1 [The Development Commission]:

On Question, Whether Schedule 1 shall be agreed to?

Lord Northfield

I should again like to ask the noble Lord a question on Schedule 1 which governs the operation of the commission. The schedule has a paragraph dealing with staff. I am very concerned about one particular remark that the noble Lord made earlier; namely, that the Government restriction on staff numbers is being applied to this body. Headquarters staff of the Development Commission number only 36 people. It is a body which is carrying out a vast amount of work on a handful of people. One of its great successes has been it has had for its servants some young and very dedicated staff who, over the years, work all hours and who, in every respect, put so much enthusiasm behind their job that they can manage on very small numbers.

If this body is to become a fully recognised rural development agency and build on these beginnings the last thing it wants at this stage is to be restricted unduly to a staff of 36. This recognition is what all of us were working for throughout the 1970s as we gradually expanded its activities and status and took it into new parts of the country so that there are now, I think, well over 1,000 small factories under construction with agreements with county and borough councils up and down the country about joint plans to revive their most disadvantaged rural districts.

I am hoping the noble Lord will be good enough to qualify what he has said about this, so that, in order that it shall be a fully-developed agency for want of another half a dozen more people, it is not going to be running up against a Government veto in that respect. This is a very important matter for a very dedicated body which is doing a great deal of work by stealth. I hope that the noble Lord will qualify what he has said about the restrictions on staffing levels.

Lord Trefgarne

I can assure the noble Lord that there will be no blind enforcement of any arbitrary level of staffing of the commission under the new arrangements. Of course, it is not possible for the Government to give some carte blanche to the commission when funds are provided by Parliament; but, as I have said earlier, we are fully seized of the important work that the commission does, and if they come forward with a case which on its merit is sound, I am certain that we shall agree to it.

Schedule 1 agreed to.

Remaining schedules agreed to.

[Amendment No. 3 not moved.]

House resumed: Bill reported without amendment: Report received.