Public Bodies Bill [HL]

Lord Empey Excerpts

Monday 28th February 2011 Lords Chamber

[Lord Judd]

My Lords, I just wanted to follow my noble friend Lord Campbell-Savours because he has put so powerfully the case for the north, particularly with his origins in the north-west. He is, in every sense, a son of the north-west. He speaks with authority.

I simply say that there is a cultural dimension to all this. It has to be faced. There are many good people living in the south-east, the south and more prosperous parts of the Midlands who just have not seen for themselves the social reality of what happened in the north in the past. The noble Lord, Lord Greaves, and the noble Lord opposite have referred to Cumbria. Just come to Cumbria. I often speak about the inheritance and the beauties of the national park, but come to the west coast of Cumbria and see the physical and living evidence of what happened before. The communities are broken, disheartened and demoralised still.

The challenges are huge and, given the economic stringency that faces the nation, this is the very time that one needs strategic and powerful authorities to look after the interests of those who will find themselves in the toughest position, as economic policy takes effect. If we have any pretence of commitment to social justice, this is the very time that there should be strong voices speaking, not just tactically but strategically, for the people of a region. Those voices should look at the issues of communications and transport, and at the work that can be done with the universities in the north, to find ways of regenerating and building a new future.

Some will argue that in Cumbria we will have the one bright prospect of becoming the energy coast of Britain. If that is a prospect—and I fervently hope that we can make a contribution in that context—this is the time that we need a strategic authority speaking for us and making sure that the plan is developed to the full, not just thrown to the vagaries of the market.

What is sad about the Government having rushed into this ill considered Bill, with all its ill considered propositions that have not been properly researched, investigated and analysed, is that we might have had a case for coming up with a review of regional policy. I agree with the argument that there was a great deal of room for adjustments to the regional structure. I am not sure that my noble and very good friend Lord Campbell-Savours will agree with me on this, but I am a sceptic about whether Cumbria—particularly north Cumbria, where I live—is in the right region. It seems to me that the natural links of north Cumbria are with the north-east—up around the coast, through Carlisle and into Newcastle and the rest. We do not think of Manchester and Liverpool. We think of the north-east. Our health service is oriented in that direction. When I needed neurosurgery, I ended up, through the National Health Service, in Newcastle. When I turn on my television in the evening, I see Newcastle-based television.

There was therefore a case for a review to make sure that the regions, in their administration and structure, were best geared to meet the real social challenges that were out there. However, instead of going down that exciting route, this new Government, who pride themselves on being so radical and imaginative, just dodged all that and went for an ideological destruction of the regional development authorities at the very time that they were most needed. I know that the Minister listens. He is a sensitive man and has not only a social conscience but a feel for social issues and people. I urge him, even at this 11th hour plus, to plead with his colleagues and say, “This is a step too far. Think again”.

[Lord Empey]

My Lords, I have been listening to the debate, but the truth is that there is no single solution to economic development policy. There is no perfect model. There is a variety of models throughout the United Kingdom, some of which work better than others. However, the amendment is a fairly blunt instrument. The decision on the number of regional development agencies in England has to be taken in conjunction with the devolved regions. Until a few months ago, I had responsibility in Northern Ireland for certain aspects of economic development policy. Prior to that, I had responsibility for establishing Invest Northern Ireland, which at that time consisted of some 700 staff and had a budget of about £160 million.

However, the whole scene has changed. I listened carefully to the noble Lord, Lord Campbell-Savours, but what applies today is totally different from what applied in the 1980s. Europe has a big influence in this, because one of the big weapons that organisations in Scotland, Northern Ireland and elsewhere had was selective financial assistance. Since 1 January, that assistance has been largely reducing and by 2013 it will be virtually gone. Therefore, the model that we used for distributing it and the mechanism that we used for trying to bid for foreign direct investment are going to be denied us. All that will be left is soft assistance, with management plans and various other things, but the hardcore employment grants and capital grants that regions depended on to buy in business and investors will be denied us because of European regulations.

I can tell the Committee that a protocol exists within the United Kingdom to prevent all the different RDAs, the regional administrations and the national Government from bidding against each other. Foreign direct investors are not stupid. They knew that people in the regions were hungry and they went about their business going from one to the other. We had to establish protocols.

[Lord Foulkes of Cumnock]

Is it not the case that the noble Lord in Northern Ireland, we in Scotland and colleagues in Wales will continue to have development agencies, so why is he denying them to the regions of England?

[Lord Empey]

First, I have not denied anybody anything. I am just beginning to develop my argument. The fundamental point is that these organisations in the devolved regions are becoming systematically weaker. They have less ability to direct financial aid because the selective financial assistance, which was their principal weapon, is diminishing very rapidly and in a couple of years’ time will be gone altogether. The whole emphasis is shifting on to the development of skills. We had a fantastic conference in the United States last September and October hosted by the State Department at which we were given the opportunity to put Northern Ireland’s case. What was really interesting to potential investors was no longer grant aid; it was whether a region had a sufficient centre of gravity and critical mass of skilled people with the right skills in the right place to attract people. You can no longer buy in companies.

Sitting in the Chamber tonight is the noble Lord, Lord Ballyedmond, one of our premier entrepreneurs. I dealt with him and his colleagues on a number of occasions, and they were frustrated because the agencies and organisations could sometimes get in the way of business. Therefore, the question is: what is the right balance? Is it going to be possible to develop a national policy that will allow for the creation of the correct skill base? That will be far more important to foreign direct investment—and indeed, I believe, to indigenous investment—than financial aid in the future because the latter is going to be reduced and will be so small. I remember examples of £20,000 being offered per job created and perhaps even more. On average, it was £7,000, £8,000 or £10,000 per job created, but those days are gone and are not coming back. I certainly feel that this list of agencies is no longer sustainable but, at the same time, it is perfectly clear that you cannot create a complete vacuum.

[Lord Campbell-Savours]

If the responsibility that the noble Lord is referring to in the case of Northern Ireland were transferred to London, does he believe that the centre in London could deliver?

[Lord Empey]

I have always been a devolutionist and felt that there had to be a local dimension to most things. The noble Lord, Lord Judd, was asking whether people fully understood the social and other implications of what has been happening in this country over recent years. The answer for me is yes. I still have a constituency. It is largely an inner-city constituency in east Belfast. The people at my advice centres are queueing up, looking for help with DLA, housing benefit and how we can get them training, so I am very familiar with all of that. But having elaborate structures today, whether they be in Northern Ireland, in Scotland or anywhere else, is not the whole answer. There is another dimension.

The noble Lord, Lord Foulkes of Cumnock, will be well aware that we have another dimension in Northern Ireland, where we are up against the Republic, which has a very attractive corporation tax rate. At the end of the day, that was attracting more inward investment to that region than anything that any of our industrial development organisations could do.

Local government also has a role to play. There is no model that is absolutely applicable in every part of the UK. I would be very afraid to take a position on the north-east of England, about which a vast array of people seem to be extremely passionate. The noble Baroness, Lady Armstrong of Hill Top, made a powerful speech in respect of what she saw in her region and many other noble Lords, including the noble Lords, Lord Bates and Lord Greaves, spoke on it as well.

[Lord Greaves]

I actually spoke about the north-west and not the north-east, but I will back the north-east as well.

[Lord Empey]

The noble Lord was saying at one stage, if I recall, that part of his region felt that it belonged to the north-east. The point is that there is a large pool of people who feel passionately that the north-east in particular has a critical mass and should have representation. I know that the noble Lord, Lord Prescott, attempted to offer regional government to that region and it did not want it at that stage. Otherwise, I dare say, it would have, just as Scotland and London and other places have, its own economic development unit, probably with a Minister working full-time on that area.

The question for us is whether this is going to be solved simply by structures or by a combination of structures and a policy involving close linkages with higher and further education and training. I am not convinced, having established one of these bodies in the past, that the model that we need to go forward for the next 10 or 20 years is necessarily the model that we have adopted in the past. I am not saying that everything that is being proposed by the Secretary of State is the right solution. Local people in those areas would have a better grasp of that than I would have from a distance. But I no longer put my faith in the structures. When you talk to businesspeople, they are very dismissive of bureaucracy. Their real interest is not in any grants that you can offer them; it is whether you have the people on the ground who can do the job. That is the thing that matters most.

There seems to be a new dimension opening up. I do not have all the answers and it is not entirely clear that the Secretary of State for Business has them either. But things have changed dramatically in the past few years, not least because of Europe and what it is now deciding. We have signed up to that. The ability of local organisations to take strategic decisions and effectively to buy in the businesses that come to invest has diminished. We have to be aware of what is happening in the rest of Europe. We feel that people in other parts of Europe do not apply the rules as strictly and rigorously as we do. I am sure that noble Lords from Scotland and elsewhere have had that repeated to them time and again. We play by the rules while others ignore them. That is one source of considerable concern to people in the regions, who feel that we are not necessarily playing on a level pitch.

When one is next door to a region where there is 12.5 per cent corporation tax versus what we have, that is what I call real competition. It is something to which no individual organisation, whether regionally based or otherwise, has a solution on its own. I am for regional solutions but I am no longer putting my faith simply in the structures that we develop. Those structures themselves sometimes get in the way of business; they frustrate businesspeople and, of course, they are very expensive. Whether we have the balance right remains to be seen and I have no doubt that there will be further debate to establish that.

[Lord Whitty]

My aim is to speak to Amendment 56 which deals with the south-west region. It is not simply to convince the Committee that there are concerns on these Benches somewhat south of Watford, but as my noble friend Lord Knight spelt out before the break, the South-West Regional Development Agency has done a fantastic job in many respects, from projects such as the Eden project through to the Osprey Quay in his previous constituency where I was only a couple of weeks ago, through to the deals with the universities, science parks, and so forth. The majority of its interventions have been relatively small and, to respond to the noble Lord, Lord Empey, most of what the regional development agency has done has involved not large sums of money but soft policies, such as putting together patches of land, developing skills, getting people talking to each other who do not normally talk to each other, in the universities, professional associations, local government and small businesses.

The South-West Regional Development Agency may not have had the right geographical boundaries and it was probably not as universally loved as those in the north-east appear to be, but the prospect of its absence is causing deep and grave concern among small businesses and others within the region. Its replacement by the so-called LEPs is a shambles. It is a crazy situation. The Government who profess to want localism and to have industry-led alternatives to the agency have ended up with a situation where Whitehall is telling groups of business people and others who put their heads above the parapet what the basis to organise should be. On what basis is the man in Whitehall telling the putative LEPs in the M4 belt in Gloucester, Swindon and Wiltshire that that is not the appropriate sub-region? It seems a very appropriate sub-region to me and, more importantly, to them. Yet, they are being told that it is not the right region. People in Dorset—in Bournemouth and Poole—are being told to talk to Southampton and the Solent areas. Why? How is that allowing local businesses to decide on their own remits?

It is clear that the Government have set out on a process not on the basis of what is best for the regions or best individually for each of the English regions, but on the straightforward basis that they do not like RDAs and want to abolish them. What has happened in the south-west, which I suspect has happened in all regions, is that business men and women who some months ago were not particularly supportive of the RDA are now saying that with the abolition of the RDA in prospect, the government office for the region going and regional planning disappearing, they do not know who to talk to if they want to put together a deal, if they want to try to bring in public and private partnerships, if they want to make arrangements to develop the skills within the region that will achieve delivery of the ideas that they, as entrepreneurs, have. They are asking, “Who do we talk to?”.

At the same time, the big potential investors are asking precisely the same question. The areas that miss out are going to be the more peripheral ones in the north and the west of the country and maybe in parts of East Anglia and the Midlands as well. In London, there is always somebody to talk to. In Wales and Scotland you have government-backed organisations but in these other regions you have not. It is not just a question of the industrial heartlands; we are talking about rural counties in the south-west. Indeed, it is not a question of the Labour heartlands, in case Members opposite feel that we are parti pris to this—these are the heartlands of the Liberal Democrats and many Tories as well. As the consequences of the disappearance of the RDA and the regional offices of government become clear, I imagine that many of the MPs in their parties are going to have deputations from businesses and from local government asking how to deal with this.

What has happened in the south-west and what people now fear in the south-west is that there is no point at which small businesses can talk to Government about their problems and there is no point at which outside investors can talk on a regional or sub-regional basis with some authority behind those discussions. What will they do? They will go elsewhere. It is true, of course, as the noble Lord, Lord Empey, says, that the interventions will not be so much financial in the future, although there will be some money there and there will be money in things such as the European Regional Development Fund and money from the agricultural side of this dimension. However, they will say it is easier to do this in France or Germany or Spain. It may be slightly easier to do it in London or Scotland or Wales but with nobody to talk to in dispersed regions such as the south-west the absence of the RDA will come to be a dreadful brake on developments which were beginning to see fruition.

I do not think that is what the political representatives of the south-west would wish to see. I do not therefore think it is what the coalition Government would wish to see. But by their own universal decree that RDAs are bad, that is likely to be the consequence.

--- Later in debate ---

[Baroness Neville-Jones]

Clearly, CRB checks will be relevant. I cannot immediately answer whether they have to be done by the individuals themselves or by their businesses to ensure that they are employing fit and proper people. I would have to write to the noble Lord. The registering of these individuals is another point that worried some noble Lords, who thought that this new method of regulation would somehow allow the bottom end of the industry to have free rein, if I can put it that way. This will not be permitted, because a registry of individuals will also be maintained by the new body to support the needs of the customer and the industry. That will do two things. First, it will ensure that named individuals are known to the regulatory body. Secondly, it will enable those individuals who are of fit and proper standing to move from one company to another with greater ease than would otherwise be the case. Any proposed changes will be subject to parliamentary approval. I thank the SIA for the help that they are giving in moving the industry along to the new regime. We have also asked the SIA if they will take forward the work necessary to ensure the full delivery. This Bill confers an ability to abolish the SIA, but this will be done only at an appropriate time in the transition to the regulatory regime.

Some noble Lords, particularly the noble Lord, Lord Foulkes, raised the issue of the response of the devolved Administrations. Since the correspondence to which he referred, and which I have seen, there have been further contacts with the devolved Administrations, and we are now in consultation with both the Scottish Government and the Northern Ireland Executive. Although it is the case that, on a voluntary basis, both the Scottish Government and the Northern Ireland Executive decided that they would accept the regulation of the SIA, the regulation of the private security industry is a policy decision for the devolved Administrations. It is a devolved matter, which we fully respect, and they will have the opportunity, if they choose to exercise it, to have a different regime. However, I agree with the noble Lord, that, given the nature of the industry, which operates across the country, it would be highly desirable if we could get agreement on a single regime.

[Lord Empey]

I thank the Minister for giving way. The noble Lord, Lord Foulkes of Cumnock, raised this earlier. I declare an interest as a member of the justice committee of the Northern Ireland Executive. The reason why we have a particular issue must be fairly obvious to most Members. We have a lot of people who, sadly, have come from a background where they were, shall I put it, organised, and were able to bring intimidation and pressure and other things to bear. Consequently, we are not talking about precisely the same situation that would exist here, albeit that there are always criminal elements there. The noble Baroness, Lady Henig, asked whether the results of the election in May would make any difference. I think that they will not, because the circumstances that we have had to deal with have a long history and will take some further time yet to work their way out of the system. I do not anticipate any immediate change in the regime following the elections in May.