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Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman must resume his seat.

8.55 pm

Mrs. Louise Ellman (Liverpool, Riverside): Regional development agencies will breathe new life into the regions of England. They will provide a focus for integrated development, investing in companies and in skills training and retraining, developing appropriate property and sites, and supporting commerce and industry. They will do that to support and develop existing business as well as attracting new business.

I am an enthusiast for regional development agencies, because I have seen at first hand what they can do. Between 1981 and 1997, I was leader of Lancashire county council, and from 1982 I was the unpaid vice chairman and director of Lancashire Enterprises, the economic development company set up by the council in that year. It was set up originally as a company limited

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by guarantee, but following hostile legislation from the Conservative Government, in the form of the Local Government and Housing Act 1989, a plc was formed as well, with the county council-controlled company owning around 19.9 per cent. of the equity, the maximum allowed, to enable it to continue to operate effectively.

Over those years, I saw what Lancashire Enterprises, working as an economic development agency with the public and private sectors, could achieve. I saw thousands of jobs saved at Leyland Trucks after the collapse of Leyland DAF; defence diversification in partnership with British Aerospace; regeneration of the Leeds-Liverpool canal; inner-city regeneration at Whitecross in Lancaster; the setting up of 10 investment funds with the private sector, some of which--including the Rosebud fund, which raised £5 of private finance for every £1 of public finance invested--were particularly concerned with the needs of small businesses; more than £30 million of European funding coming directly to Lancashire businesses; support for hundreds of small and medium enterprises; and the setting up of a co-operative development agency.

In all, the company directly supported about 26,000 jobs, 24,000 training places and the building up of £40 million of public assets. It operated as an investment-led rather than a grant-giving agency.

In the north-west, there is widespread support for a regional development agency. That support comes from public, private and voluntary sector stakeholders throughout the region: stakeholders who have been working together on a regional basis for the past six years, through the North-West Regional Association and the North-West Partnership. They include local government; the Confederation of British Industry; the chambers of commerce; the business leadership team; Co-operative Enterprises North-West; the North-West Trades Union Congress; higher education; and training and enterprise councils.

All those stakeholders, working together, do not accept that it is right for the north-west to have a low gross domestic product per head. They do not accept that it is acceptable for the north-west to have a low rate of company formation and new company survival. They do not accept the record of poor inward investment to the north-west and they are extremely worried about reports of skill shortages in all sectors--including shortages of operatives, professionals and management.

All those stakeholders want to work with a regional development agency that can focus on developing the strengths of the region, an agency that can help the region to restructure from its industrial past to a new industrial future with regeneration. Those stakeholders want an agency to help manufacturing industry, to develop our strong science base and strong vehicle manufacturing base, to support the new industries in media and in culture, to build on the base of high technology and to ensure that the vast array of knowledge in our institutions of higher and further education is used and developed commercially to the maximum.

The regional development agency should continue working on technology transfer with such major companies as British Aerospace and British Nuclear Fuels, ensuring that the vast reservoir of skills and knowledge in major companies is used not only within those companies but, with the support of those companies, to support additional companies and enterprises.

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Regeneration is taking place in the north-west. In my constituency, a great deal is happening, and much is happening locally with local people in local communities. However, the strength of a regional development agency is that it can act sometimes as a prime mover, sometimes as a partner, sometimes as an organisation putting together packages of public and private sector support to help individual companies or sectors of industry. A regional development agency is there to react when a problem arises and to anticipate problems in the regional economy.

One reason why there is such strong support for a north-west development agency throughout the north-west is that for six years, all the stakeholders that I have mentioned--in the public, private and voluntary sectors--working together, have developed an economic strategy that not only deals with the north-west region as a whole but identifies the specific needs of each part of the region. Although the north-west as a whole has major needs, including transport and environmental needs, there are also many differing needs in the Manchester area, the Lancashire area, Merseyside, Cumbria and Cheshire. The work that has been done in the past six years by all the stakeholders together has shown that it is possible to have an effective regional strategy that takes into account the specific needs of different parts of the region.

During the past six years, that strategy has developed into action. A major transport study has just been published based on the work that was done. A private sector-led working party is working now on regional innovation, ready for a regional development agency. A working party on social exclusion is about to report. The work that has taken place during the past six years with the North-West Regional Association and the North-West Partnership has shown how influence can be exerted.

There have been some specific achievements, such as the establishment of a north-west office in Brussels, bringing additional funding, and the creation of a network of technology centres, which are already starting to operate around the north-west--but how much more could be done with a regional development agency. The existing structure has influence and is starting to have effect, but we really need an executive authority working as the regional development agency. The White Paper and the Bill refer to the importance of a regional chamber. I believe that that is an essential part of the programme for a regional development agency.

In the work that has been done in the north-west with the North-West Partnership and the North-West Regional Association, we have demonstrated the very important role that a regional chamber can play. Therefore, it is extremely important that the Minister uses his powers to ensure that the regional development agency links with the proposed regional chambers.

We in the north-west are far advanced. Now we need to develop the regional chambers, based on current structures. Stakeholders have already said how they think they should operate, so there will be an interplay between those in the region--elected members, other stakeholders--and the RDA.

The proposal for RDAs has widespread national support. It has the support of the Local Government Association, representing local government across the country; of the private sector and the voluntary sector; and

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of the trade union movement. This is an excellent Bill, part of the process of revitalising the regions and of devolution. I support it and I urge the Minister--

Mr. Deputy Speaker: Order. The hon. Lady must resume her seat.

9.5 pm

Mr. Peter Luff (Mid-Worcestershire): I begin by declaring an interest as an adviser to the Rural Development Commission before I was elected to the House, and as a recently appointed member of my regional Country Landowners Association committee.

Having listened to the debate, I think that the Government are living in a fool's paradise. I wish that Labour Members were right in all their noble hopes and their aspirations for these regional development agencies, but the road to hell--on this occasion, perhaps, the electronic super-highway to hell--is paved with good intentions. I honestly believe that Labour hopes and aspirations are seriously misplaced. Although I wish that they were right, it is impossible to legislate for economic growth at 3 per cent. and inflation at less than 2 per cent. The real world is a messy and complicated place which cannot be resolved by simplistic, bureaucratic structures of the kind the Government seek to impose on the country.

The hon. Member for Liverpool, Riverside (Mrs. Ellman) made much of the fact that there has been support from outside bodies, but my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) spoke of the danger of the emperor believing that he had clothes just because people kow-towed to him. I urge the Minister and the Labour party to listen to what is really being said to the Government in the consultation period, because it is much more complicated than they believe. I am reminded of the words of Simon and Garfunkel in "The Boxer"--possibly an appropriate song for the Deputy Prime Minister:

Listen to what the National Farmers Union says in its letter to hon. Members about the RDAs:

    "There has been much concern in rural areas that the RDAs will be unduly biased towards urban concerns, and that the legitimate interests of the rural areas may be overlooked or sidelined."

That is hardly a robust statement of support.

It is true that the CLA, in its letter to Members, generally welcomed the Bill, but it went on to say:

The Deputy Prime Minister made some highly regrettable remarks about the Rural Development Commission in his statement about the Bill to the House. Indeed, I wrote to him asking for an apology for what he had said about Lord Shuttleworth, but no such apology has been forthcoming. In any case, the CLA said:

    "The Government must demonstrate at Second Reading and beyond that the RDAs will be at least as committed as the RDC to these programmes"--

of rural regeneration--

    " and that the effect on rural areas will be a benefit, not a loss."

No such demonstration has been made today, and I am more concerned than ever about the negative impact that the RDAs will have on the rural areas of England.

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Listen to the rest of the CLA's letter:

hardly a ringing endorsement from an outside body, and I suspect that other representations that the Government have received are in the same terms, if they will only listen to them with an open mind, not the closed mind that they have exhibited so far.

The rural question is at the heart of the fundamental flaw in the Bill. The Bill may be fabulous for Birmingham, the west midlands, Dudley and the black country. If I represented those urban areas, I might well be arguing for the Bill myself, because it would offer me the opportunity to draw resources from rural areas into the urban heartland. But what about the rural question? I was grateful to the Minister when I intervened in his opening speech. He said that if specific ideas were proposed to improve the situation for the rural areas under the Bill, the Government would listen to them. Let me put forward four specific issues now. I appreciate that in the short winding-up speeches tonight, there will be no opportunity to reply to them in detail, so may I have a response in writing from the Minister on these four specific points?

First, clause 4 could be significantly strengthened in line with the commitment to the rural areas that the Government have expressed in the past, to make it clear that that commitment is not just words, but reality. A strengthening of the commitment in clause 4(2) would do much to reassure me that that was the case.

Secondly, membership of the RDA boards has been discussed extensively in the debate, and rightly so. How can the relatively small boards covering such large areas represent such a diversity of economic activity, special interests and the counties and authorities that comprise the regions? Each RDA board must include at least one rural member. That could be specified in the Bill, and would be a useful step forward.

Thirdly, what about the important work that the RDC has done in identifying rural needs, monitoring them and reporting back to the Department of the Environment, now the Department of the Environment, Transport and the Regions? It would be extremely helpful if the Government could say specifically how the RDAs will be expected to assess rural needs, and to monitor and report on rural conditions and on what they have done each year to address those rural needs. Will needy rural areas continue to be determined nationally on the advice of the RDC, if it still exists--we are waiting to hear whether it will or not--or by its successor body, or will that be left to individual RDAs to decide? If so, I fear for those rural areas.

Fourthly, what about funding? We have heard a lot about the desperate attempt to claw money into the RDAs from various pots around Whitehall. Will the funds transferred from the RDC for rural regeneration be ring-fenced for rural regeneration within the RDAs? If not, why not? Those are the issues which the Government must address if they are to reassure my constituents that the RDAs will not act against the interests of rural areas.

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In addition, the Bill raises a series of worrying issues, such as the regional chamber concept, which makes matters worse for the rural areas. We have a very effective chamber of commerce in Hereford and Worcester, which was developed out of the TEC and merged with the local chamber, and is doing a first-rate job for the local economy.

Am I seriously hearing from the Treasury Bench that the Government want to merge such rural chambers into some super-regional chamber, where again the rural interest will be subsumed in the urban heartland of the regional chamber? The concept of a regional chamber is fundamentally flawed. Are we to have regional chambers, and local chambers as well? If so, no business men will serve on the local chambers, because they will constantly be overridden by the regional chambers. No business man worth his salt would serve on the local chamber. Again, the rural chambers will suffer.

Why, for heaven's sake, are the Government playing into the hands of the European Union's federal ambitions for Europe? A leaflet published two years ago by the European Commission was entitled "The west midlands--a region of the European Union." With respect, the west midlands--a concept which is useful in planning terms--has no historic or cultural tradition and no relevance to the people of Worcestershire. If it exists at all, it is a region not of the European Union, but of the United Kingdom.

Do the Government not understand that the Bill sidelines this place? It gives more power to Brussels, and it takes power away from Parliament and hands it to the placemen whom the Secretary of State will appoint to the RDAs.

Look at the duplication that already exists. Wychavon district council in my constituency has an economic regeneration function. Worcestershire county council has an economic section. The Government will still have the Department of Trade and Industry and the Department of the Environment, Transport and the Regions to decide some of the most important issues. Four tiers will be concerned with economic development and regeneration in my area. Where is the sense in that? It is just bureaucrats making jobs for bureaucrats and doing nothing for business.

Poor old Worcestershire is caught between the Government's "economic powerhouse for Wales"--to use the words in the White Paper--and the grandiose ambitions of Birmingham. Worcestershire does not belong to the west midlands or to anything else--it is sui generis: of its own. In that sense, it is rather like Gloucestershire next door. Perhaps the Government should consider being more flexible about the number of RDAs--after all, the Bill will pass and we will have these wretched things. Perhaps we should have a mid-west RDA, rather than a south-west or a west midlands RDA; it could take proper account of the interests of essentially rural counties such as Worcestershire, Herefordshire and Gloucestershire.

I accept the strictures from Labour Members about our attitude to local government. Perhaps the former Conservative Government made some mistakes in that area in the past 18 years; perhaps we did not do enough. However, if Labour Members were really concerned about helping local communities to develop their economic infrastructure, they would have given the

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powers to county councils. Instead of doing that, the Government plan to impose them on RDAs that will do nothing except create a few jobs for bureaucrats. I wish the Bill every failure.

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