Public Bodies Bill [HL]

Lord McKenzie of Luton Excerpts

Monday 28th February 2011 Lords Chamber

[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]

My Lords, I begin by thanking noble Lords for their contributions to this debate. It has been an excellent opportunity to consider the expertise that this House can provide on a subject covering all points of the United Kingdom. I understand the passion; I speak as a provincial myself. We are all in politics, to a lesser or greater extent, simply because we believe in where we come from and in the communities from which we originate and because we care about the people with whom we live and work. However, there may be other ways of dealing with the imbalances in the economy in the United Kingdom and I ask noble Lords to listen to the argument as to why the Government are proposing a changed approach. Given the breadth and detail of this debate, I regret that I am not likely to be able to respond to every point that has been raised, but I assure noble Lords that I will go through the record and seek to answer the points in a letter, which I will circulate to all noble Lords who have spoken this evening.

The Government’s economic ambition is to create a fairer and better balanced economy. We wish to see business opportunities in a broad range of sectors balanced across the country and between businesses. The noble Lord, Lord Empey, spoke with experience and authority and indicated that the real challenge of building investment and providing job opportunities was probably outside the traditional structures represented by the RDAs. Our Local Growth White Paper sets out how we will put businesses and local communities in charge of their own futures, rather than having to rely on centrally imposed regional development agencies. If I may say so, I felt that some of the speeches confused the effectiveness of critical mass with the greater strength of coherence and real local empowerment and focus.

The amendments that we are debating as a group would preserve the regional development agencies as a whole, or those in specified individual regions. We believe that preserving all or any of them would be a retrograde step. In December, we placed in the Library of the House a short briefing paper, which sets out the reasons for abolishing the RDAs and gives a snapshot of the situation in each region. This has now been updated. Indeed, the number of LEPs has increased dramatically since that time. That update has been placed in the Library and I will build on this information in the course of my remarks.

We set out the rationale for our proposals in the Local Growth White Paper, which was published in October 2010. One key theme in the document is the need to shift power to local communities and businesses. We believe that localities should lead their own development and have the flexibility to tailor their approach to this and to their individual circumstances. If this is to work, they must own their own economic strategy; one imposed from regional or national level would not have this local ownership. For all the good work that they did, the RDAs did not really belong to the communities within the regions. Many of the policies and initiatives that they delivered were on behalf of national government and did not always recognise the varied needs and opportunities that individual places have.

The RDAs were also designed around administrative regions rather than real economic geography. While it would be possible to discuss this matter in the context of every one of the individual RDAs, I would like to discuss two specific examples now. My first example is the south-west region, stretching from Swindon in the east to Penzance in the west and covering an enormous geographical and economic range, from the prosperous and relatively well connected places in the upper Thames valley to relatively isolated and deprived areas in Cornwall. Bristol has many problems in common with our largest cities—those of economic success and of economic inclusion. The issues faced in rural parts of the region are quite different. Linkages, too, differ, with parts of the region having close ties to London, the south-east, the West Midlands and Wales, and others having no such link at all. The relevant policies in each case are quite different. RDAs sought to address that problem and to recognise the differences within their regions, but it makes no real sense to establish a single body to cover the entire region and to expect it somehow to understand and cope with that huge variety. It is far better for the local partners in Bristol to develop policies dealing with the specific issues that they face and for those in Cornwall to do likewise.