The message is simple: Give Scottish Enterprise a chance and stop moaning about the loss of the Scottish Development Agency. Donald became chairman of Scottish Enterprise in January, the personal choice of Ian Lang, Secretary of State for Scotland.
The SDA was created by Willie Ross in 1975 and from the start it adopted a high profile. Indeed, its very visibility became a liability after the General Election of 1987 in which the Conservatives fared very badly in Scotland.
Mrs Thatcher looked round for scapegoats and found one in the shape of the Scottish Office. Scotland had resisted the new economic culture, the argument went, because the Scottish Office had seditiously resisted it. And one of the weapons of the resistance was the SDA, itself the creation of the Scottish Office and descended from concepts developed by it before the war.
It made a number of political errors. When it had got good news to announce it did not have the nous to invite the Minister to make it and bask in the media glory. It was spending large sums of public money but the Government got no credit for it. The press was full, instead, of local government moans about spending cuts.
(It should not be forgotten that local authorities used the unpopularity of the poll tax as a pretext for putting up their expenditure in the certain and comfortable knowledge that the Government would get the blame.)
As the agency had been the creation of a Labour Government, its very name began to be a dirty word in Downing Street circles. It would yield no political dividend to a Conservative administration and therefore there were few voices raised to defend it. Malcolm Rifkind had himself moved towards a Thatcherite position in order to disarm a sustained attack on the Scottish Office and judged, probably correctly, that to resist the change would increase Downing Street’s irritation with Scotland.
The agency had also attracted some unpopularity in Scotland. In the east it was sardonically known as the Strathclyde Development Agency because it devoted so much effort to the problems caused by Glasgow’s economic decline. It took little interest in places such as the Borders where the textile industry was in crisis.
It was also centralised and bureaucratic. Its department of daft ideas was sometimes overproductive. And industrialists were resentful that while it helped inward investment it rarely did much for the native sprigs of commerce.
The chairman of Grampian Holdings, Bill Hughes, quite unashamedly bypassed the Scottish Office as it wallowed in low political water. He went to the Prime Minister with his plan which evolved into the system over which Scottish Enterprise now presides. He told me yesterday he believed that had he not done so Mrs Thatcher would have abolished the SDA. She had already removed various other bodies inherited from the Labour days.
The system includes training and has been decentralised through a network of local enterprise companies. Their boards are run by local businessmen. The SE core function is to provide strategic leadership and tactical support.
Already there has been criticism. It is the fate of those who spend public money to be shot at. Some of the boards, it is said, are risk-averse, manned by businessmen with an eye on their gongs. One chief executive for a time developed the instincts of a J. P. Morgan. Some of the local enterprise companies are tiny. Some of their projects are daft. And so on.
Government circles confirm that the performance of the local enterprise companies so far has been uneven but Donald will have none of all this negative talk. He declines to be drawn into any discussion about the SDA and expresses his admiration of those who worked there.
He and his chief executive, Crawford Beveridge, will run the network on the basis of performance-testing. The work of each local enterprise company will be regularly reviewed. Those that do well will get more resources. Those that do badly will get fewer.
They do not think it is Scottish Enterprise’s role to bail out bankrupt industries. But they do think they can spot opportunities and help people take advantage of them. They are hot for exports and import substitution. It does seem odd that Scotland should import slates and coal — and trees. Most of the trees die in our northern climate soon after they are planted.
I have known Donald since the seventies when he was a young professor at Aberdeen and later at Heriot-Watt. He went off to start an economic and planning consultancy and has become a trusted adviser of governments. Stephen Maxwell, who was a prominent member of the SNP executive in the seventies, recalls that he was the first independent economist to identify the extent of wealth in the North Sea.
Donald cannot remember this when we discuss it over breakfast. When I am so rash as to venture some opinion about Scotland’s economic history, he quickly points out that he does know a little bit more about it than I. Touche, Donald, you are indeed a brainy chap: pass the toast.
He is energetic and analytical. Though he works for the Government in various ways, he is his own man, and they listen to what he says. He recently criticised the Chancellor’s proposed changes in the oil taxation regime. He is one of the best guys around on the Scottish scene and I wish him well. The SDA is dead; long live Scottish Enterprise.