Lord Beecham
Main Page: Lord Beecham (Labour - Life peer)
Lord Beecham
My Lords, in the coalition lexicon, there is a six-letter word missing: it is the word “region”. It has been banished by Mr Pickles, and the use of it has been banished from PCTs by the Department of Health. Of course it is true, as my noble friend Lady Royall has implied, that there is a variable geometry about regions. They are not all the same: some are regarded as too big—one thinks perhaps of the south-east, where a predecessor television programme to “Strictly Come Dancing” was called “Come Dancing”. Some of your Lordships may recall that then “Home Counties North” and “Home Counties South” were regarded as appropriate areas. Perhaps that might have been better than a single RDA for the south-east. Nevertheless, many of the RDAs have performed extremely well. If there were uncertainty about some of them, the question arises: why abolish all when there may be a very strong case for keeping some, if not all?
Nearly a year ago, Vincent Cable came to the north-east in his first few weeks as Secretary of State, and he declared his belief that the north-east was,
“one region where business support through a regional agency is both necessary and appreciated”.
He was right about that, but he subsequently went on to propose the abolition of that agency. In any case, he understates the case.
Consider the report on the RDAs from the Select Committee on Business, Innovation and Skills. It found evidence of effective intervention in the face of economic shocks and strongly endorsed the RDAs’ role because they,
“improved the understanding of local economies and their connections with businesses … They were also able to catalyse delivery of infrastructure … and took a strategic approach to planning decisions”.
It thought that some RDAs were, perhaps, too big to profit from local engagement, but it made it clear that,
“policies were far from being applied on a blanket basis within regions”.
Interestingly, the CBI recorded 66 per cent support for continuing regional co-ordination via the LEPs, if they were to be the new mechanism—and especially strong support in the Midlands and the north. Even in areas where the number of local enterprise partnerships was great, it saw the need for an overarching structure. The Select Committee recommended that regional groupings should be recognised where a clear wish was expressed. It also expressed a concern that inward investment and tackling economic shocks would be inadequate without local knowledge and support, as my noble friend has said, when functions were translated to Whitehall. This has been compounded by the proposed abolition of Government Offices for the Regions providing critical intelligence and contact from within the regions to government. Accordingly, the Select Committee recommended that government should devolve powers to regional structures where there was clear evidence of good management of resources.
A back-handed compliment was paid to the Government’s policy from one witness to the Select Committee, who said:
“One good thing that the Westminster Government has done is to abolish regional development agencies in England”,
removing significant competition from the market. That witness was Dr Brian Gibbons, who is Minister for Economic Development in the Welsh Assembly. He clearly took the view—indeed he expressed it—that the Government’s decision presented Wales with a significant opportunity at the expense of the English regions.
The Federation of Small Businesses said that the local enterprise partnerships should have the capacity to address all the issues impacting on development, including transport, planning and housing at a strategic level, tourism, the low carbon agenda and skills and training. But that long list begs the question of the scale of the organisation to carry out those functions and the resources it will need. The organisations that will take the place of the RDAs are the local enterprise partnerships and, as my noble friend has said, they will not have responsibility for significant areas of policy including the ERDF. They will be expected to work with government, whatever that is supposed to mean, on investment priorities, transport infrastructure, the regional growth funds and getting the jobless back to work. Again, there is the question of scale: you will have, as we have in the north-east, at least two organisations, perhaps with an overarching body as well. In other parts of the country there are none, in some there are numerous: how will these work together at the strategic level as opposed to the very local level?
Of course, as my noble friend has pointed out, the funding is very limited: £1.4 billion over three years is very little more than what the Secretary of State himself described as the “trifling” figure—I think that was the word—of £1 billion that was originally proposed. The committee was also concerned about the not-so-local knowledge, about the assets and about the potential for a massive success or failure if the debts were not adequately resourced. Of course, they are not being resourced: they will have no funding and no powers. As I have said previously in this Chamber, they are in danger of being penniless, powerless and pointless. That is a real risk.
There are serious questions to be asked about assets. The Government’s plan is for the assets to be used to pursue economic development benefits through transferring assets to appropriate hosts. They qualify that promise, which on the face of it looks reasonable, by reference to the need to deliver maximum value on public sector investment in the context of deficit reduction. There is therefore a clear implication that the assets will be realised to meet that agenda. There is also a clear implication that that might lead to early disposal.
I have not had the advantage of reading the entire text because Wikipedia has not yet published it. I have seen only a redacted copy of the submission made by One North East, the agency with which I am most familiar, on the proposal for assets disposal. Interestingly, it is proposed to sell some at market value to local authorities. How local authorities are supposed to fund the acquisition of those assets in the present circumstances is beyond me. Some will eventually be put on the market for open market disposal, with an interim period of management by local authorities. Again, at a time of local authority cuts, where will the capacity exist to manage this estate? Similar difficulties arise in relation to intellectual property. There are no fewer than seven pages on that in the submission, including an interestingly little-known scheme called JEREMIE, which is spelt somewhat differently from the convention. It is to do with finance for business and has been extremely successful in the north-east.
What we have here is really an irony. This Government, above all, look to the private sector to lead and to make good the deficiencies in the economy. The RDAs, which they are about to abolish, are heavily engaged with the private sector. They are private-sector-led bodies, and yet they apparently cannot be trusted with economic development in the regions.
The proposals in the Bill bear all the hallmarks of a rush to misjudgment, like so many of the measures that the Government have brought forward. We have seen examples this very day of second thoughts having occurred. I hope that the Government will listen to their natural supporters, if you will, in the private sector, in business and across parties in parts of the country; and will pause, reflect and reconsider proposals that threaten to damage the economic recovery that is essential but seriously at risk in many regions.
Lord Shipley
My Lords, for much of the period since the Second World War—and indeed before—Governments have pursued some form of English regional policy. There have been several initiatives: regional Ministers in some or all regions; development corporations; development companies; and a variety of government office structures, so that Whitehall could be represented properly across all parts of England. Policies have been chopped and changed, but they have been clarified in recent years—first by the creation of the development agencies in the English regions, and secondly by the strengthening of government offices so that all Whitehall departments were housed in a single government office. The system was far from perfect and led to some unnecessary bureaucracy. There was a lack of democratic accountability within the regions. However, the system had one overriding virtue; it was regionally based and gave a clear and firm focus for each region in England that had previously been lacking.
Some regions did not like the structure because they did not feel that their region really existed as an entity. The south-east is the most obvious example. Others, such as parts of the south-west, felt distant from their RDA and government office. Perhaps it was a mistake by the previous Government to create an RDA in each region. Indeed, it is hard to see, in terms of strategic regeneration, why the south-east needed a development agency at all. However, that is history. What is not history is the decision to abolish all English RDAs.
In the north, people have identified with their RDA to a much greater extent than in the south. Maybe this is a function of the northern regions being further from London and the levers of power. It also reflects the greater needs of those regions, which require government intervention for the ultimate benefit of the UK as a whole. The decision to abolish the RDAs and government offices in the south-east may have been broadly popular but it is most certainly not a popular decision in my own region—the north-east. I declare my interest as a board member of One North East since 2005. There is a constitutional issue here, too. Why do Scotland, Wales, Northern Ireland and London have substantial devolved powers, some of which are set to increase, at the very same time that the English regions are being further centralised within London-based structures?