asked the Secretary of State for Energy if he will make a statement on the latest progress of Leicester city's planned combined heat and power scheme.

asked the Secretary of State for Energy when he expects to receive reports from those city combined heat and power district heating feasibility studies to which his Department has provided funding.

Consortia in receipt of grant-aid regularly advise my Department on their progress. The Leicester consortium expects to announce the results of its studies early in December, and the Belfast and Edinburgh consortia are on schedule to complete their work programmes by March next year.

As Leicester is the lead city, is my hon. Friend aware that the consortium is particularly keen to get the go-ahead to start finalising the arrangements? Is he further aware that Leicester has already prepared an energy action programme which will save householders and businesses in the city £10 million over the next 12 months? Will he, therefore, do everything in his power to support the consortium—I know that he has done so up to now – to ensure that the citizens of Leicester benefit from energy savings?

I commend my hon. Friend and my hon. and learned Friend the Member for Leicester, South (Mr. Spencer) for their very strong advocacy of the merits of the Leicester scheme, and I await the report with eager anticipation.

Is my hon. Friend aware that some area boards — including the East Midlands and Leicester boards — co-operate constructively with city consortia while others drag their feet and find excuses not to cooperate? Yorkshire's lack of co-operation with the Sheffield scheme is an example of such action.

Will my hon. Friend accept that perhaps he needs to give clear guidelines on how the Energy Act 1983 should be interpreted, particularly the adopt and support section for district heating and CHP?

I shall investigate what my hon. Friend has said. As a prime supporter of the relevant section of the Energy Act, he knows that it created a guaranteed market for the sale of electricity from CHP schemes and placed a duty on electricity boards to adopt and support viable projects. I understand that, in line with section 19, electricity boards are actively involved in evaluating a number of CHP schemes. The Leicester scheme is one example and the involvement of the CEGB in that scheme has been commended by the promoters. I shall, of course, investigate the points made by my hon. Friend.

Will the Minister take this opportunity to congratulate Leicester city council on the excellent way in which it has made progress on the scheme, which we hope will provide cheap electricity for all sorts of people in the city? As the Government sparked off the scheme, will the Minister undertake that when we require major capital expenditure, in which major Government involvement will be needed, that money will be available and will not be withdrawn, as has happened in so many other instances involving Government funding for local authorities?

As the hon. and learned Gentleman should know, my hon. Friend the Member for Leicester, East (Mr. Bruinvels) arranged for me to meet the leaders of the consortia, when I was able to congratulate all those concerned.

asked the Secretary of State for Energy if he will make a statement about his Department's support for geothermal power.

My right hon. Friend the Secretary of State for Energy announced in June that the hot dry rock project in Cornwall is being extended for a further two years at an additional cost of £5.85 million. A further £1 million has been allocated to related support work.

A major review of the technology will take place next year. An important input will be an assessment of the commercial viability. I am placing in the Libraries of both Houses copies of a report on the economics by Dr. Shock of the energy technology support unit.

My hon. Friend's statement is most welcome. Can he assure the House that so long as the research continues to be successful the Government will follow through the project to the commercial exploitation stage, and can he say when that might be?

My hon. Friend is right to stress the need for proper evaluation towards commercial exploitation. I am pleased to announce to the House that both RTZ and Taylor Woodrow are now involved in the project. I hope that other United Kingdom companies will participate in this challenging venture. It will be necessary to take major decisions next year and I hope that the necessary preparatory work will have been done by then.

Is there a real hope that geothermal energy will provide a substantial amount of the country's energy needs? Many people place store on alternative sources, believing them to be infinite and large. How large is that alternative source likely to be, is it economically viable and will it make a significant contribution to the country's energy needs in the next century?

We hope that a commercial prototype will be in operation, with industrial collaboration, by the mid-1990s. My hon. Friend is right in thinking that it will not make a significant contribution to electricity generation. However, the United Kingdom has established itself as the world leader in geothermal hot dry rock technology and has achieved the highest circulation rates in the world.

asked the Secretary of State for Energy what has been the decline in the total manpower in the mining industry since the end of the miners' strike; and how many of those men are still seeking employment in the industry.

Since the end of the miners' strike to 4 October 1986 the total number of men on colliery books has fallen by 46,732 to 125,631. No part of this reduction was due to compulsory redundancy. The output from the deep mine sector of the coal industry is virtually unchanged.

Does the Minister recognise how disturbing the figures are? What will be the trend for manpower in the mining industry in the next five or 10 years? Does the hon. Gentleman recognise that in areas such as Fife male unemployment is well in excess of 30 per cent.? Does he agree that the men who have been victimised by British Coal, although they were guilty of no offence before the courts, were subject to a measure of victimisation which is indefensible by any standards? Will the Minister make representations, particularly to the Scottish management, to cease such victimisation in the interests of improved industrial relations?

As the hon. Gentleman knows, the question of dismissed miners is a matter for British Coal management. Instead of highlighting and distorting figures, the hon. Gentleman should recognise that British Coal is taking urgent measures to ensure that coal is more competitive. When the hon. Gentleman talks about a reduction in numbers, will he please recall that between 1964 and 1970, under Labour Governments, manpower in Scotland went down from 54,600 to 30,200 — a significant reduction of 24,400.

What manpower figures is British Coal budgeting for in 1987–88? If that target is not reached by voluntary redundancies, will there be compulsory redundancies?

The hon. Gentleman is right to highlight the fact that there have been no compulsory redundancies. That remains British Coal policy. Future output will depend on coal continuing to win a significant share in the highly competitive energy market place.

When my hon. Friend visits Lea Hall colliery, at Rugeley in my constituency, tomorrow, will he pay tribute to the 80 per cent. of the work force there who continued to work during the strike, despite, and in the face of, the most vicious victimisation? Is not the only way to keep jobs and improve job prospects in Rugeley to ensure that affairs are run on truly democratic lines?

I very much look forward, not only to going underground at Lea Hall tomorrow, but to meeting the leaders of the work force, to show them that there is one political party and one Government who have not forgotten the tremendous debt owed by this country to those working miners who kept the industry in being during that unnecessary and tragic strike.

Is the Minister not aware that there are still outstanding cases of miners who were unfairly dismissed during the strike, who took their cases to industrial tribunals and won them, yet who have not been reinstated because of the intransigence of British Coal? Will the hon. Gentleman tell the chairman of British Coal that it is about time those men were reinstated, in the interests of natural justice and good industrial relations, and that it should not continue to victimise them?

The hon. Gentleman should recognise that although more than 1,000 miners were dismissed as a direct result of the 1984–85 strike, more than half of them —527—have since been taken back by British Coal. The chairman recently announced his intention to hold a final internal review of outstanding cases of alleged unfair dismissal. It is a matter for British Coal to determine.

Is my hon. Friend aware that the private sector of the coal industry is anxious to expand coal production and also the number of jobs available in the industry? Does he agree that it is madness to maintain the restrictions on private sector output at their current low levels, and that they should be increased?

I agree that the private sector makes a very significant contribution to our coal industry, not only through its 154 deep mines, but through the private licensed sector. It is good that that output has continued to rise over recent years, and projections are that it will continue to do so.

The Minister referred to the need for the coal industry to be competitive so as to maintain employment levels. Will he bear in mind that whereas 150 million tonnes of coal were produced in 1974, the figure has now dropped to 90 million tonnes? Will he further bear in mind the unused development capital in the industry and consider writing off some of that so that interest charges will not be a charge on the industry, which would allow it to expand and create more jobs?

Under this Government taxpayers' money has been used to the best possible advantage by maintaining a record level of investment, mainly in existing collieries rather than in new ones. Since 1979 investment has totalled almost £5 billion, which is far in excess of anything ever projected under any Labour Government.

What would be the effect on employment in the coal industry if Mr. Arthur Scargill were to chuck in his appointment as life president of the National Union of Mineworkers and seek, together with Bernie Grant and at least two members of Militant Tendency and sundry others, to join this House in the Labour persuasion at the next general election?

My hon. Friend has rightly pointed out the true face of the Labour party. It will be interesting to see the reaction of the Labour leadership to the increasing number of Militant candidates.

The Minister has said many times this afternoon that there have been no compulsory redundancies in the coal industry. Is that not somewhat misleading, when many men who had worked for as much as 25 years in certain skills in the coal industry were offered only unskilled work when they transferred to other pits? Therefore, there was no real choice for them.

I shall merely repeat that it is a commitment of British Coal that men who are made redundant will have had an opportunity of continuing to work in the industry. Instead of constantly making party political points, I would prefer the hon. Lady to join me in trying to work for further markets for coal and in recognising the fact that, in South Wales, British Coal Enterprise Ltd. has now broken all previous records in providing 2,796 new jobs. The hon. Lady should concentrate her energies on helping 13ritish Coal Enterprise Ltd., instead of making such points.

Will the Minister concede that, particularly in Scotland, there has been a great diminution in mining employment? Will he give the figures for the period of office of the Tory Government, from 1979 until now, showing that diminution, particularly in West Fife? Will he concede the point that has been made that, in the interests of good industrial relations, it is essential that the new director in Scotland takes an active part in removing the stigma of the victimised miners, so that we may return to stability and good understanding?

I shall let the hon. Gentleman have the detailed figures, but the point that I was making to the hon. Member for Fife, Central (Mr. Hamilton) is that there is some humbug on the part of the Labour party in failing to recognise that there were significant numbers of redundancies in the coal industry before this Government came into office. Under this Government coal is regaining its rightful competitive place in the energy market.

Is the Minister aware that there is still great concern about the reinstatement of sacked miners in the coalfields? Will the internal review to which he referred also consider cases of miners who have won their case at an industrial tribunal? If not, natural justice will not be carried out.

The chairman of British Coal has made it clear that he will not put himself in the place of an industrial tribunal in seeking to review any decision that has already been made. He has also made it clear that he is willing to have a final internal review to look at all outstanding cases of alleged unfair dismissal. I wish that the right hon. Gentleman would join us in making it clear that no one convicted of serious violence, harassment, or intimidation, or of breaches of the mines and quarries legislation, will be taken back. That is British Coal's position. It has every right to look to the hon. Gentleman for some support from time to time.

asked the Secretary of State for Energy if he will make a statement about his Department's programme of research into renewable forms of energy.

The Government have identified the most promising renewable technologies for United Kingdom conditions, and substantial support is being given to their development. So far this year we have announced major extensions to our programmes on wind, tidal and geothermal energy, worth over £15 million.

Has my hon. Friend had any success so far in attracting contributions from external sources for his Department's programme, because it is vital that the private sector is involved if "renewables" are to be viable? Can he give me figures for each of the past five years?

I am grateful for my hon. Friend's enthusiasm. Major contributions have already been made to our programme from external sources, which have reached a record level this year. I shall arrange to place in the Library a financial table showing the past five years and the available information on these contributions.

Is it not likely that such a table would highlight the damaging reduction that the Government put through last year in support for research and development into alternative sources of energy? Is that not particularly self-defeating at a time when nuclear power is of such public and political concern? Might it not be in the best interests of the Government and the country if, in persuading people as to the merits of civil nuclear power industry, it were to be seen that we were not also foreclosing the option of developing research into "renewables"? Surely there is a role for both.

The Government have maintained a record level of spending on renewables. Since 1979 over £93 million has been invested in renewable energy research and development by the Department of Energy, compared with just under £17 million in the previous five years. There are some changes from year to year due to major contracts falling in one year rather than the other, but if the hon. Gentleman examines the record he will find that no Government have done more for renewable energy and research into wind and passive solar technology, biofuels, tidal energy and geothermal hot dry rock technology. Perhaps he will acknowledge that truth.

My hon. Friend will be aware of the contents of Professor Shock's report and the suggestion that it has identified sources of hot dry rocks that might show a 50-year cycle of life. What steps is the Department taking to attract the industrial investment that is necessary to bring this source of energy to fulfilment?

I congratulate my hon. Friend, who has been vigilant in ensuring that I constantly meet those involved in the project and in canvassing its advantages. He is right in stressing that Professor Shock's report concludes [hat electricity generation at an estimated cost of 4·2 per kW hour is the most attractive option for hot dry rock technology, although the cost is subject to many uncertainties, such as drilling costs and reservoir flow. Now that we have the involvement of RTZ and Taylor Woodrow and Professor Shock's important report, we are moving towards a major decision next year. I know what my hon. Friend will be urging us to do. I hope that we shall see hot dry rock technology becoming more commercially viable.

Is my hon. Friend aware that 50 miles from San Francisco there is a huge area covered with 1,000 gigantic windmills, and that similarly near Miami and various other cities similar windmills are to be found? The area covered is enormous and the noise is horrendous. Will my hon. Friend accept that although the Government's commitment to alternative sources of energy is highly commendable, and infinitely better than the stance taken by the Labour party, the fact remains that these alternative sources can supply only a fraction of the power that will be required in Britain in the next century?

I agree with my hon. Friend. I, too, had the opportunity of visiting the Altamont pass a few months ago, and I can tell my hon. Friend that the number of aerogenerators has increased from 1,000 to 5,000. It is correct to say that this has aroused tremendous hostility on the part of environmental groups. It was especially satisfying to be in the Altamont pass and to recognise that the finest aerogenerators there were made by James Howden and Co. of Glasgow.

asked the Secretary of State for Energy if he will undertake to increase the percentage of research and development funding allocated to non-nuclear energy sources.

I am delighted to report that my right hon. Friend's Department's provision for non-nuclear research and development in 1986–87 is £44·91 million, compared with the estimated expenditure in 1985–86 of £40·2 million, an increase of over 10 per cent.

First, I thank my hon. Friend for the increased expenditure on renewables. Having done that, may I suggest that the percentage, which I obtained by a previous question, of 17 per cent. for everything other than nuclear energy is illogical when it is remembered that the 17 per cent. includes the clean burning of coal and all the other items that my hon. Friend has mentioned, including the cost of the energy efficiency office. Does my hon. Friend accept that were there to be anywhere in the world another Chernobyl or Three Mile Island incident, we would find our research budget to have been hopelessly small, especially should it suddenly transpire that there was to be no further nuclear programme?

My hon. Friend is well known for his advocacy of the renewables programme, and I hope he will accept from me that the Government have provided a record level of funding for research and development into renewables. My hon. Friend is right to stress constantly the need for further expenditure on clean coal, but I remind the House that current annual public sector expenditure on coal technology research and development is about £100 million, including about £50 million on the environmentally clean use of coal. I am sure that my hon. Friend will recognise that there is there a high level of spend on renewables. We should be proud that we have all four major sources of energy — oil, gas, coal and nuclear. Our energy policies should be to keep each option active and developing.

In view of the Minister's reply, does he agree that research and development into the four fuels should be equal, because there is as much interest in alternatives as in nuclear fuels and because the amount of money channelled into nuclear research and development is far in excess of that provided for non-nuclear R and D? Does the hon. Gentleman agree that research and development should be equalised?

No. I do not believe that a valid comparison can be made. The hon. Gentleman should compare research and development in the oil, gas and coal industries. That is where a valid comparison may be made. The hon. Gentleman should recognise that over the past five years the Government have reached a record level of spending on renewables and fully intend that it should continue.

Does my hon. Friend agree that where large tranches of electricity are required, nuclear energy and coal energy are vital and that no form of renewables or non-nuclear fuels will suffice?

I agree.

Surely the most devastating question by the hon. Member for Devon, North (Mr. Speller) concerned the allocation of resources to nuclear energy and to renewable sources of energy. The Minister was trying to state the spend on renewable sources of energy compared to that on nuclear research, but, of course, they were not at the races—more was spent on nuclear. We should be specific when talking about research. Will the Minister give the House a guarantee that, as a result of the privatisation of British Gas, research into making synthetic North sea gas from coal at Westfield —incidentally, that has been very successful — will not suffer as a consequence of any spending cuts?

The hon. Gentleman is trying to drag a collection of red herrings across the record of the Department when he was Minister. Over five years, that Department spent less than £17 million on renewables. This Government have so far spent £93 million. The hon. Gentleman should reflect on that.

I thank my hon. Friend for answering all these questions and for his continuing support for the Severn barrage study. Will he make it clear that there is no conceivable way in which tidal energy can ever replace nuclear energy? Will he confirm that electricity demand is increasing again and that the contribution from the Severn tidal scheme would be the equivalent of only two or three years total growth?

My hon. Friend is right. He is right also to continue to reflect on the excellent speech on energy policy by my right hon. Friend the Secretary of State. Although we are spending record amounts on renewables, and although this Government have done more for tidal energy than any previous Government, including the further inquiries and investigations into the Severn barrage and the possible Mersey barrage, it is right to reflect that the combination of all these energy sources will not have a significant impact, even on increased electricity demand, in the next 10 years.

asked the Secretary of State for Energy, in percentage terms, what is the improvement in output per manshift in the coal industry since 1979; and if he will make a statement.

Productivity increases by Britain's miners have now risen to new record levels for four successive weeks. For the week ending 11 October, average output per manshift was 3·48 tonnes. This is a record, representing a staggering 55 per cent. improvement over the average of 2·24 tonnes achieved in 1978–79. This continued growth in productivity demonstrates the determination of all concerned in the industry to succeed in the face of severe competition.

Does my right hon. Friend agree that these remarkable figures completely justify the enthusiasm of the National Coal Board to pay by results rather than to submit to an annual round of blackmail by the National Union of Mineworkers? Have not those areas that worked on through the strike produced some of the very best of those results?

Yes. Also, I am glad to say that, as a result of the productivity incentive plans operated by the NCB, the men who are producing those fine figures are obtaining the financial benefit for doing so.

Does the Secretary of State accept, as I and many of my hon. Friends do, that improved productivity has happened for many reasons? One reason is the investment that took place under the Labour Government—because major programmes take 10 to 12 years to come to fruition — and another is the investment that has taken place under this Government. Will the Secretary of State turn his mind, and not duck the question as the Under-Secretary did in reply to my hon. Friend the Member for Normanton (Mr. O'Brien), to the investment that took place in collieries that have closed and where there is now a burden on the colleries that remain open, with a view to writing off that capital cost?

Obviously one has to review the financial background to the balance sheet of the Coal Board as time goes on. I accept that in all industries there comes a time for appropriate write-offs, and I promise that that will be reviewed. The hon. Gentleman rightly mentioned investment under both Governments. However, the fact is that under this Government investment has been higher than ever before, and I am glad to say that we are enjoying some of the results of that investment.

If that is so, may I ask the Minister why, under the Government, we have had the go-ahead for only one new colliery to take care of the future of the coal industry? May I also ask why some Conservative Members are positively trying to stop the development of the south Warwickshire coalfield?

Plenty of the hon. Gentleman's hon. Friends rejoice at the enormous investment that we have put into existing pits. We cannot have it both ways. If we want to improve the performance of existing pits to help the mining communities concerned, that must be a high priority, and it has been under this Government.

Do not the figures demonstrate that morale among ordinary miners must now be at its highest for many years? Does that not reflect the fact that what the ordinary miner wants is peace in the pits and good finn management from the leadership of British Coal?

Both sides of the House will regret the fact that the rationalisation of the coal industry has resulted in closures and voluntary redundancies. However, I am glad to tell the House that one of the most significant facts is that the new enterprise company has already provided almost 11,000 new jobs in coalmining communities.

When productivity measures were being introduced Mr. Arthur Scargill said that the accident rate in the coal mines would increase significantly. Will my right hon. Friend tell us whether the accident rate has increased as a result of the improvements?

One thing is certain. The priority of anybody concerned with the coalmining industry is to see that the highest safety standards are operated. The safety regulations of the coal industry remain very strict, irrespective of any productivity agreements.

Will the Secretary of State deny the logic of this impressive improvement, achieved as a result of the swift savagery of the contraction of the mining industry? Does he not agree that that logic should persuade him positively to support the greater use of coal in Britain? Does he not further agree that the Government should be much more insistent on achieving greater export markets in Europe and that they should make it clear that that improvement makes it obvious that the statistics about the price of coal presented to the Layfield inquiry should be withdrawn or sharply qualified?

The NCB is pursuing an active marketing policy. I have recently been to exhibitions and demonstrations for both the domestic and industrial use of coal which have been impressive. At the end of the day, the only way in which that can succeed is for the price to be competitive, and the only way in which that can be achieved is by retaining the present improvement in productivity, which compares favourably with what happened in the previous 10 years.

I am sure the House will agree that we should pay due notice to the increase in output achieved by the miners of this country. However, how does our praise for miners increasing output square with what the right hon. Gentleman's hon. Friend the Minister said in a press release, to the effect that it is unquestionable that a fitter, slimmer coal industry is necessary? Does the right hon. Gentleman agree that that is a confession by a Government who want to see the industry contract? That is the language, not of a Minister responsible for coal, but of someone who has flung in the sponge because of the collapse of oil prices.

As the hon. Gentleman has heard many times in the House, there was no greater contraction of the coal industry than that which took place under Labour Governments. Therefore, it is strange to hear those views from the Opposition. The hon. Gentleman should also ask himself, with his interest in the coal industry, why between 1974 and 1978 under a Labour Government, compared with a 4 per cent. per annum improvement envisaged in the "Plan for Coal", productivity measured by output per manshift fell in each year.

asked the Secretary of State for Energy if he will make a statement on the progress of British Coal Enterprise Ltd.

asked the Secretary of State for Energy if he will make a statement on the operation of British Coal Enterprise Ltd.

The Government welcome the impressive progress being made by British Coal Enterprise Ltd. The company has so far committed £16.8 million in support of 791 projects and has helped to create nearly 11,000 job opportunities.

Does my right hon. Friend accept that what he has told the House today will be widely welcomed by all those who are fair-mindedly willing to recognise that, in the context of the very necessary preservation of financial discipline, the Government have a humane and generous policy to help communities in real need?

The important thing about the enterprise company is not just the money that the Government have made available, but the fact that it has attracted a great deal more money with it. I hope that, with the £40 million that we have so far allocated to the enterprise company, about £200 million worth of investment will be attracted into coalmining areas. I hope that that will provide about 25,000 new jobs and much better job opportunities for those miners in areas where coal is likely to run out in the near future.

Is the Secretary of State aware that in communities such as Nantgarw and Cwm 1,200 job losses have just been announced? In recent years miners have moved to those pits under the no compulsory redundancy scheme and now will be made redundant again. The efforts of British Coal Enterprise Ltd. are hopelessly inadequate to meet the needs of communities facing such losses.

I recognise and very much sympathise with any community that suffers such substantial job losses. We heard many pessimistic remarks about the contribution that the enterprise company could make. If the enterprise company in its first two to three years produces 25,000 new jobs in coalmining areas and expansion, not contraction, in businesses, that is a considerable contribution.

asked the Minister for the Arts if he will make a statement on the pattern of development of independent museums.

There are now as many as 1,200 independent museums, many of which have been established in the past 15 years. I have been struck by their strong sense of enterprise in marketing and management.

Will my right hon. Friend join me in saluting the independent museums, the number of which has doubled in the past 15 years? Will he especially congratulate them on their energy and enthusiasm in giving a lead to the public sector? Does he agree that most of those museums charge and that the public are willing to pay for the excellence that they provide?

I join my hon. Friend in welcoming the fact that, in the past 15 years, the number of museums has doubled and that the new independent museums—many of which I have been able to visit—act as a spur to a better service for the public. As for his second question, it is true that that vast bulk of the indepedent musuems impose a charge. That appears to be something that is welcomed by the public, since they enter those museums and the charges enable museums to provide a better service.

Mr. Norman Buchan — and a happy birthday.

I have reached the time of life when I much prefer to ignore birthdays, Mr. Speaker. On the question of paying to enter independent museums, does the Minister recognise that there is a crucial difference between them and our public institutions? Will he join me in deploring the fact that the consequence of the Victoria and Albert museum introducing voluntary charges, and the predicted charge to enter the natural history museum, is a 40 per cent. collapse in attendance? How can he say that this benefits the British people when we are nearly halving attendances? How can he claim that the public support such a policy when they are staying away in droves?

I had hoped that, on his birthday, on which I also congratulate the hon. Member, he would have asked a slightly more cheerful question. It has always been entirely up to the chairmen and trustees of museums to decide whether raising charges, either voluntarily or through a straight admission charge, is in the interests of improving the service provided by museums. If they believe that in the longer term, it will improve the service and encourage more of the public to come in, it is right that they should do so. The choice is theirs and should be left in their hands.

Does my hon. Friend agree that, within the voluntary charges policy of the Natural History museum and of the Victoria and Albert museum, specific periods are set aside, so people will always be able to get in free of charge? Children's parties, elderly people and other special categories will always be able to go in free. Does he agree that that policy is absolutely right and must continue at all times?

I agree with my hon. Friend. When trustees introduce charges, they should seriously consider adequate exemptions, as happens at the National Maritime museum. The system seems to work perfectly well there. I find it strange that one can go to almost any country in the world, whether this side or the other side of the Iron Curtain, and find that charges are imposed on visitors to museums. Why do Opposition Members have such an incredible hang-up about this?

asked the Minister for the Arts whether he is satisfied with the operation of the Charities Act as it affects subsidised theatre companies.

I am not aware of any particular difficulties.

Will the Minister speak to his civil servants and see whether there might be a way in which a theatre can receive charitable status and be able to practise forward financial planning, which is currently impossible under the Charities Act 1985?

I will examine that. No particular problem of this kind has been brought to my attention before, but I promise to look at it and let the hon. Gentleman know what I think.

Will my right hon. Friend take this opportunity to pay tribute to the Chichester Festival Theatre, a registered charity, which without any support in the form of subsidies from the Arts Council or local authorities has, year after year, made a substantial cash return, and which continues to provide good theatre with 95 to 100 per cent. occupancy? Are there not lessons for other theatres with charitable status in the Chichester experience?

I am very glad indeed to join my hon. Friend in welcoming the remarkable achievement of Chichester theatre. It is a very good example of self-help in the theatre world. It is a great achievement that, without any support from the taxpayer, it is able to raise adequate resources. I hope that, like other theatres, it will find that the changes in the Budget, which encourage more giving by corporations and, from next April, by individuals, will help theatres and other arts organisations.

asked the Minister for the Arts if he will ensure that the arm's length principle of funding the regional arts associations through the Arts Council of Great Britain is maintained.

Yes, Sir.

Does my right hon. Friend agree that arms's length funding is vital? Is it not somewhat ironic that the so-called alliance is as divided on this issue as on defence, because whereas the Social Democratic party wants to keep the Arts Council, the Liberal party wants to abolish it?

I agree that it is becoming a rather characteristic feature of the alliance that it seems increasingly divided on every aspect of its policies. As for arm's length policy, it is true that the Liberal and the Labour parties now appear to want to emasculate the Arts Council, which has operated extremely well since the second world war, whereas the SDP appears to be in favour of the present policy.

Is the Minister aware that his complacency about the funding of regional arts is a matter of great concern to those who do not live in London and the south-east, as arts spending is still heavily biased towards that region? It is convenient for Conservative Members, southerners as they are, to believe that that bias is in the national interest, but those from the north or other parts of the nation know that it is obvious that arts spending does not favour people outside London and the south-east.

There is no doubt that most of the regional arts associations do a very important and good job, as I have seen when I have travelled around the country. The resources that have been allocated by the Arts Council to the regional arts associations have increased substantially from just under £12 million in 1983–84 to £25 million in 1986–87. That shows our commitment to the regional arts associations.

Will my right hon. Friend ensure that the Arts Council will continue to fund direct, and not through the regional arts association, the Royal Festival Hall, the Queen Elizabeth Hall and the Purcell Room on the South Bank, which, under the direct aegis of the Arts Council, are doing a first-class job and attracting larger audiences than they did under the late unlamented Greater London council?

I agree entirely with my hon. Friend about the job that some of these national institutions, including those on the South Bank, are doing, I know of no indication from the Arts Council that it wishes to change its policy on the methods of financing these big institutions. As I said earlier, for some of the smaller arts organisations throughout the country there has been a shift of policy and more money has gone to the regional arts associations.

What does the Minister intend to do about London now that the GLC has gone? I have in my constituency the West Six Theatre Company, which is to be given a final small grant by the London Residuary Body and then it will go bankrupt. That is exactly what will happen to many arts organsiations in London. What does the Minister intend to do about it?

It was for that reason that a year ago this Government found an additional £25 million to help with the transitional problems that were connected with catering for the abolition areas. All the evidence suggests, that, thanks to the good efforts of the local authorities, the Arts Council and the regional arts associations, most of the arts bodies that merit public support have been given it.

asked the Minister for the Arts when he last met the chairman of the Arts Council of Great Britain; and what was discussed.

I met the chairman on 6 October, when we discussed matters of mutual concern.

I thank my right hon. Friend for his reply. Will he join me in congratulating Glasgow on having been selected as the city of culture in Europe? Is it not an example that should be emulated by other cities throughout the United Kingdom? Does he recognise that culture plays a very major part in creating an image for a city and providing enjoyment for its inhabitants?

I am very grateful to my hon. Friend. Last week I was very glad to be able to go to Glasgow to announce that the city is to be nominated as the city which, subject to the agreement of my colleagues, the European Culture Ministers, will be the city of culture for Europe in 1990. Glasgow has made great efforts in demonstrating the range of arts facilities that it has to offer. We have every reason to he confident that it will be an excellent city to be so designated in 1990.

As someone who was totally neutral as regards the eight or nine cities that were bidding for the title, I am perfectly happy about the decision of the Minister for the Arts. Those who know Glasgow know that it will truly represent the best characteristics of the arts dial are developed in Scotland and in Britain as a whole. However, when the Minister has finished congratulating himself and his Back Benchers, will he tell me whether the chairman of the Arts Council has ever said that he also approves of the tapering off of the £25 million about which the Minister has just been boasting? Next year the €25 million will be reduced to £20 million, and the reduction in the rate of inflation has also to be taken into account. Very few of the bodies that were defended by my hon. Friend will survive such a policy.

On the hon. Gentleman's first question, it is very good to have had his unanimous support. It is the first lime since I have been the Minister for the Arts that I have seen him quite so cheerful. As for the taper, it has always been made clear that after finding £25 million in the first year of abolition to cater for the initial transitional cost the Government would be looking to the local authorities to play an increasing part in the years ahead. For that reason we look to them now to play an even more prominent role than they played last year, and I have every confidence that they will do so.

asked the Minister for the Civil Service if he will encourage women to offer themselves as candidates to the public appointment unit.

Yes, Sir. The Government are keen to extend the role of women in advisory and policy-making bodies.

Will my right hon. Friend confirm recent newspaper reports that the Prime Minister is taking a particular interest in this matter? Is he aware of the organisation called Women in Public Life, and does he support its objectives? Does my right hon. Friend see the public appointments unit carrying out its responsibility in that area by giving extra publicity to the desire to see more women enter the Civil Service and other aspects of public life?

I am grateful to my hon. Friend, and I congratulate him on the lead that he is taking on this important issue. It is true that my right hon. Friend the Prime Minister is taking a close interest and would like more women to be appointed to these positions of importance. I have noted the organisation, Women in Public Life, the work that it is doing and the conference that it recently held. The public appointments unit now has on its register 5,000 men but only 1,000 women and special efforts are being made to obtain more names for that list. I hope that if hon. Members have any names they will let me know.

Will the Minister give an assurance that the Prime Minister, as evidence of her sincerity in this matter, will seek to appoint a women as the new vice-chairman of the Tory party?

There are only certain things that I am answerable for, and on this occasion I shall stick to my brief.

In view of tomorrow's business, am I right in assuming that the public appointments unit does not cover any ecclesiastical appointments?

As far as I am aware it does not cover any ecclesiastical appointments, but I shall confirm that to my hon. Friend.

asked the Minister for the Civil Service when he last met the Civil Service unions; and what was discussed.

asked the Minister for the Civil Service what subjects were discussed at his last meeting with representatives of the Civil Service unions.

asked the Minister for the Civil Service when he last met the Civil Service unions; and what was discussed.

I have informal meetings from time to time with the Civil Service unions. Topics of mutual interest are discussed.

Is my right hon. Friend aware of the genuine concern over pay, particularly in the scientific grades of the Civil Service, which is affecting morale and efficiency? Will he pay further visits to establishments in my constituency to see for himself?

I know of my hon. Friend's keen interest in civil servants, particularly scientists, since he has a considerable number in his constituency. Having just visited, with great pleasure, the arts in his constituency, I shall try to visit his civil servants at some time in the future. I should like to reassure him that we are taking corrective action to try to stem the decline in the number of scientists, and that includes improved starting salaries for new recruits and pay additions which put salaries above the level of the overall increase that the Civil Service achieved this year. Those and various other measures are designed to try to encourage scientists to stay in the Civil Service.

Will my right hon. Friend join me in congratulating the executive and president of the Civil and Public Services Association on arranging for a re-run of its election, which is something that I have called for on many occasions? Will he ensure that when he next meets the unions the ballot will be a secret one, controlled by the central balloting system, with people sending their ballot forms direct to the central system rather than a local ballot, because the people in Leicester were most concerned at the unsatisfactory result, electing John Macreadie, a well-known undemocratic gentleman?

To the first question my answer is yes, Sir. The procedures for running elections are a matter for the unions.

Does the Minister discuss with Civil Service unions the staffing of Department of Health and Social Security offices and the possible shortage of staff, because it would appear from the complaints in my postbag that, despite the excellence of the staff at John William House, there is a backlog and waiting list and a need to increase the staff to look after those of my constituents who are unemployed and in receipt of DHSS benefits?

I realise that there is a problem in some parts of the country, and it is for that reason that my right hon. Friend the Secretary of State for Social Services announced some months ago that the number of people in the social services departments would be increased by 5,000, which would enable more hard-pressed departments to be covered more effectively.

Did my right hon. Friend have a chance to discuss with Civil Service unions the further relocation of civil servants' jobs? In these days of information technology, why do senior civil servants need to be located in expensive real estate in Whitehall? Will my right hon. Friend consider relocating the Treasury to, for example, Bolton?

It may be best to keep my views to myself. It is for political heads of Departments to determine whether their operational requirements mean that they can ask civil servants to move to other parts of the country. The dispersal policy has not yet quite been completed, and involves dispersing 5,900 civil servants to other parts of the country.

Does the Minister agree with the civil service unions that an increase in the number of VAT officers would lead to a net increase in the amount of VAT received by the Treasury?

I think that I shall leave my right hon. Friend the Chancellor of the Exchequer to answer that question.

Will the Minister arrange to meet the Civil Service unions about the ban on civil servants giving information to Members of Parliament in Select Committees? Is he aware that the ban can work only if Ministers are truthful to Select Committees and if Government Ministers do not name civil servants publicly? Is the Minister further aware that civil servants are well able to give a good account of themselves, if required to do so, particularly in the context of a proper code of ethics?

As far as I am aware that matter can be debated fully on Wednesday, in the context of the Government's reply to the Select Committee on the Westland issue. It is agreed that the job of Select Committees is to inquire into a Department's expenditure, administration and policy, but on the strict question of an individual civil servant's conduct, the civil servant is accountable to his permanent secretary and ultimately to the Minister, and it is the latter who is accountable to the House.

I beg to move,

That this House condemns Her Majesty's Government for its total lack of concern for Scotland and Wales as demonstrated by its failure to provide effective regional economic policies; notes the devastating implications of the European Regional Development Fund report on the United Kingdom Regional Development Programme 1986–90; and calls for a fundamental re-think of Government policy towards economic regeneration to provide real and permanent jobs within reach of all the peoples of the United Kingdom.

I have selected the amendment in the name of the Prime Minister.

There can be no doubt that United Kingdom regional economic policy has, to a large extent, failed in its purpose — which was to equalise employment chances among the regions and nations of the United Kingdom, to spread industrial development and to help decentralise the economy.

Even when the policy was at its strongest and most effective in the 1970s, it had only partially succeeded in its task. During the period 1945 to 1970 Scotland benefited the least of all the economic planning regions in terms of net employment gain attributable to the effects of regional policy. I shall refer later to the efficacy of that policy and what I consider should have been done.

For the benefit of those in the least depressed parts of the United Kingdom who have never needed the help of a regional policy, nor are ever likely to, I shall give a fairly brief history of its development. It was born back in the 1930s, but before the second world war there were only a few special areas — west-central Scotland, south-east Wales and small parts of the north of England. In the postwar period the special areas were renamed development areas. The then Board of Trade was empowered with the task of building factories in the areas providing public services, reclaiming derelict land and disbursing loans and grants.

The year 1948 saw the birth of industrial development certificates, which enabled the Government to control the location of new investment and factories. The new development areas were extended in the same year to include other parts of Scotland, Wales, the north of England and Northern Ireland. In 1960 the old development areas were abolished and new development districts created, giving a wider coverage of Scotland and Wales and, for the first time, parts of Devon and Cornwall.

From this point on, industrial development certificates were strictly controlled, with strong preference being shown for companies locating in the disadvantaged assisted areas. In 1967 regional employment premium and regional development grants were introduced. The former was a straight payroll subsidy for manufacturing firms in the assisted areas. In the previous year new development areas were created, covering virtually the whole of Scotland and Wales and large parts of the north of England.

Between 1970 and 1975 the geographical coverage of regional assistance remained virtually unchanged. This was probably the peak period of regional policy. Special development areas within development areas were extended. Intermediate areas were established; and regional development grants, automatic capital grants for firms locating in the assisted areas, were born. They were paid at the rate of 22 per cent. in special development areas, 20 per cent. in development areas and, in intermediate areas, 20 per cent. for buildings. Regional selective assistance continued and was available to companies in any area, at the Government's discretion. With all those powers in force, regional economic policy was at its strongest.

The dismantling of the system began in 1976, when the Labour party suddenly and summarily abolished the regional employment premium. This caused great consternation in industry in Wales, Scotland and other assisted areas. At a stroke, regional aid in Scotland was slashed by £78 million. Also in the mid-1970s, the Scottish Development Agency and the Welsh Development Agency were established. By wielding political power in 1974, in voting for the Scottish National party and Plaid Cymru, the electors in Scotland and Wales enabled our two parties to put on the pressure, to the advantage of the two nations. I shall say more about the Scottish Development Agency and the Highlands and Islands Development Board. My colleagues in Plaid Cymru will no doubt wish to talk about the Welsh Development Agency and the Development Board for Mid-Wales.

The later 1970s saw the beginning of greater Government concern about the state of inner cities, particularly London and Birmingham. In years to come they were to claim the attention of the Government, to the disadvantage of regional policy. Many detrimental changes took place between 1979 and the present. These began with the announcement by the then Secretary of State for Industry, the right hon. Member for Leeds, North-East (Sir K. Joseph), of a three-year programme of descheduling of assisted areas. The requirement of industrial development certificates was abolished in 1982, after having been steadily weakened since 1975. By August 1982 most of the north-east of Scotland had been removed from development area status, as were Lothian and the Borders. Most of mid-Wales was also descheduled.

In November 1984 the most recent round of substantial changes took place. The special development areas were completely abolished. Only development areas retain the automatic right to regional development grants at a lower rate of 15 per cent. of capital expenditure. Intermediate areas qualified only for selective grants.

A particular worrying aspect is that regional development grants are no longer available in development areas for replacement investment. Many of the incoming firms established in Scotland in the 1960s and early 1970s require substantial new investment. With the withdrawal of RDGs, many firms may choose to move to a new location, probably outside Scotland, and in a development area so that they can pick up a better deal.

In the 1984 review of policy large parts of Scotland were completely descheduled. Apart from the obvious loss of United Kingdom Government grants, an additional worrying factor is that these areas are no longer eligible for many European Community development grants. That is a double blow in many parts of the Highlands, Grampian, Lothian, Tayside, Central and the Borders. Scotland bore 30 per cent. of the cut in regional aid spending.

Although regional policy over the years has been inadequate in many respects, it provided a valuable and not inconsiderable boost to many parts of the country. Economists working for the Department of Trade and Industry reckoned that between 1960 and 1981 regional policy was responsible for creating some 600,000 jobs in assisted areas. Some 400,000 positions were still in existence by 1981, although the recession will have reduced that total. Even so, the figures that I have quoted do not take into account any secondary or multiplier effect in creating jobs in service industries in the assisted areas.

This situation is in no way a substitute for Scotland and Wales having the power to use their own resources and skills within an autonomous economic framework and to embark on policies for their own benefit and not for the benefit of the rich south of England. However, it has helped to stem a tide of emigration, unemployment and poverty, which would have been worse without regional economic assistance.

That regional policy in under attack is plain for all to see. The latest changes, in 1984, carried on a series of cuts and expenditure that began some time ago, in 1976. In constant price terms 1975–76 was the peak year for spending on regional preferential assistance of all kinds. First came the Labour cuts in 1976, 1977 and 1978. Spending then recovered for three or four years, but resumed a downward trend in more recent years. In cash terms, spending in 1982–83 was £956 million in Britain. This was cut to £640 million in 1983–84 and £615 million in 1984–85. Spending in Scotland shows the same downward trend from £369 million in 1982–83 to £227 million in 1983–84 and £184 million in 1984–85. There was a slight rise in the year 1985–86, to £199 million. However, in real terms, the level of regional aid now paid to both Scotland and Wales is far below the value of what was paid in previous years. In the case of Scotland, the real value of aid is only about 50 per cent. of the 1975–86 payment. It is also the case that Scotland's share of regional development grant fell from 44·1 per cent. in 1982–83 to 32 per cent. in 1984–85.

On almost any aspect, Scotland and Wales, which enjoyed a reasonably supportive regional aid system 10 years ago, have been relegated into the second division as unemployment and inner city problems have hit the midlands and south-east of England. Money has been diverted to these areas. The work of the Location of Offices Bureau in persuading firms to move their headquarters out of London has been suspended. Over the past few years the south-east region has been able to consolidate its dominance in corporate control and research and development activities.

Scotland has also lost on financial assistance under section 8 of the Industrial Development Act. This category of payment is made to certain sectors of industry, and the high-tech and micro-electronic industries have been among the main beneficiaries. The cumulative payments under section 8, up to March 1985, have been: Wales £25 million, Scotland £48 million, England £474 million. The Thames valley and the south-east region have won again, and section 8 is the fastest growing block of regional assistance.

The Scottish Development Agency and the Welsh Development Agency are well known, but how many know that there is a development agency in England as well? The English Industrial Estates Corporation, in its own words, is

"the largest developer and manager of industrial and commercial property in England. Our service doesn't end when the building does. We do everything that we can to help businesses in our care to flourish and grow."

If hon. Members who represent English constituencies contribute to the debate, I hope that they will not adopt the old, worn-out theme that runs, "The Scots and the Welsh have development agencies, why cannot England have one as well?". If any English Members have listened to the pronouncement of the Scottish sector of the Scottish economy, they might be forgiven for thinking that everything is coming up roses, or thistles in Scotland and daffodils in Wales. Unfortunately, that is not the position. It would be nearer the truth to say that any slight improvement in the relative performance of the Scottish economy is due to the deterioration in England's economy.

The Scottish economy is far from healthy. The same can be said of the economy in Wales, and I know that my hon. Friends from Plaid Cymru will want to deal with that. For the first two quarters of 1986 there were large increases in redundancies in Scotland, while the Great Britain figure remained stable. Output, when set against the 1980 base of 100, is only 104, the same level as that which prevailed in 1976. Net emigration has averaged 15,000 a year from Scotland since the start of the decade. The latest figures tell us that hard-core unemployment is still on the increase. Scotland and Northern Ireland are the only two regions to share that deplorable trend. Weekly earnings have fallen behind the Great Britain average after a few years of parity. Even oil-related employment is on the decline.

In December 1982 the Cambridge Economic Policy Review Group forecast regional unemployment figures by 1990, assuming the current economic policy was maintained. It estimated that in Wales 22 per cent. Would be unemployed, with over 20 per cent. in Scotland. Given present trends, it does not appear that it will be far wrong. I cannot begin to comprehend the Government's thinking behind the destruction of regional policy. I can only guess that the Government know where their support lies, which is in the midlands and the south-east of England, and that that is where they intend to concentrate their attention. Judged by any rational, economic or social standard, there is a crying need for more, not less, regional policy.

Recently, the Fraser of Allander Institute, a body which is engaged in economic research and forecasting in Scotland, stated:

"The catalogue of spatial, economic and industrial problems in Scotland is extensive. Shipbuilding on Tyneside, social deprivation in Glasgow, rural unemployment in the highlands and islands, skewed spatial distribution of oil-related employment are all affecting the health of the Scottish economy."

Gross regional disparities exist in the United Kingdom and these have been highlighted by recession. In a special report in 1983 the Regional Studies Association said:

"It is clear that … the evidence supports the identification of a basic regional dualism in the United Kingdom. This consists essentially of a 'greater south-east zone of relative economic buoyancy and most of the rest of the country characterised in general by economic debility and decline'."

More recently, a document entitled "United Kingdom Regional Development Programme 1986–90" grabbed the headlines. This is the first time that the House has debated regional affairs with a knowledge of what was stated in that document. It was prepared for and published by the European regional development fund. One of the most damning sets of statistics of the 17-volume report is contained in the introduction. Of the poorer regions identified by the European Community within the Community, over one third are in the United Kingdom. The "index of regional disadvantage" that is used by the Community includes in the top 10 disadvantaged areas Strathclyde, Dumfries and Galloway. Gwent, mid-South Wales and Glamorgan appear in the next 10. There are four other Welsh counties in the next 10, and the regions of the Borders, Central Fife, Lothian and Tayside are in the following 10. Of the worst 40 deprived areas, the United Kingdom has 28, 14 of which are in Wales or Scotland. These are staggering and sobering figures which demonstrate how far we have fallen behind our European neighbours in our standard of living.

In another European Community ranking that is included in the report, employment levels are used as the criteria. Eleven of the worst 20 regions are in the United Kingdom, and five of them are in Scotland and Wales.

I am sorry to interrupt the right hon. Gentleman. I know that his figures are accurate, but does he agree that one of the areas that suffers most is Merseyside? That is why some of us constantly raise Merseyside issues in the House.

I take the hon. Gentleman's point. Merseyside's problems are well known, and in my introduction I said that one of the disadvantaged areas is the north of England. There is no doubt about that. There is no doubt, too, that the hon. Gentleman's argument is valid.

The EC report observes the position of the disadvantaged regions and points out that, while industrial structure and peripherality will continue to contribute to the problem, recent research has identified other causes of continuing disparity. Research and development are concentrated in the south of England, and Scotland and Wales are largely dependent on the south for innovation. Scotland and Wales have a low proportion of managerial and professional jobs and a high proportion of semiskilled or unskilled workers.

The report considers the various regions within Scotland and Wales, and almost all emerge with a similarly depressing prospect. Overall, in Scotland and Wales, unemployment will remain at about the present levels in 1990. Although there are opportunities for expansion in both countries in high technology and the service sector, the good points cannot outweigh the sheer scale of job losses in traditional manufacturing industries such as coal, steel, shipbuilding and engineering. The document from the European Community, which was not intended to be read by anyone other than Ministers, civil servants and European Commissioners, holds out little hope of improvement in the disastrous levels of unemployment in the two nations of Wales and Scotland. The only way to effect improvement is to have a complete change in economic regional policy and thinking.

Attention must be paid to the fact that too many of our factories in Scotland and Wales are branch plants of large foreign-owned multinationals. The figures for Scotland show that in recent years foreign-owned firms were responsible for 38 per cent. of net capital investment. They were responsible for 20 per cent. of manufacturing output in Scotland. In the micro-electronics sector, 40 per cent. of firms in Scotland are owned by United States organisations, while a further 40 per cent. are English owned.

The old problem of the lack of indigenous control and development has reared its head again, with the concomitant disadvantages of a lack of managerial and research and development work. Instead, there is a concentration on assembly-line jobs. Forget the bluff, optimistic noises that emanate from the Scottish Office on the subject of the "recovery in Scotland". That recovery is not taking place. Industries are under-resourced and the unemployment problem is increasing. Our infrastructure is crying out for investment and replacement. Our young people search — mostly in vain — for worthwhile opportunities. Many give up hope and leave the country of their birth. The same can be said of Wales. If anything, the ERDF report to which I have referred paints a rather bleaker outlook for the Welsh economy.

It is against that background that the Government have sought to destroy regional policy and to starve Scotland, Wales and the northern regions of England of investment and the chance of employment and a better future. The Conservatives may continue in power until after the next election, but they will do so only on the strength of support from middle and southern England. At consecutive elections, Scotland and Wales have rejected the Government and their policies. The electorate put the Conservatives in power. The tide has turned in Wales and Scotland and the Government will soon find that people no longer wish to be part of the British state, its political system and its economic tragedy.

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:

"recognised the efforts and achievements of Her Majesty's Government in stimulating the economies of Scotland and Wales; welcomes the submission to the European Commission of the United Kingdom Regional Development Programme for 1986–90 as the basis for maximising European Regional Development Fund assistance to the United Kingdom; notes the references in that document to the significant steps being taken by the Government to replace jobs lost in the assisted areas and to strengthen the infrastructure of such areas; and endorses the Government's determination to tackle the problems of all parts of the United Kingdom by means of sustained and effective economic and regional policies.".

I am sure that I would have the support of the whole House in saying how sorry we were to learn of the accident that befell the hon. Member for Falkirk, East (Mr. Ewing) at the weekend. He was to have spoken in this debate on behalf of the Opposition. We wish him a speedy recovery.

I congratulate the right hon. Member for Western Isles (Mr. Stewart) on getting to the House in time for today's debate, despite what seems to me to be the only discernible policy of a regional nature that the Scottish National party has adopted—to boycott British Airways. But even the right hon. Gentleman's charm and personal qualities cannot disguise the inherently unsavoury nature of the motion that his party has tabled for this afternoon's debate. Here we see the distasteful spectacle of the two separatist parties, from Scotland and Wales, which want to break up the United Kingdom and which repeatedly claim that they would be better off on their own, whingeing that they are not given enough out of the United Kingdom's policies. I hope that the House will understand if I concentrate my remarks primarily upon the Scottish aspects of the motion, allowing the Under-Secretary of State for Wales — my hon. Friend the Member for Conwy (Mr. Roberts) — to deal with the Welsh side.

There will, I feel sure, be many parallels between the two countries, not least in the great difficulty we have in establishing what the nationalist parties actually stand for. Certainly, there was no guidance in the speech of the right hon. Member for Western Isles. We are falling back on the other half of his parliamentary party, the hon. Member for Dundee, East (Mr. Wilson) who plays the son to his Steptoe. We do find a specific shopping list, although we have to go back to The Scotsman of 27 November 1984 to find it in the "Recipe for Scots Recovery."

It seems that the nationalist parties want £170 million set aside for the budgets of the Scottish Development Agency and the Highlands and Islands Development Board. I have news for hon. Members. That is almost exactly what the present budgets of those bodies now add up to—both substantially increased in real terms since this Government came to office. Then they want £30 million for guaranteed investment in the steel industry. Bob Scholey must have been reading his copy of The Scotsman.

In another document there is an eight-point plan called "Scotland can work", in which its authors, on the one hand, call for a programme of public works, expanded industrial aid, a restructuring fund for industry, higher pensions, social security benefits and overseas aid —perhaps to England—and, on the other hand, call for a cut in VAT, income tax, national insurance contributions, petrol duty and vehicle excise duty.

Perhaps Scotland can work, but clearly the SNP cannot add. Perhaps someone should tell the party what happened to the price of oil. It will not know, because last June, when the Scottish Grand Committee had an important debate on the oil industry in Scotland, so far as I can gather SNP Members were not even there. I suppose that they boycotted that Committee, just as they boycotted the Select Committee on Scottish Affairs.

Does the hon. Gentleman realise that, even with the cut in oil prices, the revenue available to the Treasury would be in excess of £4 billion? Considering the size of Scotland, would that not enable us to carry out any of the plans mentioned?

As over the past 10, 15 or 20 years, the hon. Gentleman lives in a pie-in-the-sky world in which he assumes that all oil revenues derived from the North sea would automatically fall to an independent Scotland. I am glad to say that we have the views of the hon. Member for Dundee, East on regional policy from the same report in The Scotsman. It said that the SNP

"favours reform of the present range of regional grants"—

we have now done that—

"but argues that the whole of Scotland should be eligible for these in some form or other."

That is precisely the kind of blanket, everyone-gets-aprize, Socialist type of policy that characterises the lurch to the Left that the nationalists have taken in recent years. But it is not a regional policy, unless of course the hon. Member for Dundee, East regards Scotland as a region. Perhaps he was on stronger ground when, over the weekend, he predicted a Conservative victory in the next general election.

The essence of regional policy is the selection for special help of areas that are relatively disadvantaged. Before I turn to our regional policy in more detail, let me deal more broadly with the monstrous canard, put about by nationalists and Socialists alike, that Scotland does not get its full share of central Government expenditure. It simply is not true.

Identifiable public expenditure per head of the Scottish population is 25 per cent. higher than that in England—£2,210, compared with £1,761 — while the figure in Wales is £1,927. It is right that that should be so because of the special needs and geographical circumstances of our two countries. This can be seen in almost every departmental programme: on housing £126·50 per head in Scotland and £67·40 in England; on education, £392 compared with £284. On health and social services the figure is £428 compared with £336. In local government the current expenditure provision for next year amounts to £638 per head against £535 in England. Our rate support grant stands at 56 per cent. The rate for England is 46 per cent.

So, too, in regional policy the Government's concern for Scotland's special needs is recognised. With around one tenth of the British population, we have almost one third of those who qualify for regional aid. That is a higher proportion than before the 1984 changes. It is twice the British average and it includes 65 per cent. of the Scottish work force.

Last year, regional aid in Scotland through development grants and selective assistance amounted to almost £160 million—over 30 per cent. of the total in Great Britain — compared with only 21 per cent. when we came to office in 1979. That £160 million was equivalent to £62·48 per head in Scotland, as against £19·21 in the rest of Britain. In other words, taxpayers in other parts of the United Kingdom are, along with Scottish taxpayers, helping to support many Scottish industries.

The Minister will be aware that his Department is considering a request from the Highlands and Islands Development Board for full upgrading to development status for the Invergordon area, which status it had prior to the 1984 review. There is clear evidence that investment is being lost to other parts of the country or abroad because of the failure to have such advantageous rates. I appreciate the fact that the Minister cannot give a definitive response today, but will he confirm that his Department will look at the matter as sympathetically, supportively and quickly as possible?

I certainly recognise that there are problems in the lnvergordon area, but I can hold out no great hope for the hon. Gentleman that assisted area status boundaries are being reconsidered. I draw to his attention the considerable and growing success of the enterprise zone in Invergordon. There were nearly 100 jobs a year or so ago, 200 by the turn of the year, and now there are about 300. The hon. Gentleman can derive considerable satisfaction from that.

I believe, and the Government believe, that it is right, given our problems, that other parts of the United Kingdom should help Scottish industries. But against figures of the kind that I have given, I do not know how the nationalists have the gall to raise this subject for debate.

The right hon. Member for Western Isles gave the impression that the Government no longer care about regional policy. Nothing could be further from the truth, as the figures that I have given show. We have made clear our commitment to regional policy on repeated occasions. We included it in our election manifesto; we emphasised it again in our White Paper on regional industrial development; and we are giving effective proof to it in a wide range of measures available for industry in the regions. It must be remembered, of course, that regional policy is not the main source of the Government's support for industry. More important is a stable economic base with low inflation, sound monetary policies and a favourable tax regime, better training and good industrial relations. We have achieved all those. But regional policy continues to have an important part to play.

I come from an area of high unemployment. In fact the area had special development status provided through the efforts of my Government. Will the Minister explain to the House why, in areas like mine and the north-east, unemployment has increased? Is it not precisely because of the Government's failure to continue the previous regional policy?

I cannot accept the connection between the two aspects that the hon. Gentleman mentions. There is no provable link between the change in regional industrial policy and the rise in unemployment. Indeed, the development of job creation over the past three years has coincided with the changes in regional policy which we have pursued.

We believe that the present pattern of assisted areas is a fair reflection of the relative needs of different parts of the country. For example, in west central Scotland and parts of south Wales we have older industrial areas where employment in the traditional industries is in decline and where special efforts are needed to help the transition to a modern industrial economy. That is why those areas enjoy the highest level of assistance under our current policies. Other areas, where the need is less great but where help is still needed benefit from regional selective assistance and the value of that incentive should not be understated. The advantage of RSA is that it can be used flexibly and can be tailored to the needs of the individual project by phasing and timing grant instalments. It can ensure that the highest possible level of assistance is available under EEC rules for projects which offer substantial economic and employment benefits. Since May 1979 offers totalling £378 million have been made under RSA, creating or safeguarding over 140,000 jobs.

There are, of course, those areas that do not qualify for regional assistance at all. I know that that can be a source of grievance, particularly in places which had long been accustomed to the benefits of assisted area status. But it is important to remember what regional policy is designed to achieve. It is not a continuing subsidy and still less is it an aid to which any one part of the country has a prescriptive right. Rather it is a means of helping particularly disadvantaged areas to overcome their particular difficulties relative to other parts of the country.

The right hon. Member for Western Isles referred to the reduction in expenditure on our present policy. The effectiveness of a policy should not be judged by the amount of money put into it, but rather by how efficiently that money is directed. If we were, for example, to quadruple expenditure, the policy certainly would not be four times more efficient. On the contrary, there would be massive problems of deadweight and job displacement, and the implications for higher taxation and inflation would be to undermine the steady growth and recovery of the economy that we have been achieving. The new regional development grants are linked to the creation of jobs specifically to ensure that large Government subsidies are no longer handed over to capital-intensive projects which cost a great deal of money but provide very few jobs and would probably have gone ahead anyway. I am sure everyone recognises the sense of what we did.

Is the Minister telling the House that, given the criteria he has laid down, he thinks that regional policy is succeeding?

I think that regional policy is succeeding in giving better value for money to the taxpayer and in directing help to the areas where it can be more productive in job creation.

Any scheme of incentives, however well designed, must be judged by how it works in practice. We now have two years' experience of the new policy, and clear evidence that it is working, helped no doubt by our decision to strengthen our "one-door" approach in Scotland with the transfer of the administration of regional development grants in Scotland from the Department of Trade and Industry to the Scottish Office. In Scotland alone, some 3,250 projects have been approved for regional development grant since the new scheme was introduced. That represents an investment of around £450 million leading to the creation of over 29,000 jobs.

As for the lurid predictions of doom and disaster with which the announcement of changes in the policy were greeted two years ago, it has not happened. Economic recovery has continued. New companies are springing up with a net increase of 1,400 in Scotland last year, and no fewer than 50,000 more Scots are in work than at the last election. Scotland continues to rise in the gross domestic product league table and now lies third, compared with eighth 15 years ago. Our output and productivity, particularly in manufacturing industry, continue to rise faster than in the rest of the United Kingdom and average Scottish male manual earnings are now second only to the south-east of England.

Since the hon. Gentleman is giving us a roll-call of statistics, how does he reconcile the progress that he has outlined to the House with the fact that the coal industry in Scotland has contracted at a greater rate and with a greater loss of jobs proportionately than any other place in Britain?

That makes my point for me. It is precisely because we have had to contend with such major structural changes and with the decline in and loss of jobs in so many of our heavy industries that the net increase of 50,000 jobs, which means many more jobs being created than that figure suggests, reveals the success of our policy.

Scotland has an enviable reputation in the attraction of new inward investment and, indeed, in the five years that Locate in Scotland has been operating its one-door service for potential investors, planned investment totalling more than £1·9 billion has been won, bringing with it the prospect of more than 38,000 jobs, the majority of which are new jobs. Those jobs will replace the industry to which the hon. Member for Midlothian (Mr. Eadie) referred. It has been a record of growing success — and it is continuing — in which our regional assistance programme has played an important role.

By securing this new investment in Scotland we achieve not just taxation benefits for the United Kingdom economy as a whole, but we secure access to the latest technology, opportunities for suppliers, improved management techniques, better employment opportunities and the creation of real jobs. We believe that we have a lot to offer and that we should play to our very real strengths in marketing Scotland.

No discussion of the Government's regional policy, particularly as it affects Scotland, can ignore the role of the Scottish Development Agency. It has proved an effective and flexible instrument in helping to improve the Scottish economy. That was confirmed by the recent review. Since 1975, the SDA has spent over £940 million and its budget this year is £136 million. Over the life of the SDA, and particularly since 1979, its resources have increased both in cash and real terms and the contribution made by the SDA in tapping Scotland's resources of inventiveness and awakening a new spirit of enterprise is of great importance.

Since the Minister is so concerned about the Scottish Development Agency and the work it does, why do the Government intend to cut its capital programme from £61·6 million in 1986–87 to £57·7 million in 1988–89? That does not seem to be much of a commitment to the SDA.

The hon. Gentleman is being extremely selective in his use of figures. I have already pointed out that we have increased the budget of the SDA in real terms by a substantial amount. Its creative role in identifying new forms of public-private partnership and its imaginative approach to development programmes have borne fruit in such major projects as the development of the Scottish exhibition and conference centre and an integrated approach to the regeneration of areas such as Dundee and Leith. Its joint involvement with my Department in the Locate in Scotland operation has increased awareness throughout the world of Scotland's advantages as a site for internationally based advanced technology companies. Only lack of time prevents me from enlarging on the SDA's important and growing role in bringing help to rural areas. Suffice it to say that that is an aspect that I regard as important.

Another important source of regional aid derives from our membership of the European Community. For years the SNP was violently and bitterly opposed to our membership; now it tells us it is in favour of it. Perhaps one day it will get around to telling its own supporters.

Certainly Europe is good for Scotland. Over 40 per cent. of our exports go there and we benefit from grants and loans from the European Investment Bank, the European Coal and Steel Community, and the social fund. From that alone. Scotland's share of grants this year, at over £14 million, is the largest of all the parts of the United Kingdom.

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I think that I can anticipate what the right hon. Gentleman is going to say.

Mr. Stewart: The point is that such grants have come on the judgment of the European Community to the most disadvantaged parts of the EEC area.

Mr. Lang: I thought that the right hon. Gentleman was about to press me further on the case for the Western Isles to he included in the special priority category. That is something we have been pressing hard. In the meantime, I am glad to be able to comfort the right hon. Gentleman by saying that we have doubled the subsidy for the Caledonian-MacBrayne services, which amounts to a 30 per cent. increase in real terms. There has also been substantial capital expenditure on new vessels and new terminals.

There is also the European regional development fund from which Scotland has done particularly well, having received no less than a quarter of total United Kingdom allocations. The fund has been an extremely useful source of revenue for local and other public authorities and has helped to finance a variety of infrastructure projects.

An important breakthrough was made by the Scottish Office two years ago when ferry vessels serving the Highlands and Islands were accepted under the fund. And when a new ERDF regulation was introduced last year for programme finance, as opposed to project applications, we were quick to take advantage of the opportunities afforded. Already two programmes have been approved by the European Commission —one for Glasgow worth £68·2 million—the first such programme to be approved and one for Tayside worth £20·7 million.

It is against this background that our continuing success in securing a good — and a fair — deal for Scotland and for the United Kingdom as a whole is closely linked to the submission to the Commission of our regional development programme. The right hon. Member for Western Isles referred—as does this motion—to this programme. But in common with others, he misconstrued the contents of the document and its purpose.

It is first important to put the regional development programme into its proper context. The main ERDF regulation provides that:

"Member states shall communicate Regional Development Programmes to the Commission and any amendinents to them in the case of regions and areas receiving aid eligible for assistance from the ERDF."

What this means is that all member states are required to demonstrate that project applications for assistance from the ERDF relate to the problems specified in the relevant regional development programme. The regional development programme is therefore geared to achieving successful bids for ERDF. Without a regional development programme, it would not be possible to secure ERDF help.

In view of the role of the programme, it must of course he a very comprehensive document. The total United Kingdom submission for the period 1986 to 1990 runs to 17 volumes. The Scottish section alone is more than 200 pages in length. The programme is an extremely detailed analysis of the various regions of Scotland. It contains information on the economic and social situation, development objectives, measures for development, financial resources and implementation. [Horn. MEMBERS: "Is it true?"] The programme concentrates on both strengths and weaknesses alike. Indeed, without the latter, one would hardly expect to receive assistance from the European regional development fund, whose main objective is to correct regional imbalances throughout the European Community.

Against that background, it is particularly disturbing to see selective quotations in the national press which portray the programme as an indictment of current economic and regional policy. Nothing could be further from the truth and the Opposition know this.

The United Kingdom, and Scotland in particular, has benefited very considerably from the European regional development fund. Assistance of over £616 million has been won for Scotland since 1975. It is naive to believe that future ERDF support can be secured without some reference to the weaknesses and potential difficulties in the regions.

A particular point, which some hon. Members have overlooked, is that there is not a country within the European Community that does not want assistance for its less prosperous areas. Each country does so with the back-up of an appropriate regional development programme. There is not a single country among the 12 that would make a bid for ERDF aid by claiming nationwide prosperity.

The Minister has said that all countries in the Community submit programmes. Can he tell us of any other nation state which has made an assumption of such a poor economic performance as we have?

If the hon. Member for Dunfermline, West (Mr. Douglas) had read all 17 volumes of the report he would be aware that we do not submit a programme based on such poor assumptions. I had a look at the history of the ERDF programmes. Between 1975 and 1978 the Labour Government secured £64 million from the fund. Of course the fund was much smaller then. However, between 1979 and 1986 we have secured £552 million. When they submitted their programme, did the Labour Government include unemployment assumptions? No, they did not. The Commission wanted such assumptions. However, did the Labour Government fail to submit such assumptions because they did not know what the unemployment assumptions were or because they did know?

Of course, the regional development programme contains assumptions—but I would stress that these are assumptions, not forecasts. The assumptions, and they are the same assumptions as those contained in the public expenditure White Paper, project what could happen if nobody did anything about current problems. This does not mean, however, that the Government are not determined to take every measure practicable to boost the economy, or indeed that many external circumstances—such as oil prices—may not change to our advantage. On top of all the efforts being made to generate more work from purely Scottish sources and the great success we have had in attracting overseas investment, we are determined to complement our own efforts with European help. It is vital that Scotland, and the United Kingdom generally, continues to get its fair share of European money and that is the purpose of all of our regional development programme.

The EEC report refers to a prediction of Scottish unemployment at a figure of 331,000 by 1990, assuming no radical change in Government policy before then. Was that the Government's prediction? If not, where did that figure come from? Does the Minister believe that the figure is accurate? If not, would he care to tell us now what his prediction for 1990 would be?

The hon. Member for Falkirk, West (Mr. Canavan) cannot have been listening to me. The report contains no predictions and the Government have given no predictions. The Government do not forecast unemployment figures any more than the Labour Government forecast unemployment trends. The report contains assumptions and they are the same assumptions that have been made in the public expenditure White Paper and they are assumptions of what could happen if certain action was not taken.

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The report is full of positive aspects, covering such promising growth areas as microelectronics, health care, biotechnology, food and timber processing, fish-farming and tourism, and of course our highly successful finance and banking sector. It is quite wrong to accept the ill-judged deceptions perpetrated by those who would present only doom and gloom by selective quotation, and it is disgraceful that the Labour party should seek to distort and undermine the balanced presentation of Scotland's case to the Commission.

Least of all is the Labour party qualified to criticise this Government's successful development of regional policy, or to call for more infrastructure spending. Yes, we have cut spending on industry under the Scottish block by 0·3 per cent. in the past three years in real terms, but we are getting better value for money. However, when we look at the same figures for the last three years of the Labour Government the figure is not 0·3 per cent. but 13 per cent.

It is almost exactly 10 years since that same Government slashed Scotland's regional aid programme by 40 per cent. overnight when they abolished regional employment premium. That was a loss of £60 million to Scottish industry — more than double that figure at today's prices. As if that was not enough, they slapped on a further burden of £200 million when they brought in the national insurance surcharge — Labour's tax on jobs. Those were two direct, vicious, panic-stricken assaults on Scottish industry—and Wales suffered the same fate—by a party that had lost control of events, two deliberate measures that destroyed thousands of Scottish jobs.

This Government have struggled consistently and with growing success to repair the damage and restore the economy. We know, because the former Labour Government proved it, that unemployment can be tackled only through the sound economic strategy which we are following. This includes keeping inflation down and encouraging enterprise. 1985 was the third successive year of steady growth, low inflation, and growing numbers of jobs throughout the United Kingdom. It includes a strong and effective regional policy. The new policy we introduced, at a time of rapid structural change, is bringing new jobs and new hope to Scotland and Wales. Above all, it is helping to restructure the Scottish and Welsh economies on a broader base in a way which will enable them to play their full part in the regeneration of the United Kingdom. I urge my right hon. and hon. Friends to reject this absurd motion and to support the amendment.

I congratulate the Minister on his new office. His speech was persuasive except when he dealt with that impossible part of his brief relating to the application to the European regional development fund.

On that issue, no one expects the Government, when submitting an application for funds to ERDF or to anyone else, to present the weakest case. No one would expect the Government to roll out some of the more complacent speeches that we have heard from successive Secretaries of State for Scotland. At the same time, the Government must not lie. They must not pretend that they can say one thing to one audience and something else to another without both audiences hearing what is said. The Government must not behave like an opera singer bellowing away at the auditorium expecting a singer beside him not to hear him if he puts his hand over his mouth. We could not have expected the report to have remained confidential, and I do not expect for a moment that the Government thought that it would. I therefore thought that the Minister was trying to have it slightly both ways when he stressed that it was 17 volumes long and then accused the press of selective reporting. It would have been a little difficult for them to have printed all 17 volumes.

Many documents are now leaked. That is the contribution, if there be one, of the Xerox machine to the advance of civilisation. The Commission is less addicted even to attempted secrecy than the British Government. To circulate a document in the service of the Commission is to put it into the public domain. That has been the fact for some time, and there is nothing very wrong with it.

The Government have for once been caught out telling the truth. The truth is that, on present policies, with which the Government are determined to continue, there is no prospect of any significant reduction in unemployment until beyond the end of the decade. Their figures are quite precise. It is not just a projection, otherwise where does the 80,000 reduction come from? Such a figure is insignificant, however. Nor is there any prospect of a significant improvement in the circumstances of the worst hit regions. There is nothing shameful about the Government saying that that is the reality. What is shameful is indulging in the hypocrisy of pretending otherwise.

It is already abundantly and depressingly clear that the 1980s will be an incomparably worse decade for unemployment in Scotland and the rest of the country than were the 1930s. The attempt to half deny that there is a peculiar unemployment problem in Britain, especially, but not exclusively, in Scotland and Wales, produces some odd performances from Ministers.

The Secretary of State for Defence, when Secretary of State for Scotland, used to indulge in speeches of a bland complacency which were almost Panglossian. The present Secretary of State indulges in some odd intellectual contortions. Last Wednesday, he assured the House that Scotland has the highest percentage of employment in any comparable European country—63 per cent. as against 59 per cent. in Germany. Does he really believe that that figure is relevant? If so, what is he doing applying for regional aid? If the figure is valid, Strathclyde ought to be giving aid to Stuttgart, not the other way around. If he does not believe that the figures are relevent, why is he trying to throw sand in our eyes and those of the country?

The right hon. Gentleman does not need me to give the answer. He knows perfectly well that if far more women work or seek employment in the United Kingdom, that affects unemployment levels and makes straight comparison between Britain or Scotland and the continental countries invalid. A substantial proportion of people who seek employment in the United Kingdom would not seek it in continental countries because it is not as customary for women to work in those countries.

Of course. I am indeed aware that the factor involved is the stronger tradition of women working in Scotland and the United Kingdom. I am not sure of the comparison between Scotland and England as the right hon. and learned Gentleman did not give those figures last Wednesday. The stronger tradition of Scottish women working has been accentuated by the excessive shift to service industry employment, which has been foolishly over-encouraged by the Government. That move has taken us out of line with France, Germany and Italy, let alone Japan. It leaves us in line only with the United States, which can afford it. We cannot. The United States produces a mammoth balance of payments deficit which can be financed only because the dollar is not like other currencies.

I was interested to see that the Secretary of State rejected an egregious leading question from the hon. Member for Mid-Worcestershire (Mr. Forth) on Wednesday. He spoke of an obsession with manufacturing industry which we must correct. He reverses the case. We have had a dangerous lack of concern for manufacturing industry. The Government have been far too much inclined to believe that service industries can solve our problem. The reason for the apparent figures that the right hon. and learned Gentleman is able to produce is the fact that more women are at work and there is a higher proportion of service employment, a great deal of it part-time and probably low paid. That factor conceals a male unemployment rate in Scotland and elsewhere which is completely out of line with anything to be found in France, Germany, Italy and the United States—let alone Japan —which is socially and nationally debilitating.

The Secretary of State is entitled to produce bogus statistics for a little exchange across the Chamber, but he cannot take them seriously. If he does, he is effectively saying that Scottish unemployment is much less serious than that of Germany, France and any other mainland European country, which is manifestly not the case.

Several extremely interesting points emerge in the submission to the regional development fund. There is a frank comment on the level of industrial investment. It is not entirely in accord with what the Government often say. I shall quote from the summary, which I read with interest. I have not read the 17 volumes and wonder whether the Minister or the Secretary of State has. The summary says:

"In the present difficult economic climate, investment in directly productive industries is at a low level."

That is not what we hear from the Government a great deal of the time. The summary continues:

"In these conditions, infrastructure developments are doubly important in both stimulating industrial demand and in creating new construction jobs, as well as preparing the assisted regions for new private investment in the future."

The summary makes a powerful point about innovation, research and development, and shows how they are associated almost inevitably with the headquarters of companies. I believe that the choice of headquarters is to a substantial extent associated with the site of political decision making. There is a real economic argument for Scottish devolution, including substantial economic devolution. Important innovation and decision making is drawn away to the south-east in particular and is associated inevitably with the foci of political power.

Does the right hon. Gentleman agree with the leader of the Liberal party that the alliance puts proportional representation before a Scottish Assembly?