European Union (Referendum) Bill

Debate between Gordon Marsden and Lord Wharton of Yarm

Friday 5th July 2013 Commons Chamber

[James Wharton]

I want to make a little progress, then I will give way.

There is—and we can see it already—a debate to be had about whether our national interest is best served by being inside the European Union or by coming out. That debate, however, is not for today.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Will the hon. Gentleman give way?

[James Wharton]

This is a debate about the Bill that is before—[Interruption.]

--- Later in debate ---

[James Wharton]

My hon. Friend is right. That is a fundamental point. The European Community that the British people voted to be a part of in 1975 is not the same as the European Union of today.

[Mr Marsden]

Will the hon. Gentleman give way?

[James Wharton]

I will give way, then I want to make some progress.

[Mr Marsden]

I am grateful to the hon. Gentleman. He is making his points more usefully than some of his Whips have done so far—[Interruption] but is he aware of the fact—[Interruption.] Tory Members should calm down. Is the hon. Gentleman aware that 40% of UK exports go to the EU tariff-free, and that business leaders in this country have said that it would be dangerously destabilising if a referendum were to go ahead. Does he think—[Interruption.]

[Mr Marsden]

Does the hon. Member for Stockton South (James Wharton) think it is in the interests of this country that we should have four years of uncertainty for business from his Bill?

[James Wharton]

The hon. Gentleman read his intervention very well, but the British people deserve a say and they deserve to be given a real choice. They should be given a choice between the best possible relationship with the European Union that we can offer, and leaving.

Regional Growth Fund

Debate between Gordon Marsden and Lord Wharton of Yarm

Tuesday 1st November 2011 Westminster Hall

[James Wharton]

Earlier in this informative debate, the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) said that two and a half years of due diligence were conducted on the Sheffield Forgemasters loan, yet no money was given at that point. It is important that due diligence is conducted when Government money is given out. Regional growth fund money is often tied up with private investment, which can come first to allow projects to go ahead. Does the hon. Member for Blackpool South (Mr Marsden) acknowledge that?

[Mr Marsden]

It is important that there is due diligence. I will come on to explain why that is, and why the Government do not seem to have done it well.

As I was saying, nearly 90% of first-round bidders had not received their money. It is not only the Opposition saying that. In yesterday’s “Today” programme, the chief executive of the North East chamber of commerce, James Ramsbotham, was asked whether the money will help. Referring to the second round, he said:

“It’s…difficult to say, because of…the first tranche of the RGF…not a penny has been paid”.

I assume that he was referring to the north-east. He also said that

“the businesses that it’s going to are…already doing incredibly well…I do believe that it’s worth investing in success…although there is clearly a lot of debate about whether there should be more investment in jobs and in infrastructure”.

He said that the delay was serious and needed to be addressed. When asked about whether the Government should have scrapped the regional development agencies, he said that One North East had worked rather well to promote the area for tourism and business, that nobody would be doing that now, and that it would be a loss.

That brings us on to a broader point about the way in which the Government got rid of the RDAs and the impact on the regional growth fund. One of our criticisms is that the process of filtering the bids has had little regional input. The RDAs had good expert advisers, who could have been used either directly in the regional growth fund bids or in local enterprise partnerships. However, because the process has been driven by two of the horses of the apocalypse, in the shape of the Chancellor of the Exchequer and the Secretary of State for Communities and Local Government, who wanted the mention of anything regional blotted out, those people have been lost. That is a great loss.

The Government have tried to hide behind excuses for the delays. Lord Heseltine stated last month that RGF money was never expected to come first, and that businesses would proceed with other sources of cash first. Yet the guidance on the RGF’s bidding criteria, as Opposition Members have already said, states that bidders would usually expect to receive the cash in line with other payments.

In the article in The Times that has already been referred to, the Minister made precisely that point. He talked about the problems that there had been with certain bidders not being able to draw down private sector funds, which was holding up the Government’s release of cash. The Government cannot have it both ways—they cannot on the one hand say that it is perfectly all right for the money to come at the end of the process, and on the other concede to The Times that the fact that the money has not been forthcoming is a serious part of the problem. That is part and parcel of the blurred and confusing way in which the Government have proceeded.

The Minister said in the article that due diligence should take about six weeks on average, but clearly that has not been the case; 40 bidders were still waiting six months later. Sometimes the Department for Business, Innovation and Skills seems to resemble the Spanish empire of Philip II, where the bureaucracy was so labyrinthine and took so long that a famous quote said, “If death came from Madrid, I would be immortal”. We all know what happened to the Spanish armada, and I hope that its fate will not befall the Minister, the Department or its officials. There is a serious point about how the Government have handled the process. I would like to hear from the Minister what will happen to the money that he says may not be distributed under due diligence.

It is also important to ask what input there is into the process within BIS. How many people are working on it? The Minister needs to answer the questions raised by the Opposition about external factors and costs, but I know from his answer to a question of mine on 8 September that only 11 full-time officials in the Department were working on the regional growth fund at that time. I leave Members to consider whether that is reasonable. Given that it has taken the Department a long time to deal with only five bids from round 1, how long do Members think it will take to deal with 119?

Although the scheme is called a regional growth fund, there appears to have been little or no regional input in the process, with decisions taken in Whitehall. Taking the panel as an example, we know who is on it, but 15 months after the process was launched, we still do not know clearly what the panel does and how it does it. It would be helpful if the Minister could explain precisely the link between the panel’s advice and the decisions made. That is extremely important, particularly in light of two articles in The Times and the Financial Times today. The FT article dealt with an issue that the Opposition have already raised—the interests of one of the members on the panel. The article in The Times drew some conclusions on how there seemed to be a relationship between the distribution of bids, political areas in the country, and companies that are significant backers of the Conservative party. That is for The Times to say; it is not for me to comment on. I prefer to take up what is said at the end of the article. The Minister has to listen to this. The article states that the process is getting a lukewarm welcome from the CBI and from the director general of the British Chambers of Commerce, who said:

“The speed at which this funding is delivered will be fundamental to the success of the Regional Growth Fund.”

The Government must move faster. The deputy director general of the CBI said:

“Despite its size, this fund does not have the capacity to plug the finance gap. The Government needs to look at other funding options to help these firms grow.”

Those are exactly the points that the Opposition have made throughout the process. We believe in the principle that money that is meant for the regions should stay in the regions.

There are three key criteria regarding regional growth policy on which the Government should be judged: the conduct of the RGF and how adequate it is as a replacement for RDA funding; how adequate LEPs are to take over the RDA structures—I have already referred to the failings in the system—and mechanisms for releasing European funding to the regions. The Minister needs to address all those issues, particularly the role of investment in transport infrastructure.

The Minister and the Secretary of State preside over a fund into which they do not put any money—the money comes from the Department for Communities and Local Government, the Department for Environment, Food and Rural Affairs and the Department for Transport. That showed in the first few months, when, as I said, those Departments steamrollered the Department for Business, Innovation and Skills and pushed it out of the way. It is now trying to claw back the role, but too much time has been lost in that process, and too much time is still being lost because of the incompetence of the process of due diligence.