Local Enterprise Partnerships (South-West)

Ben Bradshaw Excerpts

Wednesday 10th November 2010 Westminster Hall

[Mr Ben Bradshaw (Exeter) (Lab)]

A more accurate title for this debate than local economic partnerships in the south-west would be the absence or lack of local economic partnerships in the south-west. When the Government launched their flagship regional economic policy the week before last, most of the south-west was completely missing. Only Bristol and Cornwall are covered by these new bodies.

This sorry saga began with the Government’s ideologically driven determination to abolish the regional development agencies. That of the south-west, like most of those around the country, was successful. It had brought much-needed strategic coherence to our region, as well as valuable investment. It had managed to overcome the age-old political in-fighting between the different parts of the region, and the RDA could take a view as to what was in the interests of the region as a whole. I am afraid that, like so much of what the coalition Government are doing—and in spite of the Business Secretary’s support for RDAs before the election —regardless of their merits RDAs had to go, because they were a Labour creation.

Soon after the election, in preparation for the new policy, the local business leaders in our half of the region—led by Tim Jones and the Devon and Cornwall business council—started an early promotion of the idea of a peninsular local economic partnership, comprising Cornwall, Devon and Somerset. The business community felt scale and capacity were vital for these local economic partnerships to succeed, and I wholeheartedly agree. In his letter of 29 June, the Secretary of State invited local areas to come together and put forward bids for LEPs in their areas by 6 September. That precipitated a two-month period of chaotic negotiations, lobbying and planning. That happened largely behind closed doors and was led, not primarily by business, as was supposed to be the case, but by the upper-tier local authorities—in our case, Cornwall, Devon, Plymouth and Torbay. Somerset county council was effectively frozen out of those discussions. It was clear that the four upper-tier authorities in Devon and Cornwall did not want Somerset’s involvement in the discussions or in any subsequent local economic partnership for the area.

My own local authority, Exeter city council, and the Exeter business community, led by our chamber of commerce, were totally excluded from the discussions. They were never formally consulted on any of the emerging proposals. That was in spite of numerous requests to be involved as one of the two key economic drivers in our peninsula. Exeter’s exclusion was also in clear contravention of an instruction in a letter of 25 August from the Minister with responsibility for decentralisation, the right hon. Member for Tunbridge Wells (Greg Clark), to Gary Porter, chair of the district council network, in which the Minister said,

“It is essential that district authorities are included.”

He went on to say that he did not expect county councils to act as “sole building blocks”, and that

“We want to see economic geographies reflected in proposals, not just administrative ones.”

It soon became clear that Cornwall, as is so often the case, wanted to go it alone—a move unfortunately endorsed by the Government for political purposes, much to the consternation of the Cornwall business community and business leaders in the rest of the peninsula.

I have a number of questions for the Minister today. First, does he agree with me and the business community in the west country that local economic partnerships should have sufficient scale to add value and to have clout? Does he also agree that they should reflect real functional economic areas? Is it not the case that the first of those objectives has been compromised by his Government’s decision to accept Cornwall’s bid to go it alone? Is it not also the case that the Cornwall bid did not meet the criteria the Government laid down and did not enjoy sufficient business support? Will he explain how, exactly, a Cornwall local economic partnership will differ from or add value to the economic development functions of the unitary Cornwall county council? Does he also agree with me that it is vital urgently to salvage something from this sorry mess, and that the most sensible solution would be for Devon, including Plymouth and Torbay, to work with Somerset and, if they are interested, those western parts of Dorset that look west rather than east? Will he confirm that the Government have been pressing such a solution?

When questioned in the House on the day of the announcement, the Business Secretary blamed the situation in the west country on the lack of agreement between the local authorities involved. That, I am afraid, is an understatement. In spite of the fact that Devon, Somerset, Plymouth and Torbay are all Conservative-controlled councils, which one might think would make the process of negotiation easier, they have been fighting like rats in a sack. We have seen a return to the worst sort of petty political in-fighting that blighted economic development so badly in our region in the past, and was one reason why Labour set up the RDAs in the first place. I understand that there is little love lost between the Conservative leaders and the councils involved. At one stage, to illustrate the ludicrousness of the whole process, Somerset became so frustrated by Devon county council’s behaviour that Somerset suggested a tie-up between it and Cumbria, based on the nuclear industry.

Will the Minister please start banging some heads together and tell his political friends in the south-west that they must stop their childish squabbling and work together in the interests of the public and local businesses? If they cannot, or will not, do that, will he please tell them to get out of the way, and let the business community get on with it? Business leaders are keen to move forward with a partnership on the basis I have outlined.

[Anne Marie Morris (Newton Abbot) (Con)]

I am delighted that the right hon. Gentleman has given this debate an airing, because it is crucial that we have LEPs in the south-west. Would he agree with me that, in the vein of what he has just said, we should put political divides aside and move forward and get an LEP for Devon, and I suspect for Somerset, as quickly as possible? I believe the business community is now absolutely behind it.

[Mr Bradshaw]

The hon. Lady is right; the business community is behind it. The point I was trying to make is that this is not about putting political differences aside, because the four local authorities involved are all Conservative controlled. They do not—or should not—have political differences but they have been completely incapable of working together on a sensible local economic partnership for our region. I hope we can see them make swift progress toward doing so now. If they will not do it, I want the Minister to tell the local authorities to get out of the way and leave the field clear for the business community, which, as the hon. Lady rightly says, is keen to make progress, so it can put in a bid. Will the Minister confirm, on that basis, that the business community is entitled to come forward with a bid—that it is perfectly possible for it to bypass the fractious local authorities? Will he assure the business community and me today that the Government would look favourably on such a bid? Will he also reaffirm the instruction of the Minister with responsibility for decentralisation: that it is essential that Exeter, which is so important for our region’s future prosperity, be included at the table? If I were the Minister here today, I would be hopping mad at Devon’s deliberate and calculated rebuff to his colleague’s instruction that Exeter should be included in the process.

As the head of Britain’s leading business organisation, the CBI, said recently, this process has been a shambles. We now know that the Minister’s own colleague, the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), warned the Business Secretary in a letter of 14 September that the Government’s local economic partnerships were in danger of failing. I quote from his letter:

“There is a strong view amongst the business community that many LEPs lack the ambition to make significant economic impact undermining our agenda for growth. Key messages I have been made aware of include: a lack of credible business representation on LEPs Boards; negotiations dominated by local politics and a lack of a clear focus on economic growth. They also report different messages coming from Government about LEPs. John Cridland [of the CBI] specifically was concerned that the process has not been transparent, business engagement was poor overall and exacerbated by a tight timescale. He and other senior business leaders from Tesco and Ford have expressed their concern that in their view the policy is in danger of failing to aid economic growth.”

That is exactly what the Labour party warned would happen if the Government went ahead and abolished RDAs. The public and businesses of Devon and most of the south-west have been badly let down by the Government, and the Minister and the Government need to get a grip before it is too late.

--- Later in debate ---

[Mr Hayes]

My hon. Friend, like me, will want to ensure that the criteria are applied robustly and consistently. The right hon. Member for Exeter made the good point that we need to be certain that the marriage between local authorities is right, as is the link between them and business. I repeat that I share the view that the construction of areas should reflect their economic profile. That seems fundamental to making the scheme work well.

The right hon. Gentleman mentioned Cornwall, so I will give him a straight answer. Cornwall made a powerful argument for a local enterprise partnership covering Cornwall and the Isles of Scilly, making it clear that it was a functional area. The Department examined it closely and we decided, in the end, to support the partnership. I know that counter-arguments will be made, but as he knows from his long experience as a Minister, the Government sometimes have to take decisions. We took that decision, and I think that we can justify it based on the criteria that I have outlined. People from Cornwall would certainly argue that the area’s profile is very particular. The right hon. Gentleman will know the economic challenges that face Cornwall. Its issues include skills, employment and the character of the local economy, which legitimises the case that Cornwall made.

South-west Members, including the right hon. Gentleman, understandably make the argument that they do not want the south-west to be left behind. I assure him that we are keen to see as many local enterprise partnerships taking root as possible, both across the whole of England and in the south-west. We do not want any part of the country to be left behind, so as soon as a bid can demonstrate that it meets the assessment criteria, it will be given the green light.

I will say a word about Exeter in particular, as the right hon. Gentleman would expect me to do. I am aware that he is worried that his constituency might suffer disadvantage and that it will not be able to bid to the regional growth fund because it is not part of a partnership. Let me reassure him that although we expect many LEPs to submit project bids to the fund, it is not a prerequisite that applications for funding must be submitted by partnerships—any public-private partnership may apply. Exeter’s business community and local council—along with other potential partners, such as the city’s excellent university, which he and I both know—may work together on an ambitious plan for economic development and then apply for funding accordingly. Indeed, I take this opportunity to encourage them to do so. I know that the right hon. Gentleman, as a diligent local Member, will work with them to make it a success.

[Mr Bradshaw]

My concern was not simply that Exeter would not be able to access the funds; it was more about the whole process. Devon county council has deliberately excluded Exeter, for which it was criticised by the hon. Gentleman’s ministerial colleague in the letter that I quoted. Will he deliver a message to Devon today that Exeter needs to be at the table?

[Mr Hayes]

Although the right hon. Gentleman probably did not know it, he was quoting a letter to the leader of my district council, Councillor Gary Porter, who also holds national office. I know that Councillor Porter was anxious to ensure that district councils played their part.

The Government’s position is clear and resolute. We want local government to play a part. Local government is, as I said earlier, district, unitary and county government. Circumstances will differ in different parts of the country, and that encourages—indeed necessitates—different approaches. We do not take a vanilla-flavoured view about what will emerge, although we are clear that the criteria must be met. The criteria should be consistent, but the character of local partnerships might be different, given that the local economic profiles of various parts of the country differ. We want all partners to be involved. As I think I have suggested, there is a degree of permissiveness about who may bid.

Given that enterprise, investment and innovation are the south-west’s route to lasting prosperity, as is the case in other parts of the country, we are clearing away the panoply of failed quangos that we inherited and replacing them with local enterprise partnerships as part of our new framework for economic growth and renewal. The new framework will recognise functioning local economies rather than imposing arbitrary boundaries. It will offer civic leadership and a genuine partnership between local businesses and councils instead of assuming that Whitehall knows best. It will be less about targets and micro-management, and more about the inspirational qualities of local businesses and local people. It will combine a strong voice for business with democratic accountability to local people. It will also have the flexibility to respond to local economic priorities.

The Government are determined to make the next decade the most dynamic and entrepreneurial in Britain’s history. Britain’s future can be as great as its past, and local enterprise partnerships have a vital role to play in making our ambition a reality.