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11.18 pm
Mr. McLoughlin: Having listened to the hon. Member for Kingston and Surbiton (Mr. Davey), I am glad that the Liberal Democrats are the Government's allies, and not the Opposition's. The hon. Gentleman said that he has studied the matter with great care and has examined what has gone on in New Zealand, but the Minister was able to point out some of the disparities between the universal service here and the service in New Zealand.
The hon. Member for Kingston and Surbiton answered that we should not worry about a few farmers scattered around the ends of the earth. That is an insult to farmers in my constituency of West Derbyshire--and to farmers in the Romsey constituency. I shall take every opportunity to make sure that they are aware of what the hon. Gentleman said.
I shall not make a long speech, unlike the hon. Member for Kingston and Surbiton, who took us on a world tour.
Mr. Edward Davey: The hon. Gentleman does not have a clue.
Mr. McLoughlin: The hon. Gentleman says that I do not have a clue, but if he spoke with a clue, I am glad that I speak without one.
I am sorry that the Secretary of State waited so long before bringing new clause 1 before the House. In so doing, he did not give us enough opportunity to study the new clause. Having seen it, I can understand why he did not want to give us long to study it. The new clause does not say that there will be a subsidy to village post offices, or what level of subsidy it will be. Let us be clear that we are talking about sub-post offices.
The hon. Member for Kingston and Surbiton talked about 3,000 post offices having closed during 18 years of Conservative Government. Post offices will close, given the very nature of their business. They are often run from people's homes, and when the people running them want to retire and sell their homes, that leads to closures. I accept that there were closures under the previous Government, yet over the past three years we have seen
1,000 closures. That is an escalation of post office closures on a massive scale, which is why the Government introduced their new clause. When the Bill was first conceived, the Government were not looking at supporting the sub-post office network. It is only as the Bill has progressed through the House that the new clause has been brought forward.I have seen the number of post office closures in my constituency escalate dramatically. There have been closures in Cubley, Longford, Roston, Flagg, Lea Bridge, Tissington, Fenny Bentley and Taddington. Such a major escalation of closures is a cause of concern. It is partly due to the Government's insistence on the switch to automated credit transfer and the fear that that decision has struck into the sub-post office network. That is why, after much pressure on the Government, we have managed to drag out from them this new clause.
I hope that the new clause will do what the Government desire. We will be watching future closures very closely. The system of subsidy does not reflect the great difference in the rural network of sub-post offices. Some are open for two hours in the morning for four or five days a week, while others are full time. It will be interesting to see how the Government arrive at the formula to give subsidies to community post offices and to those that offer full services in rural areas.
We have not found out enough from the Government. I hope that when the Bill goes to another place, people there will tease out from the Government exactly what they are talking about in new clause 1. I hope that the other place will fulfil that role.
Bill accordingly read the Third time, and passed.
DELEGATED LEGISLATION
Mr. Deputy Speaker (Mr. Michael J. Martin): With permission, I shall put together the motions relating to delegated legislation.
Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),
Criminal Law
- That the draft Youth Justice Board for England and Wales Order 2000, which was laid before this House on 3rd April, be approved.
Local Government Finance
- That the Local Government Finance (England) Special Grant Report (No. 61) on Special Grants for School Standards, Support of School Budgets and Costs of Transitional Funding (HC 399), which was laid before this House on 6th April, be approved.--[Mr. Betts.]
Assisted Areas Map
Motion made, and Question proposed, That this House do now adjourn.--[Mr. Betts.]
11.24 pm
Mr. Malcolm Moss (North-East Cambridgeshire): The Minister's announcement on 10 April of the Government's intention to submit an amended set of proposals for new assisted areas brought disappointment and dismay to many of my constituents and delivered a body blow to the Fenland area. It is almost a year since I stood in more or less the same place in the Chamber to plead the case for the continuation of assisted area status for Wisbech. At that time, the Government were making their first attempt to redraw the regional selective assistance map of the United Kingdom. We were delighted that a new area, embracing Fenland district council and King's Lynn and West Norfolk borough council, was designated by the Government and included in their submission to the European Commission in July 1999.
Imagine our devastation, then, when we heard of the Government's latest U-turn. Our area is to be removed from the assisted area map because of concerns expressed by the Commission, and we have only three weeks for consultation. I believe that the Government have made an error of judgment, and I shall try to put the case for reinstatement of the Fenland partnership area in the assisted area map.
No one disputes that there must be rules and strict criteria to identify areas that warrant regional selective assistance. However, a model that fits the city-region concept of mainland Europe does not necessarily embrace the particular needs of rural areas in the UK. To my mind, the key is flexibility, without which needy areas such as Fenland and others in the eastern region will lose out.
The new criteria set by the Commission require a reduced population coverage of the national map. The eastern region has provided 43 per cent. of the reduction. That can hardly be fair when eight regions are involved. The east of England is being asked to shoulder the lion's share of the proposed reduction, but has also received the lowest funding for its regional development agency and its inward investment effort.
Several companies with the potential to employ significant numbers in a rural area suffering from a steady reduction in agricultural employment have been encouraged to consider investment in the fens. They have been attracted by the opportunity of offsetting logistical disadvantages with financial assistance. I believe that Fenland and King's Lynn and West Norfolk deserve reinstatement.
Let us consider the track record of assisted area status in the Wisbech travel-to-work area, which has been the cornerstone of economic regeneration in the area since 1993. The area has an impressive track record in attracting grant, assisting companies and creating and safeguarding jobs. Some 75 offers of grant were made, totalling £5.6 million. That levered in some £35 million in private investment. A total of 1,043 jobs were safeguarded, and 1,296 created. There is both an opportunity and a need to continue to make effective use of regional selective assistance grants and to secure best value from them in the King's Lynn and Fenland areas.
In the recently published draft regional planning guidance, paragraph 4.2.5 states that a key element of the strategy is
- addressing the remaining disparities in opportunities and quality of life across the region through a focus on the priority areas for regeneration.
- Development plans should include policies consistent with sustainable development to promote regeneration, economic enhancement and environment protection and enhancement of the Priority Areas for Regeneration, including Wisbech and the remote rural areas, the Rural Development Areas and those rural areas designated under the European Union's Objective 2 and Transitional Objective 5b programmes.
The priority areas for the regeneration strategy are also reflected in the regional economic development strategy published by the East of England development agency. One of the aims of that strategy is the development of a thriving rural economy. Strategic priorities identified in the REDS include the attraction of new and high-growth businesses to the area; the revival of market towns; and the support of diversification in the agricultural sector. The strategy also refers specifically to the rural development area and to the Wisbech priority area for economic regeneration.
If the Government are serious about developing a thriving rural economy and targeting resources on priority areas for regeneration, they must understand the important role that assisted area designation has played, and can play in future, in delivering their stated economic objectives in the fens. To withdraw assisted area status does not represent joined-up thinking on the implementation of their policies for those areas that have already been identified as priorities for regeneration.
Although current economic headline indicators might not appear to be as poor as those for other areas, the Fenland and the King's Lynn and West Norfolk areas are characterised by an exposure to structural decline among traditional local industries; by over-dependence on declining economic sectors--Fenland is placed at 443 out of 459 in the Henley centre's industrial structure index; by a forecast jobs gap of 9,800 by 2006; by low educational attainment and skills; by lack of an investment image and a credible offer in the investment market; by a cost-value gap for industrial and commercial development that inhibits investment; and, finally, by peripherality and poor strategic transport infrastructure.
The substantive case relates to the underpinning principles of the Industrial Development Act 1982, which clearly states that the Secretary of State
- shall have regard to all the circumstances, actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies.
Without the designation, private sector investments will be diverted elsewhere in the United Kingdom and to Europe. Nor have the fens benefited from a jobs and business spin-out from Cambridge with its high-tech and knowledge-based economy--despite its geographical proximity. That benefit may reach the southern parts of the fens in the longer term, but it is unlikely to affect the whole area until there are significant improvements in the skills of the work force and in the transport infrastructure. It is simply unrealistic to expect benefits from Cambridge.
The area's poor future prospects are demonstrated by the fact that it has little representation in the seven sectors identified by the East of England development agency as key to the region's future growth and prosperity. The fens has a far lower proportion of employment in those sectors than the region or England as a whole. It also has a work force with considerably lower educational attainment and skill levels than elsewhere in the region. Such attainment and skills are essential to attract and support these high-growth sectors.
The withdrawal of assisted area status puts at risk the attraction of the areas to future investors. Specifically at risk is a significant investment by a European company in the fens.
I have in front of me a letter from the managing director of Graveley Packing, owned by Budelpack, a Dutch company. The managing director, James Robinson, writes to me in the following vein:
- I was dismayed to hear the news that the Government has decided to remove Fenland from the above grant assistance.
As you may know we applied for, and received, a grant of £0.5m towards buildings and equipment under the selective regional assistance scheme. This of course was subject to the EC confirming the UK regional proposals. The grant was based upon the creation of 283 permanent and 75 temporary jobs in addition to safeguarding the current 125 jobs.
Because industrial property values in March
- are extremely low we have to take a substantial loss on our investment. Our new building will cost £3.8 million. Its open market value when complete will be
- £2.8m. We have had huge difficulty in obtaining adequate external finance for the building because of this £1m cost-value gap. I have today received a suitable offer but unfortunately it is dependent on grant assistance being
- available to us.
It appears therefore that this decision, if confirmed, has pulled the rug out from under our scheme and its associated job creation.
While the first programme of assisted area benefits had largely helped the indigenous business base, there were emerging benefits of attracting new firms to the area from
abroad. Those benefits will now be lost, as the fens will no longer be able to offer financial support for companies seeking to relocate to the area.The way forward for the fens is to redraw the whole map and provide the fens with the assistance that it needs. I know that we have only a few weeks for consultation and I recognise the need for the Government to press on with the regional map so that the key areas may receive the necessary financial assistance. Therefore, in asking the Minister to consider redrawing the map, I realise that it is something of a tall order.
However, last week, the Government, in launching their national strategy for neighbourhood renewal, acknowledged that job creation was the key to addressing social exclusion. Regional selective assistance and the invaluable help that it provides in both creating and retaining jobs is crucial to addressing the wider deprivation and social exclusion problems facing the fens. It will support investment to retain and enhance the competitiveness and performance of existing industry--notably the food cluster that we have in that part of the fens. It will be a vital tool in creating opportunities for rewarding work, raising aspirations and making learning pay. Finally, it will promote private sector investment in infrastructure and property, essential prerequisites for attracting and creating more businesses.
All the agencies in the fens area are committed to working together in a co-ordinated way to address the area's problems. The area had already suffered one body blow, with its failure last autumn to be designated as an objective 2 area. Without RSA designation, it is likely to miss out on other forms of national support, such as the single regeneration budget and EEDA's partnership investment programme, which is largely tied to such priority areas. The funding available to EEDA, as the most poorly resourced RDA in England, is already limited. Targeting to objective 2 and RSA areas will mean that little funding is available for other areas that are not so designated.
Assisted area designation up to 1999 brought significant benefits to Wisbech. It helped the area benefit from the general improvement in the national economy. However, agencies in the fens believe that this is only a temporary position, and that with the removal of two core pillars of support--objective 2 and the RSA--the economy will falter and slip into decline. Assisted area designation will help prevent that, and, as we all know, prevention is better and less costly than cure.
The Minister will now know that the fens should not be bypassed again, and he should give the partners--notably the East of England development agency--the resources to do their job. I ask the Minister to assist and encourage all central Government, regional and local agencies and the private sector to work together to address the problems of the fens area. We hope that, in this very short consultation period, they will listen to all the representations made to them by the interested parties, and reinstate the fens on the assisted area map.
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