Public Bodies Bill [HL]

Baroness Whitaker Excerpts

Monday 28th February 2011 Lords Chamber

[Lord Taylor of Holbeach]

I should remind the noble Lord that I do not consider £1.4 billion in the regional growth fund to be insignificant. Noble Lords may well feel—and they clearly do—that it is better that the taxpayer should fund large redistributions through RDAs, but there may be other ways in which economic policy can be directed, as my noble friend Lady Harris of Richmond mentioned. She talked about tax incentives. Far be it for me, as a very lowly member of the Government, to challenge the Treasury on tax incentives, but there are different ways of doing these things other than handing out taxpayers’ largesse. I emphasise that that is the way in which this Government are thinking.

Perhaps if I talk about the north-east, I might be steering into danger. I am not too frightened of doing so because we should recognise that the north-east does not have a single monolithic economy. The region has a varied economic geography, with significant economic poles, across the Rivers Tyne and Wear and the River Tees. Each place has a different industrial heritage and different strengths, opportunities and threats. The local authorities in Tees Valley have a strong track record in working together and were quick to put forward an application to form a local enterprise partnership. This argues that they recognise the benefits of these new arrangements. A partnership has now been established, covering the authorities in the rest of the region. As Vince Cable has made clear, this is not to say that some form of co-operative arrangement across the north-east is not justified if local partners want it. I said that at Second Reading and I have just said it again. However, I strongly question whether a regional development agency, with all its attendant complexity and bureaucracy, is necessary to achieve this.

The previous Government gave RDAs the task of narrowing the gap in growth rates between the prosperous region of the greater south-east and the rest of England, and provided them with significant resources over a sustained period to help them achieve this. However, it was a target that they failed to meet. Between 1990 and 1999, the real gross value added per head in the greater south-east grew by around 1.8 per cent in each year, compared with around 1.4 per cent in the other six regions—a gap of 0.4 of a percentage point. Between 1999 and 2009, annual growth in the greater south-east fell to 1.4 per cent, compared to 0.8 per cent in the other regions—a gap of 0.6 of a percentage point. Therefore, the gap in growth rates has widened by around 0.2 of a percentage point. It is time to try a new policy, even in the north-east.

As the White Paper makes clear, we are encouraging businesses, local authorities and their partners to develop local enterprise partnerships based on real economic areas, rather than artificial administrative regions. The new partnerships are based on where people live and work. Businesses and civic leaders will work together to drive sustainable economic growth and create the conditions for private sector job growth in their communities. Partners have responded to this invitation in an enthusiastic and innovative way. So far, 31 partnerships have been asked to form boards, covering 87 per cent of England’s population and a similar proportion of businesses. We are actively engaged with partners in the remaining areas, helping them to develop proposals that will meet our broad criteria.

I reassure the noble Lord, Lord McKenzie of Luton, that five LEPs have been asked to establish their bases in areas that cover the east of England. I assure the noble Lord that there will be partnerships covering the entire region. There will be no businesses or parts of the population that are not covered by an LEP.

[Baroness Whitaker]

What the noble Lord has to say about LEPs does not exactly fit the situation of Newhaven, where the LEP is just wrong for it.