Public Bodies Bill [HL]

Lord Clark of Windermere Excerpts

Wednesday 23rd March 2011 Lords Chamber

[Lord Hoyle]

That might be the view of the noble Lord, but I am afraid that he is not living in the real world. How can he be when he has made a statement like that? Let him look at what has been created by RDAs. I will not speak for very long, because my noble friend Lord Campbell-Savours made a very powerful case. However, I believe that we are talking to people who will not listen to the arguments that we are putting. I am pleased that the noble Lord intervened from that side, because he is the first to do so: it has been only us speaking.

The RDAs have done a wonderful job. I have a copy of a letter that was addressed to my noble friend Lady Royall. I was critical when the Minister was winding up last time and said that he was not answering the debate. He has now taken the trouble to try to answer the debate and I thank him for that. It is not always done. Having said that, I do not agree with most of the answers he gave; he will not be surprised about that.

I could go through every paragraph of the letter, but it is too late in the evening. I will refer to one paragraph that deals with the independent evaluation by PricewaterhouseCoopers that demonstrated that every pound spent by RDAs added approximately £4.50 to regional economies. In the case of the north-west, the figure was greater: £5.20. However, no answer is given in the paragraph. It simply states:

“We appreciate the work they have done”.

The issue is not whether we appreciate the work they have done, but who is going to pick up the mantle and do the work in future. There is no answer to the question of where we will get replacement agencies that will secure that kind of growth. As has been said often tonight, we are going back to localism instead of looking at regions as a whole.

The regions did benefit. The noble Lord, Lord Cavendish, said that he had an interest in Barrow-in-Furness. When the floods hit Cumbria, the RDA brought help to local businesses in need within four days. That was not matched by any other body, and it will not be matched by any new bureaucracy that is going to be established.

I will repeat what has been done for the north-west by the Northwest Regional Development Agency: 220,000 jobs have been preserved, 23,000 new businesses have been created and £3.2 billion of private investment has been brought in. These are huge sums. The agency has looked at the region as a whole. If we split it up, we will not get that sort of aid.

I will not go on. I thank the Minister for replying, but ask him to reply also to the debate tonight, because too much is at stake in the regions: too many jobs and too much inward investment. Why should the RDAs be destroyed because of a political decision that I believe is wrong? Not only do I believe that it is wrong, but many other Members of the House believe that, too. More importantly, people and businesses in the regions believe that it is wrong. If the Minister is saying that we can do the job with other organisations, can he tell me what funding will be given to the new bodies? As I understand it, there is no funding, and if there is no funding they will not be able to do the job. Will the Minister reassure me that adequate funds will be made available?

[Lord Clark of Windermere]

My Lords, I support the case made by my noble friends through their various amendments. In doing so, having spent many years in public life, I reflect that there are certain constant difficulties and challenges. In our previous debate on this issue, I remember the case being made for the establishment of the northern development agency, including the northern part of the north-west and the north-east of England. The one overarching pressure on the NDA was how to challenge what was clearly going to be a devolved nation in Scotland. That was a very powerful problem. Unless you live in a frontier-type economy, you do not really appreciate the rather different problems that might be experienced compared with the rest of the country.

I remember how the development agencies in Scotland in the early 1980s constantly tried to offer inducements to companies in the north of England to relocate in Scotland with grants, which the local authorities—because there was no development agency then—could match. That was one of the prime reasons for the almost universal support for the agency in the north of the country—a point made by my noble friends Lady Quin and Lord Beecham. That problem will still exist. It is eight miles from Carlisle to the border and it is easy to relocate if you get financial inducements. We have to face up to that challenge. Therefore, I park with the Minister the thought that that problem will not go away.

Perhaps I may raise two specific issues. My noble friend Lord Beecham pointed out how important tourism was becoming to the north-east of England. It is just as important in the north-west, especially in Cumbria. Work was initially carried out on how to create more jobs and attract more visitors to Cumbria, and I mention Cumbria and not just the Lake District. As an aside, perhaps I may say how pleased I was that the Government decided to shortlist the Lake District as a possible World Heritage Site—I declare an interest as chairman of the bid—and how important that will be in creating jobs and stimulating the economy. I remind the Minister that Cumbria has more than 40 million visitors a year and that 32,860 full-time jobs are dependent on tourism. It adds £2 billion to the economy.

In order to succeed, you need leadership, and sometimes that involves investment. Of course, since the North-West Development Agency has gone, the funds have dried up for Cumbria Tourism. It has already had to reduce its staff from 45 to 19, so there is a serious problem there. However, it is not only a problem of attracting tourism; it is also a question of trying to compete against the equally attractive tourist resorts just over the border in Scotland. That takes me back to the problem of living in a border economy—things are different compared with other parts of the country.

I conclude by raising the issue of the assets and contractual commitments of the development agency. In a letter to me dated 1 March, Robert Hough, the chair of the Northwest Regional Development Agency, said that he believes:

“Any ongoing contractual commitments beyond March 2012 are likely to be transferred to BIS, other Government Departments or possibly a national residual body”.

I raise a specific point with the Minister that disturbs me greatly. It is why, in a sense, I am opposed to this move that the Government are proposing this evening. One of the problems of the north-west of England is the amount of derelict land. I believe that it has more derelict land than any other region in the country—all the disused coal spoil heaps and the industrial bases. The Northwest Regional Development Agency’s economic appraisal came up with the conclusion—surprise, surprise—that the way forward was to green these areas, to enhance their environment, to make them more attractive to inward investment, and to improve the health and the lives of the people who live there.

As a result, the Northwest Regional Development Agency entered into partnerships with the Forestry Commission, the Wildlife Trusts and local authorities. As a result, there has been a huge greening in the north-west of England in the old industrial areas. I repeat what I said before, but it just gives me so much pleasure to say it. Over recent years we have planted over a million trees in Wigan, over a million trees in Moseley, over a million trees in Ellesmere Port, 2 million trees in Vale Royal, and 2 million trees in Warrington. This is a mammoth undertaking that has revolutionised the environment and will do so increasingly in that part of Lancashire. It will also make it more attractive potentially for inward investment.

This was done through partnership, commitment and investment by the Forestry Commission, and through long-term leases with various charities and local authorities. As a result, the Northwest Regional Development Agency has an ongoing commitment to the year 2029 of roughly £6.6 million. Who will pay that money? Who will accept the liability? How will the funds be paid to the main recipient, the Forestry Commission? I seek assurances from the Minister on that issue because it is very important as we go forward, and it exemplifies my point that this proposal has not been thought through, the ends have not been tied up, and, certainly, I cannot support the Government tonight.

[Lord Prescott]

My Lords, I welcome this opportunity to talk about the RDAs; I played some part in their creation a number of years ago. I must apologise to the Committee because I am not as briefed as perhaps I should have been. I was in the Council of Europe today and I realised that the debate was on this afternoon. We need to understand what was inherited when the Regional Development Agencies were created. People have so easily forgotten. We were talking about 3 million unemployed, about massive disinvestment in public services, and about a growing disparity and growing inequalities between the north and south in jobs, education and investment. If anything was to be done about this, we felt that we had to do more than simply leave it to the market. What was the solution? The noble Lord, Lord Lawson of Blaby, was the Chancellor in charge of a great deal of the economy at that time and the results that we were left with were quite disastrous, frankly. I will not repeat them, or go into detail, but it was totally unacceptable to us. We came to power doing something about employment.

The employment was not just in the north and south, although the disparities had grown. I recall, when I produced my alternative regional strategy, going to the northern region and saying that we were going to have a regional development agency for every part of the UK. It was suggested to me that as a northern politician I should just think of the north and not the south. It was a very complicated meeting, but I pointed out that with a million unemployed in the south, we could not be indifferent to that, whatever the growth rates and differentials between each of the regions. We needed to develop the expertise, the partnership and the public and private sector, and set a body up that could take a regional analysis to do something about it. This was welcomed by business. In fact, business today still has very warm words to say about the RDAs, particularly when compared with the organisations that the Government now propose to set up if they abolish the RDAs—and they are on the way to doing so.

It was important that business chaired every one of the RDAs. We thought that it was very important to have business chairmen who got the co-operation of the local authorities and the various bodies and developed, as their first priority, a regional strategy for the assets of a region to see how they could best develop them to the advantage of the region, and not to compete, as was often the case in regional policy before. Governments, including Labour Governments, went round offering bags of gold to industry to move the motor car industry from A to B. That was basically the strategy. In some cases, that brought jobs, but it did not deal with the most important thing: to develop the assets of the region and the economy.

If you look at the record, the judgment of the Audit Commission, parliamentary groups and businesses themselves looking impartially at each of the regions has been that the RDAs did a good job. They helped to reduce unemployment. A lot of the 2 million jobs that we produced at the time were public sector jobs, let us be honest. I do not think that a public sector job is wrong. When so many thousand jobs went in the north-east, it was stated that they were state jobs, as if something was wrong with someone who was employed as a public servant, whether they were in a hospital, a school, another public service or even just emptying bins, for God's sake. They were in a job and were an essential part of economic development. Yes, a lot of them were in public service, but that began to have its effect in the economy. It lifted demand. It had a consumer effect. It gave more confidence. The development agencies over that period were a success. You can always ask how much that cost. You might ask yourself how much it saved when mass unemployment gives you a heck of a cost, never mind what you might feel the excessive administrative cost is of what is called a quango. They were bodies that did their job. That was important.

What worries me now is what the strategy is. A noble Lord said that we should look at what happened in Scotland and Wales. I remember arguing about this in the other place. They said, “We are going to abolish the Scottish and Welsh development agencies”, and they did not. As soon as they came to power they realised their success and the demand from the local and regional area to keep their RDAs. Admittedly, the Government recognised that at the time and refused to abolish them. Why did they not abolish them? Because they were doing a good job. Why did we think the RDAs were needed in the English regions? Because they had done a good job in Scotland and in Wales. They had improved their economies while ours had gone down and down, and it seemed that a significant feature of that was the regional development agencies, so we wanted them in all our regions. Even if the growth in the south-east was always higher than in the north-east, there was still a need to develop the regional assets. Regional development bodies can do that, and they did.

The only time there was any move to make some change was after the Toxteth riots in 1981. The noble Lord, Lord Heseltine, was sent up with a busload of bankers to look at what they could do in Liverpool. One result was that they developed these garden centres—I cannot remember their name.