Previous Section Back to Table of Contents Lords Hansard Home Page

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.

28 Jul 1998 : Column 1495

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.

28 Jul 1998 : Column 1496

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.

28 Jul 1998 : Column 1497

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.

Next Section Back to Table of Contents Lords Hansard Home Page