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8.35 pm

Ms Rosie Winterton (Doncaster, Central): My hon. Friend the Minister for the Regions, Regeneration and Planning has a personal commitment to developing an economic strategy for the English regions. I join my hon. Friends in congratulating him on introducing the Bill in the first Session of this Parliament. Like myself, the Minister represents a South Yorkshire constituency and the Bill will bring many benefits to our region.

At present, Britain is the only member of the European Union without regional decision making. In 1975, the Labour Government established development agencies in Scotland and Wales and the improved economic performance of those countries shows what can be achieved by development agencies. Even in the most severe days of Thatcherism there was no real effort to disband them. So in many senses the Bill is unfinished business from the 1975 Labour Government.

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Recently, I visited Japan and spoke to business men who were considering locating factories in Britain. It was obvious that the Welsh Development Agency and Scottish Enterprise played a key role in shouting for their areas. I hope that hon. Members representing Scottish and Welsh constituencies will not mind my saying that my own area of South Yorkshire has just as much potential, but, without the resources of a development agency, finds it difficult to achieve the same profile with potential inward investors. That is why one of the strong messages from my region as a result of the consultation process carried out by my hon. Friend the Minister was that inward investment and the marketing of a region should be a core function of the regional development agency.

It is extraordinary that the Opposition's amendment states that the Bill will reduce inward investment when all the evidence is absolutely to the contrary. As other Labour Members have said, the Bill is not only about inward investment. Every region requires the tools to develop the potential of its indigenous economy. I believe that the Bill will be one of the key ways in which the Government can achieve their aim of full employment.

My region, Yorkshire and the Humber, has seen massive industrial and structural change in the past 20 years. South Yorkshire now achieves just 75 per cent. of the average European Union gross domestic product. That makes it eligible under current European laws for objective 1 status--the highest level of financial assistance available from the EU. As I am sure my hon. Friend the Minister is aware, there is concern that the change that is being considered by the EU may make areas such as South Yorkshire ineligible for objective 1 status. I wonder whether in her reply the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Wallasey (Angela Eagle) will assure me that the Government will do everything possible, especially during the United Kingdom presidency, to ensure that areas such as South Yorkshire can continue to achieve objective 1 status.

One of the major problems that will need to be tackled by the regional development agencies, and which is reflected in South Yorkshire's eligibility for objective 1 status is long-term unemployment. That is why I particularly welcome the fact that RDAs will be expected to develop a skills agenda within their regional economic strategies.

Huge industrial changes have occurred in my area, which means that the nature of work has changed. For example, in its heyday the rail engineering industry used to employ 5,000 people in Doncaster. Now it employs just a few hundred. British Rail Engineering Ltd. used to run a training school in conjunction with the local college which was recognised throughout Britain for the high level of skills training that it provided. That training supplied a skilled work force not only for Doncaster but for the whole of Yorkshire. I visited one of the plants of what remains of BREL the other week. Out of a work force of a few hundred, there were no apprentices. People can no longer rely on training for one industry and staying with one company for the whole of their working life. Technical advances mean that skills need constantly updating.

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Yet employers complain that there is a skills shortage while unskilled and unemployed people lack opportunities for retraining and developing higher level skills. That problem has been highlighted today by the Association of British Chambers of Commerce. In any region, numerous organisations have responsibility for education and training. The problem is that there is often duplication of effort and lack of co-ordination in matching skills requirements to training. The RDAs will be able to provide a coherent strategic framework for skills development at regional level and bring together all the organisations that have responsibility for vocational training and education. That will enable a skills strategy to be drawn up to match training provision with skills required.

We are already seeing some move towards co-ordination of education and training organisations under the new deal proposals. Structures are being established to bring them together. Could the Minister comment on what role her Department could play in highlighting lessons that can be learnt from the success stories of the new deal? Certainly, the skills agenda will have to cater for those people who have been unemployed long term and those who have the lowest level of skills if the stated aims of reducing poverty and social exclusion are to be achieved.

In my constituency there are pockets of unemployment, some three times the national average, alongside fairly affluent areas. In the areas of unemployment, some40 per cent. of people have been unemployed for more than a year. That is why it is extremely important to ensure that strategies for economic development link with skills strategies. Can the Minister tell us what types of powers will be granted to RDAs to ensure that economic strategies relieve local unemployment and improve local skills and prevent the importation of work forces, as has sometimes occurred under previous regeneration programmes?

One of the most positive developments to flow from the regional debate maintained by my hon. Friend the Minister for the Regions, Regeneration and Planning and my right hon. Friend the Deputy Prime Minister has been the coming together of local authorities and others in regional assemblies. As my hon. Friend the Member for Bradford, South (Mr. Sutcliffe) said, the regional assembly for Yorkshire and Humberside has carried out excellent work with other partners in the region and is drawing up a strategic framework for Yorkshire and Humberside for the next 10 years.

The assembly also hopes to be an integral part of the new regional chamber. There is a desire, however, as reflected in the report of the Select Committee on the Environment, Transport and Regional Affairs on RDAs, that regional government should be established as soon as possible. Perhaps the Under-Secretary can give us an idea of when the Government hope to be able to introduce it.

The establishment of the RDAs will bring considerable benefits to my area. It has great potential, but all its possibilities can be realised only within the framework of strategic regional planning. The Bill will enable that long-awaited strategic planning to take place at last.

8.44 pm

Mr. Andrew Lansley (South Cambridgeshire): It is always a pleasure to listen to such debates because there always comes a point, particularly when listening to

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Labour Members, when one arrives at the reason for the introduction of legislation. The hon. Member for Doncaster, Central (Ms Winterton) finally gave us the answer--the Bill has been introduced to complete unfinished business from the Labour Government of 1975.

That thought had already occurred to me. I started work as a civil servant at the Department of Trade and Industry and I was introduced into a division called Industrial Planning. My hon. Friend the Member for Altrincham and Sale, West (Mr. Brady) said that the Bill represented the resuscitation of planning, in this case on a regional scale. I had the same feeling when the hon. Lady talked about the 1970s.

I have the same feeling about regional development grants because I worked in the branch that gave £110 million to Sullom Voe, and for what? The money was spent on a project that went ahead in any case. We abolished such grants.

My right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) spoke about what the Conservative Government did to help the Thames corridor, Docklands and places such as Corby, which has been subject to long-term competitive decline. Because of the Conservative Government's efforts, an enormous amount of inward investment was attracted to those areas, although that was not the sole improvement introduced by our Government. The hon. Members for Middlesbrough, South and Cleveland, East (Dr. Kumar) and for Huddersfield (Mr. Sheerman) suggested that inward investment was the only saving grace of the previous Conservative Government, but that Government encouraged a great deal of indigenous activity that occurred alongside such investment, such as sub-contracting. Such efforts are part of the means of securing inward investment.

As time is short, I should like to talk about inward investment, not because I consider it is the only aspect worth mentioning, but because it reveals what is at the heart of one of the problems associated with the Bill. I am afraid that the Bill is a case of "not proven". In the introduction to the Government's White Paper, the Deputy Prime Minister offered a far from comprehensive and exhaustive set of reasons for why an inward investment project might come to the United Kingdom. He spoke about the co-ordination of potential sites, finance, training and services such as transport and power supplies. That begs the question about what causes inward investment to be awarded to United Kingdom projects.

I remember standing next to the then Secretary of State for Trade and Industry in 1984 when he signed the heads of agreement with Nissan. Many factors contributed to that deal. Let us consider how many of them will be changed in substance by the establishment of regional development agencies, which will replace existing structures and arrangements.

Let us consider regional selective assistance. Will it be provided by the RDAs and eventually determined by them? No. It will be determined by Government Departments as it has been in the past. As for the infrastructure, which we know is always important to the prospect of inward investment, will it be provided by the RDAs? No, in large part it will be provided at the behest of the Department for the Environment, Transport

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and the Regions through its borrowing approvals. It will also be provided by county and other local authorities in accordance with their local plans.

Is the planning framework that will determine which areas or zones are to be available for industrial or business use to be determined by the regional development agency? No it is not. As now, such decisions will be made under planning legislation--at least I hope they will, although there is some speculation to the contrary. They will essentially be the product of strategic planning guidance leading to structure plans and planning decisions via a democratic framework inside local government.

Is the training framework to be delivered by the regional development agency? No, it is not, because training and enterprise councils will remain outside the RDAs. Having created TECs, which my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler) initiated, it would be a retrograde step for them now to be subordinated to a Government-controlled quango. That would run contrary to the principle of business-led skills and training that was always at the heart of TECs, so RDAs will not be delivering training. The hon. Member for Doncaster, Central says that the RDA can cause a region's training and education bodies to come together and talk to each other. That might not happen in Yorkshire, but in my part of the world training and education bodies already talk to one another and it does not require a regional development agency to make that happen.

There is a case for co-ordination in these matters and, although much of that co-ordination already takes place, there have been gaps. Members of Parliament representing the south-west have talked about what used to be called the Devon and Cornwall development company and we have heard about the Northern development company. In Scotland and Wales, bodies have been established that were designed specifically for the purposes of attracting inward investment and bringing together and co-ordinating activity to sustain inward investment projects.

In the east of England, there was a lack of such a body, although there was no lack of interest in inward investment. The hon. Member for Huddersfield talked about the importance of universities as a stimulus to development, but no part of the country is more aware than Cambridge of how a university can be a focus for investment. Our problem in East Anglia is not the availability of investment, but the availability of land for development. Sometimes, we have development projects that are not willing to travel an extra 10 or 15 miles and locate in a more distant and peripheral location, rather than in the specific location that they find desirable because of its proximity to markets, high-technology and infrastructure. Therefore, there was a case for looking at the regional mechanisms whereby infrastructure could be created and sites packaged so as to take the large amounts of inward investment wanting to come to East Anglia in support of the Cambridge phenomenon and spread that phenomenon to a greater extent.

The East of England Inward Investment Agency was created and I was interested to read the evidence of that agency. It said that it was happy with the prospect of a regional development agency; but it was happy because the RDA would, in effect, subcontract to the existing agency the business of co-ordinating a relationship with inward investment projects. Therefore, as we examine

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inward investment projects and consider what functions must be carried out in relation to them, we find that they are already being carried out by existing bodies, which were created for perfectly good reasons in different places and which are perfectly capable of co-ordinating with each other.

It is interesting to consider what caused all those bodies to tell Ministers that they thought that RDAs were a good idea. I would say first that Ministers should not believe their own propaganda. My right hon. Friend the Member for Sutton Coldfield made it clear that those who responded to the consultation exercise were collectively making job applications, but I would put it another way: just because people are kow-towing to him, the emperor should not conclude that he is wearing clothes. During the debate on the Greater London Authority (Referendum) Bill, the hon. Member for Brent, East (Mr. Livingstone) talked about the prospect of the terracotta army and people are responding to the prospect of RDAs in the same way. They know that the Bill will be passed and that RDAs will come into being and they do not want to be on the wrong side--but that does not mean that the emperor has clothes. It is our job, when the emperor does not have clothes, to expose the nakedness of the Government's intentions.

Our attitude is not negative to the legislation or to regional development activity. Our party supported the Welsh Development Agency, the Invest in Britain Bureau, Locate in Scotland, and the urban development corporations. As my right hon. Friend the Member for Tonbridge and Malling said so clearly, we have understood the case for focused activity where there is a defined need and we can add value.

The hon. Member for Liverpool, Riverside (Mrs. Ellman) mentioned the letter from the Confederation of British Industry. Later in that letter, the CBI said:

That is exactly my point: will they add value? I submit that the evidence so far suggests that they will not, and that the legislation is merely a stalking horse for regional government by Labour authorities, who will be able to point to a body with growing powers and say that it should be made more democratic--

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