Public Bodies Bill [HL]

Debate between Lord McKenzie of Luton and Lord Hoyle

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.