Public Bodies Bill [HL]
Debate between Baroness Whitaker and Lord Bates
Lord Bates
My Lords, in many ways, this debate reflects the sense of where we are with the whole Bill, because we have heard speech after speech about the north-east of England, which we all love dearly, pointing out what an exceptional region it is and how it needs special attention and help. People have been saying that it had a regional development agency that performed better than any other and was adhered to and held in affection by the business community of the region. It is a small region, with 2.6 million people. The Northwest Regional Development Agency, on the other hand, covers an area from the Scottish border to Cheshire. That is not a homogeneous region to which people can feel an affinity.
There are different views on this. We are having this debate, but let us remember that there is an option available to the local authorities and the business community of the north-east to have a single local enterprise partnership for the whole of the region. That offer was put forward and I supported it, so that there should be one voice for the north-east. However, the local authorities, in their wisdom, could not agree on that. We therefore have this breakaway on Teesside. In fairness to Teesside, and given my credentials in the north-east that I offer to this debate—I was born on Tyneside, represented a seat on Teesside and now live on Wearside—I understand what the noble Lord, Lord Ramsbotham, said about the region between the rivers. There are different perspectives. The people on Teesside felt strongly at the last general election that they had been let down by the regional development agency. The closure of Corus TCP was a real issue. The people felt that they wanted to reflect the fact that the economy and the process industry of the Tees valley made up a unique and discrete entity and that they might perform better on their own. I disagreed with them, but they took that decision, which was for them to take. It was on offer.
Perhaps I may offer this point of view. As well as the sort of romance that we have heard about One North East, let us remember—I am sure that my noble friend Lord Shipley from the board can confirm this—that its budget two years ago was £290 million. Under the previous Government, that was to be cut this year to £180 million. The idea that there was some sort of love-in and that somehow money was being poured into the good north-east was not true. A cutting back of the reach of that agency, and some may say its effectiveness, was already in train.
It is also worth putting this on record. Other noble Lords will also remember the time when I was Minister for the north-east under the previous Conservative Government. There were the Northern Development Company and the Teesside and Tyne and Wear development corporations, to which the noble Baroness, Lady Armstrong, referred. The development corporation for the north-east was fantastic and very well run under John Bridge, with George Russell as chairman—Ron Dearing was a previous chairman. These were terrific ambassadors for the region. They brought in significant amounts of foreign direct investment; 75,000 jobs were brought into the region during their time, although their organisation was very thin. They did phenomenal work. Our reward for having one regional development agency, going head-to-head with the Welsh Development Agency and Scottish Enterprise in trying to bid for projects, was that the incoming Labour Government created seven competitors for us in the other regional development agencies around the country. That was a mistake. There is a case for north-east exceptionalism in these matters. I should have preferred the continuation of a single entity, but that has not been possible.
In conclusion, we are entering a time when there is a change of approach. An interesting study into regionalism by the Smith Institute looked at a set of data covering a period between the peak before the recession hit and its trough. It showed that a recession born of the financial services industry, which should therefore have primarily impacted on the City of London, in fact hit the regions of the country, such as the north-east, Yorkshire and the north-west, hardest. That seemed to fly in the face of the argument that regionalism would balance the national economy. Regionalism was meant to give a little bit of emphasis and push to those regions that, because they were peripheral to the centre, struggled in economic terms. However, we were actually hit hardest.
The north-east will have a good and positive future, not because of organisations and institutions, but because of the quality of its entrepreneurs and businesses. The entire budget of One North East is only half as much as the amount by which Greggs increased its turnover last year, in terms of investment in the region. The company employs 18,000 people. The private sector is doing it. Companies such as Sage are doing fantastically well. I was at the opening of a new facility for OneX in Teesside, which is now exporting server capacity into Denmark through a new cable across the North Sea. There are some fantastic things happening.
It is worth remembering that the north-east is the only region in the country that exports more than it imports. That is a great place to start, and we have to have far greater confidence in our own ability. A good policy is the introduction for the first time of a difference in national insurance contributions, with a preference for allowing people outside the south-east and London to benefit from lower tax rates. Personally, I would go much further. There is a real case for reintroducing enterprise zones across places such as the north-east. In places such as Blyth, Easington and Middlesbrough, where there is no enterprise at all at present, you could create enterprise zones under which businesses could be set up.
The opportunity was there for us to have a single voice in the north-east, although it was not taken. However, the prospects are good, but only because our entrepreneurs and businessmen are good.
Baroness Whitaker
I rise to speak to Amendment 55, leaving the north-east. The grounds for my amendment, in contrast to the eloquent plea by my noble friend Lady Armstrong, are not that every part of the South East England Development Agency should remain exactly as it is now, but that, at present, without it, there is no adequate support for some of the poorest parts of the south-east. I am thinking in particular of Newhaven, next to where I live, where over a quarter of households earn 60 per cent less than the national median income. Newhaven would hugely repay investment. It is poised to become the key commercial port in Sussex and 30 per cent of local companies are in the manufacturing, construction and building sectors. But its high street is withering away and its residents have little spending power.
The Government have proposed local enterprise partnerships in place of the regional development agencies, as we discussed earlier. But at the moment Lewes district, where Newhaven sits, is covered by an LEP for East Sussex, Kent and Essex. This is hopeless. Newhaven has few links to the east. The travel-to-work area is west towards Brighton, north to Gatwick and Crawley, and, for commuters, north-west to London. Unless Newhaven can go into the Coast to Capital LEP, there is little hope for the prosperity of the hardworking and friendly people who live there.
There are acres of brownfield land designated for industrial and commercial use which will be of little interest to an LEP focused on Hastings, Kent, Essex and the Thames Gateway. But it is all ripe for investment. The town is well placed to provide work for the Brighton area and there are promising signs that land with planning permission for housing will soon be developed. The port owners are actively pursuing regeneration of the port, which again has few synergies with the east and north-east.
You could argue—indeed, it has been argued—that SEEDA is too big and there could be other solutions to the regional investment problem. But the worry is that places such as Newhaven will simply drop out of the loop unless the Government pay more attention to practical realities. I ask the Minister: what in the Government’s arrangements for LEPs demonstrates any improvement for Newhaven?