Public Bodies Bill [HL]

Lord Taylor of Holbeach Excerpts

Wednesday 23rd March 2011 Lords Chamber

[Lord Prescott]

Garden centres, garden festivals, you can pick the word you want. I think that the one in Liverpool collapsed after its show and still nothing has been built on that ground. We have to develop in a more effective way, although to be fair to the noble Lord, Lord Heseltine, I agreed with him that the development at Canary Wharf was significant. Transforming the docks into new industrial developments and commercial centres has been a success. That was intervention.

I recall, when we came to power in 1997, meeting Mr Walker—I am not sure whether he was a Lord or not—who was in charge of English Partnerships. He said, “We are not a body of intervention”. I said, “Well, we are on different tracks then”. He said, “I am telling you that we won’t do that”. I had to say to him, “Obviously you have not read the papers. We are now the Government. It is going to be a body of intervention”. English Partnerships did an excellent job, including in the coalfield communities that had been destroyed by the previous Government. It set up an active intervention partnership, public and private, in the coalfield communities. The Audit Commission reports show that it did an excellent job. More people are now employed in coalfield areas than when there were the previous jobs.

By the way, most coalfield areas are rural areas. Enterprise centres are now being talked about. That was all done before. I notice from the list here that very few of them are in rural areas; they are in the cities. Fine, but there is a lot of high unemployment in rural areas as well, and those enterprise zones are designed to help urban development. You do not get a balanced development. You might help the cities in a marginal way, but what you want from regional development agencies is balanced development. Only the RDAs can do that. They are also important for bringing in money from Europe. Before the RDAs in Britain, most of Europe did not bother. The recognition was of the county authorities. The county authorities were not big enough to deal with the actual decisions that had to be taken. You needed a body that was recognised at the regional level, because we were the only country in Europe that did not have a regional body. You needed to co-ordinate those resources, to bring the strengths together and to make it important.

Now it is basically proposed to abolish them. Frankly, I agree with our amendment. I am not against reform. RDAs came out of reform; we did not like what was there, we changed it, and that has been effective. Apparently, being successful is now a real problem; we abolish you. What worries me most of all is that they are being replaced with the old structures that we had before and that failed before. The Government seem to believe that it is just the market. I heard the Chancellor today talking about “growth, growth, growth”. The trouble is that he is not achieving it. We are creating the same kinds of problems that we had before. We do not maximise growth, but unemployment. That is what will come out of this.

A number of noble Lords have said in these debates that, looking at what will happen to some of these areas with RDAs, we are already beginning to witness confusion coming about due to the setting up of local enterprise partnerships. I have got them in my area. I notice the enterprise zones in these areas, and now there is talk about partnerships. Problems are already beginning to develop.

I finish on this point, because I have already seen it in Hull. Hull is an area of high unemployment. That reduced under Labour, but it is still an area of high unemployment. We now have a problem that was brought to my attention about a week ago, with a company in my former constituency that produces modular bathrooms. It has been highly successful. It is manufacturing. It employs hundreds of people. It wants to expand on an existing, empty, two-acre industrial estate where the road has been half done but not completed. The company said, “We could take on a hundred more people manufacturing in Hull, helping growth, if someone would let us expand and buy or lease that empty land and build the road to make the connection”. Well, that seems obvious. They gave me a ring, I spoke to them, and the local MP is of course involved in this. When I inquired of the regional development agency that owns the land, “Why aren’t you helping this company to expand?”, it said, “Sorry, all our assets are now being transferred to BIS”. Then they said that the local authorities cannot agree between themselves whether there should be one local body, which might be a trust, representing the north or one representing the south. Businessmen are disagreeing with what the council is coming up with. It causes delay. This company is being held up because of the problems in organised infrastructure that we are now inheriting.

I hope that the Minister will look at this. I am sure that he wants to see jobs. Certainly, the Chancellor says that he wants to see growth. Well, he could make a decision tomorrow that will bring that about, not all that waffle we have heard in the Commons today. I am sure that there are many other examples from around the country, but I would not have to come to Parliament for that. RDAs did that all the time. They made those decisions, created the jobs and co-ordinated the public and private investment. That is what the RDAs did. We had 10 years of them showing their success. Now the Government are coming along with these silly ideas to abolish them. The result will not be that waffle, it will be more on the dole and less growth. We will be back in the circumstances that we inherited many years ago, which led us to set up the RDAs.

[Lord Taylor of Holbeach]

My Lords, there might be a change of tone with my contribution to this debate. This is a serious matter and I approach the topic with humility, but with a determination to demonstrate the reasons for the Government’s decision. It is a political decision; we make no apology for that. It is a political response to the economic situation in which this country finds itself. I hope that noble Lords will give me the opportunity to explain the origins of that decision and what the Government intend to do to maintain a programme of growth announced by the Chancellor of the Exchequer in circumstances in which the vast sums of money that were available to sustain the regional development agency structure are no longer available.

I am not at all surprised at the passion that has been vented this evening. I am a provincial myself. I come from the east Midlands and I am very proud of my background. I have to say that I rather share the experience of my noble friend Lord Cavendish when it comes to the impact of the regional development agency for the east Midlands in my part of the world, but perhaps that is because I live in a relatively remote rural area and our problems are not at the top of the agenda. We have learnt to rely on our own resources probably a good deal more than other communities can afford to do.

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[Lord Hunt of Kings Heath]

My Lords, the Minister refers to the problem of borders but how are the Government dealing with the problem of borders by splitting Birmingham from the Black Country? It is sheer madness in terms of getting support across a region for the major infrastructure projects that are so desperately needed.

[Lord Taylor of Holbeach]

I think the noble Lord is under a misapprehension. The difficulty with RDAs was that they had clearly defined, strict borders. The great thing about LEPs is that they are partnerships and they are flexible enough to be able to work together when they need to. That is our answer to the question of the north-east. There are opportunities for LEPs to work together across boundaries. That is their huge advantage over the strictly geographically delineated boundaries that existed between RDAs and the difficulty of getting joint projects going with them.

The south Midlands was an area of the country where the south-east, the east Midlands and the eastern region met in an area around Milton Keynes, Northampton and Bedford. That particular group now has an LEP in common. It is a true economic region in the sense that there is a community of interest across what previously was RDA territory. We have deliberately placed the onus on the partners to show that they have identified a real economic area to cover. We have not sought to second-guess them. We have asked the partners to think again about a particular proposal only where there is a substantial difference of view in the area itself and in the places around it.

The RDAs were expensive bodies to run and often duplicated activities which could be better undertaken at local or national level. In much of the country people felt little or no attachment to regions. In our earlier debate much was made of the local support for the north-eastern and north-western regions. The noble Lord, Lord Clark of Windermere, talked of the way in which Cumbria identifies more strongly with Newcastle than with Manchester. Only yesterday the House approved the creation of the Greater Manchester combined authority. The noble Lord, Lord Beecham, and I took that through as a statutory instrument in the Moses Room last week. It reflected the desire of that area for a stronger local focus. I remain doubtful that the enthusiasm for a unified north-east region runs quite as high by the Tees as it does by the Tyne.

In our new circumstances we need lighter, more nimble bodies, capable of forging new linkages and alliances, rather than being caught up in regional straitjackets. Where partnerships wish to work together, we welcome it. If they had chosen areas which had matched one or more of the former regions and been able to demonstrate economic benefits and support from businesses and local authorities, we would have welcomed that too, but the fact is that they did not. In our previous discussion I pointed to the enthusiastic response we have received throughout the country to our call to develop local enterprise partnerships. On 8 March 2011 the 31 partnerships sent 90 representatives to a summit in Coventry. The Prime Minister, the Deputy Prime Minister and the Secretaries of State for Business and Communities were all present. They confirmed their support for the formation of an association to help partnerships share knowledge and ideas. This idea came from the partnerships. The Deputy Prime Minister also announced that the second of the regional growth funds would open on 12 April, and those successful in the first round will be announced shortly. Some £1.4 billion will be in that fund over the next three years.

I am grateful that my previous letter has been well received. I shall do my best to answer some of the questions that have been asked tonight, although it may not be possible to do so in the case of some of those which were highly specific. I shall do my best to give answers that cover some of the most central points raised. The first question was what the Chancellor announced today. He announced that the Government would introduce 21 new enterprise zones. I do not belittle them—the noble Lord, Lord Prescott, did rather. They will all be important; they will all be established in LEPs; and they will be focuses for growth. The Budget names the LEPs that will receive the first enterprise zones, plus London. The next 10 will be established through a competitive process. Benefits include the business rate discount over a five-year period.

It was asked whether LEPs have the capacity to take on the wide range of projects envisaged—the noble Lord, Lord Campbell-Savours, made this point particularly strongly. The capacity of LEPs will vary initially. Some are based on well established structures—Manchester being an example of an existing structure, let alone the fact that it now has a combined authority—but others are entirely new. The LEPs are establishing a network to share experience and best practice to bring new partnerships up to speed quickly.

The noble Lord, Lord Campbell-Savours, in what I acknowledge was a very impassioned speech, asked whether there would be a fire sale of assets. The brief answer to that is no. It will be a managed process. Assets of which it makes commercial sense to dispose in the short term are being identified and a list will be made available to local authorities shortly. However, where it is more sensible to dispose of assets over the medium or long term, it will be done. It is important to emphasise that the RDAs are liaising with the local authorities within their patch and with the LEPs to make sure that this process is managed efficiently.

It was suggested, I think by the noble Lord, Lord Beecham, that the LEPs will not have a role in inward investment and European funding. That is not the case, because UKTI and the DCLG have made it clear that they will work closely with LEPs and other local partners on inward investment and on the European regional development fund. The noble Lord, Lord Beecham, also asked what discussions were going on about the position of the North East Economic Partnership and its assets. Discussions are ongoing; I cannot comment on the path that they are taking. However, we have confirmed that that we are not able to pass on assets as gifts or for deferred consideration to that partnership.

The noble Baroness, Lady Quin, also raised questions about the north-east.

[Lord Campbell-Savours]

The letter to my noble friend refers to a nominated single national contractor. Could the Minister give us a little more information as to what is intended? What sort of body would it be? Would it be a private sector body or an existing company? Is it to be established by some consortium? What actually is it as an entity?

[Lord Taylor of Holbeach]

When we are in a position to make an announcement about that, we shall. I am not in a position to do so at this point in the debate.

The noble Lord, Lord Clark of Windermere, raised a number of interesting questions based not only on the experience of his work with the Forestry Commission but on his location in Cumbria. On the issue of competition with Scotland for inward investment, UKTI co-ordinates the work on this, and one of its main aims is to avoid wasteful competition between different parts of the UK for inward investment. The noble Lord, quite appropriately, asked specifically about the trees and their liabilities. At present, the Northwest Regional Development Agency is discussing plans for its assets and liabilities with the Government. I cannot give a response on the future of these assets until these discussions are completed.

A number of noble Lords asked about the process of consultation. One of the lessons noble Lords will take from this Bill is that the Government are serious about consultation. The procedures laid down in the Bill require Ministers to come to Parliament with full details of the impacts of any policy change that they seek to bring in through statutory instruments. There will be full consultation. I shall be happy to keep the House informed on the nature of this consultation over the next few months while this process of change is going on.

From a standing start in September 2010, partnerships now cover 80 per cent of active businesses in the UK and 87 per cent of the population. We are looking forward to reaching 100 per cent. We believe that we have unleashed a wave of enthusiasm for economic development at local level. In many places there is no appetite to go back to the old arrangements. It was clear from our earlier debate that many noble Lords retain their attachment to RDAs as they were. However, we do not believe that a return to the circumstances of a few years ago is either appropriate or possible. We are now in a new situation and we need to ensure that economic activity is taken forward across the right geography by fully committed partnerships. RDAs do not fit in with that new approach and I therefore ask the noble Lord to withdraw the amendment.

[Lord Beecham]

Will the Government consult on the basis of all or nothing or will they approach each case in each region on its merits and listen with an open mind to the arguments of business as well as local government and its social partners? Will they take a decision on a case by case basis or, as I say, will it be all or nothing.

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[Lord Taylor of Holbeach]

This is a listening Government and they are prepared to listen. They will listen to advice from everyone who feels that they have something to offer on this subject, take note of that advice and make decisions where appropriate.

[Lord Kennedy of Southwark]

My Lords, I am very disappointed by the Minister’s response. I thank all noble Lords who have spoken in the debate—my noble friends Lady Royall, Lord Campbell-Savours, Lord Beecham, Lady Quin, Lord Grantchester, Lord Hunt of Kings Heath, Lord Hoyle, Lord Clark of Windermere and Lord Prescott, the noble Lords, Lord Cavendish of Furness and Lord Empey, and, of course, the Minister.

My noble friend Lord Prescott, as did many other noble Lords, stated clearly why the Labour Government established the RDAs in 1999, what they began to tackle, the progress they made and why they should be kept. The Government have not made the case for the RDAs to be abolished. All have outlined why they worked sub-regionally.

I am happy to withdraw my amendment in favour of the amendment of my noble friend Lady Royall. In doing so, I shall leave it to my noble friend to decide whether she wishes to test the opinion of the House.

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[Lord Hunt of Kings Heath]

My Lords, I am grateful to my noble friend for moving the amendment and for allowing us to debate for a few minutes the Valuation Tribunal Service. It is one of a number of bodies which are either listed or not listed in the Bill and whose work is not particularly well known by the general public. However, these are bodies that have played an important role in terms of the good order of society. As we have debated the 150 or so bodies under consideration, there has been a tendency and temptation—given that we have all agreed that it is right that these bodies should be reviewed on a regular basis—to underestimate the contribution of the people who have worked for them or sat on their boards. It is right for me to invite the Minister—who has, if I may say so, expertly steered the Bill through your Lordships’ House—to reflect on the importance of the tone with which we debate these organisations.

I say that because, in relation more generally to debates in your Lordships’ House, in the other place and among the public on public services, there has been an unfortunate tendency to speak in a pejorative way about back-office functions. That is a matter for regret. It is not sensible to suggest, for instance, that only a policeman is doing a good thing while someone who works for the police force in a back office is not. That is not a sensible way forward. Back-office staff are being made redundant from police services, while bureaucratic tasks have to be undertaken by front-line police officers. That demonstrates some of the perverse incentives of taking a black-and-white approach.

I mention that because, as we close our first day on Report, we have an opportunity to reflect on the fact that many of these organisations will go out of business. The functions of some will be transferred to another body while the functions of others will come to a close. It is important to send a message out to the people who have worked in these bodies that we do not underestimate the contribution that they have made. The regular review that is taking place should be sensible, but in no way should it be taken as a criticism of the work that is done by thousands of people up and down the country.

[Lord Taylor of Holbeach]

My Lords, I happily associate myself with the remarks of the noble Lord, Lord Hunt, because we all share his sentiment. The more you become involved in this process, the more you realise that you are dealing with bodies that in many cases are performing important tasks and are staffed by people with a due sense of purpose and public service.

What is interesting about the amendment—I am grateful to the noble Lord, Lord Kennedy of Southwark, for giving us a chance to talk about it—is that in many ways it brings continuity between the previous Government’s proposals in the area of tribunals and our own. As will be clear from my explanation of why the Valuation Tribunal Service is in Schedule 1, noble Lords will recognise that the foundations for this decision were laid by the legislation of the previous Government.

The Valuation Tribunal Service is a non-departmental public body that provides administrative support and all the services required by the Valuation Tribunal for England, which hears appeals on council tax and business rates—in other words, national non-domestic rates.

Taken together, the Valuation Tribunal for England and the Valuation Tribunal Service—I will use the acronyms from now on—provide an independent appeals service for business rate or council tax payers who wish to challenge either the basis on which the banding or valuation of their property has been calculated, or their liability to pay business rates or council tax. In the Government's recent announcement about the future of arm’s-length bodies, both the VTS and the VTE were identified as bodies that could be abolished. However, I stress that the Government recognise that the jurisdiction that the VTE exercises, and the functions undertaken by the VTS, are still necessary—the noble Lord, Lord Hunt, is correct—and plan to transfer them so that they become part of the unified structure for tribunals, thus ensuring that the independence of the appeals process for business rates and council tax will be maintained. The achievement of these transfers would be a further step in the achievement of the long-standing policy introduced by the previous Government, following the 2000 Leggatt report, Tribunals for Users: One System, One Service, which this Government are continuing. The aim is to bring central government-sponsored tribunals in England and Wales under a single umbrella organisation.

The Government's proposal is that the jurisdiction of the VTE and the functions of the VTS should transfer respectively to the First-tier Tribunal and Her Majesty's Courts and Tribunals Service. It is important that noble Lords should note that the planned transfers are fully supported by both the chairman of the VTS, Anne Galbraith, and the president of the VTE, Professor Graham Zellick. The jurisdiction of the Valuation Tribunal for England will be transferred to the soon-to-be-created Land, Property and Housing Chamber—the Land Chamber—of the First-tier Tribunal, which was formally established under the Tribunals, Courts and Enforcement Act 2007. Powers in the 2007 Act would allow the formal transfer of the VTE's jurisdiction to the First-tier Tribunal, and the subsequent abolition of the VTE as a separately constituted tribunal. Since the 2007 Act powers are already available to achieve this, the Government do not need—and nor do they intend to seek—its abolition through the powers in the Bill. I trust that noble Lords will be comforted to learn that the jurisdictional independence currently enjoyed by the VTE will continue, following the transfer of that jurisdiction to the First-tier Tribunal.

Noble Lords will also wish to be made aware that the transfer will bring added opportunities. Members who would formerly have been in separate tribunals will be able, following the transfer, to sit on tribunals in all jurisdictions exercised within the First-tier Tribunal Land Chamber. Such arrangements are already in place elsewhere and have brought significant operational and jurisdictional advantages.

I turn to the Valuation Tribunal Service that is the subject of the amendment. If the jurisdiction of the VTE is transferred and the VTE is abolished, the VTS will effectively cease to have any purpose and powers. Therefore, the Government's intention is that, in tandem with the transfer of the VTE, the parallel administrative functions provided by the Valuation Tribunal Service should also transfer at the same time to Her Majesty's Courts and Tribunals Service, an executive agency of the Ministry of Justice that is shortly to be established following a merger between Her Majesty's Courts Service and the Tribunals Service.

The functions of the VTS, which are essentially to provide all administrative support for the operation of the VTE, including staff, accommodation and IT, would be absorbed into the tribunal service to sit alongside the administrative support for all jurisdictions within the First-tier Tribunal and Upper Tribunal. Once these functions had been transferred, there would be no further need for the VTS to remain in existence as a separate body and it could then be formally abolished. However, as the VTS was established under statute—in the Local Government Act, to be precise—new powers would be required to achieve both the transfer of the VTS’s functions and its subsequent abolition. The power set out in Clause 1 would allow an order to be laid to achieve this transfer, and that is why the VTS is included in Schedule 1.

Planning for the transfer of both jurisdiction and administrative functions is in its very early stages but, following the transfer, we confidently expect the realisation of economies of scale, operating efficiencies and added service improvements, which the unified tribunals system was established to provide. The noble Lord will, I hope, recognise and be reassured that the Government’s proposals will maintain and sustain the independence of the appeals process for council tax and business rates, and that they are a continuation of the policy pursued by the previous Government. Therefore, I hope that he will feel able to withdraw his amendment.

[Lord Kennedy of Southwark]

My Lords, I thank the Minister for his response and I also thank my noble friend Lord Hunt of Kings Heath for his comments. I should have mentioned that earlier in my local government career, in the 1980s, I was the deputy chair of the London South East Valuation Tribunal. I am persuaded by the Minister’s reply and beg leave to withdraw the amendment.