House of Commons Hansard Debates for 14 Jan 1998 (pt 39)

7.41 pm

Mr. Bill O'Brien (Normanton): I am pleased that the Bill is before the House. I fully support it. As one who represents a constituency in the Yorkshire and Humberside region, I believe that the Bill will genuinely benefit that region; moreover, it is a further demonstration

14 Jan 1998 : Column 417

that the Labour Government are keeping promises that they made to the electorate in May. This was one of the promises in the manifesto, and I am glad that we are keeping it. Another pleasing feature of the Bill is that it will remove many of the quangos that were the hallmark of the most recent Tory Government. Under the Tories, we saw the introduction of a "new magistracy" of appointees who sat as members of public bodies, spent taxpayers' money and made decisions--often in private--that should properly have been the preserve of elected local politicians.

Elected councillors have been removed from bodies on which they used to sit as of right. Under the Tories, quangos spent more than £60 billion--about 20 per cent. of total public expenditure, and far in excess of what was allocated to local government in England and Wales in revenue support grant. Unelected people were spending more money than elected bodies throughout England and Wales. We must provide safeguards in the legislation: we must ensure that we do not set up further quangos, and that we adopt a democratic approach to RDAs.

Taking evidence on RDAs, the Select Committee--of which I am a member--obtained views from many interested bodies. We took evidence for a week, and interesting contributions were made. We would have liked to consult other organisations, but sadly, because of pressure of time, we did not have the opportunity to do so. I am sure, however, that those who wish to speak and to table amendments will have an opportunity to do so in Committee.

Decision making will be a significant factor in the RDAs' operation. The Confederation of British Industry--which supports the Bill--wants them to report to a Cabinet Committee whose members would be drawn from the Department for the Environment, Transport and the Regions, the Department for Education and Employment, the Department of Trade and Industry and the Treasury. The CBI suggests that RDAs should take account of the views of the partners in their regions, and involve them in the decision-making process. Clearly, the CBI has its views about how the RDAs should operate, but who the partners will be, and how they will be involved in decision making, will have to be considered by the Standing Committee. The local government representatives who gave evidence to the Select Committee consider that the aim in establishing the board should be to achieve a geographical coverage by business as well as the local government sector.

The appointment of the chairperson gave rise to concern, but it is now agreed that the chairperson should be the best person for the job, and should not come from a particular sector.

A significant aspect introduced to the discussions by the local authorities was the question of regional chambers. Such chambers now exist in many areas, having been set up with the encouragement of the Minister of State and paid for by local government. The regional chamber is the highest level of the new regional machinery. It will be in the best interests of the RDAs to work within the wider framework prepared by the regional chambers and their partners. In the Yorkshire region, all local authorities are represented on the regional chamber, and other organisations--including voluntary organisations--have an interest, and contribute to the

14 Jan 1998 : Column 418

chamber's work. Given the wide-ranging responsibilities of the boards for strategy and strategic co-ordination, it must be agreed that those responsibilities are set within the chamber's strategic framework--that its work should contribute significantly to the strategic operations of the board.

It is clear that the various roles should be defined in a way that prevents duplication and overlap with the regional chambers. If we do not get that right, we shall rightly be accused of generating additional bureaucracy and a lack of clear "value added". In Committee, it must be made abundantly clear that there will be no duplication, and that we will reduce bureaucracy wherever possible.

Local government says that regional chambers should be consulted, should endorse operational plans and should receive mid-year and annual reports. The work of the RDAs must be scrutinised, and the regional chambers are the most appropriate bodies to do that, given their involvement and their responsibilities in the regions.

The Yorkshire and Humberside region contains four sub-regions: South Yorkshire, West Yorkshire, North Yorkshire and Humberside. A fair political balance in the operation of the RDAs can be achieved only within the local government sector. Without a fair and honest balance of representation, we could have a turf war, which would not be to anyone's benefit.

The paper submitted by the British chambers of commerce to the Select Committee welcomed the creation of RDAs, and in particular the proposals for the regional skills agenda. It said that the Government should have gone further than the proposed role for RDAs in monitoring training and enterprise councils. It suggested that the responsibilities of the TECs and the resources channelled into them should be transferred to RDAs.

I support the view of the British Chambers of Commerce, given my experience of the Wakefield TEC. TECs have been operating in the Yorkshire and Humberside region for 10 years, but there is still a shortage of skilled labour. They have failed my constituents and many people in the Yorkshire and Humberside region.

Mr. Deputy Speaker: Order. The hon. Member's time is up.

7.51 pm

Mr. Brian Cotter (Weston-super-Mare): May I begin by joining my hon. Friend the Member for North Devon (Mr. Harvey) in his expression of support for the concept of the Bill. As he said, the Liberal Democrats, in broad principle, welcome the Government's proposal to create regional development agencies. We have long argued for a more devolved system of government. However, our view is tempered by several serious reservations about the Bill.

Many hon. Members would agree that strategic and sustainable economic regeneration through the regions is the key to a prosperous future for us all. However, attention must be paid to the detail of the Bill to ensure that real economic regeneration is achieved.

Regional development agencies can make an important contribution to United Kingdom growth and competitiveness. They should be business-led organisations which work closely with local government. They should intrinsically act as vital catalysts to regional development and investment.

14 Jan 1998 : Column 419

The United Kingdom has lost out in the past decade owing to regional weakness. We have lost out within the European Union because of the deficiency of strong and properly resourced regions to which EU development funds can be routed and which are capable of raising matching funds.

The long-term success of RDAs depends on adequate funding and on their ability to pursue private finance. The Government's proposals have failed in that important respect. The relevant clause should be reconsidered, because it seems to allow only temporary borrowing in the form of an overdraft, and then only to a limited extent.

As the Bill stands, the agencies will be prevented from having access to all the functions and funding that they should have. That will be a waste of public resources, and the Government should expand the scheme further.

The Government seem to have missed a golden opportunity, in that it would make sense for the RDAs to be involved in the process of establishing a regional minimum wage. It seems logical that such an approach could deal with many of the concerns of small businesses.

The Government's proposals should be bold and daring, with much more consideration given to long-term strategy. As the Liberal Democrat spokesman on small businesses, I have a particular interest in the creation of RDAs. One of the declared primary purposes of the agencies is to help small and medium-sized enterprises. The future for all small firms is local, regional, national and even global. The emphasis on very large business organisations has rightly been reduced in recent times. Increasingly, more and more SMEs are contributing to our national competitiveness.

There is little doubt that initiative and innovation are to be found in small firms in great quantities, but many promising business plans founder due to lack of resources and support. I hope that the RDAs will deal with that problem.

Several hon. Members have mentioned the role of training and enterprise councils and business links. In the past, there has been an inordinate amount of duplication and unnecessary bureaucracy, and money has been wasted. The Department for Education and Employment will still run TECs, and the Department of Trade and Industry will still have control over economic development grants. Reference was made earlier to the system of local enterprise companies in Scotland, which should also be considered. It is my experience that many businesses are unaware of TECs and business links, so I hope that the RDA will address that problem.

The system for economic regeneration requires clarification and simplicity to maximise efficiency and to provide businesses with the first-class support that they deserve. That is why the Liberal Democrats support the one-stop approach.

Business links and TECs are driven by national Government programmes and targets. Conflicts will inevitably arise between RDAs and business links and TECs, which will create weaknesses in regional economic development and regeneration programmes that reflect regional needs. The Government's proposals do not fully take into account the vast differences between the regions. Regional diversity must be recognised.