Enterprise and New Towns (Scotland) Bill

HL Deb 03 July 1990 vol 520 cc2021-75

3.19 p.m.

The Minister of State, Scottish Office (Lord Sanderson of Bowden)

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 Sanderson of Bowden.)

On Question, Motion agreed to.

House in Committee accordingly.

[The CHAIRMAN OF COMMITTEES in the Chair.]

Clause 1 [Scottish Enterprise and Highlands and Islands Enterprise].

Lord Carmichael of Kelvingrove moved Amendment No. 1:

Page 1, leave out lines 11 to 13 and insert: ("(i) furthering Scotland's economic and social development: (ii) providing, maintaining and safeguarding employment.").

The noble Lord said: In our view this is one of the very important amendments to the Bill. I hope that the Committee will forgive me if perhaps I take longer than normal on it. The purpose of the amendment is to extend the functions of Scottish Enterprise to include a social remit similar to that available to Highlands and Islands Enterprise.

The social remit would be applied by Scottish Enterprise mainly in rural areas and would be subject to any directions given by the Secretary of State as to the exercise of its functions. While the establishment of a separate Highlands and Islands Enterprise shows some recognition that there are particular problems relating to remoteness and sparsity of population in that part of Scotland, the special problems of other parts of rural Scotland are not recognised.

In order for Scottish Enterprise and local enterprise companies to make an effective contribution to the reduction of rural disadvantage, they must be given a social remit similar to that available to Highlands and Islands Enterprise. The Minister will be aware that, when considering this issue at Committee stage in another place (recorded in Hansard 18th January at cols. 54–55), the Minister of State, Mr. Ian Lang, said: I make no apology for proposing a different remit for Highlands and Islands Enterprise. That reflects the differences between that region and the rest of Scotland. To give the same functions to both bodies would be easy but would ignore differences that are acknowledged by both sides of the Committee. The economic and social structure of the Highlands is more fragile. Sparsity of population and geographical remoteness mean that the balance between a community's success and failure is more delicate".

While the experience of the Highlands and Islands Development Board has shown the need for a social remit as a means of stimulating economic and social development, the problems experienced by many rural communities outwith the Highlands and Islands are similar in extent and diversity. Various studies have shown that deprivation is not concentrated in urban areas but is widespread throughout rural Scotland. Studies also indicate that the pattern of rural deprivation is diverse. The problems in rural areas are not solely unemployment problems. They include the availability of public and private services, low income, relatively high prices, limited employment opportunities, skill shortages, out-migration of young people and an ageing population. All these matters apply to rural areas in particular, not just to the Highlands and Islands.

The level of provision of rural services throughout Scotland was also the subject of a report by Mackay Consultants for the Scottish Consumer Council, the Highlands and Islands Development Board and the Scottish Development Agency. One of the main aims of the research was to see the changes in the provision of rural services since 1981. The study uses the same sample of 26 parishes which were surveyed in an earlier study published by the Scottish Consumer Council in 1982. The services covered include retail, education, health, social services, professional services and transport. The study presents the results for the 26 parishes in index form. Transport was excluded from this part of the survey.

The parishes with the lowest level of service provision, or which have experienced the largest reductions in provisions, are distributed across Scotland and are not concentrated in the Highlands and Islands. The parish with the lowest provision is Kinnaird in Tayside. There are other marked differences in places such as Rogart in the Highland division, Tyrie in the Grampian region, and Monymusk, also in Grampian. Overall, the rates of decline for different types of services covered in the study are not uniform. The largest reductions are recorded for public transport, education and retail. I am sure that the Minister is familiar with the survey.

In another place the Minister of State said at Committee stage that Scottish Enterprise should not be burdened with a social role that would dilute concentration on its economic and environmental role. That is fair comment but I believe that it is rather simplistic when one is speaking of deeply rural areas. The effectiveness of the Scottish Development Agency in rural areas has been constrained because of its narrow economic and environmental remit. The experience of the Highlands and Islands Development Board, the Rural Development Commission in England, the Mid-Wales Development Agency and other rural development bodies is that the ability to provide social and community assistance complements their economic development powers and shows recognition of the interconnected nature of economic and social issues.

I consider therefore that the enhancement of Scottish Enterprise's functions to include a social remit would allow both Scottish Enterprise and the local enterprise companies to adopt a more comprehensive approach to the development needs of rural communities. To allow Scottish Enterprise to be established without being at least able to deal with and consider a diversity of problems in rural areas would be to ignore the experience of rural development bodies elsewhere in Britain as well as in Europe and many other parts of the world.

We believe that the amendment is of vital importance. We hope that the Government will give some consideration to it. I trust that the Minister will consider it and be able to give us some hope. I beg to move.

Lord Mackie of Benshie

I should like to support the amendment. I do not see why the Minister should not support it. The noble Lord, Lord Carmichael, has covered the ground extremely thoroughly. There are areas such as the Angus Glens—which I know well—where the lack of social development inhibits any other form of development. We all know what that means. It involves the schools, the church, transport, and so on. Services such as the mail bus have been a great help. Much more could be done for certain areas of Scotland, not only in Angus but in the Cabrach and Aberdeenshire. It would be difficult to find a more desolate area in the Highlands than parts of the Cabrach.

I see no reason why the Government should not accept the amendment. After all, there is a remit to improve the environment. Sometimes that cannot be improved without considering the social side. I shall listen with great interest to what the Minister says. Perhaps we may question him further. However, it appears to be a sensible amendment which he could accept.

Baroness Carnegy of Lour

The Convention of Scottish Local Authorities was kind enough to speak with me about the amendment. It may have spoken to the noble Lords, Lord Carmichael and Lord Mackie. It is a very interesting point. I can understand that the Government wish the present system to continue into the future for the sake of continuity and the good working of the system, and that the rather different remits for the two bodies should continue.

As was mentioned at Second Reading, there is an overlap of some functions. The Scottish Enterprise functions overlap with the Highlands and Islands Enterprise functions. I shall be interested to hear what my noble friend says. The noble Lord, Lord Mackie, is absolutely right that there are problems in places such as the Angus Glens. Indeed, my noble friend knows well, I am sure, that there are problems in the Borders too, in Dumfries and Galloway. The question is how those will be dealt with.

Highlands and Islands Enterprise is a rather different animal from Scottish Enterprise. There is no question about that. They will continue to be different, with the training function added. It is important that the Minister tells us how problems can be dealt with in the more remote areas of the Borders, the south-west, Angus, Perthshire, and so on. We need to know that. Local authorities certainly have a role. They played a role in the Angus Glens, as the noble Lord, Lord Mackie, knows. If the Minister can tell us that, I shall be reasonably satisfied. If there is no such way, that is more of a problem.

Lord Hughes

I wish to support my noble friend Lord Carmichael of Kelvingrove on this very important amendment. The Minister of State in another place, when he argued against such action, seemed almost to be under the impression that outside the Highlands and Islands area conditions in the remainder of Scotland were such as existed only in the main parts of the central belt. But in parts of Scotland—the rural, remote parts—conditions are very similar to those which exist in the Highlands and Islands.

The noble Lord, Lord Sanderson of Bowden, is well qualified to speak on that point. He lives outside the central belt. I live in a small village with a population of less than 2,000. It is comparatively well provided for with services. We have our local school, two doctors with an assistant, a chemist's shop, two grocery shops and a police service. We depend on Crieff, which is slightly larger, for certain services. We depend on Stirling or Perth—each 24 to 25 miles away—for other services.

However, there are other villages within a 20-mile radius of where I live where the conditions are much nearer to those quoted by my noble friend for the parish of Kinnaird than for the village in which I live. I agree that the main task of Scottish Enterprise must be that stated in the Bill. But that cannot ignore the other conditions. If there is no remit to enable it to undertake in rural parts of Scotland tasks which approximate to what Highlands and Islands Enterprise will be able to do, it will not be able to carry out its task with complete success.

The noble Baroness, Lady Carnegy, said that it was understandable that when the Highlands and Islands Development Board and the Scottish Development Agency were set up they were given different remits. However, the Bill proposes to make changes to the functions that were carried out by those bodies. It does so in the light of experience gained since the bodies were set up decades ago. An additional change may be acceptance that much of the success of the Highlands and Islands Development Board rested on its capacity to take social conditions into account. Further success in the Highlands under the new body will depend on those functions being continued. I suggest most strongly that the success of Scottish Enterprise will be enhanced if it has a similar although secondary function to take account of social conditions.

3.30 p m.

Lord Taylor of Gryfe

I apologise to my noble friend for being absent at the beginning of the debate. I was upstairs attending a meeting of great importance to Scotland concerning the Environmental Protection Bill which we shall debate tomorrow. I support the case which my noble friend presented. As my noble friend Lord Hughes said, when the subject was discussed in Committee in another place, Mr. Ian Lang, the Minister, said: Scottish Enterprise should not be burdened with a social role that would dilute concentration on its economic and environmental role". There are two arguments. The first, as has been adduced already, is that other parts of Scotland are not unlike the Highlands in their remoteness. Therefore, it is inconceivable that the Highlands should be treated as a special case. The second is that Scottish Enterprise is a new body. I wish it every success but in order to ensure credibility and acceptability it should accept a social obligation. Of course, it has primarily an economic role; that is, an enterprise role within the economy. However, I have never regarded the social factor involved in operating an economic enterprise as being a burden on industry and it should not be neglected. I suggest that the Minister should respond to my noble friend's amendment.

Lord Sanderson of Bowden

Scottish Enterprise and Highlands and Islands Enterprise will have wide-ranging powers. But it would be a mistake to create either of them with remits to cover the whole of Scottish life. I shall elaborate on that in a moment. Primarily both are engines of economic development. They also have training and environmental functions because those relate closely to the economic development role. Members of the Committee will be aware of the new arrangements for training to which I shall also refer in a moment.

In addition, Highlands and Islands Enterprise will, like the Highlands and Islands Development Board before it, have a social remit. That is in recognition of the very different characteristics of the Highlands and Islands economy. In particular, I refer to the economy of the fragile areas of the Highlands and Islands. I know that they have special problems which are recognised furth of the United Kingdom; that is at European level.

I have listened carefully to what was said by the noble Lord, Lord Carmichael. I have some sympathy with his anxieties, but the fact remains that lowland Scotland as a whole does not have the same kind of characteristics as the Highlands and Islands. In lowland Scotland as a whole economic and social life is not so closely linked as to be inseparable, as the noble Lord, Lord Hughes, pointed out. There are rural areas. yes, but there is not the extent or degree of sparsity of population and geographical remoteness which makes economic and community life inseparable in some parts of the Highlands and Islands. I say that is a question of degree and extent and that is where the difference of view arises.

I accept that there are parts of lowland Scotland which are akin in some respects to parts of the Highlands and Islands. Indeed, my part of the Borders could be an example. However, taken as a whole, I am satisfied that there is a more delicate balance between the growth and decline of the Highlands and Islands communities which does not apply to anything like the same extent in the lowlands.

I am not persuaded that, because the Government accept that Highlands and Islands Enterprise should have a social remit to complement its economic powers, we should also accept that Scottish Enterprise should have the same remit. The two areas are distinctively different and it is right that the two bodies should reflect that in their remits. A social remit for Highlands and Islands Enterprise is necessary to achieve the full economic potential of the area. But a social remit for Scottish Enterprise is not necessary for that reason and could well divert that body's attention from its prime role as an economic agency.

The Scottish Development Agency already plays an important role in rural Scotland outside the Highlands and Islands. Its wide range of activities includes advice and assistance to businesses, factory provision and environmental improvement. That will be continued under Scottish Enterprise. The policy framework that we shall set for the board of Scottish Enterprise will emphasise the importance of tackling the needs of rural as well as urban areas.

In any event, I am sure that the presence on the board of Mrs. Barbara Kelly of Rural Forum, and Sir David Nickson's background as a past chairman of the Countryside Commission for Scotland, will keep rural issues in front of the board of Scottish Enterprise. At the local level the local economic

audits being undertaken by prospective local enterprise companies in their development phase will help to ensure that the needs and opportunities presented by rural areas are highlighted. Local enterprise companies will be expected to tackle training and business needs in all parts of their areas and will have the scope to devise specific initiatives to meet particular local needs.

During the course of our debate this afternoon there was a definite feeling that we should extend the social remit to south of the Highland line. However, perhaps Members of the Committee under-estimate what has already happened as a result of the involvement of the SDA which has played an important role in rural Scotland. It would be wrong to under-estimate the successes that it has had during its existence. Of course, we remember that the noble Lord's own government set up that agency.

I wish to make perfectly clear the fact that as long as any project to aid rural communities has any economic benefit—for instance, reducing local unemployment, increasing local skills or improving the local economy—Scottish Enterprise can assist. Mention was made of skill shortages. The reason for putting training under the Scottish Office into those new enterprise operations was in order to deal with that problem. In that respect the local enterprise companies come into their own. My noble friend Lady Carnegy will be pleased to hear that as regards the last local enterprise company—that for Tayside—my honourable friend the Minister of State in another place announced today that the embryo local enterprise company has been given the go ahead.

I wish to put a little more flesh on the bones and describe what happens in areas such as the Borders as regards the provision for social projects. Of course there is support for the local authorities be it through the RSG, Scottish Homes or health boards. However, one area which is perhaps overlooked is the support for voluntary organisations. That support comes mainly from the Scottish education department. I say to Members of the Committee opposite that it includes a local capital grant scheme to assist voluntary organisations and to provide new or expanded premises for educational, social and recreational purposes. That department pays 50 per cent. of the approved cost with the balance split between the regional council and the voluntary organisation. Expenditure by the SED in 1990–91 will be £1 million, 70 per cent. of which will go to projects in rural areas.

Perhaps I may take examples of that from my own area. There are several examples. There were SED contributions to five separate projects amounting to £62,000, the largest of those being to help the Lothian youth group in Jedburgh.

I have read the report to which the noble Lord referred and have read about the 26 parishes which he has instanced. By devolving powers to the local enterprise companies, we are coming a very long way towards resolving some of the problems which may exist in rural areas. For that reason, I must resist the amendment.

The Earl of Selkirk

If you are running an enterprise, one of your prime duties is to look after the welfare of your employees. It would not be important if this matter had not been mentioned. However, if it is included for one part of Scotland and left out for the other, that is an obvious suggestion that money must not be spent on it. I find that quite insufferable. One of the prime purposes of developing economies is to raise the standard of living of the people who are living there. That is ordinarily regarded as a social convention.

Had the matter not been mentioned it would be taken for granted that social elements would be economically unavoidable. However, it has now been mentioned. It has been put on one side of the balance but not on the other. I find that very difficult. Is the Minister positively saying that the moment that the word "social" is used, the Secretary of State's refusal to advance money will become automatic? That is rather awkward. I know what my noble friend is saying. Some areas of Scotland are more socially convenient than the Highlands, but there are many areas in the Borders where life is fairly simple.

I must confess that although I understand the noble Lord's argument, unless it is a matter of pure economy, it is very difficult to follow.

Lord Howie of Troon

I was struck by the Minister's distinction between the Highlands and Lowlands. As he rightly says, they are different parts of the world. We know that remoteness exists in the Highlands but it must not be concluded from that that remoteness does not exist also in the Lowlands. The noble Earl who has just spoken indicated that. However, I ask the Minister to think of south Ayrshire and, for example, of small towns like Dalmellington, or Patna or of the road from Straiton south to Glen Trool. You cannot get much more remote that that, even in the Highlands. It is a remote and distant area to which this type of provision can reasonably be held to apply.

There is a tight central belt in Scotland which is highly populated and does not need this kind of assistance. We have all accepted that assistance is needed in the Highlands, but the Lowlands and Borders, which the Minister knows extremely well, suffer from similar although lesser disadvantages. The fact that the disadvantages are less should not cloud the fact that they are similar.

3.45 p.m.

Lord Hughes

I was rather disappointed by what the Minister said, perhaps because of the contradictions. I almost gained the impression that he was speaking from briefs written by two different people supplemented by—as we are accustomed to expect from him—his own remarks, which were altogether apart from the brief.

I was disappointed because the Minister reiterated what his counterpart in another place said about Scottish Enterprise not being diverted from its main function by having such a remit. He then went on to point out what a competent body it will be with Sir David Nickson as its chairman and Ms. Kelly also on the board. If they will be so competent, why should the Minister be worried that they will be diverted from their main function by having another function?

The other contradiction was that in talking about what the Scottish Development Agency has done, whose function was mainly economic, he pointed out the extent to which it had carried out a social role. Therefore, in extending the SDA and the training side to Scottish Enterprise, why should the Government be afraid that this new body will exercise the dual functions less satisfactorily than has been the case until now?

I hope that when I read what the Minister said, I find that I am mistaken in those contradictions. However, at present I do not believe that I am.

The Earl of Perth

I listened very carefully to what the Minister said. He began by saying that it would be a mistake to apply the social angle to the whole of Scotland and that the Highlands and Islands are totally or recognisably different. He then went on to say that he recognised also that some parts of the country, which are not Highlands and Islands, were akin to them. If that is the case—and of course it is the case as many Members of the Committee have pointed out—will he consider the introduction of a clause which includes a social function but which should only apply if the Secretary of State for Scotland agrees?

It is quite clear that the Highlands and Islands stand on their own. However, if something like that was agreed to, there is a possibility that other areas could also receive the same social benefit as the Highlands and Islands. That provision would not apply to the whole of Scotland. It would only apply when the Secretary of State decided that it was right that it should do so.

I was impressed by the point made by the noble Earl, Lord Selkirk. Once the social element is in one part, why is it left out in the other? However, I hope that the Minister will think again and that the Government will introduce a clause along the lines which I have suggested.

Baroness Carnegy of Lour

I omitted to make one point to the noble Lord, Lord Carmichael, and, indeed, to my noble friend the Minister. It seems to me that if this amendment is accepted—and I do not know if the noble Lord intends to divide the Committee—it would mean that Scottish Enterprise would be involving itself in the social development of Glasgow, Wester Hailes and other places which are at present beyond its remit. Wester Hailes, Whitfield and the GEAR scheme in Glasgow are helped as part of the former agency's remit. However, in the sense that we have been discussing this matter the social development of large cities would be included. Therefore, on that account, this amendment will not do. We have been discussing only rural areas and rural deprivation.

Lord Mackie of Benshie

The noble Baroness has mentioned an important point. Surely the SDA has already had a social remit in the urban situation. No one can say that the immense transformation brought about in the fortunes of the west, Glasgow and the central belt could have been achieved without cleaning up the environment. If that is not a social responsibility I do not know what is.

We are involved in semantics. The Minister, by extending the point and refusing to include the word "social" is creating suspicion in our minds that something sinister is involved. Everything else that he said shows that there is not. I believe that he should accept the amendment and the advice given to him by senior Peers on the Cross Benches.

Lord Sanderson of Bowden

I am always interested to hear advice from Peers in all parts of the Chamber. I cannot accept the amendment but I can assure the noble Lord, Lord Mackie of Benshie, that the environmental powers that exist for the Scottish Development Agency will be continued by Scottish Enterprise. The only difference is that in the Highlands and Islands Development Board area those powers are transferred to Highlands and Islands Enterprise from the Scottish Development Agency, which the Government felt was only right and proper.

I find it strange that my noble friend Lord Selkirk appears to think that I am forgetting about the social aspects of those who live outwith the Highland board area. That is far from the truth. The Committee must understand that it is important to motivate the economy of areas, wherever they are, and move it in the right direction. That is what the Scottish Development Agency has done. I tried to point out what was actually achieved by the social clause in the Highland board area as opposed to further south.

Perhaps I can point out to my noble friend that the powers which exist deal with special cases in the peripheral areas which have to be considered. A large part of the budget of the social remit of the Highlands and Islands Development Board goes to the peripheral areas of Argyll, Lochaber and also the outer isles. My noble friend will therefore understand that the projects we are discussing would not exist if there were not a social remit.

I pay tribute to the last Labour administration in 1965 that put the clause into the Bill. By the same token I do not think the noble Lord, Lord Hughes, can have it both ways. It was his government that introduced the Scottish Development Agency and all its works. Obviously they saw the difficulties and differences that existed. If he thought I was contradicting myself, I am sorry. I hope I was not. I was trying to say that there were various ways of helping those south of the Highland line in the social remit, but that this did not come through the present Scottish Development Agency's powers and it should not come through the powers of the new Scottish Enterprise set-up.

The noble Lord, Lord Howie of Troon, may be interested to know that the projected likely budget for Ayrshire when the local enterprise company becomes a reality, will be £29.1 million; that is not small beer.

Lord Carmichael of Kelvingrove

The Minister jumped up rather early, spurred on, I think by the breadth, extent and perhaps the weight of the arguments of those supporting the amendment. The Minister read out the help that can be given—I agree and accept what he says—by the Scottish Office for various social functions. One problem that arises is that so much is not written on the face of the bill and therefore has to be explained. We shall discover that when discussing the new towns.

The Minister did not say whether the rural executive unit, which is part of the SDA's existing establishment and which provides strategic guidance to local enterprise companies, promoting training throughout rural Scotland will remain in existence under Scottish Enterprise. Had he said that, we may have been better able to understand where the social help could be given. Social help under the SDA is not compulsory. The agency is able to examine schemes with care and decide whether or not they are necessary. I would say to the noble Baroness, Lady Carnegy, that projects like GEAR, and similar schemes in Edinburgh, were so big that the SDA was merely brought in as organiser. GEAR involved the Scottish Office, local authorities and the SDA, which came in with expertise. That is a different quality to what we are discussing. For instance, the Highlands and Islands Development Board gives development grants for village halls, sports, social and voluntary projects. That is different to knocking down some of the old industrial heartland of Scotland with the appalling housing conditions that existed in the GEAR area, and totally rebuilding it. They are quite different qualitative things.

I am sure that the Minister was not deliberately misleading when he spoke about the European Commission recognising the Highlands and islands as an objective. It also recognises the problems in parts of Dumfries and Galloway, so it is perhaps ahead of the Scottish Office in recognising that deprivation can exist in rural areas that are not necessarily above the Highland line.

This is such an important amendment that in order to give the Minister a chance to think about it and perhaps bring something back on Report, I must ask the opinion of the House.

3.56 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 97; Not-Contents, 116.

DIVISION NO. 1
CONTENTS
Ailesbury, M.	Campbell of Eskan, L.
Ardwick, L.	Carmichael of Kelvingrove, L.
Atholl, D.
Aylestone, L.	Carter, L.
Birk, B.	Charteris of Amisfield, L.
Blackstone, B.	Cledwyn of Penrhos. L.
Blease, L.	Clinton-Davis, L.
Boston of Faversham, L.	David, B.
Bottomley, L.	Dean of Beswick, L.
Bristol, Bp.	Dormand of Easington, L.
Broadbridge, L.	Ennals, L.
Brooks of Tremorfa, L.	Ewart-Biggs, B.
Burton of Coventry, B.	Ezra, L.

Fisher of Rednal, B.	Mason of Barnsley, L.
Gallacher, L. [Teller.]	Mayhew, L.
Gladwyn, L.	Meston, L.
Glenamara, L.	Milner of Leeds, L.
Graham of Edmonton, L. [Teller.]	Mishcon, L.
	Molloy, L.
Grey, E.	Morris of Castle Morris, L.
Hanworth, V.	Nathan, L.
Harris of Greenwich, L.	Northfield, L.
Hatch of Lusby, L.	Perry of Walton, L.
Hirshfield, L.	Perth, E.
Hollis of Heigham, B.	Peston, L.
Holme of Cheltenham, L.	Phillips. B.
Howie of Troon, L.	Pitt of Hampstead, L.
Hughes, L.	Prys-Davies, L.
Hunt, L.	Richard, L.
Hylton-Foster, B.	Ritchie of Dundee, L.
Ilchester, E.	Ross of Newport, L.
Jeger, B.	Sainsbury, L.
Jenkins of Putney, L.	St. John of Bletso, L.
John-Mackie, L.	Seear, B.
Kintore, E.	Selkirk. E.
Kirkhill, L.	Serota, B.
Lawrence, L.	Shackleton, L.
Leatherland, L.	Shannon, E.
Listowel, E.	Shepherd, L.
Llewelyn-Davies of Hastoe, B.	Stallard, L.
	Stedman, B.
Lloyd of Kilgerran, L.	Taylor of Gryfe, L.
Lockwood. B.	Tordoff, L.
Longford, E.	Tryon, L.
Macaulay of Bragar, L.	Wallace of Coslany, L.
McCarthy, L.	Walston, L.
McGregor of Durris, L.	Whaddon, L.
McIntosh of Haringey, L.	White, B.
Mackie of Benshie, L.	Williams of Elvel, L.
MacLehose of Beoch, L.	Wilson of Rievaulx, L.

NOT-CONTENTS
Alexander of Tunis, E.	Gardner of Parkes, B.
Allerton, L.	Gisborough, L.
Alport, L.	Gray of Contin, L.
Ampthill, L.	Gridley, L.
Annaly, L.	Hailsham of Marylebone, L.
Arran, E.	Harmar-Nicholls, L.
Auckland, L.	Henley, L.
Belstead, L.	Hives, L.
Bessborough, E.	Holderness, L.
Blatch, B.	Home of the Hirsel, L.
Boardman, L.	Hood, V.
Borthwick, L.	Hooper, B.
Brabazon of Tara, L.	Ironside, L.
Brave, B.	Johnston of Rockport, L.
Bridgeman, V.	Joseph, L.
Brougham and Vaux, L.	Keyes, L.
Butterworth, L.	Kimball, L.
Caldecote, V.	Kinnaird, L.
Campbell of Croy, L.	Lauderdale, E.
Carnegy of Lour, B.	Leathers, V.
Carnock, L.	Lindsey and Abingdon, E.
Cavendish of Furness, L.	Lloyd of Hampstead, L.
Clanwilliam, E.	Long, V.
Constantine of Stanmore, L.	McColl of Dulwich, L.
Cottesloe, L.	Mackay of Clashfern, L.
Craigavon, V.	Macpherson of Drumochter, L.
Crawshaw, L.
Cullen of Ashbourne, L.	Manton, L.
Davidson, V. [Teller.]	Margadale, L.
Denham, L. [Teller.]	Massereene and Ferrard, V.
Downshire, M.	Mersey, V.
Eccles, V.	Mountevans, L.
Eccles of Moulton, B.	Mowbray and Stourton, L.
Effingham, E.	Munster, E.
Elliot of Harwood, B.	Nelson, E.
Elton, L.	Norfolk, D.
Fanshawe of Richmond, L.	Norrie, L.
Ferrers, E.	Orkney, E.
Flather, B.	Oxfuird, V.
Fraser of Carmyllie, L.	Pearson of Rannoch, L.
Fraser of Kilmorack, L.	Pender, L.
Gainford, L.	Platt of Writtle, B.

Polwarth, L.	Strathclyde, L.
Porritt. L.	Strathmore and Kinghorne, E.
Pym. L.
Quinton, L.	Strathspey, L.
Rankeillour, L.	Sudeley, L.
Reay, L.	Swansea. L.
Renton, L.	Swinton, E.
Renwick, L.	Thomas of Gwydir, L.
Rodney, L.	Tranmire, L.
St. Aldwyn, E.	Trumpington, B.
Saltoun of Abernethy, Ly.	Ullswater, V.
Sanderson of Bowden, L.	Vaux of Harrowden, L.
Sharples, B.	Wade of Chorlton, L.
Soulsby of Swaffham Prior, L.	Wedgwood, L.
	Wharton, B.
Stodart of Leaston, L.	Wise, L.
Strange, B.	Young, B.
Strathcarron, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.5 p.m.

Clause 1 agreed to.

Schedule 1 [Constitution and Proceedings etc. of Scottish Enterprise and Highlands and Islands Enterprise]:

Lord Carmichael of Kelvingrove moved Amendment No. 2:

Page 33, line 23, leave out ("eight") and insert ("eleven").

The noble Lord said: It may be for the convenience of the Committee if we take Amendments Nos. 2, 3, 4 and 5 together. The purpose of the amendment is to increase the size of the boards of Scottish Enterprise and Highlands and Islands Enterprise in order to allow greater scope for appointing members with areas of expertise outwith the purely private sector.

The functions of Scottish Enterprise and Highlands and Islands Enterprise will be greater than those of either the SDA or the HIDB if for no other reason than that they will become responsible for carrying out the duties of the Training Agency. In determining the size and composition of the boards it is therefore essential to have adequate scope for the membership to be drawn from a wide range of expertise. The expertise on the boards would be greatly enhanced if their size were increased as suggested in this group of amendments. This would provide an opportunity to appoint additional members with knowledge outwith the private sector with particular emphasis given to experience in the provision of training.

I am no believer in large unwieldy boards. I do not know how often the boards will meet or what the terms will be, but I have seen enough of large unwieldy boards to know that only a small number of members participate. However, even with the amendments we are still referring to small numbers. Some of these people will be important, and one must think of quorums, and so on. Therefore, although I do not believe in large boards a modest increase would give flexibility and the range of experience needed for the proper functioning of the boards.

I understand, for example, that the Highlands and Islands Enterprise board will not have a Gaelic speaker on it. Perhaps the Minister can tell me whether that is true. If so, it represents a big gap in the composition of the board. Such a person may be necessary for a specific function. A slightly larger board—we are not asking for a large increase—would give the Secretary of State or (this is our particular concern) a future Secretary of State the necessary flexibility. I beg to move.

Lord Mackie of Benshie

I share the distaste of the noble Lord, Lord Carmichael, for large boards. The Secretary of State appears to be able to appoint whoever he wants on to the boards, so I shall be interested to hear what the Minister says.

Baroness Carnegy of Lour

I have a query on this amendment. Apart from the fact that small boards tend to be much easier to run, the noble Lord seemed to indicate—

Lord Taylor of Gryfe

Will the noble Baroness speak a little louder or move nearer to the microphone? We are anxious to hear her.

Baroness Carnegy of Lour

I apologise to the noble Lord. It would be dreadful if he could not hear my words of wisdom! I should like to ask the noble Lord, Lord Carmichael. what he meant by saying that there needed to be extra places on the boards for people with expertise in training. The people who know most about training are employers, who are responsible for training. Surely members will be appointed by virtue of the fact that they have knowledge of training, so that is one area where it is not necessary to add to the board.

Lord Carmichael of Kelvingrove

I do not want to denigrate Scottish employers but I do not believe there are all that many Scottish employers whose efforts in regard to training is something they can be proud of. One or two employers traditionally have a wonderful record, but we need people from some of the colleges of education and the training schools. Those are the people we need with genuine experience of these matters. It is by no means confined to employers. One of our concerns is that the employers on the board will be looking for people to do the work that is required next week, and not next year or 10 years from now.

Lord Kirkhill

I am ambivalent about my noble friend's amendment. I have no strong feelings about it one way or the other. The question I wish to ask the Minister is this: did the Government give consideration to an uneven number of members such as five, seven or nine? Sometimes there is an advantage in having such numbers on a board.

Lord Sanderson of Bowden

I shall answer the noble Lord, Lord Kirkhill, first. The Government have done what he suggests. There are 11 members on the boards in each case. I share with the noble Lords, Lord Carmichael and Lord Mackie of Benshie, their distaste of rather large boards. Perhaps that is why the Government, in coming to their conclusion on the appropriate size of the boards, decided upon the numbers that we now have.

I should point out that the chief executive of each board, when he is so chosen, will be a full member of the board. That is a change. In making up the membership of the boards we have tried to have as wide a coverage as possible both geographically and also in terms of skill. The noble Lord, Lord Carmichael, is right. One of the disadvantages on the present Highlands and Islands board is the fact that there is not a Gaelic speaker. Having said that, there is plenty of expertise, particularly from Dr. Jim Hunter who was secretary of the Scottish Crofters' Union. He is on the Highlands and Islands Enterprise board.

In respect of Highlands and Islands Enterprise personnel, there are many Gaelic speakers at the Inverness headquarters. However, I accept the noble Lord's strictures. Perhaps, in time, the situation will be rectified. What is important is that the boards are chosen on merit. Now that the names of those on each board have been made public, I believe that there is general acceptance that the expertise available is fairly widespread.

In the case of the Scottish Enterprise board the contribution that will undoubtedly come from the leader of Strathclyde Regional Council, Charles Gray, and from Gavin Laird, as far as the trade unions are concerned, will be most welcome. I say to the noble Lord, Lord Carmichael, that we could debate all day what should be the optimum size of a board. However, we decided what we considered to be the appropriate size. Again, I stress that I too believe that it is not so much the size of the board that matters but its effectiveness.

Lord Kirkhill

I wish to apologise to the noble Lord, Lord Sanderson of Bowden. I completely misread Schedule 1; so my intervention a few moments ago was irrelevant. It is only fair that I should say that to the Minister.

Lord Sanderson of Bowden

I also omitted to tell the noble Lord, Lord Carmichael, that the board will meet once a month.

Lord Carmichael of Kelvingrove

The Minister said that we could argue about numbers all day. Once the boards begin operating we shall find out whether an amendment is required. Since this provision is in the schedule it may not be quite so difficult to amend it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 3, 4 and 5 not moved.]

Schedule 1 agreed to.

4.15 p.m.

Clause 2 [Functions in relation to training for employment etc.]:

Lord Carmichael of Kelvingrove moved Amendment No. 6:

Page 2, line 24, at beginning insert ("after consultation with such local authorities and other bodies as appear to it to have an interest,").

The noble Lord said: The purpose of the amendment is to require Scottish Enterprise and Highlands and Islands Enterprise to consult with local authorities and other interested bodies in carrying out its functions in relation to training before submitting its proposals to the Secretary of State for approval. The effectiveness of Scottish Enterprise and Highlands and Islands Enterprise will be determined by their ability to achieve wide support for their activities.

A range of organisations will have a significant interest in the application of the training function both nationally and locally. Local authorities will have a particular interest, given their role as statutory providers of education and training. They provide nearly one-third of employment training places in Scotland as well as contributing to the youth training scheme. Voluntary organisations also play an important role as advocates of the interests of disadvantaged sections of the labour force such as the mentally ill, the mentally and physically handicapped, single parents and the very long-term unemployed.

Another organisation which has a significant interest is the trade union movement. The restriction on the size of the boards of Scottish Enterprise and Highlands and Islands Enterprise, and the requirement for a two-thirds majority of business representation, make it essential that consultation with all interested bodies takes place before the training proposals are considered by the Secretary of State.

Once training proposals are fixed they are not easy to change. I am sure that an intelligent board will conduct wide consultation. We are not asking for anyone to have a veto. I am sure that there will be a wide consultation. It is worth reminding the relevant bodies that schemes cannot be set up without a consultation procedure. The schemes may be binding for a long time and in some cases the training may ossify unless there is consultation with some of the groups, particularly local education authorities, I have mentioned.

That is a factor which the Minister should look at fairly carefully. I hope he will not say that it will be looked at in any case, but that he will indicate that the provision for consultation is written on the face of the Bill. I beg to move.

Lord Taylor of Gryfe

I have much sympathy for what my noble friend Lord Carmichael said. However, at the same time I have some doubts about his amendment. In my view it is a little wide of the mark. We are talking about training and enterprise initiatives. It offers very wide scope if one speaks of all organisations, and other bodies as appear to it to have an interest". I want these local enterprise bodies to be successful and enterprising. I support the idea that they should consult with local people and that they should be effective. However, to say, and other bodies as appear to it to have an interest might impede the enterprise function which these new bodies may have to undertake. Therefore, I shall welcome the Minister's response to the general thrust of my noble friend's submission. I would find some difficulty in supporting the amendment in its broad terms as indicated on the Marshalled List. Perhaps the Minister can give me the necessary assurance.

Lord Hughes

It is not very usual for one colleague to rise to correct another. I think that my noble friend Lord Taylor of Gryfe interprets the amendment a little wider than the amendment states. In the phrase, and other bodies as appear to it to have an interest "it" refers to the enterprise bodies. The amendment does not refer to, such bodies as appear to them to have an interest". The bodies are required only to consult local authorities and any other bodies which they think appropriate.

Lord Sanderson of Bowden

Far be it from me to intervene between two Members of the Opposition on how to read their own amendment. As my right honourable friend the Minister of State in another place indicated, we agree on the importance of consultation when appropriate. There is no question about teat. Where we differ, however, is on the mechanics. We do not see merit in a statutory provision in this matter. At Second Reading my noble friend Lady Carnegy of Lour made that point most ably.

As I indicated at Second Reading, the general character of the Bill is enabling rather than prescriptive so as to leave as much room as possible for Scottish Enterprise and Highlands and Islands Enterprise to decide for themselves what their detailed arrangements should be. The boards of both bodies will have clear responsibility for training, and it should be up to them to consult as they think best.

As Second Reading I also said that, although serving in individual capacities, it is worth bearing in mind that there are 39 people with local authority background on the boards of the prospective local enterprise companies. That does not include Tayside. I believe that there will be members of local authorities on that embryo board too. In addition, useful contributions at the centre will be made by Councillor Charles Gray in the case of Scottish Enterprise and Councillor Valerie MacIver in the case of Highlands and Islands Enterprise.

The noble Lord, Lord Carmichael, asked about the comparison between the Highlands and Island Enterprise area and Scottish Enterprise area. That provision, Clause 5(1)(b), was brought forward from the Highlands and Islands Development (Scotland) Act 1965. There was no such provision in the Scottish Development Agency Act 1975. We saw merit in continuing the 1965 provision in the Bill essentially because of the social remit of Highlands and Islands Enterprise. Social development in particular is so clearly tied to many local authority functions that it makes sense to require Highlands and Islands Enterprise to consult before submitting plans.

The noble Lord asked about training plans and said that he thought that they would last a long time. They will not. Scottish Enterprise and Highlands and Islands Enterprise and indeed the local enterprise companies will revise their plans each year. That is implicit.

The noble Lord asked about consultation by local enterprise companies. It is for local enterprise companies to consult other bodies as they think fit. But they will be expected to demonstrate that their plans for training address the needs of their areas. That is germane to the noble Lord's point about the number of people employed in local authorities. The principle of partnership is clearly set out in paragraph 5.7 of the handbook for local enterprise companies. It states: Local enterprise companies will have a key role to play in promoting effective partnerships to tackle problems and spread information and good practice … Local enterprise companies will be expected to work in partnership with local and other public authorities, local representatives of employer associations, local enterprise trusts, industry training organisations and others". We are not far apart on the spirit of the amendment but I am afraid that I shall have to resist its inclusion on the face of the Bill in the terms stated.

Lord Carmichael of Kelvingrove

The Minister's answer is much what we expected. He is confined by the Bill as it is drafted. He said that Scottish Enterprise and Highlands and Islands Enterprise will be expected to consult. The whole point is that they need not do so. That is what worries me. The noble Lord pointed out that the plans have to be looked at every year. But will training be long-term or short-term? That point was also mentioned by the noble Baroness, Lady Carnegy. I am sure that there must be a balance. The aim should be to give people enough training so that the area becomes established as a place for certain types of work.

The noble Lord's answer was much what we expected. At this stage we are not likely to be given a great deal more. I am grateful to him for clearing up certain points. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clause 3 agreed to.

Clause 4 [Further provision as regards functions of Scottish Enterprise]:

Lord Carmichael of Kelvingrove moved Amendment No. 7:

Page 3, line 48, at end insert: ("( ) keep under review all matters relating to the economic development of Scotland;").

The noble Lord said: The purpose of the amendment is to give Scottish Enterprise the function of keeping under review all matters relating to the economic development of Scotland. A similar function is provided in Clause 5(1)(a) for Highlands and Islands Enterprise. By "Scottish Enterprise" I mean the Scottish Enterprise board itself.

The requirements for Highlands and Islands Enterprise to keep under review the economic development of the Highlands and Islands should apply equally to areas of operation of Scottish Enterprise as defined in Clause 21(3). We believe that it is appropriate to include this requirement as a further provision to the general function contained in Clause 1(a)(i) of furthering the development of the Scottish economy. The Minister mentioned a handbook entitled Towards Scottish Enterprise published in 1989. Perhaps I may be permitted to quote from it: Scottish Enterprise will provide a clear vision and direction to the design and delivery of enterprise, development, training, environmental objects and services in Scotland. Local enterprise companies will operate within a policy framework set by Scottish Enterprise. To secure greatest added value certain strategic functions and projects with Scotland-wide significance will be discharged by Scottish Enterprise direct or where appropriate in partnership with one or more local enterprise companies. But there will be extensive delegation to and freedom of action for local enterprise companies". That is a sound strategy. I completely agree with the sentiment.

A similar statement is made in the introductory paragraph of the handbook concerning Highlands and Islands Enterprise. In order to ensure that Scottish Enterprise provides the strategic context for its own activities and the activities of its local enterprise companies, the Bill must include in Clause 4 the additional provision for keeping under review all matters relating to the economic development of Scotland. As in the case of Highlands and Islands Enterprise this function should not be delegated under Clause 9(1). We are asking that the spirit of the passage in the handbook which I read to the Committee should be set out on the face of the Bill. I beg to move.

Lord Sanderson of Bowden

I recognise that this amendment parallels the provision in Clause 5(1)(a) for Highlands and Islands Enterprise. That provision re-enacts Section 3(1)(a) of the Highlands and Islands Development (Scotland) Act 1965. Such difficulties arise when one re-enacts measures in new legislation. It was included in the Bill in view of our widely welcomed commitment to give Highlands and Islands Enterprise all the existing powers of the Highlands and Islands Development Board. There was no such provision for the Scottish Development Agency in the 1975 Act. Nor has one been necessary. For the SDA to fulfil its remit to further the development of Scotland's economy it has had inevitably to take a close interest in all matters relating to the economic development of Scotland. The same will be true of Scottish Enterprise. I do not consider it necessary to add such a provision especially given the preamble of Clause 4(1), which would make such a function only permissive.

My right honourable friend the Secretary of State for Scotland said in another place on 26th July last year that Scottish Enterprise will have a strong strategic role at its own hand. It will handle large and strategic projects itself and approve other projects above set delegated limits. It will develop and design programmes with an applicability across its area, handle marketing and promotion and handle inward investment attracted by Locate in Scotland. Again I think that the power which the noble Lord seeks is there so far as strategy is concerned and I hope that when he has read what I have said he may consider that his concerns are covered.

4.30 p.m.

Lord Howie of Troon

The Minister was too quick for me. I was struggling to rise to my feet but he is spry, youthful and jaunty. In Clause 1 of the Bill we see that what is known as Scottish Enterprise has the function of furthering the development of Scotland's economy. We are all agreed that that is what it is for and we applaud that. It seems to me that Scottish Enterprise cannot further development without keeping under review all matters relating to the economic development of Scotland, and therefore my noble friend's amendment is essential in order to carry out the function under Clause 1(a)(i).

Lord Hughes

When I occupied the position which the noble Lord, Lord Sanderson, now occupies, I frequently refused to accept the sort of brief which he has, which effectively says. "All the things which you want can be done. All the things which you want will be done", and then goes on to say, "But we shall not put it in the Bill". I invite the Minister of State to look back nearly 20 years. He will then find a number of occasions when the sort of amendment which he is now resisting was accepted by me. If everything is to be done, and it is a principle like this, it ought to be in the Bill to make matters absolutely clear.

That brings me to another point and I am not asking this jocularly. This seems to be such a reasonable amendment that I am tempted to ask, having regard to the fact that the Scottish Office is having a certain amount of local difficulties at the moment, from which we hope the Minister of State in this House is to certain extent insulated, whether it is his intention to accept any of the amendments on the Marshalled List, or has he come prepared to refuse every one of them? Otherwise we shall be wasting our time and the time of your Lordships' Committee other than getting on the record the way in which we think things ought to be done.

Lord Sanderson of Bowden

I know that the noble Lord fulfilled a very useful role at the Scottish Office in the past. I have no doubt that he has also had Bills to carry through this House. I would not for a moment prejudge what will happen in the course of any section of this Bill as it passes through your Lordships' House.

As to whether these matters are not considered important enough to debate, I find that suggestion very strange. They are important and I would be failing in my duty if I did not say that I take most seriously all amendments put forward and consider them on their merits. If the noble Lord thinks that I too do not question and question and question what is put before me in the Scottish Office he is sadly mistaken.

So far as the noble Lord, Lord Howie of Troon, is concerned, as I have already said, Scottish Enterprise will inevitably have to take a close interest in all matters relating to economic development. All that I said—and the noble Lord helped me in pointing this out—was that I did not think it was necessary that we should have this amendment at all.

Lord Hughes

I am very grateful for what the Minister said about the extent to which he is prepared to disregard briefs and the fact that he is not going to prejudge the amendments. The proof of the pudding will be in the eating. It will be interesting to see when we get to the end of the evening how many briefs show that he is merely saying what is already written on paper before him.

Lord Howie of Troon

I think that the Minister must have misheard me. I did not say that the amendment was unnecessary. I said that it was necessary.

Lord Carmichael of Kelvingrove

I feel that I am in a no-man's land between two people who have been through the hallowed portals of old St. Andrew's House and new St. Andrew's House. I was never there, but I was in other departments and I have a wee idea of how they work. I have had Cabinet Ministers to whom it would have been rather difficult to go back and say, "I have lost this amendment". So we are all aware of what happens.

I was taking a note before my noble friend Lord Hughes spoke. It said, "It is going to be one of those nights." We have heard that it can be done and it will be done but there is no need to put it on the face of the Bill. We have had a few examples already and we are coming to some more. I know that there is always a draftsman who does not want to put things on to the face of the Bill because that ties people down. But our job is to tie people down. Therefore I make no apologies for urging that we put down these amendments. But there is no point in going further with this amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 8:

Page 3, line 48, at end insert: ("( ) after consultation with such local authorities and other bodies as appear to it to have an interest, from time to time prepare and submit to the Secretary of State for his approval proposals (whether general or specific in character) for the economic development of Scotland or any part thereof;").

The noble Lord said: The purpose of this amendment is to require Scottish Enterprise to prepare and submit proposals for the economic development of Scotland to the Secretary of State following consultation with local authorities and other bodies. This is another requirement which applies to Highlands and Islands Enterprise. The requirement for Highlands and Islands Enterprise to submit proposals to the Secretary of State for the economic development of the area should apply to Scottish Enterprise.

In addition, there is no provision within the Bill which would require Scottish Enterprise to consult local authorities and other bodies. The success of Scottish Enterprise must depend upon the extent to which its plans and actions are complemented by the local authorities and other relevant bodies. Such consultation is provided for as regards proposals for the economic development of the Highlands and it is just as important for the successful economic development of the rest of Scotland.

I know that there are great differences in the Highlands, but when you get to the more populous areas you find that the scale of some of the developments can have a great impact upon a fairly wide area. Therefore I believe that there should be consultation, particularly with local authorities. I beg to move.

Lord Hughes

I wish to support my noble friend in this amendment and to point out that it is very similar to what appears in the next clause in relation to Highlands and Islands Enterprise, with the necessary alterations; for instance, instead of "Highlands and Islands" in Clause 5, Clause 4 says "Scottish". Then one clause mentions "economic and social development" but "social development" is left out of the other. It just mentions "economic development".

I made my intervention about what the Minister might have in mind for the future having my eye on this amendment. If there is one amendment where the Minister ought not to have undue difficulty in accepting the principle it is this one, as it is so similar to what is in the Bill in the form that it has come from the other place. I know that the Minister emphasised the differences between the Highlands and Islands and the rest of Scotland.

I invite the Minister to consider the amendment. It is not completely right. It is defective to a certain extent, because it refers to: the economic development of Scotland or any part thereof". The Highlands and Islands are part of Scotland, so it appears to give a remit to Scottish Enterprise to stray into the territory of the other organisation. That is not intended. It would be easy to word the amendment in such a way as to confine it to the area of Scottish Enterprise. I hope that the Minister will say that he is prepared to submit an alternative to this amendment in a proper form, but embodying the principle of this amendment.

Lord Sanderson of Bowden

The noble Lords, Lord Carmichael and Lord Hughes, have suggested that, as a provision is made for the Highlands and Islands in Clause 5(1)(b), it should also be made for Scottish Enterprise. That is where our views differ.

If that argument were taken to its logical conclusion, there would be no need to have a separate body for the Highlalnds and Islands, but we recognise that the circumstances of the Highlands and Islands must be given special consideration, as I have already said. The arrangements for Scottish Enterprise and for Highlands and Islands Enterprise need not nor should not follow an identical pattern. Because of the wider remit of Highlands and Islands Enterprise and the different geographic and economic structure of the Highlands and Islands, the board may often find it useful to consult the local planning authority on major developments, or the regional council in its social work role where the social function of the Highlands board is involved.

The case of Scottish Enterprise is by no means the same as that of Highlands and Islands Enterprise, as was said earlier. There are not, although the noble Lord holds a slightly different view, the same geographic or economic characteristics in the Lowlands. Scottish Enterprise does not have a social remit. That is not to say that it will not consult local authorities and other bodies. One of the SDA's greatest strengths is its ability to work in partnership with such bodies. I do not think that the noble Lord, Lord Hughes, would dispute that. That has happened without a provision of the kind now proposed.

I hope that the noble Lord, Lord Hughes, appreciates the fact that there are no government amendments down for debate at this stage of the Bill.

Lord Kirkhill

This gets Scottish Enterprise off on the wrong foot. Most major local authorities in Scotland are Labour controlled. Some of them are already suspicious of the inbuilt business bias which the new Scottish Enterprise board will tend to show. If the Government are serious about an act of entrepreneurial co-operation, it would advance the common good to accept my noble friend's amendment or a similar amendment. It is because the Government are not seen by the public in Scotland to do that—although the Government think that they do—that they fare so badly in opinion polls. Even if the matter is considered from the government angle, the noble Lord should make a move.

Lord Hughes

The Minister of State pointed out something that we must have noticed; namely, that there are no government amendments down to the Bill. I come back to what I said earlier and I hope that in due course I shall be proved wrong. The Minister's brief can be summed up in the following terms: "We want this Bill back without any change whatsoever".

4.45 p.m.

Viscount Massereene and Ferrard

I have listened to the debate for some time. I understood the noble Lord opposite to say that he was under the impression that there was an inbuilt bias because of the businessmen on those boards. It is excellent if there are businessmen on those boards. I am on boards and am chairman of a public company. The amendments that I have heard all seem more or less the same. With due respect, the debate has been rather a waste of time. If any of the businesses or companies with which I am involved went on like this, the shareholders would be displeased. It is quite different with government matters because you have untold finance behind you, so it does not matter how much you spend or how much is thrown away. I hope that I have not gone on too long. I had to intervene because hearing all that repetition was too much.

Lord Carmichael of Kelvingrove

The shareholders in Scotland have given their verdict on the management of the economy in Scotland fairly thoroughly over the past few years. I wonder whether the noble Viscount would accept their verdict as quickly as he would accept that of a board of directors. We could go into the importance of local authorities which, generally speaking, have a much longer term to consider, but I do not want to become involved in that too much.

Perhaps the Minister will look again at the issue. I do not want to press it to a Division, but I am hopeful that he will take it away and see whether there is anything that he can do. There is always the difficulty that we do not want to put something on the face of the Bill. I am sure that the Minister will be able to do something, given the draftsmen at his disposal. I accept that my amendments are not perhaps as sophisticated as are required. However, the principle is perfectly justifiable, indeed essential. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 4 shall stand part of the Bill?

Lord Howie of Troon

I wish to intervene briefly with regard to Clause 4(1)(e) on page 4 of the Bill, which states that the body is entitled to: provide or adapt sites and provide, adapt, modernise or reconstruct premises". Perhaps the Minister will explain how wide those powers are. For example, does the adaptation of sites include the provision of access roads, access bridges, pipelines, sewerage or water supplies? Does the term "premises" apply merely to buildings or does it include a variety of industrial structures, such as overhead cranes? I am not trying to trip up the Minister. I merely ask for information. Perhaps he will clarify for my benefit the extent of the provision for adaptation which is included in this part of the Bill.

Lord Sanderson of Bowden

The important words with regard to the point raised by the noble Lord are: reconstruct premises for industrial undertakings". I should need to look closely at the terms of his query. I understand that in some cases roads will not fall into that category. However, I have been advised that Clause 4(6) allows for provision of means of access and other facilities. I thought that I would take a contrary view to that, but I am advised that the clause provides for that. I should like to consider other aspects of the noble Lord's question regarding equipment, and I shall write to him.

Lord Howie of Troon

I am satisfied with that reply.

Clause 4 agreed to.

Clause 5 [Further provision as regards functions of Highlands and Islands Enterprise]:

Lord Carmichael of Kelvingrove moved Amendment No. 9:

Page 5, line 25, at end insert: ("( ) in accordance with arrangements to be approved by the Secretary of State and to such extent as it considers appropriate erect buildings or other structures on land";).

The noble Lord said: It may be for the convenience of the Committee if I speak also to Amendment No. 10. These are technical amendments which the Minister may be willing to accept because I believe that they make the Bill clearer. The specific power to erect buildings contained in Section 5(1)(a) of the Highlands and Islands Development (Scotland) Act 1965 has been omitted from the Highlands and Islands Enterprise powers, while under Clause 4(1)(e) Scottish Enterprise has such powers. Clause 4(5) authorises Scottish Enterprise to provide premises for a rent-free period. The amendments are designed to remove any doubt that the specific provisions for Scottish Enterprise are implied for Highlands and Islands Enterprise, as already exists in the Highlands and Islands (Development) Scotland Act 1965. I beg to move.

Lord Sanderson of Bowden

As I understand it, the amendment is designed to give Highlands and Islands Enterprise a specific function of erecting buildings or other structures on land. The provisions of Clauses 4 and 5 reflect the styles of the 1975 and 1965 Acts respectively. In the 1975 Act the functions of the SDA were expressed in more detail than the more general terms of the functions given to the Highlands board in the 1965 Act. Much of the detailed wording in Clause 4 is as far as Highlands and Islands Enterprise is concerned subsumed within the wider wording of Clause 5(1)(b) and (c). I am advised that Clause 5 when read with Clause 8(1)(i) encompasses the erecting of buildings or other structures on land. That gives Highlands and Islands Enterprise the same powers as the Highlands board under the 1965 Act. The noble Lord thought that the Bill did not re-enact Section 5(1)(a) of the 1965 Act. In fact it does through the wording at Clauses 5(1)(c) and 8(1)(i) which relates to the carrying out of work on land. I hope that the noble Lord will accept that explanation and that his fears will be allayed.

Lord Hughes

I did not catch what the Minister said. What was the reference to Clause 8?

Lord Sanderson of Bowden

It was Clause 8(1)(i).

Lord Hughes

I am grateful to the Minister.

Lord Carmichael of Kelvingrove

The Minister and my noble friend Lord Hughes obviously see the amendment, as I do, as a technical one. The Minister has gone through the Bill. I was unable to follow him but I am sure that what he said has been well checked. Between now and Report I may be able to lumber my own way through it. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 10 not moved.]

Clause 5 agreed to.

Clauses 6 to 18 agreed to.

Clause 19 [Delegation of certain functions and powers]:

Lord Carmichael of Kelvingrove moved Amendment No. 11:

Page 17, line 30, leave out ("subsection") and insert ("subsections (1A) and").

The noble Lord said: It may be for the convenience of the Committee if Amendments Nos. 11 to 14 are taken as a group. The purpose of the amendments is to provide on the face of the Bill a requirement that Highlands and Islands Enterprise and Scottish Enterprise shall not delegate such functions and powers as are necessary to enable them to continue to carry out their strategic responsibilities.

Clause 19(2) states which powers and functions those bodies shall not delegate to local enterprise bodies. There is concern that the limits based on the power of Scottish Enterprise to delegate do not ensure that it will retain such functions and powers necessary to enable it to continue with its strategic responsibility. Our view is that Scottish Enterprise should maintain a strategic role by keeping under review the Scottish economy as a whole, by developing Scotland-wide industrial sectors and opportunities and by undertaking strategic development projects. In addition, Scottish Enterprise will need to augment its training expertise to enable it to develop an overview of Scottish training.

The importance of the central body's role was highlighted in the SDA's response to the White Paper Scottish Enterprise. Paragraph 14 states: We believe that the role of the central body is also fundamental both to our proposals and to the success of Scottish Enterprise … The mission for Scottish Enterprise overall is truly challenging: to promote the development of the Scottish economy to ensure business has access to the highly skilled workforce it needs and to make Scotland a better place in which to live and work. If that is to be achieved Scottish Enterprise and the ADCs must seek to achieve gains for Scotland as a whole: and resources need to he allocated with that objective in mind. This demands a clear remit and hard choices between priorities across Scotland". The response also believes: Scottish Enterprise would also be responsible for: setting the cross Scotland policy framework within which the Area Development Companies would act; the design and development of projects and programmes particularly in industry and enterprise development with an applicability across Scotland; agreeing strategic and operating plans prepared by the Area Development Companies, providing the necessary resource and monitoring their performance; approval, oversight of and responsibility for major projects outwith the delegated authority of the ADCs; certain functional activities including major investments, the attraction of inward investment, marketing, and the design and implementation of major physical programmes requiring scarce expertise; secretariat, finance and staffing functions".

The importance of that strategic role has been emphasised by other organisations. The Scottish TUC put foward a powerful case. The Scottish Council for Development and Industry put forward a powerful case supporting the general tenor of what the amendments are trying to achieve. I hope that the Minister will have seen those responses. If the amendments do not make the points that he wishes to make, I hope that he will accept the spirit of them and agree to consider them. Perhaps he will word them in such a way to ensure that the spirit is accepted and that they can be on the face of the Bill. I beg to move.

Lord Mackie of Benshie

These are important amendments. I should like to be assured that Highlands and Islands Enterprise as a whole will have an overall function and that matters will not depend entirely upon the local boards. In the Highlands I understand that there are about 10 boards. To ensure that all those boards are free of local prejudice and suspicion is difficult. Some board members may not desire a development which might cut across their own businesses. It is essential that Highlands and Islands Enterprise and Scottish Enterprise retain their overall strategic role. I should be interested in what the Minister has to say. He must know that the more we can bring the local population behind us the more we can do, but the overall direction of the strategy must come from the centre.

5 p.m.

Baroness Carnegy of Lour

When I first saw the wording of the amendment, it seemed that in spirit at least it was important. I agree with the noble Lord, Lord Mackie of Benshie. However, the noble Lord, Lord Carmichael, went further than I had imagined was intended by the amendment. Undoubtedly, parts of the role of both bodies—Scottish Enterprise and Highlands and Islands Enterprise—must be retained centrally. They will have a strategic role. The intention, I thought, was that the functions that they should not delegate but should retain should appear on the face of the Bill. However, the noble Lord, Lord Carmichael, suggested that the overview of the economy of Scotland—the whole strategy of how Scotland attracts industry and develops its economy—should be in the hands of these bodies. Surely, that is the job of the Scottish Office and the organisation which is specially set up to assist it. That is a Scottish Office affair. I do not believe that the electorate of Scotland would wish an unelected body to carry out that function. That is going too far.

What the two bodies wish to keep central to them is difficult to define. They will have to find out exactly how much they need to keep in their own hands. I see no danger at all of overall strategy being in the hands of local bodies. That would not work. I should not have thought that anyone would wish that. My fear is that not enough, rather than too much, will be delegated. On the whole, having heard what the noble Lord, Lord Carmichael, said, I do not feel able to support the amendment. I shall be interested in what my noble friend Lord Sanderson says.

Lord Howie of Troon

This clause concerns delegation of functions and powers. If I understand it correctly, it is probably a delegation of functions and powers to private enterprise organisations of one kind or another. Among matters, according to clause 19, that should not be delegated are, the functions of Scottish Enterprise, and of Highlands and Islands Enterprise, mentioned in section 2(2) of this Act". The clause states that the two enterprises are obliged to submit proposals to the Secretary of State. Presumably, that obligation includes proposals in connection with the delegation of powers.

Quite simply, I wonder whether this means that the enterprises submit proposals for delegation of powers and functions to the Secretary of State in an ad hoc manner as and when they are asked to delegate powers and functions. Or, as I prefer, is it intended that the delegation of functions and powers should be seen against some form of guidelines or general guidance to the board as to what it should or should not do?

Lord Sanderson of Bowden

I can assure the noble Lord, Lord Carmichael, that in policy terms there is little between us. We agree on the importance of a strong strategic role for Scottish Enterprise and Highlands and Islands Enterprise. The attempts by honourable members in another place to amend what is now Clause 19 were technically defective. I have to tell the noble Lord that the proposed Clause 19(1A) is equally defective. The difficulty, as my noble friend Lady Carnegy of Lour, mentioned, is one of definitions.

The amendments are flawed because the wording in statute must be capable of precise interpretation. I see that the noble Lord, Lord Macaulay of Bragar, has joined us: I am sure that he will be aware of this. How does one interpret the words "strategy responsibilities"? We could all come up with plausible—and different—definitions. What is the point of telling Scottish Enterprise and Highlands and Islands Enterprise not to delegate functions and powers which they need to exercise their "strategy responsibilities"? If they need to use such powers themselves they will of course do so. But the same powers in the Bill can be used for both strategic and local purposes. If, for example, Scottish Enterprise needs to use Clause 8(1)(a) relating to the making of grants or loans or Clause 8(1)(h) dealing with the acquisition of property, for a large strategic project, is it not also to be allowed to delegate the power to a local enterprise company to undertake smaller or medium-sized projects? That would be an absurd position. Indeed, Clause 19(3) puts it beyond doubt that the central bodies may continue to exercise a function or power even if that function or power has already been delegated to a local enterprise company for use at local level. The proposed new Clause 19(1A) is therefore both technically unsound and inappropriate.

I repeat that everyone is agreed on the importance of giving Scottish Enterprise and Highlands and Islands Enterprise a strong strategic role. That is essential if they are to build on the achievement of the existing bodies. It is a crucial part of the whole concept of integrating training and enterprise development support. I draw the noble Lord's attention to what my right honourable friend the Secretary of State said in another place on the matter on 26th July 1989.

We set out the respective responsibilities of Scottish Enterprise, Highlands and Islands Enterprise and the local enterprise companies in a recent paper which I sent to the noble Lord, Lord Carmichael, and which is quite instructive. That is what the noble Lord, Lord Howie of Troon, referred to when he asked what were the roles and whether they would be set down so that there was guidance. That is the case. I shall send the noble Lord a copy of the paper so that he can study it. It is quite detailed. We stand by the commitment given by my right honourable friend on 26th July in this regard.

I wish to look carefully to see whether there is a way whereby the wishes of the noble Lord, Lord Carmichael, and those of the Government could be carried out in this case. I am sure that that will be acceptable to the noble Lord, Lord Hughes, who perhaps thinks that I do not take much notice of what the various amendments that come forward might entail. I shall do that before the next stage of the Bill. I can give him no promises because we may come up against a brick wall again, as happened in another place.

Before I sit down, perhaps I may say to the noble Lord, Lord Mackie, that local enterprise companies may resent the Highlands and Islands Enterprise strategic roles. By the terms of their contracts with Highlands and Islands Enterprise they will be bound to have regard to the Highlands and Islands Enterprise overall strategic intentions. If they do not, I am afraid that they will have difficulty in getting their contracts accepted.

Lord Hughes

The noble Lord referred to what I said. I am glad that I made those remarks because it evoked the response from the Minister that when he gave that assurance he was not reading from a brief. I said that perhaps at an earlier stage he appeared to be reading from briefs which had been written by two different people, plus the words of a third—his own. I am glad that the comment was in his own words and not from the brief.

Lord Carmichael of Kelvingrove

I am grateful to the Minister for agreeing to look at this issue again. He is Probably right in saying that we are not all that far apart ideologically in this little part of the Bill. I understand what the noble Baroness, Lady Carnegy of Lour, was getting at. We are not trying to stifle enterprise at all, but we are slightly afraid that in an area one can get a particularly powerful tail that wags the dog and perhaps causes a great deal of damage. We have all had experience of that.

The Scottish Council for Development and Industry has stated in this regard: In addition to providing a research and resource centre for the local enterprise companies the central organisation would need to retain the capability to implement certain programmes directly from the centre. The experience and specialist resources required for certain activities could not be replicated economically throughout the local network". I can envisage an aggressive local enterprise committee replicating some of the work that was going on because it became impatient, whereas it should discuss the situation rather than go off on its own. Such a local enterprise committee could take important intellectual resources with it. This matter opens up many possibilities. I hope that the Minister will be able to give us an explanation that will reassure us on this matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 12 to 14 not moved.]

Clause 19 agreed to.

Clause 20 [Assistance from local authorities and development corporations in carrying out certain functions]:

Lord Carmichael of Kelvingrove moved Amendment No. 15:

Page 18, line 10, leave out ("(d)") and insert (")(a)").

The noble Lord said: The purpose of this amendment is to allow local authorities to act as agents for Scottish Enterprise in providing or assisting in the provision of finance to persons who are carrying on or are intending to carry on industrial undertakings, and to persons who are establishing or carrying on industrial undertakings separately or for other persons or establishing or assisting in the establishment or growth of community enterprise or co-operative expertise.

In many areas of Scotland, particularly rural areas, local authorities are the leading providers of finance to small-scale, high-risk business enterprises which create badly needed new jobs and economic activities in depressed areas. Dumfries and Galloway Regional Council, for example launched a village shops assistance scheme in 1988 in co-operation with the Scottish Development Agency. The scheme is intended to support shopkeepers in isolated rural areas. It offers them grants of up to £2,500 for property improvement or equipment. It also offers them business counselling and marketing assistance, including the provision of shop signs. Those are all important functions which local authorities in co-operation with the SDA have carried out in different part of Scotland. I have given the example of Dumfries and Galloway.

Funding for the scheme comes from the regional council which meets the cost of items relating to property improvement and business counselling, and from the SDA which pays for a part-time village shops counsellor who is himself a local retailer. The scheme is an example of joint local authority/SDA involvement in business finance for the benefit of local communities.

Without the SDA input, the scheme would not be possible. The joint basis of the scheme also ensures there is no duplication of the efforts of the local authority and the SDA in assisting businesses. Many local authorities in Scotland already devote considerable resources to giving assistance to community and co-operative enterprises. Such assistance is of particular importance in creating much needed employment and services in some of Scotland's most disadvantaged communities. Given the wealth of experience available to local authorities, there is good reason to allow them to act as agents for Scottish Enterprise.

Finally, the exclusion relating to the establishment or the carrying on of business is extremely shortsighted and would seem to go against the Government's philosophy of encouraging local authorities to be commercially minded and businesslike. It would discourage innovative approaches to business support where local authorities are able to play a valuable role. I beg to move.

5.15 p.m.

Lord Sanderson of Bowden

Clause 20(1)(a) simply reflects Section 19(1) of the Scottish Development Agency Act 1975. It will allow Scottish Enterprise and the local enterprise companies to work with local authorities and new town development corporations in the exercise of certain functions, including promoting the growth of industry, providing sites and premises, and environmental improvement. But I see no advantage in extending those provisions.

First, as my honourable friend the Minister of State for industry and education made clear in another place, to use local authorities as agents for the provision of finance would fudge accountability for the funding and add another layer of bureaucracy. Also, the power to act as an agent is different from and far more restricted than the power to act under delegation. An agent can carry out only executive functions whereas delegation can also involve decision-making functions. So local authorities acting merely as agents would in any case not have the power to decide to whom finance should be provided. They would not therefore have a meaningful role to play.

Secondly, the Bill is not intended as a vehicle to adjust the economic development functions of local authorities. Those are unaffected. I emphasise that point. It remains open to local authorities, for example, to continue to assist community enterprises at their own hand or in partnership with Scottish Enterprise under their powers in Section 83 of the Local Government (Scotland) Act 1973.

Thirdly, as my honourable friend the Minister of State for industry and education also made clear in another place, the Widdicombe Report recommended that the Government should initiate a review of the proper role of local authorities in economic development. The Government broadly accepted this recommendation in their response to that report, the White Paper (Cmnd. 433) entitled The Conduct of Local Authority Business, issued in July 1988. Legislation was brought forward for England and Wales in Part III of the Local Government and Housing Act 1989. Local authority powers to take part in or carry out economic development in Scotland are still under review, as CoSLA is aware. I do not wish to pre-empt the outcome of that review. I hope that makes the situation clear in relation to the powers of local authorities which still exist. We have just lifted this part of the Bill out of the 1975 Act.

Lord Carmichael of Kelvingrove

I am grateful to the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 agreed to.

Clauses 21 to 23 agreed to.

Schedule 3 agreed to.

Clauses 24 and 25 agreed to.

Schedule 2 agreed to.

Clauses 26 to 32 agreed to.

Clause 33 [Winding up and dissolution of new town development corporations]:

Lord Carmichael of Kelvingrove moved Amendment No. 16: Page 26, line 25, at end insert: ("( ) A winding-up order shall provide that any local development company set up to own and manage assets of the former new town development corporations must have a board whose membership includes representations from each local authority within whose area that company is located.").

The noble Lord said: We now come to the new towns part of the Bill. Scotland always seems to be landed, if not with miscellaneous provisions, with two subjects which are not related in the same Bill. This part of the Bill has raised a great deal of interest, as I am sure the Minister is aware. It deals with the winding up of the new towns, and the purpose of the amendment is to try to ensure that a local community, through its elected representatives, is actively involved in its local development company. That would facilitate the private and the public sector working in partnership to attract investment and ensure continued development for the benefit of the whole community.

The benefits of economic development should accrue to the whole community. Measures to deal with economic development at local level need to be co-ordinated so as to permit a full contribution by all local organisations and local authorities. The private and public sectors should seek to co-operate and to work in partnership to facilitate investment and continued development to the benefit of the whole community. The Government should clarify how the arrangements proposed in the Bill will affect central government's representation on local development boards, the Government's proposed criteria for the assessment of management buy-out bids submitted by development corporation staff and any action that may be taken in relation to the possible failure of a management buy-out bid or of a management agency.

I am sure that the Minister is aware of all the arguments. New towns mean a lot to Scotland. Some of the well-established new towns have as much local pride as some of the oldest towns in the Highlands or the Borders. Therefore they will be watching this part of the Bill with interest. I hope that the Minister can either accept the amendment or reassure us that he will consider the points that have been raised. I beg to move.

Lord Hughes

This is the part of the Bill in which I have the greatest interest because of my past connection with new towns. I strongly support the amendment for reasons arising from that experience. When I became chairman of Glenrothes Development Corporation in 1960 the pattern was very similar to that found in new towns, whether in England or in Scotland. The relationships between an existing local authority and the new town was not always of the best because the local authority tended to regard the new town development corporation as carrying out functions which more properly should rest with the elected authority. From time to time there were differences between them. We were always accused of not being an elected body but a creature of the Secretary of State.

That was in 1960, when I went to Glenrothes. Fifteen years later, in 1975, I became chairman of East Kilbride Development Corporation. The first thing that I noticed there was the tremendous change which had taken place in the interval. The jealousy between the town council and the development corporation no longer existed although there were differences from time to time. One of the main differences was one which the former Secretary of State, George Younger, emphasised. The new towns had no greater friend in the Government than George Younger as Secretary of State. That was made obvious when Mr. Heseltine was busily decimating the new towns in England and transferring them to the commission. Mr. Younger made Perfectly clear that he had no intention of following that example in Scotland.

One point that Mr. Younger made quite clear to the local authorities in the course of time was that in his view when it came to the winding up of a new town the houses would go to the local authority but the commercial and industrial assets would not be transferred to the local authority. That is what is happening now. However, there was and there continues to be a strong interest in the local authorities in the commercial and industrial developments because they know that the prosperity of their towns is tied up so much in those developments. Therefore it would be a great help if there were an obvious local authority connection in any development company that is set up. I hope therefore that the Minister will find it possible to look at the amendment favourably or, alternatively, bring forward a government substitute to carry out the purpose of the amendment.

Baroness Carnegy of Lour

The noble Lord's experience goes back a long way and he has given tremendously distinguished service in the new towns. He is well known for that. My understanding of the story of the new towns is that their enormous success in Scotland has been due to the fact that they were not elected bodies but had chairmen fulfilling the role that the noble Lord occupied. That was what worked so well for the new towns. What the noble Lord said about the improvement in the relationship between new towns and local authorities is true. They came to live together in a way that they had been unable to earlier.

To suggest that the community will want to play a part in the running of the new organisations that may be created once the new towns are dissolved and will want to do so through their elected representatives is probably a misinterpretation of what people want. What they want is competence. They want the job done effectively. The people who live in the new towns, who will become the customers, will want the towns run in their interests without any political input.

I should have thought that what the amendment proposes is not the modern way and not what the people of Scotland are looking for in this instance. They want their local authorities to do certain things. Local authority councillors will be very much busier than they have ever been in the past as a result of the enormous new community care requirements that will become their responsibility. Although I can understand the motive behind the amendment I believe that it is a little out of date.

Lord Hughes

I do not want to interrupt the noble Baroness, but she has overlooked one point. The new town development corporations in Scotland each included at least two elected members of the local authority. That is still the position. There are still local authority members in new town corporations. We must accept that as regards the industrial and commercial enterprises the development companies will be the successors of the development corporations. If it worked with the development corporations I can see no reason why it would not work with the development companies.

Baroness Carnegy of Lour

I appreciate that there have been elected representatives on the new town corporations all along. They were there when the jealousy existed and they are still there now that there is less jealousy. I do not believe that they have affected the jealousy question.

5.30 p.m.

Lord Sanderson of Bowden

As we start this section of the Bill I must say to the noble Lord, Lord Hughes, that I rise with some temerity in view of his experience of new towns and his distinguished record. I should like to pay tribute also to the work of all those who have made such a success of the new towns in Scotland. I thank him also for the generous words in which he spoke of the Secretary of State, George Younger, in that connection. It is relevant at this stage, as we start, to note what a success the new towns have been.

Only yesterday I was looking at some of the success stories. It is significant how many jobs have come to those new towns. Looking to the future of Scotland one realises that the young populations in those towns will make them even more attractive in the 1990s for a country in which the national labour force will contract most acutely in the 16 to 24 year-old age group. For example, Livingston will have a 60 per cent. growth in the number of 16 to 19 year-olds coming forward for employment. That makes my job, and no doubt in the past made the noble Lord's job, very much easier when trying to sell Scotland as a place for manufacturing industry. So I take his point.

The White Paper makes clear the Government's view that the most effective organisation to undertake economic development activities in the new towns after wind-up will be a private sector local development company. Such a company is likely to be a limited company with the normal share stucture, articles of association and a board of directors. I do not believe that it is necessary to impose on what will be a private sector company any statutory entitlement to have representatives for the local authorities.

Perhaps I may say straight away that if the local enterprise companies and the embryo boards that are being set up are any guide, the point made by the noble Lord, Lord Hughes, will be very well met. Sensible companies might look very closely at those who have had experience in local authority work in the area as possible members of boards.

The establishment of the development companies does not exclude local authorities from participating in or supporting the activities of those companies—far from it—in much the same way as the new town development corporations and local authorities presently co-operate in joint projects. There are a number of ways in which that could be achieved. It could be done by, for example, a local development company and a local authority participating together to sponsor industrial and commercial projects or area development initiatives. Alternatively, the local authority could contract with the local development company to supply local business advisory and support services.

Those are just examples of the way in which local authorities can contribute to economic improvement in their areas with the assistance—I say that advisedly—of local development companies. These companies are not to be viewed as competitors with the local authorities but can very well be potential partners allowing the authorities to draw upon the experience and expertise of the private sector; and vice versa so far as may concern individuals from the local authority world.

In the light of those arguments, I hope that the Committee will accept that there are a number of ways in which local authorities will be both allowed and encouraged to participate in the activities of local development companies. I do not consider that it is necessary or desirable to put a statutory requirement on the face of the Bill. I hope that the noble Lord, Lord Carmichael, will consider this approach as the best way forward for what we all intend, so that there is no hold-up in development in those areas where the new towns exist.

Lord Hughes

I was very interested in what the Minister had to say about this matter. He said that there would probably be a limited company with shareholders. Will the participation (about which he spoke more than once) that the local authority will be able to undertake include the district council being entitled, for example, to take up shares in the company?

Lord Sanderson of Bowden

That is something—a district council as such being a shareholder—on which I would need to take advice. One would need to look at the formation of those companies which may wish to put in bids for the various local development companies that come into existence. Personally, I see no reason why it should not do so but I should like to check that point. The difficulty is that it is a local authority which would seek to become a shareholder in such an operation. I think that it may be possible, but I should not like to give the noble Lord an assurance without double checking.

Lord Hughes

That is fair enough. Perhaps the Minister will be good enough to write to me when he knows the answer.

Lord Kirkhill

I wonder how the Minister would react were I to say to him that I take the view (which I expressed earlier) that the remarks he has just made are another example of one facet of the destruction of the community life of Scotland, which is a destruction of the essential fabric of the life of the people in Scotland. The idea that people will not have an inalienable representation on the new private limited company type board is another example of this Government's ideology running riot. It will be further confirmation of their appalling political record in Scotland.

Lord Sanderson of Bowden

The noble Lord is a little extreme in his views. I think he must look to the economy of his own area in Aberdeen and judge for himself as to whether the successful economy that the Government have brought to that area is doing well or badly at the present time. Frankly, I believe it is absolute nonsense to say that it is doing badly. It is doing extremely well.

Lord Carmichael of Kelvingrove

For the Government to take credit for the success of oil is a bit rich. We think that they have wasted the oil proceeds—some £100 billion of them. And with all that they have still managed such an economic record.

We are worried about the whole question of the new towns Bill. I am sure that the Minister has seen many articles written about this issue. There is one in the Glasgow Herald, a newspaper which does not lean toward the Labour Party, which asks: Will the new towns float off in a property flood? We do not know what will happen. We do not know how they will be sold off. We are unaware of the details. We are convinced that they will be sold off cheaply because the Government want to get rid of them. Everything that the Government have sold with, I think, the exception of BP has doubled or trebled in price within weeks or months on the stock market. Once the Government make up their mind to sell something, they get rid of it. Every single privatisation has been like that. One of our worries is that the good things will be removed and that this will become a type of asset stripping.

The article in the Herald quotes Douglas Harrison of the STUC. I could not do better than give the Committee his final remarks in that article. He says: Why disband something that works just because some loony in the Adam Smith Institute says that you should? It's crazy". That is generally the feeling that we have. However, I am sure that we shall not have a great deal of comfort from the Government. We shall be very interested to know the details of management buy-outs or corporate buy-outs if they are possible or the sort of system we shall have for purchasing these new towns. It is all incredibly vague. However, rather than continue to speak on this subject I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 17:

Page 27, line 8, leave out from ("State") to end of line 11 and insert: ("(3) In granting consent as provided for in subsection (2) above, the Secretary of State in relation to the disposal of property, rights or liabilities relating to housing, land to be developed for housing purposes, garages, tenants' meeting rooms or associated housing purposes shall require the development corporation to have consulted with—

1. (i) regional and district councils in which the new town is situated;
2. (ii) tenants or such bodies representing the tenants;
3. (iii) other associations directly affected who carry out functions or operate within the new town area:
4. (iv) any other bodies which appear to it to have an interest.

(4) This section shall come into force at the expiry of two months beginning on the day this Act is passed.").

The noble Lord said: This amendment ensures that consultation with local authorities and tenants takes place prior to the disposal of any houses or facilities linked to the houses, such as meeting rooms, garages, etc. It is important that tenants should be involved in the process of wind-up and that they should be assured of that at this stage.

I knew many tenants and families from the areas that I represented—the Woodside, Maryhill and Anderston areas—who went out to East Kilbride and Cumbernauld when it was considered to be a fairly remote area. They did not have decent transport, the roads were not made up and they had very few facilities. In a way, they were pioneers. To a very large extent it was their efforts which made those communities, gave them their being and produced the feeling of warmth which you meet when you enter many of the new towns, particularly in Scotland.

There is concern within local authorities and among tenants of development corporation houses that transfer of housing stock will take place without consultation with local authorities and other local interests. Housing is a most important aspect of people's lives. It is essential that they be involved in decisions about the future of the houses that they occupy. Although provision for consultation with tenants of new towns on wind-up is dealt with in the White Paper, it would ease the concern if it were incorporated in legislation.

The high profile of the New Town Tenants Forum indicates the concern of tenants about their future and demonstrates the fear that decisions will be taken without their direct input. The handling of the consultation paper, Maintaining the Momentum, where a large body of opinion was sought, including the views of the Scottish Wildlife Trust but excluding tenants and their organisations, has done nothing to alleviate the concern.

This amendment is to ensure that the involvement of tenants is enshrined within the statute. Residents' associations and community councils, as well as tenants, are concerned about the future of new town housing stock. For that reason statutory consultation should be promoted for those groups.

The position of local district councils must also be considered, bearing in mind that the White Paper refers to their possible involvement in the future of the housing stock. To be presented with a fait accomph on this matter is totally unacceptable and against the interests of the new towns and the district population alike. The expertise of the district councils coupled with that of the new towns could be made to operate in the best interests of the tenants. The amendment seeks to ensure that the right to be consulted is incorporated into legislation rather than simply left as a commitment in the White Paper.

Tenants may be under severe financial difficulties. They may have been anxious to obtain a house but may have spent many hours each day travelling back to their old community at first. They will now have built up a new community. Their wives and families were isolated for a long period until the community was built up. For such people now to be told that they have no rights and will not be consulted is quite disgraceful. I feel very strongly in moving the amendment.

The Earl of Selkirk

The point that the noble Lord made is very true. I have received a number of letters on the subject. I should like to know what will happen. It is said that one can choose one's home or one's landlord. However, what will happen to local authority housing? I shall be grateful if the noble Lord will explain that. It will be a great relief to people to know that consideration has been given to this issue. People are worried about it. I shall be happy to know the Government's proposal in respect of local authority housing.

5.45 p.m.

Lord Hughes

I hope that the Minister will find it possible to accept the amendment or something similar. I have spoken of my experience in new towns. I also have long experience in local government. One of the biggest mistakes in housing made by local authorities was building enormous housing estates with a lack of facilities.

I became Lord Provost in 1954. At that time one of the issues for which we campaigned in the election and which enabled us to win the majority of seats in the council related to a scheme called the Fintry housing estate. I do not remember how many thousands of houses were on the estate. But the children in that development went to 15 different schools throughout the city because there was not a single school in the development. There were a few shops but some essential services were not available.

That was the main difference between the way housing was developed in cities in those earlier years and the way that it was developed in the new towns. In the new towns all the facilities were included. The schools were built, sometimes before even there were pupils. In the new towns the co-operation between the education authority and the development corporation was first-class. Industries grew. That was the main success of the new towns.

The important factor was that the co-operation of the tenants was sought by the local authorities. The facilities provided for the tenants such as are referred to in the amendment were possible because of close consultation between the development corporations and their tenants. That did not happen simply through the good will of members of the development corporation but because it was part of the function with which they were entrusted. They were not just building houses or factories. They were not just creating jobs. They were creating communities. They accepted that a community did not just mean houses, a school or a factory; it meant everyone working together.

It is important that that aspect should continue. Some provision along the lines of the amendment is necessary.

Lord Taylor of Gryfe

In an earlier discussion we spoke of transferring assets from the new towns. I felt that the noble Lord, Lord Carmichael, made very pertinent points. However we are now discussing an even more important matter—not the transfer of assets but of people's homes. It is a very intimate and important aspect of the life of the community.

Like other noble Lords I have had representations from the Scottish Local Authorities with New Towns and other bodies, including the Scottish Federation of Housing Associations. They have expressed surprise that at the present time tenants may not transfer to district councils. The Government have been coy about whether tenants will be given the option of district council landlords after the winding up of a development corporation.

The Government have said that district council landlords have not been ruled out; but neither have they ruled them in. It would be helpful if the Minister were able to assure tenants of their rights of transfer. Apparently surveys that have been undertaken in this field indicate that there is a preference for transferring to local authorities. It would therefore be useful if district councils were among the landlord options after the winding-up procedure.

Lord Sanderson of Bowden

The drill on winding up can more appropriately be discussed with the next amendment. Perhaps my noble friend might glean more from that discussion than from this debate, which deals with consultation. My ministerial colleague in another place Ian Lang, has been most assiduous in his conduct of the consultation process and the development corporations have played a very full part in stimulating and fostering a constructive public debate on the issues in their communities. The noble Lord, Lord Carmichael, is quite right: there has been considerable interest in housing.

However, perhaps I may answer the question of the noble Lord, Lord Hughes, on a previous amendment. He asked whether local authorities could be shareholders. The answer is, yes, they could be. In answer to the noble Lord, Lord Carmichael—since our discussion refers generally to new towns—no, public assets will not be sold off cheaply.

Lord Hughes

The Minister said that he would refer to housing. Are we discussing Amendments Nos. 17 and 18 together? I assumed that it was only Amendment No. 17.

Lord Sanderson of Bowden

We are discussing Amendment No. 17 only. Amendment No. 18 is a substantive one which I know that the noble Lord will wish to take separately. We are discussing how much consultation is going on, can go on or will go on.

I know that the noble Lords' concern, which is shared by everyone, whatever their party affiliation, is to maintain the momentum of the towns through the period of transition. I insist that the period of translation is very long. That reflects the point of the noble Lord, Lord Hughes, about George Younger's timescale for change. To undertake such transition effectively requires the participation and co-operation of everyone concerned. That is why in the White Paper and in a debate on a similar amendment in Committee in another place we made clear our wholehearted commitment to consultation as wind-up progresses. I understand that the development corporations readily consult with everyone concerned before advising their boards on appropriate action to be taken.

I trust that the noble Lord, Lord Carmichael, accepts the sincerity and constancy of the Government's and the development corporations' position on the issue of consultation. I can today again give the assurance that those most involved in the winding-up process in the new towns, in particular the Convention of Scottish Local Authorities and the Scottish local authorities with new towns in their areas, will continue to be included in the consultation process.

At this stage I shall refer to a document which many Members of the Committee will have seen—The Choice is Yours. It provides patent evidence that the Government take the matter seriously. Six thousand copies of the document have been distributed to tenants and some 120 associations and federations have responded to it. It sets out clearly the options that the Government consider will be appropriate at wind-up. I shall ensure that all Members of the Committee who are interested in the subject receive a copy of the document if they have not done so already.

Given the depth to which we are prepared to go into the matter, I do not believe that the amendment is necessary. I hope that the noble Lord will understand that we take the consultation process seriously, especially as regards the homes of the various tenants.

Lord Hughes

Can the Minister ensure that at least four Members on this side have copies of that document before the next stage of the Bill?

Lord Sanderson of Bowden

I shall ensure that all Members who have contributed to the debate receive copies of the document.

Lord Carmichael of Kelvingrove

That reply changes what I had intended to say, because I shall need to read the document. The Minister heard all Members on this side of the Committee speak of the importance that they attach to the selling of these assets. I wish that I had the Minister's confidence that they will be sold at a reasonable price. Whatever bricks and mortar are in the houses, they and other properties have been made acceptable by the work and the devotion of the people who built up the area.

A property agent in Scotland has said that industrial property is not high on the list of the average estate agent in Scotland. I have given away my notes, or I should have given the Minister the actual quotation. The agent believes that there will be a great deal of stripping of the best of the property. We do not know what will happen to the market in 10 years' time, but we are worried. We do not believe that the new towns consist only of bricks and mortar; they consist of a great deal more. I am sure that the Minister accepts that and I hope that those responsible for setting the prices and disposing of the property will also accept it. I beg leave to withdraw the amendment.

Lord Hughes

I have been passed a note referring to the Minister's comment that local authorities might become shareholders. I do not understand the note, which reads: Local authorities can be shareholders in local development companies but I understand this can only be done with the consent of the local development companies". Until there are shareholders there cannot be a local development company either to give or withhold consent. Therefore, if the local authorities are entitled to obtain shares in the company they will be part of the local development company from the outset. Will the Minister examine the situation again?

Lord Sanderson of Bowden

Of course I shall. The noble Lord has an advantage over me because he does not have the note that I received.

Lord Hughes

Perhaps I should be happier if I had not received my note.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove moved Amendment No. 18:

Page 27, line 11, at end insert: ("( ) In granting consent as provided for in subsection (2) above, but also in respect of the period from the date of commencement of this section, until the date of coming into force of the wind-up Order, the Secretary of State shall ensure that each tenant of any house owned by a development corporation, if that house may be transferred or disposed of to a new landlord, shall have the right to choose that the new landlord shall be one of the following bodies namely, the district council in which the new town is situated, Scottish Homes or such other body as may be approved for that purpose by Scottish Homes, provided that the tenant's choice of landlord is agreed by that body.").

The noble Lord said: The amendment is crucial because it seeks to ensure that new town tenants are provided with the right to transfer their tenancy to the appropriate district council both at wind-up of the new town and during the interim period. At present, tenants are allowed to choose to transfer to a limited range of landlords, including Scottish Homes. It is important that the choice is extended to include district councils because that is the express wish of many new town tenants. The amendment is supported by the Scottish Consumer Council, the Scottish Federation of Housing Associations and the Institute of Housing.

To some extent it was satisfying to note that a commitment was given in the White Paper to the effect that no individual new town tenant would have to change landlord during the period before wind-up. Such a commitment is welcomed by tenants. However, it is regrettable that no such specific provision is made to ensure that their wishes are provided for on the wind-up of a new town. Part III of the Housing (Scotland) Act 1988 granted all public sector tenants, including new town tenants, the right to choose a new landlord with effect from 1st April 1989. Regrettably, district councils are excluded from becoming receiving landlords under that legislation.

Independent surveys carried out early in 1989 by the district councils of East Kilbride, Cumbernauld and Kilsyth, Cunninghame and West Lothian showed conclusively that the majority of new town tenants wished to have the choice of transferring their tenancy to the appropriate district council now and at the time of wind-up. The results of those surveys were confirmed by the findings of a survey carried out by Market Research Scotland on behalf of the Scottish Office. The results were published in November 1989 in The Future of Public Sector Housing in Scottish New Towns. The survey identified that in an unprompted response 65 per cent. of tenants would then choose the district council as their new landlord and 50 per cent. would make the same choice on the wind-up of the new towns. In both instances only 7 per cent. of tenants were in favour of Scottish Homes as a new landlord.

The most recent survey of tenants' opinions in the new town was taken in May 1990 by Market Research Scotland on behalf of the five district councils using exactly the same methodology as that used in the survey undertaken on behalf of the Scottish Office. I am sure that the main results of the latest survey, together with a comparison of those obtained in 1989, are available to the Minister. I shall not read them out in full. The survey clearly demonstrates that tenant awareness of the Government's housing proposals is high and has increased since 1989. Landlord preferences have become more focused, with higher a proportion of tenants wishing to choose their district councils both now and on wind-up. To deny such a substantial number of new town tenants the right to choose district councils as their new landlords would run contrary to the Government's stated objective of maximising the tenants' choice.

The White Paper, The Scottish New Towns, The Way Ahead, provides for those tenants who have not transferred to other landlords on wind-up to be transferred to Scottish Homes. However, as only 7 per cent. of tenants found it to be an acceptable choice of landlord, many tenants would find themselves transferred against their express wishes. Although the White Paper does not dismiss the possibility of district councils becoming receiving landlords, no statutory right exists in the Bill to permit tenants that right to choose.

This amendment, fully supported by the surveys carried out, seeks to provide new town tenants with full choice as a statutory right. It should be borne in mind that tenants transferring to district councils would retain the right of tenants' choice and could opt for an alternative landlord at a later date. That is because of legislation passed some time ago.

I find it difficult to express fully the results of the survey because I have them in tabulated form. I do not have the Minister's facility to answer Written Questions. I am sure that the Minister will accept that it is the overwhelming view that people should be given the opportunity to opt for a district council as their landlord. Therefore, I hope that the Minister will be sympathetic towards this amendment. I am sure he will realise that this matter is causing a great deal of anxiety throughout the new towns and in housing circles in Scotland. I beg to move.

6 p.m.

Lord Hughes

I support my noble friend. I have received representations on practically every conceivable aspect of this from the new towns in Scotland. The chairman of the Glenrothes residents' association telephoned me a week last Sunday to let me know that a very recent survey showed that 83 per cent. of those who replied wished to transfer to the district council. In Livingston, the chairmen of five different tenants' associations—they appear to be organised on a sort of ward basis there—have all written to say that they wish to have the right, among others, to transfer to the district council. The same applied in East Kilbride.

I looked at what the Minister said on Second Reading. He said: I should like to mention the fact that I was somewhat disappointed by the reaction of CoSLA when it referred to: 'the deliberate exclusion of district councils from the transfer options available to new town tenants despite the Government's stated commitment to giving tenants choice'. I find those words difficult to reconcile with the clear statement contained in paragraph 5.10 of the 1989 White Paper on Scottish new towns". The Minister then goes on to quote exactly what is said in that White Paper. He adds: The Government have not changed their minds since publication of the White Paper. We remain committed to formal consultation with all the interested parties. We remain committed to the same list of potential recipients of development corporation housing as set out in the White Paper. For the sake of clarity, I will spell out again that list: it includes, housing associations, co-operatives, district councils and private or other landlords. I hope that the noble Lord will forgive me, but it is such an important area and it is most important that we get it right before we reach the next stage of the Bill's proceedings. I wanted to make the position absolutely clear". [Official Report, 18/6/90; col. 719.] The point is that the Minister is referring to what is said in the White Paper. Where does that appear in the Bill?

Lord Taylor of Gryfe

I have already spoken to this amendment. I did so when we discussed Amendment No. 17 and I have nothing to add. I apologise to the Committee and to the mover of the amendment for speaking to this amendment when we were discussing the disposal of assets. I can only add my voice and any persuasive powers which I have in support of this very reasonable amendment.

Lord Sanderson of Bowden

As the noble Lord, Lord Carmichael, said when he moved the amendment, this requires us to spend some time on the reply. I apologise in advance for taking slightly longer in replying than Members of the Committee

may want. However, it is a very important area and the noble Lord, Lord Hughes, is right that on Second Reading I made the point, I hoped, abundantly clear.

The amendment focuses on the single issue which has been presented by the party of the noble Lord opposite as the main reason for resisting the passage of the Bill. The noble Lord's honourable friends in another place profess surprise at the Government's policy on housing transfer as set out in the 1989 White Paper. I, too, must admit to considerable surprise that an amendment has now been tabled which is identical to that which was considered in another place. However, this matter is very important and I want to go straight to how we envisage that progress will be made after enactment of the Bill.

The Government's whole approach to winding up the development corporation is designed to secure results consistent with our principal objective; namely, to maintain the momentum and to ensure that the new towns continue to make their key contribution to the Scottish economy and the community. We have talked already about the successes of the new towns and again I pay tribute to those who have been involved in their development. The Government set out a timetable for wind-up in the White Paper. That timetable was requested by consultees in response to the Green Paper published in 1988. That sets out a realistic and orderly framework which, significantly, has been accepted by all sides in the various debates which have taken place on the subject.

That timetable spans virtually an entire decade. The Government's view, expressed quite clearly at paragraph 5.10 of the White Paper, was that the appropriate time to consider transfer of remaining development corporation housing was towards the end of wind-up and that that should be carried out after thorough public consultation. We made our views very clear. We have achieved substantial success in house sales where the growing majority of new town residents are home owners.

We expect that the right to buy and voluntary sales over the next nine years will raise the present figures to two in every three being home owners. However, we are also concerned to offer greater choice to those who choose to continue to rent. To those who see no good need to change their landlord. I must say that they will not be able to continue to rent from their development corporation after dissolution. The clear majority of present tenants—72 per cent. in the recent SLANT survey—see wind-up as the right time to take a decision as to a future landlord. That has been the Government's position since the publication of the White Paper, and it remains their view.

We see no advantage in allowing tenants to transfer now to the district council. That would be directly counter to the Government's commitment to reducing the size of the public rented sector and would not give tenants the time to examine fully the other renting options on offer, particularly housing associations and tenant owned or managed co-operatives. I know very well the movements by various housing associations particularly in regard to the new towns.

We on this side of the Committee are greatly encouraged by the recent SLANT survey, which found that people are more aware of the options on offer. Our leaflet, The Choice is Yours, to which I have referred, has undoubtedly helped levels of awareness. However, there is still some way to go in that area, as the SLANT survey shows. It is in the interests of tenants to make an informed choice at the appropriate time. SLANT seemed concerned with only one choice and it wants that to happen now at a time seen as inappropriate by the great majority of tenants in SLANT's own survey.

In the first three months of this financial year, the corporation has sold just under 900 houses of its stock. We now see housing associations actively participating in the new towns as economic success expands residents' interest in new types of housing tenancy. The trend to a smaller family size and the substantial numbers of young and single people seeking accommodation provide ready markets which housing associations are actively examining with some of the corporations.

I should refer to the pamphlet again. It is in the Library, but I shall ensure that Members of the Committee receive copies. I have highlighted one of the most critical parts of the document which has gone to tenants. It reads: Among the options the Government will consider [during wind-up] will be transfers to: housing associations, housing co-operatives, district councils [and] other landlords". I do not know what the Government could do to spell out more clearly their intentions for the wind-up of the corporations.

Lord Carmichael of Kelvingrove

Perhaps I may ask the Minister whether district councils would definitely be an option at the wind-up.

Lord Sanderson of Bowden

As I quoted from the pamphlet: Among the options the Government will consider will be transfers to housing associations, housing co-operatives, district councils [and] other landlords".

Lord Hughes

The Minister says: Among the options the Government will consider". Would it not have been better if the pamphlet had read, "Among the options which the Government will accept"? We know, particularly with this government, that consideration and decision are not always the same.

Lord Sanderson of Bowden

I must stand by the wording of the document and the information I have given to the Chamber on the matter.

Lord Hughes

Perhaps I could phrase my question another way. Does "consider" include "accept"?

Lord Sanderson of Bowden

In consultation everything must be taken into account. The Government must then make up their mind: they may or may not accept a specific option. I cannot give the noble Lord further guidance, as he well knows.

Lord Hughes

Perhaps the Minister will give the assurance that the main consideration which the Government take into account in the options will be the option the tenant wants?

Lord Sanderson of Bowden

I made it perfectly clear that the tenants are the people who matter in this exercise. That is the reason we came forward with this document for circulation. That is why we spelt out clearly when decisions have to be made. The Government will of course take into account what the tenants want.

Lord Hughes

The Government may take into account what tenants want, but will they necessarily accept what the tenants want?

The Earl of Perth

I am a little confused. I understand at the moment that there is a 10-year period in which to operate. The key question that arises is what will happen at the end of those 10 years. I heard a quotation from a document which I look forward to receiving. However, as I understand it, there is no certainty that at that time, if tenants want to stay with the district council, they will be entitled to do so. Is that right?

Lord Sanderson of Bowden

We are dealing not with tenants of the district council but tenants of the new town corporations which are to be wound up. The tenants cannot stay with the corporation because it will be wound up.

6.15 p.m.

The Earl of Perth

I may have phrased my question badly. Can we be satisfied that at the end of the 10 years, if the district councils disappeared, the tenants may stay with the new towns which take their place?

Lord Carmichael of Kelvingrove

The noble Earl, Lord Perth, says that he is confused. He is not alone. We are all in a state of confusion. Not having a copy of the pamphlet does not help. I know that the Minister is usually very courteous. There must have been some slip-up in the distribution system.

The Minister must be aware that the trend is that people are becoming more aware. The more aware they become the more they would like, on wind-up of the new towns, to go to district councils. A large number would perhaps like to go to district councils now. That indicates a feeling that they do not trust anyone else. One assumes that for a while the district council will still have the option of selling. I do not believe the Minister's interpretation of up to two-thirds owner occupation would necessarily be greatly affected.

I can only withdraw the amendment, but we shall need to bring it back when we have carefully considered the Minister's response and read the pamphlet. I may be very simple or perhaps totally confused. But, at the wind-up, tenants will obviously be able to go to Scottish Homes. However, they could go to Scottish Homes as soon as the process starts, long before the actual wind-up. They could go at any time to Scottish Homes, or perhaps a private landlord, right up until wind-up and thereafter, or at the point of wind-up. At the very best interpretation of what the Minister said, they will only perhaps have the option of going to the district council of their choice when the corporation is wound up; and even that is not certain.

We shall need to wait until we read the Minister's speech. I am sure that he will also write to us. We will go through his remarks with a tooth-comb and perhaps bring something back at the next stage of the Bill.

Lord Sanderson of Bowden

It is important that the noble Lord should study between now and the next stage of the Bill the differences in housing needs of the various development corporations. They are all different, and different considerations will apply when it comes to wind-up.

Lord Taylor of Gryfe

I should like to ask the Minister just one question. Can he tell me what the English legislation says? I understand from the noble Baroness, Lady Stedman, that in her area a ballot is taking place among tenants in the new town which is being wound up as to whether they wish to become tenants of the local authority, the district council, housing associations or otherwise. I wonder if there is any inconsistency in the legislation.

Lord Sanderson of Bowden

We prefer to deal with the Scottish situation as we are doing. We believe that that is the proper way to tackle the problem. I insist that the tenants have a prime interest in the whole affair. I should be misleading the Chamber if I did not say that the options contained in this famous document, which I shall circulate, are clearly spelt out. When the time comes the decision for the Government will be clear.

Lord Hughes

Did the Minister answer my question regarding where the White Paper commitment appeared in the Bill?

Lord Sanderson of Bowden

I did not answer that question because the commitment does not appear on the face of the Bill. There are very few clauses which deal with wind-up, but we are dealing with all the aspects of wind-up. I said that the commitment of the Government to the White Paper is absolute, and we shall carry through the whole operation of wind-up regarding housing in accordance with what is written in the White Paper.

Lord Hughes

I am sorry to sound like tweedledum and tweedledee but if the Government's commitment is absolute, what is the objection to having it in the Bill?

Lord Sanderson of Bowden

As I understand it, the noble Lord's amendment is to transfer the whole of the development corporation housing to the local authority. As I understand it, that is the amendment with which we are now dealing.

Lord Carmichael of Kelvingrove

I believe not. The amendment suggests that a tenant of a house owned by a development corporation, if that house may be transferred or disposed of to a new landlord, shall have the right to choose that the new landlord shall be one of the following bodies namely, the district council in which the new town is situated, Scottish Homes or such other body as may be approved for that purpose by Scottish Homes, provided that the tenant's choice of landlord is agreed by that body". That is fairly clear.

I should dearly love to press this amendment to a Division but I do not know what the amendment will be changing because I have not completely understood the interpretation that the Minister has put on the Bill. Therefore, because of the difficulties involved I am inclined at this point to withdraw the amendment. However, before doing so I see that the noble Earl, Lord Selkirk, is anxious to speak, and on housing he must be heard.

The Earl of Selkirk

I speak with great ignorance because I have not seen the White Paper. I did not realise its significance and I know that I have a duty to the Committee to read it carefully. However, perhaps I may ask one question. To whom is the development corporation going to transfer the habitations of the people in the corporation? The noble Lord has spoken about the success of the new towns. That is splendid. But nothing is more important for success than the good habitation of the inhabitants. We must know who is to have these properties, whether now or in the future. We all attach great importance to that.

Lord Hughes

I hope the Minister will reconsider this amendment; otherwise we must come back at the next stage of the Bill. He appears to be arguing against the amendment under the misapprehension that it relates to compulsory transfer to district councils. All that the amendment does is insist that the district councils are among the options available. If that is what is said in the document that the Minister has in front of him, I cannot see the objection to putting it in the Bill.

Lord Sanderson of Bowden

I refer my noble friend to what I said about the options that will be available prior to the ultimate winding up of these corporations. The options available which the Government will consider at the time, after consultation, for all those tenants in the corporations will be housing associations, housing co-operatives, district councils and other landlords. However, as has been clearly stated by the Government, if at the final wind-up there is any residue, those houses would have to be taken over by Scottish Homes. We very much hope that it will be a very small number indeed.

Lord Carmichael of Kelvingrove

Having listened carefully to that final comment by the Minister the matter becomes even more confusing. There is no way out except to take the amendment back, read what the Minister said, re-read the appropriate parts of the White Paper and the pamphlet provided by the Minister and on the basis of that reconsider the whole matter and bring forward an amendment at the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Mackie of Benshie moved Amendment No. 19:

Page 28, line 16, at end insert: ("( ) At a date not later than two months before the date of dissolution of a development corporation, the Secretary of State shall nominate the relevant District Council to carry out the following functions:

1. (i) establish a single housing list (in this section a "housing list" means a list of applicants for rented housing held by housing associations, approved landlords. local authorities and Scottish Homes within a new town area, kept by a District Council in connection with the allocation of housing).
2. (ii) ensure, after annual consultation with the Secretary of State, relevant housing associations and other housing bodies, that a reasonable number of lets will be made available from each housing body to homeless people, to whom the local authority has a duty under section 31(2) of the Housing (Scotland) Act 1987.

( )[...] The Secretary of State, prior to consenting to any disposal of housing stock by any development corporation, shall require that the new landlord give written undertakings to comply with determinations made by the nominated body in terms of section 36D(5) above.").

The noble Lord said: This amendment was put to me by Shelter and I am glad to move it because it deals with an extremely important part of housing policy—that is, the provision of housing for the homeless and the long list of people wishing to rent houses.

The amendment seeks to combine housing choice, efficient allocation according to need and the continuing provision of homeless accommodation which is presently allocated by the development corporation. The position has become gradually worse—in fact, not gradually but quickly—in the district council areas where the new towns are situated. In Glenrothes the number of homeless in 1983–4 was 225 and it is now 1,042—an increase of 363 per cent. In the West Lothian District Council (Livingstone) the figure has risen from 103 to 302, an increase of 193 per cent. The position is not so bad in Cumbernauld where it was 343 and is now 341. In Cunninghame District Council (Irvine) the figures are about the same. In East Kilbride the figure has increased by 68 per cent. Those are serious figures and action needs to be taken to ensure that we have a competent system of allocating housing to the homeless under a great number of new landlords and to ensure that whole matter does not go by default.

The amendment also seeks to enshrine the nomination rights of district councils in statute and to place a contractual obligation on any new landlord who is taking over property—on the last amendment, the Minister said that the options were many, with a large number of different bodies—to provide the district council with nomination rights to a number of places provided by the new landlords. This would ensure the continued provision of accommodation for the homeless—a provision that would be flexible to changing needs.

Homelessness is only one indicator of the importance of making statutory provision for those in the greatest housing need once the new towns are wound up. New town waiting lists also show a current high level of demand for rented housing, while the waiting lists of district councils in which the new towns are situated indicate similar high levels. I shall not read out the figures, but since 1981 they have increased by an average of about 100 per cent.

In the past development corporation housing has been allocated according to need rather than ability to pay. As the stocks of rented housing in new towns has diminished through the promotion of right-to-buy and rents-to-mortgage schemes it is essential that the remaining stock is allocated by social landlords to those in greatest need. Rather than have a separate waiting list for each landlord, a single list held by a nominated body would be an accurate indicator of housing need in an area and would allow for efficient allocation to those in greatest need.

In another place the Government replied that a single housing list would be an authoritarian imposition that would not work effectively in Scotland. In fact, it would be the only effective method of providing for the needs of people who wish to rent housing and who desperately need it; in other words, the homeless. Following the dissolution of the development corporations the nature of housing in the new towns will change. It is envisaged that rather than one single landlord a wide variety of landlords will take over development corporation stock. That will impede the hitherto efficient allocation of housing according to need, whether through the homelessness route or waiting list channels. The amendment simplifies the position and proposes a method of allocating housing. I beg to move.

Baroness Carnegy of Lour

The noble Lord deals with an important point. However, perhaps he will consider looking at the community care provisions which by the time this Bill is enacted we hope will be well on the way and working smoothly. The regional council, which will be responsible for community care, will be considering all housing possibilities for the people who need it. Discussions will be carried out with the district councils and with Scottish Homes in regard to the housing they have available. I wonder whether much of that will overlap with this amendment.

6.30 p.m.

Lord Mackie of Benshie

I dare say that it will. It looks as though the district council will have far fewer houses of its own to allocate. It is for that reason that Shelter has put forward the suggestion that it should handle the list of needed housing and allocate the homes owned by different landlords to the homeless. I think it is a straightforward matter. I know that there are snags and that there may be some overlapping. However, this amendment fulfils a need.

Lord Sanderson of Bowden

The noble Lord's honourable friend in another place, in moving her identical amendment, was concerned that housing should be allocated on the basis of need and that adequate provision should be made for the homeless and for single people. She also made reference to the problems of homelessness in new towns. She claimed that current levels of homelessness in the district council areas in which the new towns are situated are high.

I wish to deal with these points, to which the noble Lord referred when moving this amendment. I make it clear that the Scottish development corporations manage their stocks in a very professional way. Regular purges of their waiting lists are carried out to ensure that individuals do not suffer any delays in housing allocation by outdated information—a situation that is commonplace with district council waiting lists.

Applicants on waiting lists are accorded priority according to their needs. That is done using a points system which is essentially identical among all Scottish public sector landlords. That system recognises individual need on a spectrum from the urgent, medically-based need for a house fitted out in a particular way for a disabled person to that of 18 year-olds who still live with parents and who put their names on the lists as a matter of course.

In considering the capital buildings programme of the corporations, the Government look very carefully indeed at the prevailing level of demand and at the internal composition of that demand. They allocate resources accordingly. The Government have been concerned to ensure that East Kilbride Development Corporation, for instance, has substantial resources available in order to meet the high level of real housing demand. The internal composition of that demand shows numbers in high priority groups that give us cause for concern.

It is significant that in East Kilbride the council and the development corporation have voluntarily concluded to operate a shared housing list. That arrangement works very well. The list does not extend to housing associations or other landlords. It is our firm view that any such pooling of the housing waiting list should be made voluntarily. Our support for the concept in the White Paper was framed in that context.

The honourable lady in another place referred to the problems of homelessness in new towns. She made the claim that the current levels of homelessness in district council areas in which the new towns are situated are high and that the effect of failing to establish nomination rights after the new towns are dissolved will increase the misery and hardship of those on the waiting list.

The honourable Member for Livingston in another place also made a wholly erroneous claim about the number of houses kept vacant in the town to assist with housing key workers and that these houses could be used to house what he claimed were the many homeless in the town. I really must put the record straight. In Cumbernauld for the three years 1987–88, 1988–89, and 1989–90 there were successively 90, 90 and 107 homeless nominations provided by the development corporation, all of which were taken up. For the current year the agreed figure is 85.

In East Kilbride for those same years, 28, 37 and 37 homeless persons were found accommodation in development corporation housing. In Glenrothes for those same years, 116, 110 and 62 were accommodated. In Irvine over the same three years, three were accommodated. For these four corporations no request from the district councils was ever turned down. The district councils themselves have invariably expressed their gratitude to the development corporations for their constructive partnership in dealing with these matters.

In Livingston for those same years, 14, 76 and 23 nominations were made available and only 10, 23 and 9 were taken up. I suggest that that is hardly evidence of a surfeit of demand which was claimed to exist by the honourable Member whose constituency is part of that town.

The reality is that the development corporations that have less than one house in five in their areas, compared with the district councils' one in three, have made an honourable and constructive contribution to meeting the needs of the homeless. Their contribution is matched by the commitment given by this Government in the White Paper and in the debates on the Bill both here and elsewhere. We have pledged to consider the need to retain nomination rights to provide for the homeless when making large-scale disposals of development corporation housing to successor landlords. That commitment stands.

I am sorry that I have gone on at some length about this matter but it is essential that we get the record straight concerning the new towns and the corporations in this very difficult area of homelessness.

Lord Mackie of Benshie

The Minister has underlined the need for consultation and also how usefully the district councils and the corporations have worked together. The development corporations will disappear and this amendment is to provide a system which is as good as the one that previously operated. That is the purpose of the amendment. By then the housing stock will be widely spread. The Minister gave very significant figures; namely, one in three houses for the district councils and one in five for the development corporations.

A great many of these houses will disappear. I trust and hope that the Minister's claim that the Bill will contain provisions for making future landlords allocate houses will become a reality. I shall study what he said. The figures I quoted were from surveys carried out by Shelter. I do not know about the figures given by the Member for Livingston. Shelter may exaggerate or take a more sympathetic view, which is its function, than the district councils when it comes to the hard fact of allocating a house. Nevertheless, the figures are significant in showing the trends in homelessness. No doubt I shall receive advice from other quarters on what the Minister said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carmichael of Kelvingrove had given notice of his intention to move Amendment No. 20:

Page 28, line 51, at end insert: ("[...]) At a date not later than dissolution a number of houses for allocation to the homeless, as may be agreed by the development corporation and the district council, and failing such agreement. as may be determined by the Secretary of State, shall be transferred to the district council in which district the new town is situated.").

The noble Lord said: This amendment is quite close to that moved by the noble Lord, Lord Mackie of Benshie, though there are some important differences between them. It would be trying for the Committee to go through my amendment just now. Perhaps it will be more profitable for me to read what the noble Lord said and what the Minister said in response and then return at Report stage with perhaps a joint amendment with the noble Lord, Lord Mackie. Therefore, I do not propose to move Amendment No. 20.

[Amendment No. 20 not moved.]

Lord Carmichael of Kelvingrove moved Amendment No. 21:

Page 28, line 51, at end insert: ("( ) The dissolution order referred to in subsection (1) above shall among other things require the transfer of any houses provided by the development corporation which are specially designed or adapted for the needs of persons of pensionable age or disabled persons who have been transferred to the district council of the district in which the houses are situated.").

The noble Lord said: This amendment also asks for housing to be allocated to the local authority on the wind up. The amendment is for people with special needs. The noble Lord will remember the problems that we had. I believe that we actually gained something when we were discussing a housing Bill a couple of years ago. The point we are concerned with is that the houses have been specially designed or adapted for persons of pensionable age and disabled people. We believe that the houses should be protected by being transferred to the district councils.

There appears to be some doubt about local authority nominations being accepted by a future landlord. As the statutory obligation to provide such housing ultimately falls on the appropriate district council, the amendment provides for the requisite number of houses to be transferred without condition to the local authority on the wind up of the new towns. The nomination rights will be incorporated in statute for all future special needs projects irrespective of the landlord.

In the White Paper the Government concluded that nomination rights only should pass to the district council either during the wind-up period or at dissolution. Given the uncertainty as to the future landlords of these houses, there is quite genuine and serious doubt as to whether nominations will always be accepted. Should such doubts materialise it would be necessary for the need to be met by district councils. That would create over-provision, the very concept that the Government are opposed to. From 1991 local authority social services departments will be responsible for answering the needs of individuals and developing a package of services to meet those needs. Those requirements are laid down in the National Health Service and Community Care Act.

The provision of suitable housing is fundamental in meeting the Government's objectives and leaves much greater scope for social services departments to work with district councils. Factors such as the growth in the numbers of elderly, the increasing numbers of mentally handicapped and mentally ill people being discharged from institutions, the number of disabled people requiring suitably adapted property and the range of problems which they are likely to face all point to an increasing role for district councils. Diminishing stock through the right-to-buy legislation could prevent district councils from fulfilling their function in special needs provision. From current trends it is unlikely that the existing housing associations will be able to meet the needs of those in this category.

There are shortfalls in all districts in the provision of specially adapted properties, supported accommodation and sheltered and amenity housing. Local authorities have been able to solve some problems by a more sensitive approach in the use of their housing stock. They have been able to do so by transferring under-occupying tenants to smaller accommodation, by converting properties and by increasing co-operation with the private sector. Nevertheless, demand is outstripping supply.

If district councils are to meet their obligations as laid down by the Government it is essential that the amendment should be placed on the face of the Bill. We have been through this argument before. It is sometimes necessary to spend large sums of money on adapting property for disabled people. We believe that those houses should be in the hands of district councils. In the National Health Service and Community Care Bill we gave them responsibility for looking after these people. The wording of the amendment may not be acceptable but the sentiment is exactly as we should like it. I hope that the Minister will agree. I beg to move.

Lord Sanderson of Bowden

The provision of special needs housing in the new towns is fundamentally important. The corporations have been making steady progress over the years in reducing their waiting lists by attracting the private sector and housing associations to participate in various schemes and building quality developments themselves, sometimes in partnership with the district councils concerned. The corporations continue to work actively with voluntary and charitable groups to provide housing and related day care and other facilities. I refer to the Red Cross housing development at Irvine which will open next spring and which will provide 40 units for the very disabled in Ayrshire. They will also continue to negotiate with the private sector and identify suitable sites which can be made available to prospective developers to provide special needs housing or sheltered housing for the elderly. Housing associations have recently expanded their activities in the new towns, particularly on special needs provision. The purchase of the Hillcrest development at Cumbernauld by Bield housing association is a good example of how housing associations' expertise in this area is being put to good use.

I do not see a good reason why all special needs housing should automatically transfer to a district council as a number of agencies are well able to undertake this kind of provision. However, as the noble Lord said, nomination rights for such housing will pass to the district councils at wind-up. That was made clear in the White Paper. Consideration will be given during the consultation on housing transfer towards the end of wind-up as to whether it would be appropriate for an element of special needs accommodation to transfer to the district councils at dissolution. That is as far as I can go. I cannot agree to the absolute requirement proposed by the amendment. The sentiment put forward in the amendment is acceptable to the Government. When the noble Lord looks at what I have said he will recognise that his sentiments and those of the Government are pretty well in line.

Lord Carmichael of Kelvingrove

We are not always convinced that the Government's sentiments are right. That is why we keep asking for amendments on the face of the Bill. I have no doubt about the noble Lord's sentiments and good intentions but he does not run everything. We shall study his statement with great care. We may refine our amendment to accommodate what he has suggested and return to the matter at a later stage of the Bill. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 33 agreed to.

Remaining clauses and schedules agreed to.

House resumed: Bill reported without amendment.