Lord Hoyle
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(13 years, 9 months ago)
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Lord Hoyle
This has been a very interesting debate on RDAs so far. I refer to some of the remarks of the noble Lord, Lord Empey, before I develop my theme. The noble Lord mentioned the difficulties faced by the Republic of Ireland because of its economic policies. As I understand it, it has been in a little difficulty recently, has it not? The noble Lord talks about Stormont, where power is devolved. I think he will understand that we want the best for our regions as well. I agree with him completely on one thing; this is about training. If that is left completely to industry, it might well, as it has in the past, go to the south-east rather than to the other regions. As has been said tonight, whether noble Lords have been speaking about the north-east, the north-west—as has the noble Lord, Lord Greaves—or other regions, such as the south-west, which my noble friend Lord Whitty spoke about, it is about ensuring that provision is spread more widely than the south-east, which, if it was left to the market, is where it would go. Because of that, I am totally against the Government's proposal and hope that, in the light of the debate and certain disquiet, as I sense it, from part of the coalition, they might just think again about their policy.
The noble Lord, Lord Greaves, raised this issue, but I want to speak a little more about what the Northwest Regional Development Agency has done and what successes it has had. In doing so, I pay tribute to the chairman, Robert Hough, and his colleagues, and the dedicated staff for their vision when they were led by Steve Broomhead, who until recently was the chief executive. I want to spell out more concretely for the Minister what the agency has done for the community. It has created or safeguarded just over 220,000 jobs; it has created 23,000 new businesses; it has reclaimed 4,000 hectares of brownfield land; and it has levered in £3.2 billion of private sector investment. This is quite a record in itself.
Data from the independent evaluation by PwC of the north-west’s development activity over the period 2002-07 reported—and this is very important—that, for every £1 invested, the Northwest Regional Development Agency had achieved a £5.20 increase in GVA. Independent X-ray inspections by the NAO in 2007 showed that the NWDA was performing strongly. At the time, this was the top mark possible. A subsequent report in 2010—let us bring things more up to date—showed that the NWDA was strong on reprioritising to deal with the economic challenges of the recession. That will be lost to us. Recently, the NWDA moved into the IiP gold standard. The big thing about this in relation to development agencies generally and the north-west in particular is that they built on the region’s heritage and strengths to provide the investment where it was needed—that is the important thing—and the leadership and support to ensure that the places, assets and industries of the north-west were best able to seize the opportunities for a sustainable future.
The Northwest Regional Development Agency supported the north-west in dealing with the tremors and shocks—particularly economic shocks—that can appear. They dealt with foot and mouth, which was very important in Cumbria in particular, and with the more recent flooding in Cumbria, getting practical support to businesses within four days of the floods. All that was very important indeed, especially in Cumbria. Could that be done by any other agency? I do not think so. The agency has also worked with partners to attract, host and develop a legacy from a wide range of events in the north-west, including the extremely successful Commonwealth Games—which everyone remembers—and Liverpool as the European capital of culture. This was largely based on the funds that came. The agency led the development of economic strategy in the region and produced the strategies needed. The important thing was that it brought together the regional agencies to develop the whole of the north-west economy, from Cheshire in the south to Cumbria in the north-west.
Let me go even further and develop in more detail how the agency played a part in the regeneration of Ancoats in east Manchester. In 2002, it undertook England’s largest compulsory purchase order to regenerate Ancoats, revitalising historic cotton mills and ensuring the north-west’s history as the birthplace of the industrial revolution, while bringing back derelict buildings for new economic use.
Let us talk a little about what they did in Liverpool. As Members here understand, the agency invested heavily in the regeneration of Liverpool’s waterfront, particularly the world famous “Three Graces” and the Albert Dock. How will we do that in the future? It helped to secure the arena, the convention centre and the new museum. It reopened the Leeds-Liverpool Canal, as we know, and the Mann Island development. These investments have paved the way for a fully private sector-funded redevelopment of Liverpool’s city centre. How will we do that without an agency that looks at the whole region?
I am sorry if I am going on a bit but, because we have been talking about development agencies, I want to put into context what has happened in the north-west. On businesses, the agency secured support for the nuclear industry, the supply chains, and the Nuclear Decommissioning Authority in west Cumbria. It also secured the national skills academy, the nuclear headquarters and the flagship energy facility in west Cumbria. We have talked a lot about west Cumbria because it is an area that could be forgotten. It has been said that it should perhaps have been with the north-east, but let us say what has actually been done. I notice my noble friend, who made a very powerful speech, nodding his head in agreement with what I am saying in relation to this.
Let us take Business Link Northwest. In 2007, the development agency launched a one-stop regional business link service to provide a primary access point for business support in 2008 and 2009. Over 92,000 businesses accepted the service, which was a 30 per cent increase on the previous subregional arrangements, with an 89 per cent customer satisfaction rate. What it has done is worth recalling. We talked earlier about skills. The noble Lord talked about the need for them. In Manchester, in 2004, the Victoria University of Manchester and UMIST combined to form a single university. The investment by the development agency helped to pave the way for integrating the two institutions and enabled the construction of new state of the art facilities. As a result of the help that it received, the University of Manchester is now Europe’s largest single-campus university, with over 27,000 undergraduate students. It is steadily climbing in the rankings to one of the top universities in the world, not just in this country.
A bit nearer home to me in Warrington is the Daresbury Science and Innovation Campus. Investment and leadership from the agency to create a critical mass of research knowledge, expertise and capacity has resulted in extensive spillover with over 100 high-tech enterprises now located in the Daresbury Innovation Centre. They benefited from all the help they were given by the agency. Are we going to throw all that away?
The noble Lord talked about RDAs competing. Does he imagine that the local enterprise partnerships will not compete with each other? I do not know where he is coming from. The RDA was split into Cumbria, Greater Manchester, Liverpool city region, Cheshire and Warrington, plus—the noble Lord, Lord Greaves, mentioned one of them—possibly three overlapping supporting approaches for local enterprise partnerships in Lancashire. Indeed, as he said, a lot of work has been done in a territory that both of us know well: the Pendle area and Burnley. There is the Blackburn with Darwen Borough Council, and an approach is being made by Blackpool, Fylde and Wyre. All these can go together in relation to it. The question is whether that will be the powerful voice that the RDA has been in the past. I do not think so. The needs of the whole region will be neglected. I am afraid that the competition between the two cities of Manchester and Liverpool will be to the detriment of the rest of the region. That is what we are hoping to get away from. We hope to look at the north-west region as a whole. That is the way in which we should go, but I am sorry that the Government have taken this approach. They have taken the idea—
Lord Greaves
I wonder whether the noble Lord—as he says, both of us know the Pennines well—will agree that when a region such as the north-west finally gets a complete set of local enterprise partnerships, or LEPs, whatever pattern it is, what will happen—and it is already being discussed—is that at regional level all the LEPs will come together to form some sort of association or confederation of LEPs to recreate a structure at a regional level. However you look at it, this will be necessary.
Lord Hoyle
I could not agree more with the noble Lord. Of course that is what is going to happen. Something is being tossed away needlessly by the Government in a very hasty decision, without due thought being given to either region. I certainly agree with him that these things will need to come together if the various regions throughout the country are to benefit. Unless we do that—unless we get them together—we have failed. I am so sorry that they are being split up in this way, only for them all to come together under another name, as the noble Lord, Lord Greaves, says. In view of the pleas that have been made from these Benches and from other Benches, particularly from the Benches within the coalition—they seem to sit a little bit apart at times—will the Government please think again before destroying the RDAs?
Lord McKenzie of Luton
My Lords, I speak to Amendment 51, which opposes the abolition of the East of England Development Agency. I am perhaps a lonely voice for the east, although it is a region that I know the Minister knows well, so I look for some particular favour in his response tonight. I do not think that the east as a region has the innate identity that we have heard about tonight, particularly with the north-east and the passion that goes with that. We are probably a bit more like the south-west; we have grown to be a region. Before I develop my theme, I just say in response to the noble Baroness, Lady Harris, who I think was arguing for the benefits of some regional selective tax breaks, that selective tax breaks can be good for job creation, but mostly for accountants and lawyers. For me, it is a slippery slope and we need to think about it very hard.
I take this opportunity to reflect on the opportunities for the east, which EEDA has encapsulated in its Blueprint for Growth, and on why the fragmentation of the regional effort will diminish those opportunities. I caution that the replacement local enterprise partnerships are no substitute for the RDA. In any event, in the east some 27 per cent of the population and 26 per cent of the businesses will not be covered by a LEP.
My first encounter with the RDA was about a decade ago, as leader of the council, when we heard the news that the Vauxhall car plant was to close; in fact it was—would you believe?—heard over the radio while people were still working on the production line. I did my job as leader of the council in my office in Luton town hall; I sent off a fax to the chief executive of General Motors in Detroit demanding that it rescind this closure notice. I still await a reply. It was the RDA that sprung into action and convened a strong local partnership, which took action around skills training, supply chain diversification, job placement, investment and infrastructure. It was the RDA’s efforts that made a significant difference to the local economy and to literally thousands of local people in Luton and the surrounding area.
EEDA has a clear mission to improve the economy of the east of England. It works across the six counties of Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk. The east of England is one of the fastest-growing regions in the UK in terms of population. It is a beautiful and diverse region, rich with cultural heritage and international trade links. It can be proud of its many achievements, but it faces many challenges, especially from intensifying global competition.
Despite the lack of homogeneity across the region, EEDA’s efforts have been spread right across the area—in its impact in Bedfordshire borough, central Bedfordshire and Luton, for example. In the past 10 years, EEDA has invested more than £100 million in this sub-region. Some 6,000 jobs have been created or safeguarded, 13,000 people have improved skills, 1,000 businesses have been helped to start or grow, 2,300 people have been supported into employment and 43 hectares of brownfield land have been reclaimed. Funding of the UK Centre for Carnival Arts in Luton has created a national centre for carnival excellence, boosting the local economy and the cultural heritage.
In Norfolk over that period, EEDA similarly has created or safeguarded some 6,000 jobs, improved the skills of 22,000 people, helped 1,100 start-ups and reclaimed 72 hectares of land. It has also supported projects such as the Hethel technology park in its bid to be a globally recognised centre of excellence for low-carbon engineering and manufacturing. The Cambridge rural enterprise and mentoring initiative is encouraging start-ups in economically disadvantaged parts of the region.
The East of England Manufacturing Advisory Service has supported Vacuumatic, the world leader in paper counting technology, to implement lean manufacturing principles. Over the past 10 years, EEDA has invested £81 million directly in the Hertfordshire economy, helping some 22,600 businesses to start up. Highly skilled jobs for research companies are to be created as part of a £120 million expansion of the GlaxoSmithKline bioscience campus at Stevenage. Some £8 million has helped to support small life science companies and to protect jobs in the biopark in Welwyn Garden City. EEDA investment has regenerated Ipswich waterfront. EEDA has also invested in the Haven Gateway Partnership, the single most important cluster of ports in the UK. Everywhere you look in the region, it is possible to see the impact of the RDA.
Looking back is one thing, but what of the future? One in every nine UK businesses is based in the east of England—more than 430,000. Business investment in R&D is three times higher than the UK average. It has the most successful life sciences cluster outside the US. The world-renowned Cambridge technology cluster is in the region representing 1,400 companies and employing 43,000 people. The east of England has significant capability in both mature and developing high-value knowledge-based markets. It is already a major generator and supplier of energy, including leading the way in renewable energy generation, which makes it the centre of one of the world’s largest markets for offshore wind energy and the UK’s most dense area of offshore development between the Humber, the Greater Wash and the Thames estuary.
Despite these successes, the region requires a skills base that better suits its needs. There are disparities in economic performance within the region and areas such as Luton have high deprivation. The region suffers from an infrastructure deficit, with congestion on the transport network costing the UK more than £1 billion per annum. There is only one commercial broadband network in the east of England, which provides coverage to only around 60 per cent of the region.
It is at this time of huge opportunities but significant challenges that the Government choose to pull the plug on the agency that has been at the heart of the success of the east of England and best placed to address its challenges. In parallel, they are killing off regional spatial strategies. There is a continuing need for joined-up interventions in support of skills, infrastructure, business support and supply chain managers.
The focus that the RDA brought to the region is being scattered, as we heard from others, in all sorts of directions—the EU programme to DCLG and Defra, inward investment to UKTI, manufacturing support to BIS, and Business Link, eventually, to some national scheme. Other noble Lords have mentioned issues of asset disposal. One of the issues that needs to be addressed, especially when regeneration funding is involved, is the potential for clawbacks, particularly for local authorities.
So much for localism. The local enterprise partnership does not cover the whole region; it covers parts of three old RDAs. By all accounts the process locally fits the Cable description of being,
“a little Maoist and chaotic”.
As we have heard, LEPs have inadequate funding, there are no significant resources for their development and local authorities are going to be very hard pressed to fund even the secretarial support. It is not too late to draw back from the hasty and ill thought-through decision to abolish RDAs. The east of England will certainly be less well placed to realise its potential without the RDA. This is a loss not only for the region but for UK plc.
Lord Taylor of Holbeach
I was coming to the whole business of Newhaven. I am grateful to the noble Baroness for mentioning earlier that she wanted to talk about Newhaven. As she will know, Newhaven is currently covered by the LEP for East Sussex, Kent and Essex. It is perfectly possible for Newhaven and the Lewes district to work with the Coast to Capital LEP as well. The whole point is that boundaries are not as important with LEPs as they are with RDAs. I hope that Newhaven’s position will indeed be recognised by Lewes District Council in the way that it operates within the LEP framework. It is perfectly at liberty to do just that.
I come to a few other parts of the country; we have mentioned everywhere, I suspect. There is perhaps an example of cross-regional development that I should also draw your Lordships’ attention to. The partnership in the south-east Midlands attempted to deal with an economic area in which the former regional boundaries were particularly irrational and obstructive—the area around Milton Keynes, which the noble Lord, Lord McKenzie of Luton, will know. To an extent, the RDAs recognised this but they were largely ineffective in responding because their structures hampered them in doing so. The local partners do recognise it fully. They are basing their proposals around a practical response, and I regard this as progress.
The White Paper also described the regional growth fund, which, as I said, is worth £1.4 billion over three years. This is money to be spent outside the south-east of England. This complements the other measures that the Government are taking to support growth through investment and to provide support for education and skills. The noble Lord, Lord Empey, emphasised the role of skills, improvements in competition and support for research and innovation. These are the focus of the measures and will lead to real jobs and skills. Without a skills base, we have no opportunity of building the jobs and the industries that will provide employment in the future.
Lord Hoyle
Will the Minister say why he thinks he will develop skills better than the RDAs have done?
Lord Taylor of Holbeach
The skills will be developed as part of the skills policy of the Government. My honourable friend in another place, the Minister, Mr John Hayes, has recently announced a skills strategy for the country. If we have not debated it in this House, it is because we have been very busy debating other things. However, it is a very important strategy, and it is part and parcel of the strategy for economic growth in this country.
Perhaps I may continue to describe the regional growth fund. It is intended to encourage private sector enterprise and create sustainable jobs. In particular, it is designed to help places currently reliant on the public sector to make the transition to private sector-led growth. I suspect that there is a feeling across the House that this is important. Once again we are encouraging proposals to come from the bottom up, responding to local circumstances. When the first round of bidding closed at the end of January, we had received nearly 450 proposals, showing that there is a significant appetite for an approach of this kind. My noble friend Lord Heseltine is chairing the panel which will be selecting the best of these proposals; and noble Lords have referred to my noble friend in contributions to this debate. Noble Lords will need no reminding that encouraging growth throughout the country is a cause dear to his heart.