§ 5.41 p.m.
§ The Minister of State, Scottish Office (Lord Clenarthur) rose to move, That the order laid before the House on 21st October he approved. [33rd Report from the Joint Committee]
§ The noble Lord said: My Lords, I beg to move that the Highlands and Islands Development Board Area Extension Order 1986 which was laid before your Lordships on 21 st October be agreed to.
§ The purpose of this order is to extend the area in which the Highlands and Islands Development Board can exercise its statutory powers and responsibilities. The areas to be included form part of the district of Moray in Grampian Region.
§ Your Lordships may recall that my right honourable friend the Secretary of State for Scotland announced the extension on 6th June following a request by the Committee on Scottish affairs in another place, in their report published in March 1985, in which they asked the Government to consider altering the board's boundaries to include areas of Grampian, Central and Tayside Regions which have natural links with the board's area. Many representations have been made in favour of an extension of the hoard's area and I can assure your Lordships that these views have been very carefully considered.
§ My right honourable friend is required by Section 1(2) of the Highlands and Islands Development (Scotland) Act 1965 to have regard to the character of the areas to be included and their proximity to the board's existing area in considering any extension to the board's area.
§ Six main criteria are used. To be included within the extended boundary any area should be contiguous with the existing area, have close economic linkages with the Highlands, have an unemployment rate which is at least as bad as the average for the board's area and which has persisted for some time, have a narrow employment structure with considerable dependence on primary activities and with limited development of manufacturing, possess a population structure reflecting characteristics of out-migration and ageing, and be remote from service centres and markets.
§ My right honourable friend made a most careful examination against these criteria of the areas 1146 adjoining the HIDB boundary. Although some of the adjoining areas met some of the criteria, most of the areas did not have natural links with the board's area, nor did they display similar characteristics. Furthermore they did not show levels of social and economic disadvantage which were as bad or worse than the average for the Highlands and Islands. My right honourable friend therefore concluded that only in the case of those parts of Moray referred to in the order was the combination of circumstances sufficient to justify an extension of the boundary.
§ Perhaps I may now turn to the areas to be included within the extended boundary. There can, I think, be no argument about the claims of Inveravon and Kirkmichael in Upper Moray. Both parishes were considered for inclusion in Highland Region at the time of local government reorganisation, although they were eventually excluded. The area suffers from a number of problems similar to those experienced within the existing area: extreme remoteness, sparsity of population, high altitude, a high proportion of poor quality land and, apart from agriculture, a dependence on the whisky industry and tourism.
§ The other parishes in Upper Moray, while more populous, also have a high proportion of poor land, an even greater dependence on whisky distilling, shortage of alternative industrial employment and a poorly developed tourist trade. As your Lordships will appreciate, the whisky industry has been undergoing a significant contraction in the area and tourism continues to suffer from a short season. The weakness of the economic base, therefore, alongside the natural disadvantages of Upper Moray make it a prime candidate for inclusion in the HIDB area.
§ The problems of the Forres area are somewhat different and are primarily economic. There is an extremely high unemployment rate, the manufacturing base is narrow and very weak, and the service industry is suffering from increased competition especially from Inverness and Elgin. In addition, the southern part comprises a very large area of poor quality land.
§ We believe that the natural disadvantages and the economic problems of these areas are best dealt with by the kind of comprehensive measures which are within the powers of the Highlands and Islands Development Board. We are also satisfied that the proposals are in line with both the letter and spirit of the requirements of the Act to which I referred earlier. Also under the terms of the Treaty of Rome the Government have to inform the Commission of any intention to extend the regional aids administered by the Highlands and Islands Development Board. The Commission has no objections to the changes proposed.
§ The decision has been taken after a most careful consideration of all the relevant factors and all the representations made. Inevitably there will be disappointment among those who are not to be included in the extended area. The Government recognise the support for an extension to include the whole of Moray District and other areas. But these other areas do not exhibit the same combination—and I stress the word combination—of adverse conditions which would justify their inclusion within the HIDB 1147 boundary. That is why the extension order is restricted in the way that it is. I commend the order to your Lordships. I beg to move.
§ Moved, that the order laid before the House on 21st October be approved. [33rd Report from the Joint Committee]—(Lord Glenarthur.)
§ 5.45 p.m.
§ Lord Ross of Marnock
My Lords, I take a rather paternal interest in the Highlands and Islands Development Board. It has just come of age. It was 1965 when the measure was eventually passed. I can well remember the kind of speech to which I had to listen from the Conservatives of those days. One of the arguments was that it was rampant socialism. When one thinks that the wide-ranging general functions of the board were preparing, concerting, promoting, assisting and undertaking measures for economic and social development in the Highlands and Islands, one can well imagine how Conservatives in those days felt about it. But, worse than that, it was characterised as Marxism. Then we had the howl from certain people when the power was provided to extend the areas. I remember a speech suggesting that it was creeping socialism to cover the whole of Scotland with this Marxist organisation. I also suggested at that time that if the speaker was worried about it we would take out Argyll, the area that he represented, but the response was not very forthcoming.
It is now 21 years after 1965. In, I think, 1975 we first made a dent into the old county of Nairn. The suggestion then was that the whole area covered by the new Highland Region should come within it. We also took in the Island of Arran which is virtually an extension of the Highlands.
In 1979 another change was made with the islands, first of Bute and Arran; and then Cumbrae was also included. We have here another extension order. However it is laudable for those who inspired the original Act to find the Minister telling us that people were disappointed that they did not achieve the protection of the Highlands and Islands Development Board. One can look at that both ways because if it needs the protection of the Highlands and Islands Board it shows that the economy of that area is not in the best of health. It will come as a surprise to many in your Lordships' House that Dallas has now become so impoverished it has to have the protection of the Highlands and Islands Development Board. I speak of Dallas as one of the 13 parishes included in the area.
The next time noble Lords hear these fatal words about blockages of snow on that best known of all roads. Cork Bridge to Tomimtoul, they will know that, thanks to this order, the greater part of that road is going to be in the Highlands and Islands Development Board area.
I should like to congratulate the Government on listening to the Select Committee on Scottish Affairs. This was the last of the recommendations that they made after a very searching inquiry into the Highlands and Islands Development Board and the exercise of their functions over 20 years. This was the last recommendation that they made. The Minister was right to express his regrets about some people being left out because there were demands that the Upper 1148 Banffshire area should he included along with what has always been considered a real part of the Highlands, the upper Perthshire area which is the area that Rob Roy MacGregor flourished in. These regions are not included.
I listened with interest to what the Minister said about this. He will appreciate that once one draws a line and extends that line further and further to the East (as he has been doing) then one gets complaints from the people who are just the other side of that line. One must remember that when we talk about the Highlands and Islands the area itself is not all that remote. The Spey Valley, which this area covers, is about two and a half hours by road from Glasgow and about two hours from Edinburgh. One can understand the feelings of those just on the other side who have been left out. If additional help is given in the one area and there is the possibility of attracting industry or development of some kind, then the 13 parishes which have now been included have a considerable advantage over the other areas. I can understand why at least one of the Members in another place was concerned about how his area will be affected. I think it is inevitable.
However, what concerns me more is what was said in the report of the Select Committee. The Select Committee were so concerned about the rural areas in Scotland. namely, the difficulties in areas which may not be adjacent to, or contiguous with the Highlands and Islands Development Board area, that they suggested that a rural development fund ought to be started in Scotland:Accordingly, we recommend the establishment of a new Rural Development Fund, to he administered by the SDA with an annual budget of at least £25 million".What have the Government to say about that? It was stepping outside their remit to consider an area as wide as the rest of Scotland. The Government have recognised that the board's area was already very extensive and a further expansion would merely dilute the effectiveness of the board's financial and manpower resorces. I can hear the Government saying. "Yea" to that.
One should remember that when the searchlight was brought on to the board's finances by the Select Committee, it was discovered that the support from the Government had increased barely enough to cover inflation, but not enough to cover the changes that the Government were making in relation to regional policy. What the SDA could do within the Highland area was greatly reduced due to changes made in relation to the assisted areas policy intermediate areas. Nine areas were completely dropped. It was suggested that the Government would need to increase funds.
Having discussed these changes the Select Committee states at paragraph 154:In the light of these figures we consider the underlying level of the board's buget may need to he further increased in future years when the full effects of the assisted area changes become apparent; and so we recommend".However the Government did not make any increase. Now one hears that the Government are giving them more responsibilities, by adding a new area, the Grampian region. There are 13 parishes, which have the difficulties outlined by the Minister.
1149 However, I understand that the Government will not make a single penny more available to the Highlands and Islands Development Board. Therefore those who are being left out need not he concerned that they will miss anything, if the Government will not spend any more money or if they are going to rob some other area in order to do something there.
Perhaps I may repeat what the Select Committee actually said about many of these areas, namely, that they should increase development of the more remote areas, and the islands which felt that they had been left out. That was the finding of the department, and not that they should have another area within the mainland. I shall not object to that and I would not object to it, provided the Government face up to the realities. If one says something is to be done, then the means for it to be done must he provided.
There is only one other point I wish to cover. I was very very interested to hear what was said about the board itself, remembering what was said at the start of it and the hopes expressed. The committee were disposed to discount glowing tributes about the work of the board. There were tributes from the local authorities and other public representative organisations. The CBI considered the board had made a significant contribution to the economy of the region. The STUC, the National Farmers Union of Scotland, said the hoard had made a significant and vital contribution to the maintenance of employment in the remote rural areas. The Highland Regional Council said that it had developed the highest regard for the work of the Highlands and Islands Development Board. No wonder the committee said in paragraph 149:For a Government agency to establish this sort of reputation and relationship with the people in this area is a considerable achievement".I too can understand why certain of these areas are disappointed because they are not being given the protection of the Highlands and Islands Development Board. However, I say that if we want to retain the reputation of the hoard, it must be given the funds to do the job that the Government hope it will do. I anxiously wait to hear from the Minister of State. No doubt he has been throwing his weight around in Scotland, and in the Scottish Office, hopefully effectively. so he will he able to tell us "Yes, we shall get the money to do the job".
§ 6 p.m.
§ Lord Mackie of Benshie
My Lords, I have listened with great interest to the noble Lord, Lord Ross of Marnock, and he deserves great credit for his achievements in the past because he was certainly the gynaecologist who delivered the board and gave birth to it. However. I think I can claim that the Scottish Liberal Party was in at the conception, which is normally the better part of the procedure. I remember also that we had published very good booklets and had done a great deal of work. The most the Labour Party could do at that time before the election was to rush out a little sheet of black and white paper copying our vital statistics. However, we were very glad of it and very grateful to Mr. Ross (as he then was) for delivering the baby which we happily thought we had conceived.
1150 I must say that the extension is interesting, right and proper. However, the way in which we set about it then was entirely wrong. It was rather like the making of certain African states. We took the counties which were called Highland counties and put them into the Highland board. Great areas of Aberdeenshire, Angus, Kincardine and Perthshire, which were purely Highland in their makeup, in their land and in their difficulties, were all omitted simply because they were not in what were called the Highland counties. I think that this is rather a small extension.
It is curious that the coastal parishes have been included. There is some rather good land there. For example. just beside Pluscarden there is a priory, and priories were always sited on good land. In the old days the monks knew a thing or two. There is the area of the Cabrach; it is one of the places where farmers on good arable land wake up screaming in the night if they ever dream that they are farming in the Cabrach. It is the worst sort of nightmare that one can have. It is absolutely right and proper that that should he included. The famous Cock Bridge is not included and Glenbuchat is not included. All the land down by Braemar is not included.
It is high time that we had a logical extension to that area because the whole of our rural area will need a great deal of government work. If agriculture goes the way of reducing labour and everything else, as is the case, we shall need an extension to cover the whole of our countryside in order to keep the people there; we shall need help to establish small businesses and tourist areas. That sort of thing must happen throughout Scotland, and indeed in many parts of England as well. Therefore, I obviously welcome the extension, which is right and proper. However, it does not tackle the real problem of the Highland area down the east side of Scotland. At some time or other that will have to be included.
Even if the money available is not increased, the extension will be good for this area. Certainly a great deal of money has been spent in the rest of the Highlands, and if the board is as good as we think it is, that should he bearing fruit. A little money could certainly be spent on new areas, even though the money available will not be increased. However, the Government will have to increase the money: they cannot go on cheeseparing and expect to get results. Therefore, I welcome the small advance. I do not think that it tackles the major problem of the Highland area on the east side, but we must be grateful for smallish mercies.
§ Lord Glenarthur
My Lords, I am grateful to both noble Lords for their comments. To a large extent I think that the noble Lord, Lord Ross of Marnock, answered the substance of the points raised by the noble Lord, Lord Mackie of Benshie, when the noble Lord, Lord Mackie, described his feelings that the east side of the country ought perhaps to be included together with the West Kincardine and Deeside District. The difficulty of actually meeting the needs in line with what the Act describes and the criteria which I gave earlier was pointed to by the noble Lord, Lord Ross. For example, West Kincardine and Deeside District is not contiguous to the Highlands and Islands Development Board area. It does not have economic 1151 linkages with that area. Unemployment is lower than in the HIDB area. The economic structure may be weaker than that in the HIDB area, but the ageing population is rather greater there than in the HIDB area. Therefore, there are a whole number of different factors which point to it not being included, and other arguments apply to the noble Lord's own part of the country.
I should like to clarify one point for the noble Lord, Lord Ross of Marnock. I believe that Upper Banffshire is included because it has been renamed Upper Murray. I could give a number of reasons to explain why Upper Perthshire is not included, but they are largely along the same lines of not matching the criteria which apply to. the other areas to which I referred just now.
When we consider the finance of the HIDB it is important to remember that there has been a significant increase in expenditure by the board over the past seven years or so. It has increased by some 16 per cent. in real terms. It is also important to bear in mind that for every £1 that the board invests, it attracts £3 of private sector investment. Therefore, to that extent one is not talking about pure finance to the board; one is talking about the board being a catalyst to attract other finance. I believe that that in part answers the noble Lord. Lord Ross.
Ministers have consistently said that decisions as to the level of funds to be made available to the board cannot be taken outwith the context of public expenditure as a whole. In 1986–87 the board will spend upwards of some £35 million fostering the social and economic wellbeing of the Highlands and Islands, and it is satisfied that that substanial sum will enable it to carry out its responsibilities within the enlarged area. It is a matter for the board to adjust to that extension in the way in which it would be expected to and in a way which I am sure the noble Lord, Lord Ross, would have expected it to do when he set it all up nearly 21 years ago.
As to the rural development fund for Scotland, to which the noble Lord, Lord Ross, referred, we concluded that a rural fund would be unlikely to offer any significant benefits to rural areas over and above the present very extensive measures of support. We are convinced that the future interests of rural areas are better served by maintaining the present structures of assistance rather than by creating new administrative machinery, such as the rural fund. The range of assistance already available to rural areas is very much in excess of the £25 million proposed by the Scottish Affairs Committee as an annual budget for the fund.
The board was established—and I certainly acknowledge the responsibility which the noble Lord, Lord Ross, has towards it—to deal with the fragile Highland economies. It maintains a certain amount of flexibility to try to deal with that particular area. The noble Lord referred to quotations by my party in the debates that set up the Highland board and said that it had been referred to by some as "rampant socialism". I am certainly very pleased that I have the responsibility in the Scottish Office for looking after that particular part of the world. It is a big responsibility and I have a great deal to learn about it, so I certainly would not start throwing my weight 1152 around. I have to get around and learn about it before I can play a fuller part, but that I certainly hope to do soon. However, in relation to such quotations, I expect that one day I shall be able to remind the noble Lord, Lord Ross, of claims he has made about this party's legislation, and I shall try to carry out my researches into that.
However, I think that this extension will benefit the areas that have been designated. I believe that it will help them enormously. I believe that the Highland board is perfectly capable of coping with the financial situation. Of course, there are many who would like more money for this sort of thing, but the fact is that they have to use their own resources and spread them around in a way which will best suit them. They have to do it in line with public expenditure constraints and public expenditure arrangements as a whole. I believe that this is a beneficial order and I commend it to your Lordships.
§ On Question, Motion agreed to.