HL Deb 28 July 1998 vol 592 cc1489-98

(" .—(1) The Scottish Executive shall make appropriate arrangements with a view to securing that its functions are exercised with due regard to the principle that there should be equality of opportunity for all people.

(2) After each financial year of the Parliament, the Scottish Executive shall publish a report containing—

  1. (a) a statement of the arrangements made in pursuance of subsection (1) which had effect during that financial year, and
  2. (b) an assessment of how effective those arrangements were in promoting equality of opportunity.").

The noble Earl said: The amendment seeks to provide equality of opportunity. This appears to be a very good measure in the Government of Wales Bill. I tabled the amendment to see how such a provision would apply in this Bill. I believe that the intention of the amendment is clear and I shall not say any more. I beg to move.

Baroness Ramsay of Cartvale

The new clause reflects a concern to support equal opportunities which I wholly share. I have already spoken to this in Committee. Equality of opportunity will be fundamental to the Scottish parliament both in the way it conducts its business and the policies it adopts through legislation. Our White Paper made this clear. The matter of equal opportunities, as noble Lords will recall from an earlier debate, is generally reserved: it is right that there should be common standards across the Border. However, the Scottish parliament will be able to encourage equal opportunities generally. The exceptions to the reservation are designed to ensure that the parliament can exercise a role in respect of equal opportunities such as by supporting advertising campaigns and developing non-discriminatory policies in all devolved areas. The parliament will also be able to improve duties on certain public bodies to make arrangements to secure that their functions are carried out with due regard to the requirements of equal opportunities law.

The new clause would impose new duties on the Scottish executive to observe equal opportunities in the exercise of its functions and would require an annual report. It seems to me that it should be for the Scottish parliament, not the Bill, to impose such duties on the Scottish executive. This is one of the reasons for which provision is made in Section 2, Head 11, in Schedule 5 for the Scottish parliament to impose duties on certain public bodies to make arrangements with a view to securing that its Scottish functions are carried out with due regard to the need to meet the requirements of equal opportunities law.

Amendments Nos. 222B to 222E which we debated yesterday clarified what the Scottish parliament would be able to do in this respect. It will be able to impose this duty on any member of the Scottish executive, so the Scottish parliament will have the power to impose duties on the Scottish executive to make arrangements with a view to securing that its functions are carried out with due regard to the need to meet the requirements of equal opportunities law.

We believe that this is an area in which the Scottish parliament can be expected to take the lead. I hope that I have said enough to convince the noble Earl that the amendment is unnecessary and that he should seek leave to withdraw it.

The Earl of Balfour

I am surprised it is regarded as necessary that an annual report should be made on the matter. I had not intended to take the matter that far. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 50 [Devolved competence]:

Lord Sewel moved Amendment No. 259:

Page 23, line 6, leave out second ("so") and insert ("in such a way").

On Question, amendment agreed to.

[Amendment No. 259A not moved.]

Clause 50, as amended, agreed to.

12.45 a.m.

Clause 51 [Functions exercisable with agreement]:

Lord Sewel moved Amendment No. 259AA:

Page 23, line 8, after ("provision") insert (", or any provision not contained in an enactment,").

The noble Lord said: Amendment No. 259AA would extend the scope of Clause 51(1) so that it would disapply non-statutory as well as statutory requirements for functions transferred to the Scottish ministers under Clause 49 to be exercised after consultation with, or with the consent, of another minister.

At present the clause disapplies only statutory requirements. However, the case for disapplication applies as strongly for non-statutory requirements. For example the Royal Charters of Scottish Sports and Arts Councils provide for the form of annual statements of account to be determined by the Secretary of State with the approval of the Treasury. After devolution the function of determining the form of accounts will be exercisable by the Scottish ministers, as would the function of approving their own determination. That clearly makes no sense, and so Clause 51 as amended will remove the unnecessary approval requirement.

The Scottish ministers can be expected to develop their own internal mechanisms for financial control and, as they will be accountable to the Scottish parliament, it would generally not be appropriate for the requirement for the Treasury's consent to be retained, except in a few special cases which we have provided for in the Bill.

I trust that with these explanations the Committee will agree that this amendment is necessary, and I beg to move.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 259B:

Page 23, line 13, leave out from ("enactment") to end of line 15.

The noble Lord said: This is a serious amendment, and will take some time. I shall probably withdraw it and return to it at Report, but there we are. This was labelled the "Margaret Beckett amendment" when it was in the House of Commons. It has now of course changed to become the "Peter Mandelson amendment" and that, as far as the Scottish parliament and Scottish economy are concerned, is much, much more serious.

As it stands, Clause 51(2) of the Bill excludes two paragraphs of Schedule 32 to the Local Government, Planning and Land Act 1980 from subsection (1), which states that, a Minister of the Crown to exercise a function with the agreement of, or after consultation with, any other Minister of the Crown shall not apply to the exercise of the function by a member of the Scottish Executive by virtue of section 49". We are into industrial and economic policy. The Local Government, Planning and Land Act which is being excluded by this clause designates enterprise zones. Paragraph 5 designates enterprise zones and begins: If a body adopts a scheme under this Schedule, the Secretary of State may (if he thinks it expedient to do so) by order designate the area to which the scheme relates as an enterprise zone". It goes on to say: No order may be made until … the expiry of the period of six weeks commencing with the first publication (whether in the London or Edinburgh Gazette…)", and that should please the noble Earl, Lord Mar and Kellie, who I believe has an amendment relating to the Edinburgh Gazette somewhere else in the Bill, under paragraph 3(7) above, or … if an application in relation to the scheme is made under paragraph 4(1) above, the time at which any proceedings arising out of the application are disposed of. The power to make the order shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament, and"— naturally— only with the Treasury's consent". If the noble and learned Lord, Lord Simon of Glaisdale, were with us at this time of night he would probably draw the Committee's attention to the fact that those words are unnecessary.

Paragraph 15 of Schedule 32 to the Act deals with modification orders by the Secretary of State. It states: Subject to sub-paragraph (3) below, the Secretary of State may (if he thinks it expedient to do so) by order modify any order made under paragraph 5 above". Paragraph 15(2) states that an order under this paragraph, may extend the period for which the zone is to remain an enterprise zone; and may provide…if the enterprise zone is in Scotland, that the enterprise zone authority shall be the planning authority exercising district planning functions…for the zone for different purposes of the 1972 Act, or in relation to different kinds of development". The power conferred here does not include, Power to alter the boundaries of an enterprise zone; power to designate a different enterprise zone authority for the zone; or power to reduce the period for which the zone is to remain an enterprise zone".

I have read out those parts of the Act to emphasise how important these powers are with regard to enterprise zones.

Enterprise zones are an important part of the way we attract industry and commerce to areas of Britain where unemployment is high and employment prospects are poor. There are some criticisms of the enterprise zones. Those criticisms can come from other parts of the kingdom where it is felt that the special provisions of an enterprise zone can poach a company from one place to another. If my recollection serves me aright, an issue was raised in this House recently about a company that left, I think, Berwick and moved to an enterprise zone. It was said by those worried about Berwick's position, understandably in the light of subsequent closures by Dawson, to be unfair. I have some sympathy when enterprise zones are used like that.

When my noble and learned friend Lord Fraser of Carmyllie was MP for East Angus, he had a similar problem, although I believe that he was the recipient of the move from one area of Scotland to an assisted area. It can cause difficulties. But those difficulties are as nothing compared with the advantages an enterprise zone can confer on an area when inward investment is sought.

What worries us about this clause is that it is clear to us—it is why we have nicknamed it the "Margaret Beckett amendment"—that the Government are planning to end Scottish control over inward investment matters by centralising those powers in the DTI. This clause centralises those powers in the DTI. Indeed, Mr. Ian McCartney, a DTI Minister (I am not sure whether he is still a DTI Minister; I suspect that he is) confirmed last November that the department had plans to strengthen Whitehall's control over Scottish aid packages aimed at wooing major job creation projects by multinational companies. That was reported in the Scottish newspapers too.

I have already raised this matter in relation to other issues. But it is related to assisted area status which is very important indeed. Locate in Scotland, Scottish Enterprise and Highlands and Islands Enterprise have been successful in bringing new jobs into Scotland, in particular into assisted areas, and in safeguarding jobs there. In 1995–96, the number of new or safeguarded jobs associated with inward investment was at a higher level than at any time since Locate in Scotland was set up in 1981. Indeed, 10,136 of 12,500 jobs were new jobs; and that was the highest figure ever. It was an increase of 1,000 on the corresponding figure for 1994–95. These jobs are important. Over the five years to March 1996 there were 400 inward investment projects with an investment total of £3.4 billion and 50,000 jobs associated with them. We are talking about something that is of huge importance to the Scottish economy. Everyone in Scotland knows how successful we have been in attracting US investment, and the United Kingdom as a whole has been very successful in attracting Japanese investment. This is particularly important in Europe's semi-conductor industry. In Scotland, what is called Silicon Glen now produces 13 per cent of Europe's semi-conductors.

I have indicated, as briefly as I can in view of the serious nature of the subject, the importance we attach to aspects such as assisted area status and how suspicious we are of the Department of Trade and Industry. That suspicion is increased by the arrival of Mr. Peter Mandelson at that department. I refer to the proposal in Clause 51.

My honourable and right honourable friends in another place and my noble friends here are extremely suspicious that this power will be taken away from the Scottish parliament and placed here where the defender of Scotland's interests will be a Secretary of State for Scotland who, frankly, will not have nearly as much clout as the Secretary of State has had to date, for reasons we have touched upon today.

If the Minister tells me that I need not worry because Mr. Brian Wilson has been sent to join Mr. Peter Mandelson, I have to tell him that my worries merely increase because, after the incident of the student fees at Scottish universities, I would not depend on Brian Wilson to defend any Scottish interest at all, and against Mr. Peter Mandelson I suspect he would not even be in the game; if he could not defend Scotland's interests against the noble Baroness, Lady Blackstone, what chance would he have against Peter Mandelson?

Even if he were to be successful in the short term, he is not always going to be the Minister at the Department of Trade and Industry, nor will there always be a Scottish Member at the Department of Trade and Industry. I just feel that this is a very difficult position for the Scottish minister, some of the Scottish executive and the Scottish parliament. Here is a power that is important to Scotland: it relates to the designation of assisted areas, the changing of assisted areas, increasing the time during which the assisted areas can operate, yet the Scottish parliament will not have anything to do with it. I find that situation very worrying. I hope that the Minister, even at this late hour can give me an answer which relieves a worry of mine and of some of my noble friends, who, had they been here this evening, would have gone into this matter in greater detail. I beg to move.

Viscount Thurso

I am grateful to the noble Lord, Lord Mackay of Ardbrecknish, for that comprehensive explanation because I spent most of this afternoon trying to work out what this meant. I even went so far as to go to the Library and photocopy both the paragraphs. I can confirm that, with one very small exception, the noble Lord read them out perfectly.

I would like to comment generally on the issue of assisted area status and enterprise zones. In this I concur with the noble Lord; these are a very important tool in Scotland, one which is much appreciated and which has been responsible for bringing in much needed jobs in areas with a particular need. I suspect that we are all in agreement on that matter.

I shall be very interested to hear what the Minister has to say. I had read the combination of Clause 51 and Clause 49 differently and put a slightly different interpretation on it. If these matters are taken away from Scotland to be dealt with by the UK Parliament, that will be a retrograde step. I hope that the Government will look at devolving these matters.

1 a.m.

Lord Sewel

I shall try to deal with the fears and perhaps unwarranted nightmares of the noble Lord, Lord Mackay of Ardbrecknish, just by pointing out that Clause 51 is about Treasury control of enterprise zones. It has nothing to do with the DTI or whoever happens to be the President of the Board of Trade. We can remove the DTI from this debate entirely.

Lord Mackay of Ardbrecknish

I am grateful for that piece of comfort. But I have to say that, after all my years of dealings with the Treasury, I am not sure that I would not prefer the DTI.

Lord Sewel

I am only trying to help the noble Lord to get a good night's sleep. Clause 51 disapplies generally any requirement to consult or act with the agreement of a Minister of the Crown in respect of functions which are within devolved competence and which therefore transfer to the Scottish ministers under Clause 49. In general, it would not be appropriate for the UK Government to have a veto over action by the Scottish ministers within devolved competence. Rather, it should be for the Scottish ministers to develop their own control mechanisms.

The noble Lord's amendment would delete the exception to this general rule—the requirement to obtain the Treasury's consent prior to exercising powers under paragraphs 5 or 15 of Schedule 32 to the Local Government, Planning and Land Act 1980. These powers relate to the designation of enterprise zones. As Members of the Committee will be aware, perhaps the most distinguishing characteristic of enterprise zones is the considerable tax advantage which designation brings. It is because of that reason there is a proper need to seek Treasury approval.

The Treasury consent requirement is essential for the continued oversight of the tax privileges conferred by the grant of enterprise zone status. With this one proviso, the Scottish parliament will have competence for matters relating to economic development, including area regeneration through the use of enterprise zones. I have already brought forward an amendment to Schedule 4 (Amendment No. 167A) entrenching the consent requirement so that it is outwith the legislative competence of the Scottish parliament.

As regards assisted areas, in an earlier debate the former Secretary of State for Scotland, the noble Lord, Lord Lang, made an important contribution. He pointed out and agreed with the case that the designation of assisted areas could not be devolved to the Scottish parliament simply because of the EU requirements that member states were allocated a percentage of the population that could be covered by assisted area status and the further requirement that in drawing the lines on the map they had to follow a common methodology within the member state. Therefore, it was impractical to devolve the drawing of assisted areas because of the EU requirements for commonality within the single member states.

Perhaps I may touch on inward investment generally. The White Paper made it clear that there would be a concordat on financial assistance between all parts of the UK. In that concordat, we are seeking to have simple and transparent arrangements based on co-operation and partnership. We hope shortly to be in a position to publish the draft concordat. It will allow Locate in Scotland to maintain its excellence of securing inward investment for Scotland. It will also give assurance of value for money for the taxpayers and fairness to all parts of the United Kingdom, while allowing effective negotiations to attract inward investment projects.

I understand and appreciate the concern of the noble Lord, Lord Mackay of Ardbrecknish, to ensure that we have a strong and effective regional development policy and strong and effective regional development tools at the hand of the Scottish executive. I believe that we do and I honestly believe that his concerns are unfounded. I hope that he will be able to withdraw the amendment.

Lord Mackie of Benshie

Will the Minister tell me whether the money comes out of the block grant or direct from the Treasury? Is the only reason for Treasury permission because of the tax advantages?

Lord Sewel

Yes, the only reason for the Treasury permission is because of the considerable tax advantage that enterprise status provides. Basically, if you went around creating enterprise zones at your own hand, that would very quickly have an effect on taxation and macro-economic policy generally. It is because of that particular characteristic of enterprise zones that there is the requirement for Treasury consent.

Lord Mackay of Ardbrecknish

I am grateful to the Minister for that explanation. I understand the point about the Treasury. The Treasury's consent is one thing. I wonder whether the Scottish parliament will be able to suggest enterprise zones to the Treasury. In other words, will the Scottish parliament be able to make a proposal that such and such a place which may have had serious closures, or whatever it may be, should be made an enterprise zone? The Treasury will then be able to consider that. Whether it gives its consent is another matter. But will the Scottish parliament or executive be able to trigger that? If the Minister cannot tell me now, perhaps he will write to me so that we can consider the issue.

Lord Sewel

I shall write to the noble Lord but this falls under the general heading of trying to maintain the best and most effective dialogue between the Scottish parliament and UK departments. That would be an example where one would wish to see the most effective dialogue possible.

Lord Mackay of Ardbrecknish

That reply probably means that yes, the Scottish parliament would be able to say to the Treasury, "We think you should have an enterprise zone." I can understand that the Treasury may say "We would be quite happy with that but you have rather too many. If you have that one, you may have to lose one. Would you agree to us removing enterprise zone status?" I can understand that.

I see the point of the Treasury's consent being needed. But I am not entirely persuaded about that part of the drawing of the boundaries and that the suggestion of an enterprise zone or an assisted area cannot be devolved. After all, the parliament will have to act under EU law and regulations in many spheres, including agriculture and fishing which we have discussed on a number of occasions. Therefore, I do not see a problem with the Scottish parliament having to operate within EU rules when it comes to these matters because it will have to do that in other areas.

Lord Sewel

Perhaps I may go further on the earlier issue as to whether the Scottish parliament can suggest enterprise zones. The simple answer is yes because it is Scottish Ministers who will actually designate enterprise zones, subject to the Treasury consent. That is how the relationship will work.

Lord Mackay of Ardbrecknish

While I accept that the dead hand of the Treasury tends to be everywhere, the Treasury does occasionally give consent for enterprise zones. It has done so in the past. One hopes that it thinks they are good value for money as regards the number of jobs that have been brought to this country.

For the moment, I shall thank the Minister for his reply. I shall consult my noble friends who, from their experience in ministerial office, know a great deal more about these matters than I do. We may return to the subject on Report; on the other hand, the Minister may have satisfied me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 51, as amended, agreed to.

Clauses 52 and 53 agreed to.

Lord Carter

I beg to move that the House do now resume.

Moved, That the House do now resume.—(Lord Carter.)

Lord Steel of Aikwood

I understand that the Motion is debatable. Therefore, before we agree that the House do now resume, I think that we should press the Chief Whip to be a little more frank with Members of the Committee as regards his intentions. In other words, is it his expectation or even his hope that we can conclude these Committee proceedings on Thursday, bearing in mind the fact that we have to finish by 11 o'clock? I am genuinely seeking information here and, if that is not his hope, it will mean that we will have to resume the Committee stage in the spill-over.

If that is the case, perhaps the noble Lord can give us two undertakings. The first is that this Bill will have clear priority, given the demands of the Irish legislation which we all understand; and, secondly, that he will move a Motion to dispense with the requirement to have two weekends between the completion of the Committee stage and the commencement of the Report stage. Without that, we shall find ourselves seriously behind in proceeding with the Report stage of the Bill.

Lord Carter

There has been agreement that we will get as far as we can on Thursday, and if we need any time in the spill-over we have allowed a day for this in the first week back. I believe that that should be enough. I cannot give the undertaking regarding the truncation of intervals because that is up to the usual channels. As I said, we have allowed a day should we need it. We realise that we are in fact short of time on this Committee stage because of all the other pressures on our time. We have allowed an extra day during the first week back, which I believe is the first Tuesday, when we should be able to finish the Committee stage.

Lord Mackay of Ardbrecknish

Before the Motion is put, perhaps I may express my gratitude to the noble Lord, Lord Carter, for his indication that we will have a day in the spill-over. That will actually make up for the number of half days we have lost. I am most grateful to him.

Lord Carter

I should point out that it may well be that the day allocated will be quite a long day, but we will finish the Committee stage on that day.

Lord Steel of Aikwood

I am sorry to press the noble Lord on the matter, but my concern is not that we go into the spill-over with the Committee stage; my concern is that, if we had finished before the Recess, that would have provided the quarantine period between the Committee and Report stages which is normal. If we do have this day on our return, which I also welcome, there will necessarily be a gap in the short spill-over before we can even start the Report stage. That is very worrying.

Lord Carter

There will be time when we get back. Because of the exigencies of the spill-over due to the time that we need for the Northern Ireland Bill we can, with the agreement of the usual channels, fit this Bill in. If everyone agrees on the Report stage, and so on, we will be able to get the Bill through on time.

On Question, Motion agreed to.

House resumed.