§ Mr. Allan Stewartasked the Secretary of State for Scotland if he will make a statement on the arrangements for financing the industrial and commercial activities of new town development corporations in Scotland.
§ Mr. LangAs part of one of the series of financial management surveys of non-departmental public bodies, the Government have recently been reviewing the arrangements for financing Scottish new towns expenditure. We have concluded that it is unlikely that Cumbernauld, Glenrothes, Irvine and Livingston development corporations will generate surpluses in future on a sufficient scale to enable them to repay borrowing taken out to cover past deficits or to reimburse the Government grants paid to meet the interest charges on loans taken out to finance general revenue deficits.
We therefore propose to take steps at the earliest opportunity to put the funding of corporations' non-housing activities on a more stable and realistic basis. The aim of the new arrangements will be to enable corporations to continue during the remaining period of their lives to perform their essential functions of promoting economic development in Scotland in an efficient and cost-effective way. My Department will shortly commence discussions with development corporations about the precise form of the new arrangements. It is. however, clear that, to pave the way for the new arrangements, it will be necessary to seek statutory powers to write off part of corporations' existing debt. The Government will introduce the necessary legislation as soon as practicable.
In the meantime, corporations will continue to have access to the national loans fund to cover revenue deficits and the Government will continue to make grants available to cover the interest charges on such borrowing.